Going to its roots, democracy is kratos, rule, by demos, the people. Pure democracy is the rule by all the people, not just some of the people. The only way to implement absolute democracy is for each participant to voluntarily agree to the governance structure, and be able to exit when one no longer agrees.
Democracy can be divided into mass democracy versus “cellular” or small-group democracy. Mass democracy occurs when the voting group is so large that the people cannot individually know the candidates. In a small-group democracy, the voters are able to join meetings with candidates in groups small enough so that every person is able to fully participate. In a small group, a candidate may distribute literature at a low cost. Although money can play a role in a small group, the influence of moneyed interests is limited by the ability of other candidates and promoters of propositions to counter large spending with personal contacts. A small voting group solves the problem of having both free speech and the will of the people.
The German sociologist Max Weber, writing in the late 1800s and early 1900s, wrote that “Bureaucracy inevitably accompanies modern mass democracy in contrast to the democratic self-government of small homogenous units.” Mass democracy cannot be pure, radical, and absolute. “The demos itself, in the sense of an inarticulate mass, never ‘governs’ larger associations.”
A mass democracy is governed by how the leaders are elected. The politicians must use the mass media to send their messages to the public in order to curry their votes. These messages have to be condensed and simple, as most of the public will not pay attention to detailed issue analysis. The messages are often negative attacks on opponents. And the messages have to be paid for, which generates an inherent demand for large amounts of campaign funds. While individuals do send contributions to parties and candidates, much of the financing comes from special interests such as corporations, labor unions, lawyers, and the financial and real estate industries.
Economists use the odd term “rent seeking” for the seeking of subsidies, privileges, and protection from competition. The classical economists recognized that land rent is a surplus. The generalized the concept to “economic rent,” any payment beyond what is needed for production. Subsidies to special interests are economic rents.
Governments today practice imposed representative mass democracy. The implied ideology is the moral supremacy of the majority in each particular issue. The majority imposes its will by force on the minority.
Governments today practice imposed representative mass democracy. The implied ideology is the moral supremacy of the majority in each particular issue. The majority imposes its will by force on the minority. As Weber stated in his essay “Politics as a Vocation,” “He who lets himself in for politics, that is, for power and force as a means, contracts with diabolical powers.”
Many people think that democracy is based on equality, since each person has an equal vote. But Weber wrote, “The propertyless masses especially are not served by a formal ‘equality before the law.’” The poor believe that justice requires compensation for their economic deprivation. But the political process determines how this is done, and “under the conditions of mass democracy, public opinion is communal and born of irrational ‘sentiments.’” The sentiments of the poor tend to seek a forced redistribution of wealth in their favor, since that is the superficial solution.
The radical alternative to imposed mass democracy is voluntary small-group voting. The political body is divided into tiny neighborhood cells, just as the human body is composed of small cells. The population of a neighborhood cell should be about 1000, small enough to know the candidates and meet personally to discuss issues. Citizens vote only for a neighborhood council.
Then a group of neighborhood councils, say about 20 or 30, elect, from their members, representatives to the next higher or broader council. The second-level council elects the next higher level legislature, and so on, all the way to the highest level parliament or Congress. That legislative body then elects the president.
Such cellular democracy can replace the mass democracies that prevail today, and that would be a major improvement, in extricating money from politics. But radical democracy also requires another change, replacing imposed democracy with voluntary democracy. The neighborhood cells would be voluntary contractual organizations.
In law, the written contract is required for major decisions, such as the purchase of real estate. The American political philosopher Lysander Spooner wrote in The Constitution of no Authority : “It is a general principle of law and reason, that a written instrument binds no one until he has signed it... The laws holds, and reason declares, that if a written instrument is not signed, the presumption must be that the party to be bound by it, did not choose to sign it, or to bind himself by it.... Neither law nor reason requires or expects a man to agree to an instrument, until it is written; for until it is written, he cannot know its precise legal meaning. And when it is written, and he has had the opportunity to satisfy himself of its precise legal meaning, he is then expected to decide, and not before, whether he will agree to it or not.”
If a signed contract is need for real estate transactions, how much more important is the political transaction of governance. If one joins a residential or condominium association, the law requires a display of the laws governing the association, and the new member must sign if he is to join. How much more important is the general governance. Radical democracy requires the signed consent of each member to the written contract.
A free society must have a constitution that protects individual liberty from the tyranny of the majority.
The rule of all the people begins with the recognition of individual sovereignty, a contract among equal sovereigns for governance, and then implements small-group multi-level governance to let the people govern and minimize transfer-seeking by special interests.
Of course, even radical democracy does not guarantee liberty. A free society must have a constitution that protects individual liberty from the tyranny of the majority. But without genuine democracy, a constitution is an unsigned document that becomes manipulated to provide the appearance of equality and freedom, but the reality of imposed “diabolical powers,” the tyranny of both majorities and minorities.
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FRED E. FOLDVARY, Ph.D., (May 11, 1946 — June 5, 2021) was an economist who wrote weekly editorials for Progress.org since 1997. Foldvary’s commentaries are well respected for their currency, sound logic, wit, and consistent devotion to human freedom. He received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He taught economics at Virginia Tech, John F. Kennedy University, Santa Clara University, and San Jose State University.
Foldvary is the author of The Soul of Liberty, Public Goods and Private Communities, and Dictionary of Free Market Economics. He edited and contributed to Beyond Neoclassical Economics and, with Dan Klein, The Half-Life of Policy Rationales. Foldvary’s areas of research included public finance, governance, ethical philosophy, and land economics.
Foldvary is notably known for going on record in the American Journal of Economics and Sociology in 1997 to predict the exact timing of the 2008 economic depression—eleven years before the event occurred. He was able to do so due to his extensive knowledge of the real-estate cycle.