EKIP– Expert Club for Economics and Politics A Different Opinion
In everyday speech, especially discussing the events around and after 1989, the terms democracy and market economy are used, if not synonymously, then at least inseparably from each other. In this article, I will argue that a pure market economy, built on individual freedom and private property, cannot exist in a democratic system in which a varying percentage of the income of a portion of the citizens is nationalized and spent in a manner specified (at least on paper) by the majority.
In everyday speech, especially discussing the events around and after 1989, the concepts of democracy and market economy are used, if not synonymously, then at least inseparably from each other. In this article, I will defend the thesis that a pure market economy, built on individual freedom and private property, cannot exist in a democratic system in which a different percentage of the income of a part of the citizens is nationalized and spent in a way specified (at least on paper) by the majority. Seen from this side, democracy is nothing more than a softened version of socialism and the differences between a democratic and a totalitarian state are not in their nature, but only in the degree of tyranny.
The nature of the democratic system, in which those elected to govern have a term limit and are rarely re-elected for a second term, necessarily leads to a shortening of the horizon of planning their actions. It is not difficult to predict that, holding in his hands the repressive apparatus of the state, extracting benefits from the productive part of the population for a strictly defined time, the interest of a politician in this activity will be limited to the expected end of his term. He does not own the “capital value” of discounted future taxes, he usually cannot bequeath it to his heir, so he is not interested in the long-term viability of the source of the loot. The politician is simply a temporary manager who seeks to extract maximum benefits for himself and his immediate environment now and in the immediate future, minimizing the risk of unpleasant consequences - violent overthrow of power, imprisonment, etc. Very useful for this purpose are the court intellectuals who cheerfully attack convenient target groups - speculators, greedy corporations, foreigners, minorities and others - for the unpleasant consequences of state interventions. The market, crippled by regulations and state monopolies, is a priori guilty of all sorts of and often contradictory sins. In times of growth, indignation rises about a consumer society that has become divorced from spiritual values. Recessions, on the other hand, bring Marxist cries about the impoverishment of the working class back to the agenda. All this, of course, cries out for wise and decisive state intervention, which always translates into more power over the life of the individual and more money taken away from the productive part of the population. It is enough to look at the state of the "untouchable" sectors of state planning such as security, education, pensions and health care to see where the growth of bureaucracy leads. But since technically anyone in the population, with trivial and easily circumvented restrictions on educational qualifications and a clean criminal record, can be a ruler, the people are dulled in their sensitivity to the growth of organized plunder by the state. While in an absolute monarchy it is perfectly clear who is ruling, who is being ruled, and who will be able to dispose of the resources extracted from the taxpayer, in a democratic government there is always the option of “our people” taking office and spending the plunder in a way that “we” like. In this line of thought, the completely deliberate use of plural personal pronouns in the media manipulates the discussion towards group thinking instead of individualistic. There can be no “our” foreign, domestic, social, or any other policy. “We” do not build highways, sports halls, factories, and we do not give money for security, justice, culture, and the like. All these are events, the result of the activities of a few people, who through demagogy and (promised) bribes of wide circles of voters get to the management posts. The class struggle, a favorite theme of communists and other Marxist sects, is a fact, but the dividing lines are different. The exploited are the productive members of society, and the exploiters are the net consumers of taxes.
The upcoming referendum on the Belene NPP is a blatant example of the failure of democracy as a system for civilized coexistence between people. The fact that the 700,000 people who signed the petition and the other sympathizers of the idea, most of whom are net tax consumers, are of the opinion that a new nuclear power plant would be a meaningful investment in no way gives them rights over the property of the rest of the people living in this territory. The number of voters neither guarantees the infallibility of the choice, nor is it decisive for its morality. The vote of two wolves and one lamb regarding the menu for the upcoming lunch may be democratic, but it violates the natural property rights of the individual over himself and the resulting right of ownership over the products of his labor. Such conflicts do not exist on the free market - supporters can register a joint-stock company if they find enough like-minded people and voluntarily raise capital through shares and bonds, and the power plant will be built. If the investment is successful, investors will get their money back and register profits; if it is a loss, they will also bear the burden of their decision.
Socializing the investment means several things. First: forcibly taking away property from those who disagree with the project through increased taxes and government indebtedness (which means only future taxes). Second: withdrawing existing resources from optimal market uses and redirecting them according to the decision of the bureaucracy and the political machine. And third and most importantly - shocking inefficiency, inherent in the state, which does not operate with its own funds and its representatives do not bear a personal risk of loss. At the moment, no one can even name an estimated cost for the construction, and experience teaches that the multiple transfer of the set costs is more the rule than the exception in state projects. Unclear ownership relations in the public sector (it is not clear who exactly pays for what and who uses it) are a source of opacity, moral hazard, respectively corruption. It is indeed strange that the residents of a country that regularly occupies leading positions in rankings for perceived corruption, want more resources to come under state control.
I have no words. The author is unaware that he is heading in a direction that is completely opposite to the values he declares.
