SODOM & GOMORRAH: The Spanish philosopher Donoso Cortes wrote that monarchy was destroyed by freedom of speech just as democracy will be destroyed by bankruptcy. We must remember this as battles over spending reach the capitals of major democratic governments around the world.
In the United States, the governor of the state of Wisconsin has been battling labor unions to save the state budget. Governors of other states have engaged in similar struggles. Labor unions themselves have promised to politically destroy these proclaimed enemies of the working class.
In Great Britain, approximately 500,000 friends of labor smashed windows, vandalized property, and protested spending cuts that would hurt their bottom line.
In right-wing circles, it’s generally acknowledged that entitlement programs will bankrupt the state. As the so-called “baby boomer” generation retires, there will be more people drawing on pension benefits than working to supply them. Medical costs will also increase, as the elderly have more issues to tend to than the young. There are calls for cuts, but there are a few reasons why cuts won’t happen.
1. The short-term nature of democracy. Crowds are fickle. A politician in a democracy has to cater to the crowd or he or she will lose their job. As such, the decision horizon of a politician is limited to the immediate election cycle. Further, as the Kingdon model demonstrates, what issues actually come before elected officials are decided almost arbitrarily based on the news, public opinion, or trends in policy making. Nobody wants to worry about a problem that’s ten years down the road.
2. The funding mechanisms within democracy. Democratic power rests on votes of interested people. The usual myth is that majorities win. This is not true in modern government. Now, majorities don’t care. Vested and vocal minorities make policy decisions. These vocal minorities can control the narrative that shapes public opinion by convincing the broader public to become interested in an issue. But it’s all about the smaller groups. In modern democratic government, there are four ways of funding programs. First, the government taxes everyone to pay for one group’s benefits. Second, the government taxes a small group to pay for another group’s benefits. Third, the government taxes everyone to pay for everyone’s benefits. Fourth, the government taxes a small group to pay for everyone’s benefits. The model depends on a loose definition of “tax”; here it means any money extracted by the government. The easiest programs to pass are ones that tax everyone to benefit a small group; the small group is vocal in their support of the law, and everyone else is either convinced of the merits or somewhat apathetic of the new spending since the costs are distributed over a large number of people. Likewise, these are the hardest to repeal. The small group will always fight to defend their privileged position, whereas the broader public isn’t as impassioned.
3. The decision criteria for democracy. Liberal democracies rest on a utilitarian basis. The ideas of John Stuart Mill, his father, and Jeremy Bentham matter. The numbers game that the utilitarians play to reach some tenuous understanding of justice directly impacts decision making today. In public policy circles, everything centers on costs vs. benefits. In an abstract way, the metaphysical existence of liberal democracy is all about money. This means that what kills it will be money. The metaphysical basis of monarchy was faith and honor. When these two things were corrupted, monarchy failed. Perhaps not now, in this crisis, but definitely at some point in the future, money will fail the liberals.