Democracy Is A Referendum On The Economy — This Is A Defense Of Democracy?

While I regularly disagree with Ezra Klein, I believe that honestly one of the main differences between him and many libertarians is that he still has faith in the political system. He’s smart, he understands incentives, he just refuses to take the next step and start understanding public choice theory and the malincentives rampant in the political sphere (or thinks they can be fixed).

Today, though, he went off the rails. Here is his defense of the political system, regarding political science’s understanding of it:

First, campaigns don’t matter as much as we think. I take that as a good thing: Democracy shouldn’t be overly reliant on whose political consultants are better at spinning the truth into advertisements and attack mailers.

Okay, here I partially agree with Ezra. Advertising is a distinct activity independent of the quality of what is being advertised. If Ezra’s argument was that voters are able to see through the spin and BS to understand the actual qualities of the candidate, I would consider that a great thing. Sadly, Ezra’s next three paragraphs explain that the advertising is not insignificant because voters see through it, but rather because they don’t make decisions on candidates or policy anyway.

Second, “elections writ large depend more on performance than on policy — that is, they depend more on how things are going (for which the incumbent party is on the hook) than on specific policies, bills, legislation, etc.” That’s a bit unfair to incumbents, who aren’t totally responsible for conditions, but it’s nevertheless a fairly decent way for voters to make decisions.

So you’re saying that voters don’t make decisions based upon candidates or policy, they make decisions on conditions like the economy and national conditions. When things are good, they keep the incumbent, and when things are bad, they throw the bums out. How can you possibly square this with the belief that any election is a mandate for policy? I.e. if voters threw the Republicans out of office due to the war and the economy in 2008, can you claim that the voters actually wanted the Democrats to enact healthcare reform?

The argument that Ezra is making is that voters are simple and driven by macro events, while Washington is driven by micro activity (bills, policies, etc). And the argument that voters are making decisions based upon overly-simplistic reasons is used as a defense of democracy?

Third is that voters don’t approach elections with strong views on policy issues. Instead, they look to the political leaders they already trust to tell them what their views should be. If President Romney had proposed ObamaCare before a mostly Republican Congress, it would’ve gotten an easy majority of Republicans — both in Congress and in the country — and almost zero Democrats. Party affiliation drives policy opinions, and not the other way around.

Okay, so the argument here is that Americans voters trust “the guy I’d like to have a beer with”, rather than actually knowing or caring about his policies. And that American voters are tribal and protect “their own”, whether it’s R or D. Further, rather than voting for what they believe, they wait for those in power to tell them what to believe, and vote accordingly.

And again, this is a defense of the system? If voters make their decisions based purely on trust and tribe, why in the world should their decision empower our leaders to do anything?

The political science take on elections is sometimes accused of being nihilistic, as if doubting the importance of campaigns is like quoting Nietzsche and dressing in black. In fact, it’s fairly optimistic: Elections are driven by the real state of the country, not the money candidates spend to advertise to voters. You could say that it would be better if people made their judgments based on the policy Congress was passing to change conditions rather than the conditions themselves, but when you really look into how people decide which policies they support, it’s actually not clear that a more policy-centric process would be an improvement. Conditions are what voters know best, and so it’s good that they rely on them.

Ahh, I see. So the argument isn’t that voters should make decisions based upon policy, because the argument is that voters are too stupid and easily-led to have any reasonable understanding of policy. Thus, they vote purely as a referendum on who’s in power, not whether replacing the group in power will result in better or worse policy.

Ezra clearly explains why democracy doesn’t work, while trying to defend democracy. When Ezra finally realizes this, he might just make a political switch.

  • CJS

    It is noteworthy that Klein says that the view of political scientists seems nihilistic. In order for that to be true, our choice has to be between democracy or nothing. And that is the way that most people see it – we either have democracy or one of many other government systems which may be different in nuanced ways but which are all ultimately authoritarian. If that is really the choice that we have, then Klein’s weak attempt to defend Democracy makes perfect sense – much like we all accept situations in our lives that are less than perfect but better than the alternatives.

