The Democracy Wager
How to choose a regime, or proxies for liberty behind the veil.
At long last, a stateless wanderer can immigrate. But they must choose between unknown lands, told only that one is a healthy democracy, while the other has a thriving free market.
Which should they prefer?
Our settler is no theorist: "I just want the freer of the two," they say. But how will this be judged? The value they place on various liberties—freedoms to trade, to move, to speak, and so on—will matter. Those obsessed with certain freedoms will have an easier time; the avaricious won’t even pause.
Suppose, then, that our pilgrim decides to play it safe. Rather than maximize any particular freedom, they choose to minimax, to limit their maximum losses and avoid their worst outcome, accepting all manner of compromises in order to skip the gallows.
The wanderer would do well to choose democracy. Stable democracies—formally governed by political equals, informally ruled by elites (alas)—remain the most powerful technology yet devised for protecting individual lives. Experience proves this better than we can explain it; surely much credit goes to liberal rights protections and the liberalizing drift of equal citizenship. Democracies are not infallible—we are not so far removed from Socrates’ hemlock—but modern safeguards tend to be robust.
Laissez-faire leaves the wayfarer more precarious. Any genuinely free market will have norms or rules that allow for predictability in the general run of affairs; without these it would not be a market for long. These rules may be codified into law, but they needn't be; history abounds with examples of commerce beyond state control. But general predictability does little to minimize the maximum risks, and these may be great indeed. Many a market exists by the grace of a tyrant. We know well the regimes that permit only trade from a leash. However benevolent the despot, however many Chicago economists consult, the implicit threat never varies: “Spend and buy what you wish! But only so long as I wish it.”
Happily, of course, democracy and markets coexist well, and our traveler needs sacrifice no liberties. As Robert Dahl noted at millennium’s turn, every extant democracy is also a market economy.
The obverse does not hold.