The trouble with too much democracy

The real threat is not economic decline, it’s political decay

The trouble with too much democracy

Jewel Samad/AFP/Getty Images

The most telling moment of the recent standoff over talks to raise the American government’s debt ceiling came on July 22, when President Barack Obama called a press conference to announce that House Speaker John Boehner had backed out of the negotiations. “I’ve been left at the altar twice now,” Obama pouted. In case the image of the President as a jilted lover was not clear to everyone watching, he added that he had spent the previous day waiting for Boehner to return his phone calls.

The whole affair has left a lot of Americans in a state of bipartisan disgust, with citizens from all points on the political compass cursing out their elected representatives. Yet it doesn’t seem to have occurred to many people that there is something structurally flawed with a system that allows the head of just one legislative house to treat the supposed leader of the free world as his last choice for the senior prom. If there’s anything that needs cursing out it isn’t the elected politicians, but the constitution of the United States.

America is a mess. The economy isn’t growing, the job market is a wasteland, its infrastructure is crumbling. On any number of measures, from education to health care to technological innovation, the country is getting beat by up-and-comers in Asia, Scandinavia, and South America. But the real threat to America right now is not economic decline or technological stagnation—those are just the knock-on effects of a much deeper rot.

Political decay is a largely overlooked phenomenon. We tend to think of political development as a one-way ratchet from despotism to democracy, with very little in the way of backsliding. But history is littered with states that flourished and then fell, as their political infrastructure failed to adapt to new and increasingly urgent circumstances.

The American constitutional order rests on the belief that the biggest threat to liberty is the concentration of political power in one person or office. And so the founding fathers gave the new country an absurdly baroque system of checks and balances and of power-sharing between the various political branches. It was designed to dilute political power, but the reality is that the U.S. federal government has a difficult time doing anything much at all.

That’s fine if your big worry is the return of a tyrannical monarch. But despotism comes in many forms, and there is more to political liberty than simply wrapping the government in a straitjacket of constitutional restraints. Sometimes true self-government involves giving the state a free hand to push through an agenda that might be deeply unpopular in the short term, but is vital to the long-term flourishing of the society.

A handful of prominent writers have taken to talking up the virtues of strong government. The New York Times columnist Thomas Friedman has been arguing for a couple of years now that China’s political system is far better equipped to deal with climate change and to force the country into alternative sources of energy. In her recent book How the West Was Lost, the Zambian economist Dambisa Moyo argues that a seven-year election cycle would make it easier for the government to identify problems and put in place more structural solutions without having to face the electorate. Heck, even American politicians recognize that sometimes the government needs to actually do something: one of the great accomplishments of the Bush presidency after 9/11 was to greatly strengthen the hand of the president on issues of national security and foreign policy.

A lot of pundits have been cheering the gunboat politics of the past few weeks as nothing less than democracy in action, with the final debt-ceiling deal read as some kind of healthy pragmatic compromise. While this involves deliberately interpreting the worst bugs in the country’s political software as its best features, the truth is that it is possible to have too much democracy. America’s elected representatives just expended an enormous amount of political capital wrangling over something that should have been passed with a nod months ago, while far more important matters went unaddressed. Worse, even conservatives admit that the Tea Party caucus got next to nothing for their efforts, despite making it clear they were willing to nuke the country’s credit rating over spending cuts.

Edmund Burke once wrote, “A state without the means of some change is without the means of its conservation.” He was talking about the French Revolution, in particular about the way the aristocracy of the ancient regime had so entrenched itself as a parasitic class that it had become completely unreformable. The only way to do a hard reboot of the French state was to cut off a large number of heads.

It’s hard to see a revolution coming to America. Yet it’s also hard to see that its political system has the internal resources to reform itself. The result, then, will be the steady rise of more agile and focused countries, while America settles into a long and drawn-out period of political decay. Right to the end, they’ll probably keep calling it democracy.




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The trouble with too much democracy

  1. Right-wing tyranny is thriving in North America.

  2. Once again I’m proud and happy to be a Canadian — too bad Steve is so bent on emulating the policies born in that disfunctional mess to our south –

  3. I agree that institutional constraints are a problem for the US, but you are mistaken if you believe this to be an explicitly Democratic problem. Just as Democracies rely upon the electorate in order to maintain power, authoritarian regimes must satisfy a “selectorate” including members of the ruling party, the military, and other influential figures. China may speak with one voice publicly, but the output we see is the result of factional debate within the Communist party. In contrast, Westminster Democracies really do concentrate vast amounts of power in the hands of the Prime Minister (though I wouldn’t expect columnists to recognize the tension between decrying the tyranny of the Harper PMO, while also tut tutting at the disorderly debt debate in the mobocracy to the south). 

