Broback's Blog

Initially, the work of economists in this area raised serious doubts about the political process. Working simultaneously, but independently, Kenneth Arrow and Duncan Black proved that democracy, interpreted as majority rule, could not work to promote any general or public interest. The now-famous ‘impossibility theorem’, as published in Arrow’s book Social Choice and Individual Values (1951), stimulated an extended discussion. What Arrow and Black had in fact done was to discover or rediscover the phenomenon of ‘majority cycles’, whereby election results rotate in continuous cycles with no equilibrium or stopping point. The suggestion of this analysis was that majoritarian democracy is inherently unstable.

Gordon Tullock, who wrote a seminal paper in 1959 using the example of farmer voters, each of whom wants to have his local road repaired with costs borne by the whole community. Tullock showed that majority rule allows for coalitions of such farmers to generate election results that impose unjust costs on the whole community while producing inefficiently large outlays on local roads.

An illustrative example is provided in inheritance and estate taxation. In the standard discussion of fiscal reforms, merely to raise issues concerning this tax is to choose sides. And the choosing is not difficult. Those persons who identify themselves with favorable asset positions tend to argue persuasively against increases in and for reductions in such taxes. Those other persons who cannot or do not make this identification argue, with equal persuasiveness, that these taxes should be made confiscatory. The collective decision process becomes strictly analogous to a zero-sum game, and no reasoned discussion of an efficient or optimal scheme or asset-transfer taxation can possibly take place.

The point here is that nested within the conventional view that government is not a mammoth apparatus of coercion is the tenet that society is an organization to which we belong. Either on the view that we constitute and control the government (“we are the government”) or on the view that by deciding to live in the polity we choose voluntarily to abide by the government’s rules (“no one is forcing you to stay here”), the social democrat holds that taxation and interventions such as a minimum- wage law are not coercive. The government-rule structure, as they see it, is a matter of “social contract” persisting through time and binding on the complete collection of citizens. The implication is that the whole of society is a club, a collectively owned property, administered by the government.

…it is common to hear sentiments expressed which violate virtually every tenet of reason and common sense such as, “we are the government.” The useful collective term “we” has enabled an ideological camouflage to be thrown over the reality of political life. If “we are the government,” then anything a government does to an individual is not only just and untyrannical but also “voluntary” on the part of the individual concerned. If the government has incurred a huge public debt which must be paid by taxing one group for the benefit of another, this reality of burden is obscured by saying that “we owe it to ourselves”