Democracy refers to that form of government in which the people, either directly or through their representatives, determine the laws. In the 20th century, during a time of a deep ideological divide between authoritarian dictatorships and capitalist democracies, democracy was often associated with liberty and respect for the individual. Although there is a correlation between liberty and democracy, democracy refers to a particular type of political system that does not necessarily imply or lead to a society in which men are free. A democratic system provides that citizens exercise control over the government, whereas liberty refers to the limits of that power regardless of who exercises it. A popular view of democracy is that democratic government should act to further the will of the majority, but this vision is obviously incompatible with liberty. As Alexis de Tocqueville observed, a majority can be just as tyrannical as a dictator.

Democracy works well as a collective decision mechanism when there is a consensus of opinion within the decision‐​making group, but many other collective decision mechanisms would work equally well when there is widespread agreement among group members. When there is lack of a consensus, however, democratic decision making breaks down; so when evaluated as a mechanism for arriving at political decisions, democracy works worst when it is needed most. There are a number of reasons that democracy might not work well in the absence of a consensus among members of the decision‐​making group.

In a democracy, there are some cases where there will be no clear outcome supported by a majority. This case can be illustrated with an example in which majorities are cyclical. In the simplest of these cases, there are three voters, 1, 2, and 3, who choose by majority rule among options A, B, and C. Voter 1 prefers A to B and B to C, voter 2 prefers B to C and C to A, and voter 3 prefers C to A and A to B. If options A and B are the only political options, then a majority (voters 1 and 3) would prefer A to B. However, a majority also prefers C to A, and a majority prefers B to C. So by majority rule, Adefeats B, C defeats A, and B defeats C. No one option can defeat all others by majority rule; in this example, there is no clear majority preference. Kenneth Arrow has shown that it is not possible to design a social choice mechanism that is able to produce a rational ordering of group preferences from the orderings of the preferences of the individuals in the group. In theory, democratic decisions must be imperfect reflections of the preferences of those in the decision‐​making group.

More significant problems may occur in democracies when there is a clear‐​cut majority that is able to use the political system to impose its will on the minority. Such instances make the conflicts between liberty and democracy readily apparent and reveal the wisdom of placing substantial constitutional restrictions on the ability of democratic governments to implement policies that are approved by a majority. Alexis de Tocqueville believed that once the majority realized that they could vote themselves benefits at the expense of the minority, democracy was in danger of collapse.

Minorities also pose a significant danger in democracies in the form of special interest groups. Because in democratic governments one citizen’s vote is unlikely to have much impact on government policy, citizens in democracies tend to be rationally ignorant, as Anthony Downs emphasized. There is little benefit to becoming politically informed because one’s vote counts for so little, so most people are unaware of most of what the issues before the voters entail. Rational ignorance provides the opportunity for special interest groups to lobby government for concentrated benefits directed at them at the expense of the general public. Politicians gain the support of the interest groups they help, whereas the general public remains rationally ignorant of the costs they bear to provide these interest group benefits. Mancur Olson observed that as democratic governments mature, special interest groups gain an increasing amount of power and ability to effect transfers to themselves, generating societies in which people substitute transfer‐​seeking activity for productive activity, which ultimately leads to social decline. Because democratic leaders always run the risk of being voted out of office, they often pursue more shortsighted policies, and they tend to favor special interests over the general interest more than would government leaders with more secure long‐​term prospects.

It is apparent that there are many problems with democratic government. As Winston Churchill observed, “Democracy is the worst form of government except for all those others that have been tried.” The biggest advantage of democracy over other forms of government is that political leaders require a wide base of support to remain in office, so public officials cannot ignore popular opinion. In autocratic governments that are maintained by a small coalition of supporters, political leaders must provide benefits to those supporters to keep them from defecting to potential rivals, which leads to corruption, cronyism, and inefficient policies designed to benefit a small coalition, rather than the general public. Leaders of democratic governments also try to maintain political support by providing benefits to their supporters, but when most people are able to vote, officials sometimes attempt to provide benefits that appeal to a broad cross‐​section of the public. However, because democratic leaders try to gain the support of various special interest groups by targeting policies to their benefit, democratic governments still tend to favor special interests over the general public interest. The difference is that autocratic governments tend to favor only a few who are the leader’s strong supporters, whereas democracies tend to spread special interest benefits to a larger group.