    • He is just looking at the state of things south of the border. I don’t read his article as being a treatise on any form of government, other than the particular brand of democracy practiced by the US. References to other governments are just that: references, not analyses.

  4. Indeed. Too bad whole world was not like China, it would be delightful. 

    Maybe when technocrats ever give the appearance they know what they are doing, maybe then people would be more willing to trust them. Democracy is not a few ‘smart’ people deciding what needs to be done and then ramming it through for good of ‘people’, that’s anti-democratic.

    Astonishing how democracy in crisis articles appear in our left wing press whenever right wing types start to get involved in political process. 

    Potter, surely you should have mentioned that you have a Mao collection at home and that you are fan of biggest mass murderer in history. Might make your article more comprehensible. 

    “CHINA’S high-speed railway network, once a source of great pride for the Communist Party, has turned into an embarrassment. A collision between two trains on July 23rd near the coastal city of Wenzhou not only killed at least 35 people but also unleashed a torrent of online criticism of the network and the railway bureaucracy.”

    http://www.economist.com/blogs/banyan/2011/07/chinas-high-speed-train-crash

    A report that relatives of senior Communist Party cadres make up nine out of ten of China’s multi-millionaires has been firmly denied by the Chinese government.

    http://www.telegraph.co.uk/news/worldnews/asia/china/5989110/China-denies-claim-that-Communist-Party-offspring-make-up-90pc-of-multi-millionaires.html

    P Pan, Out of Mao’s Shadow: 

    This is not a big-theme book about the “true” China but a concrete, closely observed encounter with particular people, places and events. He puts the reader on a stool in the small shop of laid-off steel worker Yao Fuxin as Yao and some colleagues plot a doomed demonstration against corrupt local officials in the rust-belt city of Liaoyang. We run through cornfields with blind activist Chen Guangcheng as he escapes from government thugs in his home village, hoping to carry a petition for justice all the way to Beijing.

    http://www.washingtonpost.com/wp-dyn/content/article/2008/06/26/AR2008062603726.html

  5. Hm. Democracy is failing in America, and autocracy is failing in China. Good thing I live in Canada :)

    • It seems that it is really improper to live in China and US for me. I should move to Canada as you said!

  6. I’m not convinced that software or computers and human political processes are analogous.  

  7. Well put, Mr. Potter!

  8. Your argument is based on the assumption that the Tea Party concerns are really of no concern. Isn’t there a fundamental policy disagreement here? The Democrats (and you it seems) want to go on spending and stimulating a la Keynes, while the Tea Party, somewhat lead by Ron Paul who follows Hayek’s economics, think that this is exactly the opposite direction to be going.

    So they chose a strategic point to put the pressure on — the point where the debt needed to be raised — what better point to negotiate to turn the taps off ?

    I, for one, think generations from now people will study how silly we all were to follow Keynes’s theories and dig ourselves into a bigger and bigger hole. (Starting to look obvious now, today, with further recession inevitable after multiple large stimuli).

    Maybe the Tea Party’s direction is the direction America should be going.

    • I could just as easily say that people will study how silly we all were to forget Keynes’ theories and cut our legs off at the knees just as we were starting to move again (Starting to look obvious now, today, with further recession inevitable just as the stimulus spending ends)

      • So when does it end ? Japan has been playing this game for over a decade and getting nowhere.

        Hayek and the Austrian economists think central banking and cheap money creates a boom, distorting the economy in certain sectors like housing and thus requires a correction. A Keynesian stimulus just puts off the day of reckoning and distorts the economy further.

        Clearly (if Keynesian theory was valid), government taking up the “slack” and dampening the “animal spirits” has to be something that is temporary and limited . At some point a more natural recovery would need to take place. As we see today, there is a limit to how much governments can spend. The Keynesians can always say … if we just didn’t stop having more stimulus. How many treatments does the patient need before the spirits stay up ?  

        In earlier Depressions, prior to the advent of central banking in the 1920′s, downturns were sharp but short. When artificial booms could be created by the central banks then things got worse.

        Keynesian stimulus is supposed to help the little guy out of work. I think if I were him I’d rather sit out a short sharp downturn than be out of work for years as we see with some people in the U.S. today.

