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July 13, 2019 - Freedomain Radio - Stefan Molyneux
22:18
Democricide | Why Democracy Always Fails
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Hi everybody, Stefan Molyneux from Freedom Aid Radio, the largest philosophy show in the world.
I hope you're doing well.
Let's talk a little bit about democracy, which has had a rather checkered reputation throughout most philosophical history.
And for some fairly good reasons that I would like to talk about with you, given that somewhere in the world, there's always some spin cycle going in and going around of some meet the new boss, pretty much same as the old boss.
I'd like to explain the reasons why.
Democracy, which is of course majority rule and ideally supposed to be limited by some sort of bill of rights or some sort of charter that limits what the government is able to do, democracy is a functional and fundamental impossibility.
Like if you look around the world, democracies, well governments as a whole are doing badly, but democracies, particularly since the 1960s, have been doing very badly.
They are unsustainable, trillions and trillions of dollars in unfunded liabilities, massive amounts of debt, instability, inflation, booms and busts, just a mess all around.
And there is this sort of I believe that a better driver can fix a car that's broken.
And that really is not the case.
It's not the gas and the brake and the gears that make this thing work or not.
It's whether the engine can turn over.
And there's so many problems with democracy that need to be understood in order for us to figure out not just what's wrong with the world, but really how to fix it.
So the first thing to understand about democracy is improving people will not help.
So we all understand that people have self-interest when they vote.
So if you're on unemployment insurance, then are you likely to vote for a candidate who wants to end unemployment insurance?
Quite likely not.
If you are a government worker, are you going to vote for somebody who wants to privatize whatever you're working in?
Well, probably not.
Are you going to, if you're a government worker, are you going to want to vote for any limitations on collective bargaining processes within the union?
Well, probably not, right?
So there's all of these conflicts of interest that are really foundational To understanding just the first layer of what is wrong with democracy.
There's a lot more, but that conflict of interest in business and in the sciences and a lot of areas of human endeavor, you really get a diminished voice if you have a conflict of interest.
At least you have to publicly state these conflicts of interest.
In the business world, you know, you have to put forward your conflict of interest.
So if you own a bunch of shares that you're recommending to someone else, you usually would have to say something like that or that kind of stuff.
The conflict of interest is foundational to democracy because people care most about that which affects them the most.
And so if you are on welfare and somebody says, well, I want to end welfare, well, that's going to impact you significantly and I assume negatively.
On the other hand, if you are part of the military industrial complex and the government says, we want to increase our spending on the military, that affects you positively.
So you're going to get very involved in that.
When people get the most involved and the most informed, it's almost directly proportional to the degree with which the conflict of interest almost precludes them from making an objective rational.
Decision.
Because ideally, of course, we want, you know, the good of society as a whole and in general and the long term and so on.
But people only generally inform themselves about those aspects of a democracy which most directly impact them.
And so, where people get most involved, they're the least objective.
Because they're getting the most involved in that which either affects them positively or negatively directly.
So this level of interest is level of I don't want to say corruption, exactly, but level of interest, level of focus, level of involvement is directly proportional to self-interest really precluding the ability to make rational, objective decisions.
So that's the first and fairly important.
Now, you could argue, of course, that if you train people or make the case to people that they should put the good of society ahead of their own good and so on, if you could get them to surmount their own petty self-interest and so on, then they could vote better and so on.
Well, first of all, people respond to incentives, the basic principle of economics.
So you're really asking for a kind of different species if you want people to act against their own self-interest for the sake of some collective good.
It doesn't really happen at all.
But even if you could, even if you could somehow snap your fingers, wave your potter wand, and get people to think altruistically about the good of society as a whole rather than that which affects them positively or negatively in the moment, it still would not fix the problem.
Let's put an example forward.
So let's say that your town is thinking of putting in light rapid transit, you know, some sort of monorail or something like that.
And it's going to cost, I don't know, $10 billion or something like that.
And this is going to be a government initiative.
Okay.
There is no possible way for anyone to rationally and factually make the case that spending $10 billion on the LRT is the very best use of scarce resources within the community.
There's simply no way to make that case.