    So the only way your critique makes any sense is if you have an alternative in mind. I’m assuming that you do, but this is where I start to get fuzzy with your position and libertarianism in general. Beating up on government is easy and fun – it’s like an American pastime. But it is always easy to be opposed to something. It’s quite another thing to support a better alternative.

    I know your answers will revolve around free markets, but I am very skeptical that any market can be free. As I have indicated before, oppression is a natural tendency in humans, and it will occur in the absence of government. I may be able to have my choice of beer, but I will have no control whatsoever over my wages or my work conditions in a free market. These are seen as commodities to be bargained for the lowest prices in capitalist systems, so my wages and work conditions will generally be as poor as possible so long as I’m kept alive long enough to continue working. I’m digressing but my point is that wages and working conditions are one way that free markets can oppress people – and they are one area where government intrusions have seemed to have a positive effect.

    Believe me when I say that I really really don’t want to be in a position of defending our government or any other. But I have to be honest and say that if I look around I do see that there are positive benefits to living in our democratic, progressive tax paying society. Aside from certain basic protections that prevent other rational actors from using their greater monetary power to oppress me, particularly in the workplace, I am given a variety of services that would be much more difficult for a private enterprise to provide. How exactly do we privatize roads without having to create monopolies to rival the state or without having to pay 50 different agencies just to get to work? I’d rather just pay a monthly tax.

    Now if we are just talking about where to draw the line – where the government should and shouldn’t be involved, then I think we have a worthy debate. But at the end of the day who is to be put in charge of drawing that line? It seems to me that the choice is between of some of the people (authoritarianism) and all of the people (democracy).

    When I asked a similar question to you, your answer was along the lines of “in some cases, no one [should make these decisions]”. But that doesn’t really seem like a real answer. Who gets to decide what cases should be decided by someone and what cases should be decided by no one (i.e. left for individuals to decide). We’re back in the same rut.

    So to conclude this, I agree that democracy sucks and Klein gives a weak argument defending it. I agree that the current political system has numerous flaws. But I still do not see where the alternatives are to this. And the only alternative that you have proposed seems to me to have just as many problems as democracy.

  • Brad Warbiany


    It is noteworthy that Klein says that the view of political scientists seems nihilistic. In order for that to be true, our choice has to be between democracy or nothing.

    Excellent point. I hadn’t considered that this was written in the guise of Democracy vs. nothing. As has been said, Democracy is the worst form of government, except for all the others…

    I actually think that Democracy isn’t a bad way to pick our leaders. But I think that Klein points out that the more you expect those leaders to do, the less effective Democracy becomes at selecting them based on rational preference for policy.

    Before addressing your main question (i.e. what is my alternative), let me explain where Klein really went off the rails…

    Democracy is us collectively voting on policy. Representative Democracy is us collectively voting on those most capable of representing our interests in order to enact the policy that is most in our interests.

    Klein laid bare the issue — we’re not voting on who is best able to enact the policy in our interests — voting has become a sport where we rely on general conditions (the state of economy, foreign policy, etc) and tribalism to pick “our guy” vs. “the enemy”.

    After all, we elected Bush twice and had Republican control of Congress for much of his term. You’d think the result would be small government, which is what every Republican campaigns on. But we didn’t get it, we got bloated messes.

    You’d think that given America’s constant criticism of pork & wasteful spending (and politicians claims about how they’ll rid Washington of the filthy swine), that we’d have made progress. But we don’t.

    Further, our Representatives offload as much decision-making as possible to un-elected civil service bureaucrats who spend decades in Washington. They’re not even making the decisions themselves, so how can we hold anyone accountable? You can’t vote out who you didn’t vote it.

    My overarching point is that Democracy has failed because there is no longer any true link between public policy preferences and what the clowns in Washington actually do. They let us continue to vote because, in the long run, we’re no longer a threat to them.