        One logical flaw in Keynesian theory is that interest rates are seen as outside the economic system, as a control that can be manipulated without side effects. In contrast, the Austrians see interest rates as an integral part of the economy that give signals to investors and entrepreneurs. Manipulation of interest rates by central banks give “false signals” encouraging poor investments such as encouraging everyone to invest in housing to excess. 

        We’d probably be better off to get rid of the Federal Reserve and other central banks and go back to independent banks as we had in the U.S. and Canada in the 19th Century. True there would be occasional bank failures but we wouldn’t have systemic failures that threaten to bring down the whole economy. And we wouldn’t have central bankers inflating the money supply, debasing the currency and thus impoverishing low income people and the middle class. Off-shore banks operate today in this fashion and are more robust because no central bank is going to save their bacon.

        • Nature will give us Kings – alpha monkeys. But just as we build warm houses against the winter and communities against the bullies, a civilized society will have government and regulation. 

          • Oh dear. It seems we’ve misunderstood each other. I was too broad.

            In the economic sphere, good government is a regulator. During inflation it stimulates supply side. During recession it stimulates demand side. 

            The problem is that the two sides of that responsibility are carried by ideology i.e. the all-time panacea of any economic trouble is whatever your ideology espouses.

            And right now we need demand stimulus big time. And you can be sure that the supply-side ideology has statistics (you’ve heard the story about statistics, I’m sure ) that proves their side. 

            But the plain fact is that right now we are suffering from low demand while we have a growing glacier of wealth that’s not going to trickle down until government steps up to the other side of its responsibility.

            Do we agree?

          • Actually no I wouldn’t agree. What you are describing is Keynesian theory. (Currently widely accepted)

            People with money will start investing when there is an opportunity to make a profit. The government getting involved will only distort the market. In some cases, it will allow some people to make money speculating but it usually won’t be very productive.

            It’s better to let the market adjust itself. There’s no free lunch.  

          • If Keynesian theory was widely accepted Krugman would be where Geithner is.

            As you say, “People with money will start investing when there is an opportunity to make a profit.”

            What better opportunity than people with money in their pockets to buy what you have to offer?  But right now, unless your daddy is rich and you have nothing to do with your day but spend. Free Lunch! Nobody has the money to make any kind of opportunity for any delusionally confident entrepreneur.

            Unless you have really big bucks… Oh well! Then the government’s your oyster.

        • Rubbish!

        • In reverse order:

          Oh please. To say we wouldn’t have systemic failures is to simply ignore all of the history that’s happened since Hayek. Do you really honestly think banks wouldn’t try to merge? That our major economic players wouldn’t tie themselves back and forth to take advantage of the economies of scale and leverage over the competition and the rest of us that provides? Hell, the reason Canada hasn’t suffered so much is because government regulation from Martin specifically prevented our banks from merging into super-banks when they were whining about how it hampered their ability to compete.

          Deregulation solves nothing. Sure, eventually the market will sort itself out, but eventually the universe will die of heat death as well. Which one will happen first and what kind of damage gets done in the meantime are the problems that we need to deal with. Hayek provides nothing toward this.

          I think you don’t understand what “side-effects” means, because giving signals is exactly the point of setting the interest rate. That’s not an unintended side-effect, that’s a very deliberate effect. The signal isn’t false, it’s exactly what we want to happen, we want people to invest in things. Because it’s investment that starts driving the economy.

          Downturns were not necessarily short. Try looking up “The Long Depression” and tell me how 23 years is short. However, that one wasn’t that sharp.. for that, we go to the “Panic of 1837″, which is a 5 year downturn with multiple bank failures etc. So perhaps it would do you a bit of good to look at real history, and not just the crap that Ron Paul spews.

          Now with your second paragraph, you’ve managed to get something right. A natural recovery has to occur. However, that takes time, and it takes investors not being scared out of their pants. In the meantime, people start going through some real suffering. Well-directed stimulus can avert that. Part of the problem with the stimulus we’ve seen so far is that it’s been anything but well directed.

          Bailing out banks is idiotic. Bail out people. Cut taxes for the wealthiest? In god’s name why? Wealthy people don’t employ folks when there’s no demand for it.. if they do, they don’t stay wealthy very long. Build roads. Build publicly owned fibre-optic nets. Build universities and research labs and hospitals and telescopes. Basically put people to work building things that will have lasting benefits for society, that probably wouldn’t get built otherwise, and that we can justify paying people for so that they can then go out and have demands that the market can seek to meet.

