For Love of Democracy

Tunisia…Egypt…Libya…a half dozen others on the brink… While restless masses across the Middle East and North Africa region are struggling to realize democracy in their own lands, many here in the USA are just now waking up to some of the not-so-pleasant effects of it. The expression of discontent is more or less the same in each country. The results? Well, we’ll have to wait and see…

In the beginning, democracy seems a virtuous and decent enough solution to autocratic tyranny. And it is…so long as the process is populated with virtuous and decent people. During the seeds of revolution, dictators are quickly overthrown and the people usually obtain a “voice” through the ballot box.

Everyone feels part of the progress, part of the plan. Love, hope and jasmine. All that good stuff.

But democracy has the regrettable tendency to remain in the hands of the virtuous and the decent for precious little time. As Winston Churchill once suggested, democracy is “the worst form of government…except for all the others that have been tried.” It wins by default, in other words.

Over time, once the fanfare of revolution begins to fatigue, the democratic political system matures toward a kind of tyranny of the majority. By the time people get around to voting other people’s property into their own hands, the game is more or less over. And while oppressive regimes like those of Ben Ali, Hosni Mubarak and now Muammar Gaddafi present easy targets for freedom-seeking individuals, it’s much easier to topple a dictator than to topple “of the people, by the people,” no matter how big a mess the people are making of their own condition.

Opined our Reckoner-in-Chief, Bill Bonner, on the topic last week:

“Is it possible that democracy is just the flavor of the month…an evolutionary development, like all the forms of government that came before it? Is it possible that it succeeded in the 20th century because it was much better adapted to leeching out the wealth and complicity of the average man? It gave him a stake in the system – like getting some prisoners to guard each other, or bribing taxpayers to rat out their neighbors to the IRS? Isn’t it possible that by giving the masses a ‘voice,’ the elites who really control government are better able to take his money…and, if necessary, his life?

“Soldiers will do their duty to a dictator, if the price is right,” continued Bill. “They will do their duty to the government they helped elect for less. And they will more willingly submit to government’s taxes, too, if they feel they are its masters, rather than the slaves. The real difference may only be an illusion, but it is an effective one. In practice, the individual may have less ability to influence the large pool of voting numbskulls than he does to influence a single knuckleheaded autocrat. But heck, we’re all democrats now.”

..for better or worse, we would dare to add.

And this brings us to the current situation here in America today. The individual states, having voted for themselves unsustainable welfare systems and exorbitantly expensive public services, are broke. From Markets and Money Weekend Edition:

“States from coast to coast are facing budget shortfalls of a magnitude heretofore unseen, unfathomable, even. More than 40 states are in the red for a combined budget shortfall of $125 billion for fiscal year 2012. California is the worst, with a $25.4 billion hole to fill, more than seven times Wisconsin’s gap. Illinois comes in next with a $15 billion shortfall, followed by Texas with $13.4 billion, New Jersey at $10.5 billion and New York at $9 billion.”

Voters have only themselves to blame. But here at Markets and Money, we like to look on the bright side of life. We celebrate the collapse of governmental incompetence at any and all levels, whether in this country or abroad. And with each passing day, and with each meddlesome, cumbersome, costly bill that is passed, we draw one step closer to that denouement.


Joel Bowman
for Markets and Money

Joel Bowman
Joel Bowman is managing editor of Markets and Money. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.

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