Democracy and the Market

Today is the first of my seminars on democracy, previously advertised here. The topic is the definition of democracy and, in particular, the relation between the market and democracy. Here's a copy of my handout summarizing the presentation:

Definition and conceptual analysis is a properly philosophical task – although, like the early Socratic dialogues, the following discussion may be ‘aporetic’.

Description vs. Evaluation

‘Democracy’ is used in a variety of ways and contexts. One danger is that it may become a term of commendation, devoid of descriptive content. A purely descriptive definition, however, is uninteresting. I suggest that we think of democracy as a thick evaluative term – recognizing it as one value amongst many but not precluding final evaluative judgements.

Power to the People

Ober: the -arche suffix predominantly focuses on who holds office and thus tends to attach to numerical terms (e.g. anarchy, monarchy, oligarchy), whereas the -kratein suffix referred primarily to who had the capacity to do things and thus was attached to non-numerical terms (e.g. aristocracy, plutocracy, democracy).

Rule of the Many

We need a decision rule. We must separate who the group of decision-makers should be and who, within them, should rule in case of conflict. Majority rule is neither sufficient nor necessary for democracy.

Political Equality

Dahl defines polyarchal democracy in terms of citizen sovereignty and political equality. One argument for political equality might be that certain inequalities that actually disenfranchise some, e.g. in a group of four persons, if three each have three votes and the fourth just one vote, with a majority (six votes) needed for a decision, then any two of the first three are sufficient for a decision and the fourth person’s single vote is never pivotal to a winning coalition, so effectively irrelevant. What is wrong is not necessarily inequality but that some people are effectively excluded altogether. A case in which we had one hundred voters, ninety-nine of whom have one vote and one individual has two votes is not obviously undemocratic. I do not wish to enter substantive debates, but if equality was necessary we would need to pay a lot more attention to potential sources of inequality, including district sizes, unequal turnout rates and persistent minorities.

Democracy and the Market

The market realizes ‘consumer sovereignty’ but is often contrasted to democratic decision-making. Dahl’s characterization would seem satisfied if all had equal resources to bid for what they wanted, as in Dworkin’s clamshell auction. If equality is not necessary then it may be that any market is democratic. How might one resist this claim? One possibility is that the distribution of influence need not be equal but should be just – though this threatens the status of democracy as a distinct value and implies equal votes not always democratic.

The Market and the Forum

Pettit criticizes the market model of democratic control on three grounds: i) in politics, voters can only choose between the packages of policies on offer; ii) voter impact is mediated by electoral rules and not necessarily equal; iii) it is not clear that voters choose rationally between policy outcomes, as opposed to voting on the basis of expressive commitments. The first is not always entirely true, nor so different from the market (Pepsi or Coke?). The second is no challenge to my argument. The third is an empirical claim but we may distinguish why people vote at all from why they vote as they do – the latter may be rational even if the former is not. Moreover, we should not assume market choices are any more rational (advertising, brand loyalty, etc).

Elster suggests different modes of decision-making are appropriate for the economic market and the democratic forum. One possibility is a difference of motivation – selfishness versus public-spiritedness – but this contrast is overdrawn (fair trade goods, permissible self-interested voting). Both are arenas in which people to some extent advance their own interests within the limits imposed by the demands of justice and the needs of others. Another possibility is that market decisions are ‘private’ in the sense of not open to scrutiny or interference by others – but this is not obviously true (harm principle, private ballot). Deliberative democrats argue that democracy should really be about reason-giving than rule by force (even force of numbers), but even if this describes the ideal or best democracy, it does not follow that anything falling short does not deserve the name democracy.

The Autonomy of Politics

Walzer observes that we usually regard political influence as one thing that money cannot buy. One may question his interpretive claims, how far they are descriptive or prescriptive and whether they exhibit a conservative bias. Moreover, it is not entirely clear what he means by ‘blocked exchange’ – it seems more objectionable if economic inequality simply implies political inequality, but less objectionable if money is actually exchanged for political influence (making both parties better off). It is true that many are concerned by the undue influence of money in politics, but I do not need to take a stance on the permissibility of buying and selling votes. We do not ordinarily assume that it is permissible for me to trade my vote on one decision for your vote on another (log-rolling). Thus, that I am not allowed to buy your vote does not show that the market is not democratic, only that it is not permissible for people to trade influence between two distinct democratic decisions.

Conclusion

In the first part of this article, I raised a number of problems involved in defining democracy and argued that – contrary to common assumptions – it does not appear to require majority rule or even political equality. If democracy is simply a matter of popular sovereignty, then this suggests that the market may well be democratic. I am not seeking to homogenize the market and the forum, merely to point out that the market may properly be regarded as one form of democratic institution.