          Now, I’ll admit, that’s not old-school Keynes, which was more of the opinion that it doesn’t matter where the money goes, so long as it goes out, but given that you don’t know history, I expect you don’t know modern economic theory either, so I’ll just suggest you look up more recent developments in economic theory than those from WWII.

          • What we’ve had since Hayek is mostly Keynes so the systemic failures you can leave on his doorstep. What have bank mergers to do with central banking? The government would still have the ability to control mergers. Hayek did have some thoughts on this and economies of scale but it’s an entirely different issue.

            I suspect that Canadian banking was safer had more to do with higher capital reserve requirements and the like than anything to do with the size of banks.

            Sounds like you read the Depression wiki.

            As they say “the Long Depression (1873–1896) was indeed longer than what is now referred to as the Great Depression, but shallower. ” It was more a recession in our terminology.

            Here’s a discussion of the Great Depression of 1920. Here’s some more history:

            http://www.firstprinciplesjournal.com/articles.aspx?article=1322&theme=home&loc=b
            It ended in a year without government stimulus.

            And why shouldn’t an investor be scared out of his pants when governments go deeply in debt to stimulate, foolishly motivated by the desire to give us a “warm and fussy feeling” about the economy ?

          • You’re right. Bank mergers have nothing to do with central banking. But as I’ve already shown, central banking isn’t the cause of depressions, since there were both longer and sharper ones before the advent of central banking.   Realize that even though all you seem to be able to understand is a hammer, the world is more than just nails.

            The depression wiki isn’t bad, true. Too bad you couldn’t have been bothered to do even *that* much research before making your false assertions.

            Whether the depression ended in a year without stimulus is irrelevant, as I’ve already agreed (as does Keynes, and Hayek) that the market is not fully controllable, so there is a natural course to these things.  That we can’t control them perfectly, however, doesn’t mean we should just throw up our hands and hope everything turns out okay, as Hayek suggests.  Indeed, it’s interesting to note that every time we actually try that, every time we start deregulating the financial markets, or letting them get ahead of regulation we get something like this.

            Investors weren’t scared out of their pants that the gov’t would go deeply into debt. Do you already forget all the whining and crying that went on in 2008? The fear was that the government *wouldn’t* intervene to save their arses.

            Just to be clear, the problem the US is having now isn’t because they followed Keynes’ with Obama, but that they *didn’t* follow him with Bush 2. Remember, Keynes’ theorems also call for gov’t to cut spending and increase taxes during good times, which Clinton brought the US into. Bush 2 did exactly the opposite, and the result is what we have now.

    • To webcoaster.  You are misinterpreting Keynes. He suggested government expenditure in hard times to get the pot boiling BUT he also said that in good times you do the opposite – pay off the debt. Trouble with US it had Viet Nam, Iraq and Afghanistan in good times, plus a space program and an overall military program in good times and bad.   The Tea party strike me as selfish libertarian nut cases. But they are partly right; the US never got around to really  paying off the deb, despite having a balanced budget occasionally.  Three trillion of the debt is held by China.

      • I know the other side of the theory. If we do get to good times maybe we can try that. The present problem is that Keynesian stimulus doesn’t get the pot boiling.

        By the way Hayek would not really be considered a libertarian rather more like a classical liberal. I’m more of a small c conservative who prefers limited government. I always find it curious how left-leaning types consider as “unselfish” a policy of compulsion of the population for collective goals that they themselves happen to like.

        • But that’s what we’ve had since just after WWII – good times.  Instead of paying off the debt the US blew the money on man-into-space, excessive spending on the military including the Cold War,  Vietnam and the Iraq – anything but looking after its mounting debt and the disadvantaged of their people.  I am a fiscal conservative and a social liberal and in Canada we generally recognize that those who benefited from the way we are structured and because of the rich resources owe the country for being able to operate within by income sharing. I don’t know Hayek from Kayak and whether the tea party are this or that, they certainly aren’t liberal. They are selfish nut cases.  

    • blacktopold is bang on, the problem isn’t so much with Keynes’ theory as it is with pols only understanding (the easy) half of the theory and not pulling back when times are good and stimulus isn’t required.

