Thoughts on economics and liberty

Government is our servant, and democracy the way to elect the servant: nothing more!

Statists and collectivists have a common characteristic. To them government and democracy are goals in themselves, things society must have for the sake of government and democracy.

The classical liberal believes that BOTH government and democracy are TOOLS, instruments to just one goal: our life and liberty.

If one could assure life and liberty by hiring Martians, so be it. We should do so. The goal of liberty is paramount. Nothing can come between that goal and us. Our instruments are not objects of worship. They don't count. Only the outcome: liberty, matters.

Statists, on the other hand, believe that we exist for the sake of the state, hence the nation/ government is the raison d'être of our existence. Such sentiment underpins statements like: "Ask not what your country can do for you – ask what you can do for your country".

This kind of sentiment is a dead give away of the person's statist theory of state. In such a theory we are merely cogs of the state. The king is our "god". The extreme form of statism is displayed by communists/socialists like the Nazis. Hindutva theoreticians also fall in this group. According to them the Muslims must accept a second class status, for this land (I'm referring to India) "belongs" to the Hindus. The statist glorifies the state. A government is a big deal – to such thinkers.

"Soft" collectivists (unlike hard statists such as Nazis) can have a strange fascination with democracy for the sake of democracy. To them the society is supreme. Everyone must have a say in what happens (they are blissfully aware of the baleful implications of Arrow's impossibility theorem, that even three people can't EVER agree to any consistent ordering, leave along a billion). Direct democracy is their preferred mode of "public" decision making. We need democracy that is "representative". The environmental fanatics, right wing crazies, leftists, classical liberals, and libertarians must ALL get a voice at the "decision making" table of this great "society". Irreconcilable views MUST be "honored" and "reconciliation" attempted. Proportional representation is the next best to direct democracy, for such thinkers.

But what exactly is government, and why do we need democracy?

The ONLY reason we need government is to defend us from invasion/ internal crime, to ensure justice, and to provide things like roads which are hard for us (in our private capacities) to organise. PERIOD.

A government is a Big Servant. Its ambit is limited through the Constitution, and its discretion limited to dealing with matters of urgency (such as war). All else is constrained by due process, e.g. the judicial system. Our Big Servant is like the Jinn in Aladdin's stories. Its job is to OBEY US, not to tell us what to do.

If we could find a Jinn that PERFECTLY protects us and ensures our liberty, and provides public goods at a cheap cost, we would NEVER need democracy. We would simply let the Jinn do its job.

When we consider this obvious (!) approach – that the role of a government is PURELY to defend our life and liberty – then everything falls into place.

For instance, what should this Jinn charge for its services? Well, it is a monopoly provider of these services, so it must charge as a monopolist should.

And what is the ONLY method by which a monopolist will charge a price that the perfectly competitive market would supply? First degree price discrimination (ie. everyone charged separately, based on ability to pay). So that's what should form the underlying principle of the taxation system. That principle is hard to implement, but it should remain at the back of our mind.

What about democracy? Given that the Jinn is NOT a decision making body (nor should it be!); merely an implementing body, what is the importance of democracy to us? Why do we care about democracy at all?

In fact, that's a very good question. Democracy got a very bad rap for thousands of years. And for  good reason. Socrates is cited as one of its victims. And indeed, there is little to distinguish democracy from mob rule. RATIONAL people (our ancestors were not irrational!) CHOSE to have a king to protect them and their liberties. That was not as stupid an idea as it may sometimes appear to us today.

The greatest work in this regard is that of Hobbes who showed how an absolute king is best placed to defend our liberties. He was basically referring to a Jinn.

But Jinns aren't practical.

We need to a method to get a good king. That is clearly a problem. For there are good kings and bad kings. There are good dictators and bad dictators. There is no "one size fits all".

And the key problem with kings is that good kings often have BAD children. It is very hard to get good kings.

So the idea of democracy was revived after being condemned for thousands of years. Not by the Marxists, but by classical liberals. John Locke should be credited with reviving democracy as a major political idea. But of course, it was not his idea. It had a history in the Magna Carta. And the experience of Cromwell's revolution that failed.

But the democracy that was revived was very limited: for the EXPLICIT purpose of getting a good government, a good Jinn. It was not an exercise in "representation". And there were good reasons why it was not elevated to the pedestal that it often is elevated to, today. It was widely recognised that democracy is not a end in itself. It is not a public good. It means NOTHING, really. It is just a tool to get good government, a good Jinn, and to ensure that we are not stuck with a bad government.

Because every few years we can change the government that performs badly.

When we elect a government we elect a Big Servant, a Jinn. We then constrain this servant and ensure it doesn't go outside its bounds. Then, if it doesn't perform well, we throw it out and get a new Servant. That's the role of democracy. To help us CHANGE our government without violence. Not for us to get  a seat at the "decision making table" of the Jinn, the government.

That, in brief, is the reason why democracy exists. To blow up democracy beyond this minimalist role as an INSTRUMENT of our liberty, is PURELY STATIST. Such veneration of democracy is inconsistent with our main goal: liberty.

What about public consultation? Well, ALL government decisions must be made transparently and with adequate consultation. Thereafter a government must DECIDE. The Jinn must do its job.

If we don't like what a government does, we can throw it out after three/four (in Australia) or five (in India) years. But WE don't get to decide. The Jinn decides. The government is an abstract concept, a servant limited by the Constitution. It must remain constrained. It must not become an object of veneration.

Sanjeev Sabhlok

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