If we can’t trust one politician, is a whole nation of them any better?Max Weber / December 7, 2021 (11 min. read)“If you want to see the fate of democracies, look out the windows”. This line, of Fallout New Vegas’ Mr House, is quite the rhetorical statement. After all, the player can only ponder in shock, whether the destitution of the radioactive wasteland that Fallout New Vegas takes place in is the result of representative government. Is it? What are the shortcomings of democracy, and why does it seem that democracies, despite being, as Churchill put it, “the worst form of government except all those that have been tried”, seem to sometimes yield such unsatisfactory results? Perhaps it has nothing to do with the form of government itself, but like in many such cases, the corruptibility, irrationality, and blindness of human tendencies Fallout New Vegas Concept Art, or, The Fate of Democracies Criticism of democracy is nothing new under the sun. In terms of political literature, one could say it is the status quo that dates to Plato’s Republic. And yet, we live in a world where the majority of the globe’s nations at least purport to be governments of a representative nature. Even communist autocrats, such as those of North Korea, derive their legitimacy from the supposed popular mandate. Truthfully, we often point to the economic failure of dictatorial regimes, such as those of the USSR or North Korea, blaming the economic failure of those regimes on the inherent clash between the economic interests of the ruling class of bureaucrats and the average man. Even democratic bodies, such as the European Union, have been targets of this (though for the EU, wrongful!) assessment. Ergo, we live in a world where popular representation is seen as something that is, if not something just, then at least economically correct thing for a regime to have. And herein lies one of the largest contradictions of democracy; good economic policy is scarcely popular. Subjecting Technocrats to Popularity Tests “The average voter is unable to attain a passing grade in economics. No wonder then, that foolish policies such as protectionism, price control and like so often prevail” - Brian Caplan The word technocrat has, among populists at least, become somewhat of a dirty word. For this group of people, the word technocrat has come to be the very manifestation of an idea that screams boldly: “you can’t trust the people to govern themselves!”, an idea repulsive enough to most populists that it just might make them puke. But what happens when you do the opposite? Can experts be elected through a popularity contest, where the best candidate, be he a PhD or a high school dropout, wins if he can win in the heart of hearts for the majority of the electorate? And what should we expect from such experts? When my grandfather moved from the CCCP (Soviet Union) to the marginally less repressive ČSSR (Communist Czechoslovakia), he found work as an agricultural expert on a worker’s cooperative situated in the Czech-Slovak borderlands. He had been stationed there at the behest of the communist central planners, for at the time when being an illiterate prole was exalted as a state virtue, he had been one of the few people who decided to make something of himself and pursued university education. His Master’s degree got him his position as an agronomist, something of a management position on an agricultural commune, but besides this initial push in his career that central planning (ironically) had afforded him, the rest of his career growth would depend on his popularity. Needless to say, his education and expertise didn’t help him. The fact that he was a former citizen of the USSR marked him as an outsider, unfit to rule the Czechoslovak team (or so the locals would say). The fact that the Russian imperialism of the USSR was also targeted at Czechoslovakia did not help my grandfather either (though he is Ukrainian, not Russian, the difference is too subtle for a vocationally educated riff-raff). I say this anecdote to put a human face on a problem that democracy faces - it very often results in majoritarianism. The bad news is that the majority doesn’t tend to brandish PhD degrees, or in some cases, even Bachelor degrees. The majority, out of their lack of knowledge and primitive tendencies, makes bad decisions. And so that my detractors don’t accuse of me picking on the indisputable worker’s paradise on earth, a similar if not a worse trend could be seen, across the pond, in United States workers’ unions. A 1913 article from The Atlantic describes how Afro-Americans coming from the hinterlands of the Deep South have been systematically (and democratically!) excluded from majority-white labour unions in the cities. What’s more, the same article reports that labour unions have made several “democratic” attempts to exclude blacks from working in the same factories as whites altogether. These racist labour unions are a microcosm of the same democracy that made life hell for many minorities for decades. It is important to note, lest we lose perspective, that these events, as abhorrent as they are to the sensitivities of us educated folk, are no Holodomor or Holocaust. However! They are a clear demonstration of how democracies are conducive to the same emotional malaises that prop up regimes engaged in ethnic cleansing. Even today, we can hear clever rhetoric targeted at the so-called common man, warning him of the dangers of immigration, advising him to close borders lest his wages be taken by a foreigner. Although this is economic sophistry at its best (as Card demonstrated in his study observing Cuban migrants that came to Miami, immigration doesn’t decrease wages) it resonates with the masses. So what is the result of subjecting experts to popularity tests? The majority votes for ‘experts’ and policies that soothe their emotions over those that would bring results. A Venue for Perverse Incentives “When a consumer has a wrong opinion about a product, he foots the bill. When he votes for the wrong policy, the whole population picks up the tab.” - Brian Caplan The problem with technocracy is that there is no way to tell if the experts are beholden