    In a $4T budget, there’s no way to maintain meaningful oversight of government when all you have available is a vote for 1/435th of the house, 2/100ths of the Senate, and a meaningless (in the electoral college system) vote for President. The process is so far removed from oversight that all you can do is cast an affirmation or a protest of the pols in power.

  • Brad Warbiany

    As for my alternatives…

    As you may know, I’m an anarcho-capitalist, so I’d personally take all power away from government. But I’ll argue this as a more mainstream libertarian.

    When minutiae decisions are made in Washington, we have three problems:

    1) There is a “rational ignorance” problem. Given the amount of power I have to change things, it’s a waste of my time to actually pay attention. This is why most of the political pundits sound more like sports partisans than policy experts. It’s entertainment, not activisim.

    2) There is a collective knowledge problem. Deciding these things from Washington DC for a populace of 300M people is simply not possible. Policy must become overly constraining or too complicated to be enforceable.

    3) A system too large to be controlled and understood is rife for special interests and lobbyists. Because lobbyists tend to reap huge benefits from arcane loopholes and (per point #1) voters have minimal incentive to engage in oversight, the system becomes co-opted by those who want to use it for personal gain.

    The alternatives are simple:

    -Devolve AS MUCH POWER AS POSSIBLE from Washington DC. Task the national government with national issues ONLY.
    -Devolve as much State powers to local cities as possible. If it doesn’t affect the State as a whole, why should they decide it?
    -Natural city authority is then subject to competition and more direct oversight at a level where citizens can actually effect change.

    The Swiss Canton system is a good model. It is basically what American Federalism was intended to be. Wide independence for individual territories, subject to some national regulations when necessary.

    It’s consistent to believe that the government has a role in procuring public goods, and at the same time to agree that almost zero of those decisions should be made in Washington DC.

    Governing the day to day decisions of 300M people is simply impossible. It is best to leave big over-arching decisions to the national government, and leave day-to-day governance to much smaller entities.

  • Akston

    I wrote my response before I read Brad’s most recent response. Looks like I’m not going to offer much debate with him here:

    Democracy is an adequate system to decide an issue that requires one answer for everyone in the system. How often is that necessary?

    Markets are voluntary (and therefore more ethical) systems for deciding issues which can have as many answers as participants. How many of these situations do you find in your daily life?

    Tyranny of the majority is less odious than tyranny of the few, or tyranny of an autocrat, but force is force. If I’m going to support that force over a voluntary market – and call it something innocuous like “policy” – I want to have to resort to it as seldom as possible. This gives me an interest in limited government.

    I place the burden of proof that a single answer is required on those who propose it. Democracy is not necessary for a vast majority of the issues we abuse with it.

    Jefferson put it this way in a letter to Joseph C. Cabell in 1816:

    “The way to have good and safe government, is not to trust it all to one, but to divide it among the many, distributing to every one exactly the function he is competent to. Let the National Government be entrusted with the defense of the nation and its foreign and federal relations; the State governments with the civil rights, laws, police, and administration of what concerns the State generally; the counties with the local concerns of the counties, and each ward direct the interests within itself. It is by dividing and subdividing these republics from the great
    national one down through all its subordinations, until it ends in the administration of every man’s farm by himself; by placing under every one what his own eye may superintend, that all will
    be done for the best.”

  • Michael O. Powell

    “I actually think that Democracy isn’t a bad way to pick our leaders. But I think that Klein points out that the more you expect those leaders to do, the less effective Democracy becomes at selecting them based on rational preference for policy.”

    One of the biggest problems the electorate seems to have with its politicians is corruption. I’d like to recommend to any readers the public radio show The Thomas Jefferson Hour, which is broadcast out of North Dakota. Clay Jenkinson plays Thomas Jefferson and answers listener questions as he believes Jefferson would have answered them.

    One of the answers in a recent episode actually talked about single-term limits on presidents so as to avoid the large scale campaigning we see now, which will distract from actual policy and lead to corruption and messed up priorities.