Comrade Mikov,
If you don't like democracy, you can safely settle in China - where the horizon for politicians is 10 years (not the short-term 4 or 5), in Russia - with a horizon of 15-20 years (depending on how long Putin and Medvedev will change) or North Korea - for life.
I am an absolute opponent of the Belene NPP, the 7th unit of Kozloduy, etc., but I am an even greater opponent of pseudo-libertarians who do not know what they are saying and writing and what consequences their ideas may lead to.
Stoyan Panchev
I don't think you quite understand what Kalin is saying. He is certainly not advocating dictatorial regimes. To give you a hint, I will use a paraphrase of a Ron Paul quote:
"America is not a democracy, we are a republic" 🙂
And what exactly does it proclaim and how does it propose to solve the problem? Restricting voting rights, educational/property qualifications, or something else?
Yes, I don't like certain things either, but a crappy democracy is many times better than any alternative. Simply because the alternative is always one - dictatorship.
Brilliant objection, I'm thinking of sprinkling ashes on my head and joining in on Kim Jong Il's birthday celebrations 😀
My pseudo-libertarian ideas are really extreme - I think that other people are not my property. And by the way of logic, I am not the property of others either, no matter how many there are. I don't see why a few or many people should impose their will on others, whether it's nuclear power plants, education, pension insurance and other "services" usurped by powerful groups, sorry, the state. The smug opinion of statist intellectuals that they know what is good for others disgusts me.
Every product or service valued by people will be offered with better quality and at a lower price on the free market, so the "control" every 4 years over the state's violent monopoly is an absolute travesty. The way out is expressed in a single word - freedom. Freedom from violence, slavery, robbery and the will of others. How you understand freedom, Mr. Toto Pet, is another question.
Take a brief look at history. Limiting democracy inevitably brings to power an oligarchy that plays with the plebs, and the middle class blows the soup or disappears. If you have a chance to move to the class of the super rich - OK, you will have absolute freedom. If not - I don't think so. Today the middle class is disappearing and the reasons are not ideological, but purely demographic. Baby boomers are retiring (becoming net users) and youth unemployment is proverbial (again users). That is, even if you limit the rights of these two groups, and introduce some absolute monarchy / power, it will still rely on them (the plebs) and the result will be the same, if not worse. You are offended when I compare you to the Koreans - OK, no problem, Greece is close, you can jump back and ask (regardless of left or right) what kind of "freedom" there was during the time of the colonels.
And one more thing. There is not a single example in history where absolute power has provided any "freedom". There is no absolute market economy (without restrictions), but the closest system to this ideal was realized in the USA, through democracy, and precisely as a reaction to the "freedoms" provided by the British crown. One only has to read Adam Smith's Wealth of Nations to see how "free" the American settlers felt under a power that was not limited by 4-year terms.
I think it is rather the expansion of the state that robs the middle class, regardless of whether the form of government is direct, indirect democracy, monarchy, dictatorship, or whatever. Democracy simply gives a seeming legitimacy to parasitic structures, due to the fact that a part of the population identifies with the rulers. Thinking that "we" implement certain policies leads to absurd conclusions, such as that the German Jews themselves subjected themselves to the Holocaust because Hitler's government took power through the democratic apparatus.
The period of the most rapid growth in the United States coincided with a period of a country of negligible size, a time when most residents did not know the name of the president, because he had little influence on their lives. On the other hand, Franklin Roosevelt was reelected three times during the Great Depression, because the masses dependent on the state perceived him as a messiah.
Stoyan Panchev
I'm not sure what alternative he's proposing, but what comes to mind is a constitutional limited republic.
I do not see how such a thing can be achieved in practice. Any restriction, whether constitutional or not, ultimately degenerates into dictatorship. The limited Roman Republic gave birth to the Roman Empire, the French Republic to Napoleon, and the limited Weimar Republic to Hitler. The other option is to alternate periods of democracy with periods of military dictatorship, following the example of South America or Turkey.
The problem is not democracy, but the shrinking middle class, which is actually the net taxpayer. Its decline is due to both demographic processes (aging population) and globalization.
Today we have a shrinking middle class and two large groups - the very poor (minorities, those who have dropped out of the labor market, unemployed youth, etc.) and the very rich. Both the poor and the very rich are actually net tax users. Some directly consume funds from the budget, while others find thousands of ways to avoid paying taxes, to drain various state "investment" programs, and when they see fit, to receive "aid" many times greater than what they have contributed.
You mentioned Ron Paul - in my opinion, he was the one who represented the interests of the middle class, and what were his chances - zero.
Let's go back to Bulgaria. The Belene NPP and the 7th unit in Kozloduy are the concern of the richest. They are interested in building something (no matter what) so that they can "absorb" funds, collect commissions, etc. The poor support them, not because they will get something, but because they are up against the wall, they will not pay anything for this adventure anyway, and they are also promised that their situation (electricity bills) can improve. The only question is who will pay the bill, as the middle class in Bulgaria (the net taxpayer) is disappearing.