We don't know what people want.
We don't know what's going to happen in the future.
We don't know what alternatives are going to be there.
I mean at the moment in the United States more businesses are failing than being created.
Now that's due to a variety of macroeconomic issues but Even if we say that it's somewhat even, it means that when people have their own money on the line and they're working like crazy to start their own businesses, half the time they get it wrong in terms of what people want, what they're willing to part money with for.
So there's no way that someone can say to you, this light rapid transit is the best Use of 10 billion dollars within this community.
Now what you do know of course is that the government is going to extract that money by force from the population through taxes or by printing money or by borrowing so it's just deferred theft and so on.
But the government is going to take that money by force.
What that means is that there aren't enough people who want to voluntarily fund this light rapid transit and therefore the power of the state has to be used to compel people To give up the money for this, because there's this idea, you know, sort of put out that, you know, government is where we get together to solve problems, participate and so on.
Well, government is force.
And, you know, if you force someone to do something, it's really hard to say that that's what they want to do.
I mean, that's sort of the foundation.
That's why charity is different from theft and lovemaking is different from rape and so on, because the difference is force or fraud.
So people who are going to say, well, you should, we've got to get this light rapid transit.
They're going to say, well, it's for the good of the community.
Here are the economic benefits.
Here's the payoffs and this and that and the other.
Now, always be suspicious, always be suspicious of people who come to you and say, here's all the gold and there's no downside.
Here's all the benefits and there's no downside.
Because the people who are going to be most enthusiastic about this monorail are going to be the people who are going to be supplying services to build it.
So they're going to make a huge amount of money.
The people whose property values might go up because there's now a monorail to their community.
People who might be able to have one less car in the family because they can take the monorail to work.
So people who are going to benefit from this monorail more than it's going to cost them are going to be very enthusiastic in putting forward this monorail.
So in other words, they're only going to tell you about the benefits They're going to vastly underestimate the costs.
I think a study was done that like government projects are usually at least two and a half times their initial projected costs.
The original Iraq war was supposed to cost $50 billion.
Anyway, so they're going to really pump up the positives and they're going to really downplay the negatives.
They are not going to be giving you the truth.
The truth is going to be skewed by their self-interest.
It's also going to be skewed by the fact that there's simply no way to know how resources should be best allocated within society.
This, in a free market scenario, is decided by everyone choosing to quote vote with their dollars and buy what they want or save or spend and that's what people want.
There is no Way that any central planning agency, any government or anything like that can objectively and legitimately say, this is the best use of $10 billion.
Can't be done.
It simply can't be done.
An individual can say, I have $10 billion and I want to invest in LRT.
That is the best use of money for me.
Of course.
Yeah.
I cannot say what is the best use of your money.
In five minutes, five years or five decades.
I simply cannot.
I can say I want to marry this woman.
I cannot say you have to marry this goat.
And I can say it.
But if you're not into goats, we're sort of at an impasse.
So there's no way to know how the money should be spent and everyone who is going to be interested and involved in communicating about this has already had their self-interest compromised because the only reason they're interested in it, oh this monorail is going to block my view of the mountain so I hate it!
So I'm going to tell you all about the downsides and not about the upsides and and so on, right?
So this is a tricky thing.
You know, cigarette companies had their way, you know, there'd be these labels on cigarette packages, like goes great with coffee, relaxes you, makes you look cool.
Not true, but that's what they'd like to put on there instead of the, you know, here's your death lung inner vision of the future.
Because they want to, like advertisers want to say, here's all the good stuff about what we provide.
And why would we advertise the downside?
Like, unless there's some regulation that requires them to do so.
So this is a huge problem when it comes to democracy, that the, Those who are the most involved have no incentive to tell you about the downsides.
And those who are involved because of the downsides, because they don't want it to happen, have no incentive to tell you about the upside.
And everyone who tells you what the upside or the downside is, is lying because they don't know.
They don't know.
Nobody knows what the price of Apple stock is going to be like 10 minutes from now.
Nobody.
