greek philosophy justice governance universal ethics

egalitarian voting doctrine

Three Thousand Years of Philosophy Down the Drain

by Fred E. Foldvary, Senior Editor, 27 August 2012

Philosophy flourished in ancient Greece, where Socrates sought answers to “What is Justice,” Plato wrote on ideal governance, and Aristotle prescribed the ethical mean between extremes. Ancient Greece brought democracy to the world, and its ancient works, physical and literary, still bring awe, but what has been the practical effect on governance? Nothing! All down the drain.

The Roman Empire, which conquered Greece, had a Senate, but democracy did not penetrate into the popular psyche. Bad emperors came and went until the empire crashed. Then during the Middle Ages, despite the philosophizing on natural law by St. Thomas Aquinas, the religious hierarchy ruled and overruled.

With the Renaissance, Europeans developed the ethical ideals of moral equality, and its implications, liberty and democracy. But ethical philosophy remained somewhat shallow, not delving deeply into the fundamentals of ethics, and democracy became misdirected into the direct election of national parliaments. Without a deep understanding of ethics and governance, a directly elected parliament or congress become lethal to liberty and the economy.

It is taking centuries for egalitarian ethics to sink into popular cultures and become enacted into law. Chattel slavery was only legally abolished during the 1800s, and female legal equality not until later. Only during the 1960s was forced racial segregation abolished in the U.S.A. The frontier of civil liberties is now equal rights for same-sex couples, but there are other frontiers yet to become widely popular.

While legal equality advances, liberty is receding, as each year there are numerous more restrictive rules and mandates. Taxation remains lethal, and both fiscal and monetary policy have become erratic. Instead of providing a stable set of rules, governments have greatly increased regime uncertainty, making it difficult for everyone to make financial plans.

Also receding is democracy. The core problem is in the structure of voting and governance. While direct representative democracy may have made sense in 1789, the direct election of Congress and state legislatures is now inherently dysfunctional. As the population grows, each vote has less impact, and the demand for campaign funds grows. Restrictions on campaign funding clash with free speech. There is no remedy other than to restructure democracy.

The prevailing economic doctrines have also failed. The land-tapping wisdom of the French Physiocrat economists of the 1700s, along with the classical theories of Adam Smith, Henry George, and current research and theories of economists such as Tideman and Gaffney, are ignored. The free-market-banking theory of current economists such as Selgin and White are ignored both by policy makers and in the classroom.

The prevailing fiscal doctrine is welfare-statist redistribution with taxation and subsidization. The welfare state is inherently an admission of economic failure, because it assumes that the typical worker cannot from his wage afford medical care and retirement. Mainstream economists do not seem to have grasped the obvious fact that if government takes away a third of the worker’s income, he will be much less able to provide for his basic life-time consumption.

Three thousand years of social philosophy and social science have failed to put into the popular culture three basic ideas. First, that there is a universal ethic by which only acts that coercively and invasively harm others are evil and should be prohibited or penalized. Second, that all voting should be in small groups in which the candidates can be personally known. Third, that public revenue be derived only from non-invasive sources, namely user fees, profits from competitive governmental enterprises, compensation for negative external effects, and land rent.

Greece, the home of the ancient philosophy that inspired the world, is now the world’s most pessimistic nation. As the Greek economy plunges, worried Greeks withdraw funds from the country’s banks, and young and skilled people emigrate. Three thousand years of philosophy have not taught the Greeks how to properly govern themselves. What is worse is that the people, the media, and even the professors, are not digging into or discussing the foundational issues.

Therefore power and economic dynamics are shifting from the developed world of Europe, the USA, and Japan, to the rising economies of India, China, and Southeast Asia. These countries have been moving towards more economic freedom, but in governance, they are still blindly copying the failed European models of mass democracy and oligarchy.

The old saying in English, “it’s Greek to me,” could now acquire a new and sinister meaning. But as Hegel stated in Philosophy of History, “Nations and governments have never learned anything from history.” As prior to the Crash of 2008, the economies of several European countries are letting the financial currents drive them down a river towards an economic waterfall. Two policies could let Europe escape the crash: either a shift to land-value taxation, or a hyper-euro-inflation that would bail out the debtors but wipe out the creditors, including all those who hold euros.

More important than euros down the drain is the waste of so much philosophizing and theorizing that has failed to provide good governance for Greece or anywhere else.

-- Fred Foldvary


Copyright 2010 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.

Also see:

Should Goldman Give Back $2.9 Billion to Taxpayers?

Economism and the Night Sky

A New Heresy -- Abolish Corporate Income Taxes

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