Market Interpretations of Democracy

Concept 1 - Market Averse
1. Rousseau: The social contract
  1. in the state of nature we need to overcome inconveniences and therefore form a social contract to set up government
2. This conception is a positive conception of freedom: cannot be free if someone else has the power to tell you what to do.
  1. Friedman thinks this is sinister and moves towards a negative concept of freedom
3. participation in politics as morally virtuous
4. democracy must involve deliberation
5. Modern conceptions have similar aspects
  1. there is a school of people who have revived the republican conception of liberty = freedom consists in the ability to take part in decisions that affect you but not from government interference in general. so more things dissolved and left to local government
  2. participation in politics is morally virtuous. democracy produces more active, thoughtful citizens
  3. citizenship is a duty which attempts to make sure decision does not fall into the hands of small minority - an oligarchy
  4. democracy requires deliberation. it needs social debates on the issues at hand.
Concept 2: Market Friendly
1. Utilitarian argument for democracy: Bentham and Mill
  1. the assumption that humans are maximisers of utility
  2. the preference for the commercial, class society
  3. the argument for democracy
    1. an argument to do with welfare not liberty
    2. does not necessarily entail an equal right to every adult to participate in the political process
Joseph Schumpeter
1. a rejection of the general will
2. low view of citizens capabilites
  1. citizens only understand things that concern themselves, not high politics
  2. ironic statement since he wrongly attributed the general will to the utilitarians not Rousseau.
3. "the role of the people is to produce the government... the democratic method is that institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitve struggle for the people's vote."
4. all votes concern the competence of the leadership.
5. politics as a market
6. attacks the idea of a general will because we all disagree
7. highly inconvenient for every person to vote on every issue.
  1. it is more convenient for a committee appointed by the people to make these decisions
8. voters themselves prove themselves bad and indeed corrupt judges of such issues and often they even prove themselves bad judges of their own long-run interests, for it is only the short-run promise that tells politically and only short run rationality that asserts itself affectively
Down's Economic Analysis of democracy
1. makes the assumption that members of government are rational seekers of wealth, power and prestige
  1. they sell votes in order to achieve this
    1. significance?
      1. on the assumption that there is perfect information and that the government action will be a perfect reflection of the preferences of voters.
      2. on the realistic assumption that there is limited information.
        implications of this assumption
        some people are more important politically because they can influence more votes than they cast.
        the government had to give up power to people who can tell it what the electorate wants and who can persuade the electorate.
        the government has to pay attention to those who make extra efforts to influence it
        the government is susceptible to bribery by special interests
        "imperfect knowledge leads to the unequal distributions of income, position and influence - which are all inevitable i any economy marked by an extensive division of labour - to share soverignty in a relam where only the equal distribution of votes is supposed to reign."
        Lack of information creates the need for ideologies
        where information is costly to acquire - and it always is in terms of time if nothing else - it is rational to remain ignorant
        the degree of influence the average individual can have on the political process is negligible. So, the likely gain from voting in a well informed fashion is exceeded by the cost of gaining information.
        the government is influenced by lobbyists on behalf of particular interest in a way the is it no supposed to be
        it is rational for people with a strong interest to devote time to influence government in policy making
        hence the government tends to be biased in favor of producers rather than consumers.
Overview
1. many reasons for limiting the market are due to a wish for democracy
  1. most people want the benefits of democracy as well as what the market brings us
2. Friedman uses the term democracy that is commonly used in modern discourse because we have the sorts of freedoms he talks about (economic freedoms) that make our society democratic.
  1. but, he wants to limit the application of government as much as possible, so that most things are to be decided by the market
  2. democratic process is a bad way of deciding things. Friedman wants to limit the sphere of democracy
  3. Democracy is an essentially disputed concept
Tomkins
1. guidance will have to come from elsewhere - not from within the law but from philosophy and history
2. the point of our freedom is not that it should never be interfered with but that, when it is necessarily interfered with, the interference comes from a course whose authority over us is legitimate rather than illigitamate.
  1. legitimate authority is authority without domination. this means that authority is neither arbitrary no capricious, but that which is reasoned and contestable by those who are subject to it
3. republican freedom is a positive kind of freedom: it is the right of citizens actively to share in the experience of self-government
  1. republicanism has 3 themes
    1. anti monarchism and popular soverignty
    2. freedom as a non-domination and its consequences 1: government in the public interest: open government. 2. citizenship in the public interest: civic virtue. 3. equality.
    3. the institutional design of accountability

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Market Interpretations of Democracy

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