Wednesday, November 12, 2014

Democracy, Dogma and Market

A good insightful and articulate piece by Nitin Pai on the dangers of democracy to public rationality got me thinking. Following are some thoughts -

In his article, Nitin Pai highlights the limitations of democracy in promoting a certain set of values which are of self evident worth (at least to anyone subscribing to a basic form of liberalism). He argues that values like Rationality and individual liberty are important values that can be harmed by the working of a majoritarian democracy. Thus, they need an a-priori protection (i.e. not based merely on majority opinion). To address this, he says -- in the liberal tradition that goes at least as far back as John Locke -- that we should do two things -

First, we should constrain the majoritarian workings of a democracy with a basic republican constitution which will protect such important and self evident values (and hence not to be decided by the show of hands) as individual liberty and freedom of speech. The protection of these values should be as absolute as possible, not only because they are valuable in themselves but also for the instrumental reason that they promote other values like public reason or individual self-development.

Second thing to do is to moderate a purely majoritarian system with an institutional structure that can provide the locations for exercise of reason isolated from temporal pressures of popular will. One such important institution is judiciary and we must therefore ensure that the judiciary is immune to popular pressures and influences to the maximum extent possible.

Nitin also cites Bryan Caplan as arguing that -- there are systematic biases through which a democracy places irrational pressures on a goverment. Therefore a goverment should allow greater role for markets to determine the economic outcomes.

I do not find this last argument as entirely convincing (though there's perhaps more to it as I haven't read the book mentioned in Nitin's article). The contradiction that I see in the argument in its present form is this -- if we begin from the position that the self centered individuals in the market place of ideas (i.e electoral democracy) do not lead to rational outcomes/policies, then we can not, at the same time, also claim that self centered individuals in the market place of commodities (i.e. markets) lead to rational outcomes. There has to be more explanation for why greater liberty fails to secure rational outcomes in a democratic setup but not in a market setup. (And this explanation should not be mere definitional -- i.e. it should not begin with definition of rational as what markets do).

In addition, I also see markets as having the systematic biases of their own that can also lead to amplification of dogma over reason. Let's take the example of TV news market. In India it's a relatively competitive field with no channel enjoying a monopoly. Accordingly they all compete for the same viewership. This leads news channels to decide their news or commentary agenda not based on any higher principle of truth, rationality or moderation but rather on what the popular view at the moment is. This is as the market imperative would require 'rational' actors to do -- paradoxically leading to similar erosion of public rationality as was argued above for a democratic arrangement. And since this is true for all channels, it is reasonable to argue that in this case even market as a system is not immune to having their own inbuilt systematic biases.

I think in the end it all boils down to this question -- how do you make maximum liberty of an individual compatible with other values -- rationality, moderation, equality etc. 
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1 comment:

ankush samant said...

Well written Satto.

"One such important institution is judiciary and we must therefore ensure that the judiciary is immune to popular pressures and influences to the maximum extent possible."
Rightly said. In fact, not just the judiciary, but all the 3 pillars - judiciary, executive and legislature - if, acting without a monopolistic bias will work well in favour of the values like liberty of individuals and the system. And I feel in the coming times, we have a 4th pillar growing - that is the voice of the public or the junta. Social media is the weapons in their hands. It needs to be seen how this 4th pillar keeps a check on the other 3 and how the other 3 pillars react and change in the presence of this new power.