Posted by: Dirk | July 1, 2010

DeLong on democracy

Brad DeLong ponders the functioning of the capitalist system:

Four centuries ago, the consensus, in Western Europe at least, was that good and even adequate government in this fallen world was inevitably a rarity. Democracy always degenerated into mob rule, monarchy into tyranny, and aristocracy into oligarchy. Even when well run, democracy took little interest in the distant future, aristocracy took little interest in the well-being of those whom Simpson calls the “little people,” and monarchy took little interest in anything other than legitimate succession.

Then, at the end of the eighteenth century, the founders of the United States of America and their intellectual successors claimed that this pessimism about government was unwarranted. “The science of politics…like most other sciences,” claimed Alexander Hamilton, “has received great improvement….The regular distribution of power into distinct departments…legislative balances and checks…judges holding their offices during good behavior; the representation of the people in the legislature by deputies of their own election…are means, and powerful means, by which the excellences of republican government may be retained and its imperfections lessened or avoided…”

Technology and tastes change over time, and institutions which have been created long ago can become obsolete or dysfunctional, eventually blocking the road to wealth/happiness/development. Let me point out some developments which I think have changed the way things work. In the last decades we have seen mass media reorganize, with developments like Fox News in the US and Berlusconi in Italy. Independent news is something which is hard to find these days, although the media still keep up their Potemkin facades.

Media companies run for profit have changed the way we access news, and the internet has fostered that development. At the same time, we have a problem in education in that the children of non-academics are kept away from university. This has created a society in which the status quo rules. The demographics also play a part, since old people are more interested in keeping financial asset values inflated than in fighting unemployment. Then, the integration of China has put pressure on wages all over the world, leading to a decline in power for unions. At the same time, increasing returns to scale came to dominate the decision of where to produce, providing a monopoly in conjunction with a lot of political power for the capital owners. All these things have influenced the way our societies work.

Western civilization has followed a road towards progress, human rights and democracy for many centuries, with many bumps in between. In the last decades, this road has been left. Values have been replaced with money, ideas with ideologies, cooperation with competition. History is not linear, and it certainly has not ended. To be continued …



  1. I find your articles and comments very interesting.
    What I would like to know is your point of view not someone’s else. It’s okay to observe and be a witness, but can you offer some solutions to the problems the civilization is facing?
    I would love to hear from you.

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