    Chile actually has precisely this system in South America. Chilean presidents can only serve one four year term, no matter how popular they are. Senate seats are also limited to avoid the “senator for life” dilemma that we have here. Transparency International has reported Chile as being on the whole corruption free.

    When you compare that to the obscenely corrupt politicians like Jack Murtha that have had their obesity subsidized by taxpayers, one begins to think reforms would be a good idea. Of course, that may be like advocating rolling a boulder up Mt. Everest.

  • CJS

    I agree with most of these comments. However I have to wonder if the problems in American politics are inherent in the system itself – embedded in the Constitution and the concept of Federalism.

    The Constitution is a legal document, and it is not difficult to interpret Article 1 Section 8 (Taxes for defense and general welfare) and the interstate commerce clause as granting the federal government very broad authority (I can point you to some articles that do just this – and very convincingly). I’m not saying its right – I’m saying its there and the founding fathers either intended it to be this way or they screwed up and weren’t clear enough (they are human lets remember).

    Federalism tries to split powers between various levels of government, but what it actually does is set us on a pathway towards a bigger federal government. The reason for this is simple. Person A wants to get something done. It doesn’t matter what – prohibition, civil rights, war in some country that no one can find on a map, labor laws – good or bad it doesn’t matter. So when you want to get something done, are you going to spend decades convincing each state to adopt your idea, or are you going to go to DC and kill 50 birds with one stone?

    Now this dilemma of what type of government we should adopt is made more complicated when you compare the constitution and federalism to its predecessor – the Articles of Confederation. This document was quickly replaced because the government that it set up was so weak that it could not provide for the defense of the country, pay of our debts from the revolutionary war, and so on. So we have the additional problem – too little power yields incompetent and worthless government, too much yields… well the same.

    Which then tends to lead to discussion of another alternative – anarcho-capitalist – or no government at all. Brad said that the difference between liberals and libertarians are that liberals still have faith in the political system. But there is another difference – that libertarians still have faith in the free market. And that is where I sit – I have faith in neither. I see many of our recent problems as collective failures of both government and the marketplace. And then I see liberals, conservatives and libertarians arguing over which of the two fuck-ups who got us into this mess should be further empowered to get us out of it. And I just shake my head.

    I know that our current market is not free, but no market has ever been free. This alone makes anarcho-capitalism sound somewhat Utopian. I sincerely doubt that your mythical free market can ever come into existences as there will always be forces who will try to manipulate it for their own gain. The unfree market is also hardly voluntary, nor does it allow us to make individual choices unaffected by others. I am forced to work to make a living, so I am therefore forced to accept wages set by the market. If those wages do not provide for basic means, then I’m screwed and have no recourse, short of violent insurrection (strikes don’t work when the boss can just hire some Pinkertons). Working conditions were not pretty before government intervention, and although I don’t like the fact that we gave the government an inch and they took a light year, I’m not ready to return to the chaotic absence of government either.

    I’m also reminded of a comment that was meant to make fun of libertarianism: “Central planning doesn’t work – that’s why all large companies are organized as little markets with no central leadership.” I don’t think this was the point of the comment, but perhaps our corporate non-free market has some of the same problems that government has – obesity, excessive power and centralization – and they too are becoming too authoritarian (with CEO wages 500 times that of their employees, they do seem like little dictators don’t they).

    So I’m asking – what exactly does a truly free market looks like, and what can make me believe that its not just a fairy tale?

  • Brad Warbiany


    Two things:

    1) Yes, the problem is inherent in the structure of the Constitution. Few founders outside Alexander Hamilton (who attempted — and failed — to get “big government” written into the Constitution) would ever have wanted a central government like the one we have today.

    2) Yes, the problem is inherent in any federalist system. Organizations try to aggregate power, which the Founders knew. They attempted to write restrictions on central gov’t power into the Constitution, but these apparently were not strong enough to withstand two centuries of barrage thrown on them by the very forces you mention (the people who want something done and go fight the battle in Washington rather than in individual states).