to the masses they claim to have taken the responsibility away from. But are the masses ever beholden to themselves in a democracy? Given that these masses are often (economically) illiterate to most matters they vote on, I would argue that they aren’t. Let us look at housing, for example. When a young individual or couple acquire property, it becomes in their best interest to push for NIMBY policy. What does NIMBY mean? NIMBYs (short for Not In My Back Yard) is a general set of attitudes that advocates against the building of new (usually, though not necessarily, accessible) housing. The usual argument is that the building of new housing would destroy the character of a neighbourhood, city, county etc. The underlying principle that pits NIMBYs against new housing, however, can be found in basic economics. Lower supply under constant demand means higher prices, whereas higher supply under the same conditions will naturally yield lower prices, making the “investment” of buying an abode seemingly less worthwhile for property owners. These policies are usually pushed through by NIMBYs on a local council level, though sometimes these policies rear their ugly head on the state or even national level. It is shortsightedly rational for NIMBYs to advocate against the building of new housing. I say shortsightedly because, in the long run, the policy is damaging to them as well. Higher housing prices may price them out of up-sizing their home should they ever have children, and it may prevent children from entering the same housing market as their parents altogether. These tight policies don’t only make buying housing more difficult, but they also increase rent. But, there is no need to worry! Populists have another fruitless solution for this problem as well, in the form of rent control! Rent control is one of those beautiful populist policies that sound great but are, in fact, disastrous to almost all parties concerned. High rent is usually a symptom of, like most high prices, a product of scarcity. And given that rent control only addresses prices of products, rather than the underlying reason for those prices, it stands to conventional logic that if scarcity won’t manifest in prices, it will manifest in some other form. And if we look at the latest source of populist economic embarrassment, Berlin, we can see just that. The rent controls implemented in Berlin by the city’s government have helped no one that they claimed to help. The rent control policy, which forcibly reduced rent in the city by over 50 per cent, also resulted in mass shortages of regulated housing. Those privileged enough to have been renting apartments when the policy was implemented were reluctant to leave their apartments that they were now renting for figures you wouldn’t even get from a relative. Those who owned property regulated by the rent control were in no rush to put their apartments up for rent, so they resorted to converting their properties into luxury housing for sale. Needless to say, those “in need” of the rent-control policy weren’t the ones buying these refurbished luxury apartments. What’s more, those arriving on the housing market after the policy was implemented must have been delighted to find that if they chose unregulated housing, they were likely to be priced out. Why? Due to the artificially low rent of regulated properties, unregulated properties grew in cost so much that they surpassed pre-rent-control price projections for Berlin and the price growth rate of Germany’s next 13 largest cities. If unregulated housing wasn’t to their liking, they could satisfy themselves with regulated housing (that is, if they could find it) that came with mandatory complimentary, chairs, forks, cups or carpets valued in thousands of euros, a technique brave landlords used to bypass the rent control completely. The rent control policy was one large trainwreck. But at least we stuck it to those capitalists! We can see a similar perversion of incentives in green policy as well. It is most often the working class, those who stand to lose the most from climate change in the long run, who oppose green policies because of what it costs them in the short run. For example, as the Economist writes, the Yellow Jackets movement in France was inspired by rising gas prices caused by environmental taxes, and right-wing populists such as the Alternative for Germany build their campaigns in opposition to what they call “green hysteria”. Because they do not see the threats coming from a change in the weather, the working class often opposes green change on the grounds of job loss and increased living costs. Closing thoughts As we can see, there is no shortage of examples that demonstrate just how poorly populism and policy-making mix in democracy. Indeed, it is as though no one was listening when Plato warned us not to pick captains of ships based on popularity, but on their skill. But what is the solution? I want to say more technocracy, but I am afraid that may not be the correct answer. Because, though the rabid crowds at the ballot box, seething for more rent control or less immigration, may not be accountable to anyone, who says that technocrats are any more accountable? What’s more, the presence of technocracy, which may, in the long run, be incentivised to make good decisions to prevent outright revolt, seems to breed hatred from the masses that have been taught their opinion is valid, irregardless of its vapidity. So, there is no way “back”, away from democracy and towards an “enlightened bureaucracy”. Is there a way forward? Perhaps. If we can reconcile democracy with responsibility, that is, if we can find some way for people to be meaningfully affected by the policy they want to push through, in such a way that they learn from mistakes, perhaps the fate of democracy can be a brighter tomorrow, and not in the radioactive sense of the word. Sources: An anti-green backlash could reshape British politics, The Economist Berlin’s Rent Controls are Proving to be the Disaster We Feared, Bloomberg The Myth of The Rational Voter, Brian Caplan The Negro and the Labor Unions, Booker T., The Atlantic
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