Chris Dillow – Capitalism versus democracy

People are falling out of love with democracy. In one recent poll, over half of 13-27 year-olds said they would prefer a “strong leader” to our current democracy. A survey last year by Pew Research found only 31% of UK people saying that representative democracy is a very good system of government, a decline since 2017. And only 30% of voters now say it was right to leave the EU, suggesting that they believe our biggest exercise in direct democracy was a failure.

This scepticism about democracy is shared by some thinking people, embodied in Jason Brennan’s Against Democracy and Bryan Caplan’s The Myth of the Rational Voter.

None of this should be surprising in a historical context. Benjamin Franklin didn’t actually say that democracy was “two wolves and a sheep voting on what to have for dinner” but the line was plausibly attributed to him because there was for decades antipathy towards democracy among a ruling class who feared it would lead to the tyranny of an ill-educated mob. That’s why Victorians were so loath to extend the franchise.

Unquestioned enthusiasm for democracy was only a 20th century phenomenon – and one that seems to be on the wane in the 21st.

We should therefore ask: what’s so good about democracy?

One standard answer is that it give power to the “will of the people”. This, however, runs into obvious problems. Why, then, does the government have a massive majority despite winning less than 34% of the votes? Why does public opinion shape policy in some areas (such as migration) more than in others, such as public ownership or wealth taxes? Are people’s preferences a datum or a product of social pressures and of what is on offer from the capitalist media? Are they a good guide to their interests?

This answer, then, has rarely been used as a serious defence of democracy.

Which wouldn’t be a problem, were it not for the fact that other defences don’t seem terribly strong in our actually-existing capitalist democracy.

One is that democracy embeds a form of equality, that of citizenship rights (pdf). As the 1789 French Declaration of the Rights of Man (sic) put it:

Men are born and remain free and equal in rights…
Law is the expression of the general will. Every citizen has a right to participate personally, or through his representative, in its foundation. It must be the same for all, whether it protects or punishes. All citizens, being equal in the eyes of the law, are equally eligible to all dignities and to all public positions and occupations, according to their abilities, and without distinction except that of their virtues and talents.

The problem is, however, that whilst we all have equal rights to vote and to participate in the making of law, we don’t have equal influence, and not merely because the votes of those living in marginal constituencies matter more than those of people living in safe seats. It’s also because the rich have much greater say, and not just because they’ve bought politicians and the media. It’s because they control businesses and so governments (wrongly) believe they must win their favour if they are to achieve economic growth. It’s also because, as Adam Smith said “we frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous” and so we defer to them – a tendency corroborated by research into the just world illusion (pdf) and related cognitive biases.

In these ways the rich have more power than those with more relevant “virtues and talents”. This conflicts with the notion of democracy being valuable because it is a form of equality.

A second argument for democracy is perhaps more plausible. It’s that, as Adam Swift put it in a popular textbook:

People living under laws that they have made for themselves enjoy a kind of freedom (the kind of freedom called autonomy – self-rule) not enjoyed by people whose laws were made by others. (Political Philosophy, 2nd ed, p204).

It’s this that Brexiters celebrated when we left the EU. But the mere fact that many younger people don’t value democracy suggests they don’t feel the benefits of self-rule, perhaps because they don’t feel they have much chance of influencing policy.

Another argument for democracy is more consequentialist. It was put by Tocqueville:

Democracy does not provide people with the most skilful of governments, but it does that which the most skilful government often cannot do; it spreads throughout the body social a restless activity, a superabundant force, and energy never found elsewhere, which, however little favoured by circumstance, can do wonders.

And echoed by Mill:

Wherever the sphere of action of human beings is artificially circumscribed, their sentiments are narrowed and dwarfed in the same proportion.

Whether this is actually true is doubtful; there’s plenty of energy and self-improvement in China or Singapore, for example. Even if it is, though, it’s not clear that recent UK governments welcome it. Harsh penalties against protesting; Labour’s lack of support for counter-protests to the far right last summer; and the indifference (or worse) of both main parties to the shrinking of universities all suggest that the political class doesn’t value the energy or “intellectual exercise” which Mill and Tocqueville thought were the results of democracy.

There’s a further alleged benefit of democracy which is even more absurd, though. It’s that democracy uses the wisdom of crowds.

The problem with this is simply that the conditions required for this wisdom to yield good results simply don’t hold, because voters’s beliefs aren’t merely wrong but correlated and so are systemically wrong – a problem which, as Bobby Duffy has shown, is worldwide. Saying this is not the arrogance of a metropolitan elitist; voters themselves now think the result of the 2016 Brexit referendum was wrong.

This is why we have representative democracy. Voters’ systematic errors about basic social facts needn’t be a problem if their elected representatives can deliberate rationally on the basis of good evidence.

But they don’t. The problem here isn’t merely that the whipping system restricts diversity of opinion, or that some MPs have bought into the idea that they are mere delegates of the people to do their bidding. It’s also that even the best MPs, like all of us, have biases by virtue of their profession. They are likely to be overconfident about what top-down policies can achieve; to be biased towards managerialism and against empowering people; and to underweight of the problems of bounded knowledge and rationality.

Nor are MPs less beholden to the rich than are voters generally. If anything, the opposite. The fact that the government isn’t nationalizing utilities, imposing a wealth tax or rejoining the EU – despite these having popular support – shows they are swayed more by the opinions of a few billionaire crank newspaper owners than by the public.

None of this is an argument against democracy. Churchill was right: it is “the worst form of government, except for all the others.” Instead, it’s an argument for rethinking how democratic ideals should be implemented. Henry Farrell is dead right: “what we need are better collective means of thinking.” We need more institutional brains, as we might acquire – for example – from forms of deliberative democracy.

Almost no mainstream politician or pundit is even asking how to do this. Why not?

Part of the answer lies in the fact that ideas are shaped in our formative years: as Napoleon said, “to understand the man you have to know what was happening in the world when he was twenty.” And in the formation of those of us over 50, western politicians saw democracy as a self-evidently good thing; it was contrasted to the “evil Empire” of the Soviet bloc. And so capitalism and democracy were conflated in the public mind.

But this was an unhappy alliance because, as Jean Batou says, there has always been a tension between the two. Yes, capitalism needs democracy because popular consent, even if partial and ill-informed, helps legitimate inequality. But on the other hand, the power of the rich – even when they are not drug-addled neo-nazis – undermines the virtues of democracy. And this is becoming obvious to voters: a survey by the Fairness Foundation found that 63% of Britons think that the very rich have too much influence.

For now, this opinion is latent and largely unarticulated except on the margins of political discourse. But it poses questions: can we build a better democracy without challenging actually-existing capitalism? And if we cannot, which should give way?