Thursday, October 25, 2012

Why Democracy is Irresponsible

Guest post by Strangering. Originally posted at /r/anarcho_capitalism.

Let's define what it means to be responsible. One is considered responsible for his actions if the consequences of the actions are owned by him. For example, if one drives drunk and crashes into a tree, the damage to the car and his body is his to bear. If he was driving someone else's car, then responsibility will be transferred to the drunk driver, by making him pay to repair the damages to the car (and possibly for the tree as well). If the drunk driver crashes into someone else, then he will be responsible for the crime - he will have to make amends to the victim and prove that he is no danger to society or go to prison.

Responsibility has two axis - the negative and positive. When one commits bads, one is held to be negatively responsible by applying punishment. If someone fails in a work assignment, or violates company policy, he is fired. His coworkers are not fired in his place, unless they were themselves responsible for his performance (they were required to train him for instance), in which case they have failed their assignment and are held responsible.

Note that responsibility is not automatic. People must act to hold someone responsible. If committing bads results in no consequences, then the incentive to do bad will increase and more and more bad will take place.

When one commits good, one can also be held responsible for the good done by assigning rewards. For example, a businessman who correctly identifies a gap in the market and supplies it will earn large profits, creating the incentive for all businessmen to fill all the available gaps in the market. If these profits are taxed away, there will be no reason to fill the gaps and economic calculation will break down completely (socialism). Within a single firm, an employee who succeeds in his assignments will be promoted to levels of higher responsibility (more difficult assignments with higher stakes, thus higher rewards and worse punishments), the ultimate good being increasing the capital value of the firm.

And now we arrive at the structure of democratic government. In a democratic government, the elected rulers are considered caretakers, not owners, of the government. This means the only incentive they have is to be elected and re-elected, which they can do by simply denouncing their opponents and nothing more. Once elected, there is nothing they can gain any further - there is no reward to democratic rule at all! Increasing the capital of the state has no consequences on them, since they have no right to reward themselves from success. In fact, the voters are likely to punish them for rewarding themselves. This makes democratic rulers positively irresponsible - they cannot earn rewards and can only be punished.

What kind of behavior is rational for someone who can only be punished and never be rewarded? The behavior is to do nothing, and plant the blame for all failures of the system on everyone but themselves.

Ownership, being held responsible for both one's successes and one's failures, is the foundation of civilization's progress. Any institution not built on ownership can only become increasingly corrupt and sclerotic. Successful companies are those that practice ownership within their organization, and successful societies are those that protect ownership with property rights.