    I suggested the Swiss canton model as a good example of federalism, which I also suggested is what our Founders intended our federalism to be. That said, the Swiss system isn’t immune from the very pressures found here to centralize power. Frankly, I’m not sure of any credible Constitutional controls that will stand up to such continued barrage.

    However, I would recommend that you heed Akston’s point about the difference between democracy and the market. In a democracy, we all get together and make a single binding decision for everyone. In a market, there is freedom of decision. Sometimes that freedom is not absolute (i.e. in my industry there are basically only 5 vendors worldwide, and the barriers to entry are so high that new vendors are unlikely to arrive), and sometimes it’s not clean (i.e. if you want Bud or Miller, it’s easy to get, but if you want Odell’s IPA, it’s a lot harder to find). But there is no single decision made for everyone. Even more than the choice of decision, the key is the competition between choices forces them to actually meet needs, whereas government has reached a level of inaccountability that they can waste all sorts of resources with impunity because there is no competition.

    There are some decisions that might be better made democratically (i.e. should we put a highway in location A or location B, or how many F-22’s and how many F-35’s should the Air Force buy). These are decisions for which a single, collective decision is necessary, and for those decisions it’s often better to use democracy than to use dictatorship.

    But as Akston points out, many decisions that we *attempt* to define democratically do not need to be a single one-size-fits-all decision. The middle ground between what we have now and anarcho-capitalism is to at least try to limit government ONLY to decisions for which one collective decision actually makes sense. Public goods are an example where this might be the case (note that education & healthcare probably are not examples of public goods). Civil rights are an example where this might be the case (i.e. it’s better for ALL of us if gov’t protects religious liberty rather than letting individual states infringe upon it). But our current government is involved in a lot of things for which this is NOT the case.

  • Akston

    In reference to:

    I’m also reminded of a comment that was meant to make fun of libertarianism: “Central planning doesn’t work – that’s why all large companies are organized as little markets with no central leadership.” I don’t think this was the point of the comment, but perhaps our corporate non-free market has some of the same problems that government has – obesity, excessive power and centralization – and they too are becoming too authoritarian (with CEO wages 500 times that of their employees, they do seem like little dictators don’t they).

    A while ago, I was listening to a podcast called EconTalk put out by economist Russ Roberts of George Mason University that had some interesting takes on the economics of business firms. The summary:

    “Mike Munger, of Duke University, talks about why firms exist. If prices and markets work so well (and they do) in steering economic resources, then why does so much economic activity take place within organizations that use command-and-control, top-down, centralized structures called firms? Within a firm, most of the goods and services that the workers use are given away rather than allocated by prices–computer services, legal services and almost everything else is not handed out by competition but by fiat, decided by a boss. A firm, the lynchpin of capitalism, is run like something akin to a centrally planned economy. Munger’s answer, drawing on work of Ronald Coase, is a fascinating look at the often unseen costs of making various types of economic decisions. The result is a set of fascinating insights into why firms exist and why they do what they do.”

  • Akston

    Sorry. Fat-fingered the link above. Try here for that podcast.

  • CJS

    Brad and Akston – thanks for the comments. I will listen to the podcast. But I think you’ve both helped to make my point. Markets don’t solve everything. There are still cases where central planning is necessary – whether it is the planning of highways or the planning of a firm or business. And when possible, such planning should be done democratically (having been in the military I understand that there are situations in which that is most definitely not possible – “Are we going to take out that building? Everyone in favor raise your hand.”)

    Markets are a good tool and they can solve many problems. But they are a hammer and all the world is not a nail.

    Liberals do have too much faith in the political process, and I think that libertarians have too much faith in markets. Perhaps we can meet somewhere in the middle.

    (And as for conservatives – I just don’t know what they believe. They talk like libertarians and act like the Taliban.)