Democracies come in different forms, and the parliamentary democracies that govern Europe appear to have been less successful at controlling the size of government than American democracy because interest groups can wield more influence in parliamentary systems. Although every nation is different in its particulars, in parliamentary democracies, parties choose who will represent them in elections, in contrast to the system that prevails in the United States, where anyone can run for office. Additionally, voters in parliamentary systems almost always vote for parties, rather than individual candidates. After parliamentary elections, the winners form a government that has control over legislation as long as it remains in power. Because the parties choose representatives in parliamentary systems, representatives vote the party line and do not have the independence to vote against the party position, unlike in the United States. As a result, interest groups have more influence in parliamentary systems primarily for two reasons. First, special interests form relationships with parties, and those relationships can last beyond the terms of individual members, whereas in the United States interest groups must deal with individual representatives who may or may not vote with their parties. Second, once they are in power, parliamentary governments have less opposition because they control a majority of the legislature, whereas in the United States individual representatives often vote against their party leaders, so the leaders of the majority party in the United States have less power to dictate policy than they would in a parliamentary system. The larger point here is that there are differences among democracies, and the differences in the form of democracy can have a significant impact on government policy.

There are many problems inherent in democratic decision making. Recognizing these problems, the American founders were wary of the power of democracy and deliberately designed a government with constitutionally limited powers. The United States was not designed to be a democracy, in the sense of a government whose policies are determined by popular opinion. Rather, the founders fashioned constitutional limits on the government’s powers and created a system of checks and balances to try to prevent abuse. In addition, they limited the ability of citizens to directly influence government decision makers. Despite the popular appeal of democracy, one must recognize that the success the United States has enjoyed in producing prosperity and freedom relative to other parts of the world is more due to the constitutional limits placed on government power than to democracy.

The American founders, as they originally designed the federal government, created institutions that were strongly insulated from popular opinion and the will of the majority. The judicial branch is insulated from democratic pressures because justices and judges are appointed by the president and confirmed by Congress and hold office for life. The founders intended the executive branch to be similarly insulated, with the president chosen by an Electoral College. The Constitution did not specify how the members of the Electoral College were to be selected, and early in the nation’s history the most common way was to have presidential electors selected by the state legislators. The founders envisioned the Electoral College as a selection committee to choose the president, insulating the selection of the president from direct input from the citizens. The process never worked quite as they intended, and it evolved into a more democratic one by the 1830s, in which citizens nominally voted for the president. Similarly, the Constitution originally provided for Senators to be chosen by their state legislatures, and this process was altered only in 1913 when the 17th Amendment mandated their direct election. Yet as the government was originally designed, only members of the House of Representatives were to be directly accountable to the citizens. If each of the three branches of government were given equal weight, as would be required if a system of checks and balances were to work, then the government would only be one‐​sixth democratic, with only half of the legislative branch of government subject to direct popular control. However, with the popular election of the president and Senators, it is now two‐​thirds democratic. The U.S. government is much more democratic and its leaders are much more immediately accountable to its citizens than when the nation was founded.

The 20th century was characterized by a deep ideological divide between oppressive communist dictatorships led by the Soviet Union and freer capitalist democracies, the most prominent of which was the United States. This war of ideologies led many people to equate democracy with freedom. Yet democracies have the potential to be as tyrannical as dictatorships, and the road to freedom is not to move from dictatorship to democracy, but from bigger to smaller government. Although democracies tend to be freer than dictatorships, democracy and freedom are by no means the same thing, and more democracy does not necessarily bring more freedom with it.

Further Readings

Arrow, Kenneth J. Social Choice and Individual Values. New Haven, CT: Yale University Press, 1951.

Black, Duncan. The Theory of Committees and Elections. Cambridge: Cambridge University Press, 1958.

Buchanan, James M., and Gordon Tullock. The Calculus of Consent. Ann Arbor: University of Michigan Press, 1962.

Bueno de Mesquita, Bruce, Alastair Smith, Randolph M. Siverson, and James D. Morrow. The Logic of Political Survival. Cambridge, MA: MIT Press, 2003.

Downs, Anthony. An Economic Theory of Democracy. New York: Harper & Row, 1957.

Hamilton, Alexander, John Jay, and James Madison. The Federalist. Washington, DC: National Home Library, 1937.

Holcombe, Randall G. From Liberty to Democracy: The

Transformation of American Government. Ann Arbor: University of Michigan Press, 2002.

Hoppe, Hans‐​Hermann. Democracy, the God That Failed. New Brunswick, NJ: Transaction, 2001.

Olson, Mancur. The Rise and Decline of Nations. New Haven, CT: Yale University Press, 1982.

Tocqueville, Alexis de. Democracy in America. New York: Knopf, 1963 [1835].

Randall G. Holcombe
Originally published
Read More
Read Less