And so the idea that I know how 10 billion dollars of other people's money should be spent and it's the very best thing to do,
This is how democracy just corrupts people, because it puts self-interest directly as their motivator, but then they have to make all this mealy-mouthed garbage, altruistic nonsense up about the good of society as a whole, because they can't say, well, if we build this, I'm going to make a fortune, or if we build this, I'm going to lose my view of the mountains, so I don't like it, because then they're saying, well, I'm motivated by my self-interest, which we all are, of course, but they have to pretend that it's for the good of Hamana, Hamana, Hamana, right?
You know, like Randy Weingarten, one of the heads of the teachers unions, he said, I'll stop representing the interests of the children when children stop paying union dues.
I think he said that not with the intention of public consumption, but then of course he's got to say, well, it's for the kids and education is for the kids and government schools are for the future and all that kind of stuff.
So, and politicians do the same thing.
So politicians, of course, want to spend money rather than take money away.
And this is another fundamental challenge with democracy, is that you cannot rationally allocate resources when those resources kind of fundamentally appear to be infinite.
I mean, if in 2003, George Bush and Condoleezza Rice and all of the other people who were gung ho for the war in Iraq had said, we want to go to war against Iraq, and we're going to need $50,000 in taxes extra this and we're going to need $50,000 in taxes extra this year to fund the war.
Well, that would have been a way of saying, well, do I want to cheer or do I want to pay $50,000, which you probably don't even have, right?
So that's a way of making these decisions.
But going to war Without raising taxes, which is kind of fundamentally what happened, does not give people the feedback, the sort of rational resources or finite desires or infinite feedback that helps them make informed decisions.
So when the government says we want to increase welfare by 35% Well, that should come with a significant increase in people's tax bills, right?
Because the government doesn't have any money.
The government simply transfers money from one person to another while keeping a fairly hefty cut for itself.
Like 70 to 80% of money in the welfare system is absorbed by the bureaucracy and never gets to the poor.
And so because There is this free money, you know, because they can borrow and they can print and they can tax other people or overseas corporations or whatever it is that they're going to try and do.
They appear to have this magic money.
And so people vote on a proposition that lets increase welfare by 40%.
And there's no bill for it.
And people can't say, well, is that worth it?
Here's how my taxes are going to increase to increase welfare by 40%.
And by the way, only 10% of that 40% is actually going to end up getting to the poor.
Maybe private charities would be better.
There's no correlation between what is promised and what has to be paid or very little correlation for those things, which is why the debt continually goes up and up because the government puts you into an ideological or a sophist corner.
You are cornered because what the government appears to be doing to people is saying, I want to give 35% more money to people on welfare.
Of course, the government doesn't have any money, so they borrow, which screws up the next generation, or they print money, which means that the poor are going to end up with significant amounts of inflation.
I mean, everyone does, but it hits the poor and those on fixed incomes hardest of all.
But usually not one person in a thousand can trace increased welfare payments to increased prices 12 to 18 months later, and they just blame the shopkeepers and, oh, you greedy capitalists and so on, rather than the fact that the money is just being diluted by being over-created.
And so what happens is if you say, I don't think we should pass this, then you appear to be motivated by hatred for the poor.
Well, it's like, but the poor will get 35% more money and no one's taxes will go up and the government won't get cut in any way.
So it's not like a Trump.
So why don't you want people to get 40% or 35% more welfare money?
You must hate the poor.
And that is possible because people think that there's this magic money machine at the basis of government that can be created and spent without harming anybody else.
And these are the challenges of democracy, particularly democracy where governments control currency, where governments are limited by some sort of fixed standard like the gold standard or Bitcoin or whatever can't be just magically created out of nothing.
It's like, do you want other people to get free stuff that they desperately need?
And if you say no, people are like, why don't you want that?
Whereas if government said, we want to give every poor person in the country $500 and we're going to charge you $2,000 extra on your tax bill.
Well, that would be, you could argue against the $500 without being perceived as the Grinch who stole Christmas for everyone in worn shoes.
Because you'd say, look, I mean, so 75% of the money isn't even going to the poor.
And if I have this money, then I'll spend it.
That will create jobs and whatever, you know, I'll save it, which will mean money is available for people to start businesses, which will create jobs or whatever it is.
