Democracy – Part 3

Namdhari store at the Orion Mall in Bengaluru

In part one of this series, I baldly stated that I think democracy is a bad idea. I do not think it is totally worthless but it does not scale.

Here I explore democracy in terms of scope. I hope to argue that if you wish to have democracy scaled up, then you have to severely limit its scope; thus only to the extent that its scope is limited can it be scaled up.

The TL;DR version: scale up democracy to your heart’s content to the extent that you are willing to limit its scope; and increase democracy’s scope as much as you wish if you limit its scale. Scale and scope are opposed. The more of one you wish to have, the less of the other you may have.

While democracy does work in limited contexts, when it is scaled up, democracy is actually inimical to individual freedom. What’s scaling? What works in the context of, say, a dozen people deciding on a course of action to a million people deciding on an issue, it decidedly fails to deliver a reasonable solution.

Why the scale matters? Because when you go from a dozen to a million, an individual’s preferences count for very little, and therefore an individual’s vote matters close to nothing. Therefore, an individual has no incentive to expend time and effort to become informed about issues, and so is rationally ignorant. An individual is justified in being rationally ignorant, and his individual vote does not materially alter the outcome but on the aggregate, individual rational ignorance leads to socially disastrous outcomes.

I’ll continue with where I left off the last time.

Scale matters in this sense. When you and a few of your friends agree to democratically decide where you’d all go to lunch, it makes perfect sense to decide, first, on the “democratic” rule you’d follow. You all have to agree on the rule. What are some possible choices of “rules of the game”?:

      • A: Majority wins. If and only if 50+% of you vote on a restaurant, then that’s where you all go for lunch
      • B: First-past-the-post wins. Any restaurant that wins more votes than any other restaurant wins
      • C: Super-majority wins. Only if 2/3rd+ vote for a restaurant, then that’s where you all go for lunch
      • D: Unanimity. Only if everyone agrees to it, only then you select the restaurant. Which means everyone has a veto power: if anyone says no, then that restaurant is out
      • E: Dictator decides. Through some rule, you and your friends identify one of you as a “dictator” and whichever restaurant the dictator picks, that’s where you all have to have lunch

I have listed only a few of the possible rules. The core idea here is that, first, you have to pick the rule you would use to decide what you would wish to decide on, and then follow that rule to make decisions. Decisions on how you’d decide is prior to the actual decision.

This exercise of two-part decision making is not a trivial matter of academic nitpicking. We have to understand and appreciate the distinction between choosing between sets of rules and then using using a chosen set of rules to choose rules when the game is played.

James Buchanan distinguished between the constitutional stage in which the choice is between sets of rules (which is what a constitution is), and the in-period rules made by those people chosen by the chosen constitutional rules.

We have to keep that distinction in mind, and understand what it logically implies: that in the stage that we are choosing between rules — A, B, C, D, E in the above example — we have to necessarily have unanimous consent. That is, all of us have to agree to the procedure for arriving at the in-period rules of the game. We can only be morally obliged to follow some rule only if we have all consented freely to be bound by that rule. It is morally impermissible to impose rules on people that they have not freely chosen to abide by.

Once we have freely chosen the rule that would determine which restaurant we’d all go to, only then we are morally obliged to abide by the decision arrived at by that rule. If I never agreed to the rule, for example, that the majority decision is a good rule for us to decide on the restaurant, then I cannot be morally bound to go to the restaurant that the majority voted on. But if I had consented to the rule that “majority decides”, then when the majority decides, I am obligated to obey because I freely consented to obey the majority decision.

If you say that all this is really pointless academic nitpicking that you’d rather not waste time on, you have my sympathy and I wish you a respectful goodbye. For the rest, let’s plod on.

Now I am ready to argue the point that there’s a trade-off between the scope of democratic decision making and the scale of democratic decision making. The larger the one the smaller the other.

Be well, do good work, and keep in touch.

 

 

Author: Atanu Dey

Economist.

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