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Democracy and the Market
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13983 |
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Section : |
MODERN THOUGHT
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| Issue
Date : |
2 / 1988 |
4,005 Words |
| Author
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Thomas Sowell
Thomas Sowell is a Senior Fellow at the Hoover Institute and a
nationally syndicated columnist. |
Democracy is a political process in which ultimate power--sovereignty--resides in a majority of the electorate. There are many kinds of democracy. At one time, direct democracy was possible--a town meeting, for example. The referendum is another form of direct democracy. But mostly what exists today is representative democracy, through elected, accountable surrogates. Unfortunately, we are also and increasingly getting self-anointed guardians of what is called the "public interest." There are "public interest" law firms, consumer advocates, and of course appointed judges. There is even something called participatory democracy, in which people feel that they have the right to obstruct the mandated policies that have been voted in.
Freedom is a result that is hoped for, but not inherent in, democracy. In the South after the Reconstruction era, when the South lacked democracy, certain constitutional rights were extended to blacks. These proceeded to disappear as the Union armies pulled out and democracy too over. Something parallel has happened in a number of colonial countries where, under direct imperial rule, there were rights for the native peoples, which disappeared as settler democracy grew, as in South Africa. Moreover, under democracy, people can actually vote in totalitarianism as they did in Germany in 1933.
The "market" also needs definition. Often people talk about "the market" as if it is a place where something happens, where transactions take place. But a market, in that sense, exists even in communist countries. A genuine free market exists only when people are free to make whatever transactions they can with another, on whatever terms are mutually agreeable. As a framework for this kind of marketplace, there has to be law and order. Government usually provides this law and order, although there are some ingenious libertarians who will give you examples in which free markets arose without government.
The absence of law and order in many parts of the world, such as in medieval Scotland or in parts of Africa in the past century, has had an enormous economic and social impact. For example, vast areas of fertile land were unused because no one dared to go out and farm them. It was unprotected militarily, and whatever you grew might well be lost at harvest time, or you yourself might be lost before harvest time.
Even laissez-faire economics assumes, and requires, law and order. It is ironic to me that when a person mentions laissez-faire economics people say, "That
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