      But to webcoaster and everyone rah-rahing about the Tea Party’s “brave” stand on the debt ceiling…it was barely a few months ago that over 70% of these brave souls voted IN FAVOUR of the US budget, which not only implicitly BUT EXPLICITLY gave the US government authorization to continue to spend more than they were collecting in tax revenues, which EXPLICITLY (or explicitly to anyone who has math skills beyond about a grade three level, that is) means that they would need to continue to borrow to fund those expenditures…and NOW they take their stand?

      The Boston Tea Party was about taxation without representation, but the emphasis was on representation. Principled people taking a principled stand. Directly or indirectly, the Boston Tea Party leads to the Declaration of Independence, which leads to the US constitution…in which the Founders EXPLICITLY give the US government the right to levy taxes. It’s a perfectly legitimate debate to argue about which expenditures the government should be making. Defence spending, Medicaid, wars abroad, Homeland Security, Social Security…hell, put ‘em all on the table. It’s perfectly legitimate to debate the role of government. It’s also perfectly legitimate to debate who should pay for all this, and in what proportions, in the form of taxation. What is HYPOCRITICAL, COWARDLY, and don’t forget mathematically-challenged, is to vote to authorize the spending and then not vote to finance it.

      Republicans in the US (also applies to our Reform government here at home) want to portray themselves as “the party of business”. George W Bush was the first MBA, and was going to run the government like a business. I’m a professionally designated accountant and a biz school grad, and while I suppose that it’s possible that I was hung over and missed that class I honestly don’t recall where we were taught that the objective was to INTENTIONALLY REDUCE REVENUES, especially when you’re intentionally raising expenses. Any CEO who proposed such a thing would be fired before the next board meeting ended.

      The above rant is not meant to endorse perpetual deficit spending per se, and is certainly not meant to endorse those Democrats who voted against the budget becasue it didn’t call for enough spending. It’s a truism to say that people get the government that they deserve. I know that in some quarters it’s very fashionable to blame the US for everything that goes wrong in the world, but the American people don’t deserve THIS, do they…?

      Hard reboot, indeed.

  9. I had previously considered Potter not one to be taken seriously but methinks perhaps he needs to go to a place with less Democracy for a time and see how that works out for him.

    I sense he is serious. The USA is one of the oldest Democracies in the world and it didn’t become its greatest super power because it had a serious amount of too much democracy.  Whenever it was down, and it’s been there before, it found a way to bounce back. 

    The fact it has an incompetent manager as CEO, in Obama, may well be remedied next year. We can only hope.

  10. It is short-sighted to believe that government is the only source of tyranny. Democratically elected government was created to keep the tyranny of the wealthy (Kings, Lords etc)  in check. Weaken democracy and those other forces of tyranny will return. 

    We call them something else now, but the tyranny of the wealthy is threatening our democracy. It is threatening our middle-class life. 

    Yes, government can go too far. But it can also not go far enough. 

    We have lived for so long under the protection of true democracy that we no longer feel its benefit. Some think we can somehow live without the constraints of government and still retain the benefits of the society it has created.

  11. Someone suggested that Potter needs to go live in a place with less democracy but he already lives in a place with less democracy – Canada. We are a quasi democracy not a true one like another commentator deceives himself into thinking. The US has an original system of checks and balances in three parts and ideally this should  provide the democracy desired by the forefathers but the phenomenal growth and dynamism of its citizens along with the greed of its politicians has skewered  that ideal. In other words its the quest for money and power by the pols that has destroyed an originally good system. Canada, on the other hand, muddles along with a borrowed system with far too many politicians for the size of the country, some elected and others unelected, but all at the teat of Ottawa, gorging on the taxes of an apathetic public. So you see the “true” democracy of Canada isn’t really true and our politicians are only less obvious in their greed than those to the south. America will come back strongly as that is the nature of its people but like all empires will gradually decline as a new world power takes over and that has nothing to do with the present predicament it finds itself in. Canada’s concern should be that it will never be even a medium power if they don’t shake that inherent apathy.

  12. At least you managed not to use the word “ungovernable” this time.

    Looking back on history, the US government has managed to do many things, some of them remarkably great.  One hyper-Peter-Principled president and a political party/ideology steadfastly in denial about the disconnect between historical revenue levels and scheduled entitlement growth is not evidence of “too much democracy”.

    Yet again the messy difficulties of having to deal with different points of view becomes the opening for a renewed discussion of various shades of totalitarianism.  “If only…”, “Sometimes…”, “Wouldn’t it be easier…”, all with an underlying assumption of benevolence and wisdom on the part of the government-to-be – somehow all the usual pork and payoffs and prop-ups are just going to disappear.

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