You can make a case Where there's costs and benefits that directly accrue to individuals.
Ah, but in the magic money scenario, then you look like you're just being mean.
Why wouldn't you want people to have free stuff that makes their lives better?
Doesn't cost you anything, doesn't add to my tax bill.
So there is rabid self-interest without the limitation of competing self-interest.
Right, so, want $500 to go to the poor for free?
It's gonna cost you $2,000.
Ooh!
Well, I do want the poor to get more money, but at the same time, I don't know that this is the right... But if it's just you want free money to the poor.
Well, do you want Obamacare?
Do you want more people to get health insurance?
No!
I mean, that's just mean because there's no cost-benefit in democracy.
There's just no way to figure out where the actual costs and benefits are accruing because there's this weird narcoleptic drug of magic money of deferred costs that allow people to Cheer on a war that has to be paid for by money printing, which destabilizes the housing market and causes a four or five year economic crash.
But very few people get the connection between you cheered the war, you didn't want any additional taxes, the government had to borrow and print money to pay for the war, and that screwed up the housing market, caused a crash, and blah, blah, blah.
How can they see that?
Because people Don't I mean they vastly underestimate the benefits of free market transactions.
They vastly underestimate the benefit of dealing with foreign countries because they're like home team advantage people and so on.
So there's just a huge amount of knowledge that is missing.
Now people are experts in themselves and generally, myself included, idiots about others.
I don't know exactly what you want for breakfast this morning, but I know that I had half a bagel.
All of these things, and there's many, many more, but all of these things mean that democracy can't work.
It simply can't work.
It's not like, well, if people were better, it's like asking, well, democracy will work when the speed of light is one kilometer a second.
No, it's not.
It can't be.
Democracy will work when it's powered by a square circle.
It's not like, well, you know, if we just encourage people to be better or give up their own selfish self-interest.
It doesn't matter because there is no such thing as the general good of society as a whole.
Right?
Society is not warring, at least in a free market environment, but it is competing interests.
So if you and I are both putting in a bid for some business contract, one of us is going to win.
Or one of us is going to lose, assuming we're the only two and it has to be go to one of us.
So what's the interest of a whole?
Well, you could say, well, it's better for me to lose if I'm less efficient and so on.
But that's, there's all these competing interests.
If I date the girl and she's monogamous, you don't get to date the girl and vice versa.
So there's all of these competing interests.
So what is the best for the rainforest as a whole?
I don't know.
But you can't sort of really figure that out because the rainforest is an aggregation of competing species and plants and bacteria, all of whom are vying for supremacy and so on.
I don't mean to sound this is all kind of Darwinian because trade doesn't kill people.
It's like you're going to eat the loser of the winning bid.
But it does mean that when we think about the sort of good of society as a whole, It's really, really impossible to figure out what that is.
There's no giant blob called society as a whole.
We're not a Borg.
And we should all of course be free to pursue our own self-interest in cooperation with others.
But the benefits and costs must accrue to us personally.
Not only can we never figure out what's good for society as a whole, but even if we could, it would be warped and distorted by government's magic money machine to the point where anybody who tries to talk about rational limitations to state power is considered to be a meanie Von Grinchy head who just hates the poor.
And last but not least, because of graduated income tax, which is pretty foundational to modern state power, it allows us to play the envy the rich resentment game.
Governments have an incentive to have more and more rich people because rich people pay massive amounts of tax.
Massive amounts of tax!
Like the top couple of percentage pay like 20, 30, 40 percent of the taxes as a whole.
And so the government has a massive incentive to get more and more money concentrated into fewer and fewer hands because those are the people who will pay the majority of the tax that they use as collateral to borrow to bribe everyone else.
So this is another reason why in late democracy, the income gap between rich and poor generally tends to exacerbate and get worse.
And this is an inevitable.
You can't, you can't find a way to avoid this.
This is the physics of human motivation.
So just a few thoughts.
I'm sure that I've missed out a whole bunch of stuff in which democracy is a challenge.
Please let me know in the comments below.
I'll do a follow up with those who have the best ideas and arguments.
And thank you so much for watching.
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