Demo-crazy: voting over and over again expecting different results

Earlier this year, our friend Patrick Chkoreff (inventor of Loom(external link)) wrote:

"Democracies are far more efficient than communism at taking wealth away from those who produce it. Communism was defeated because democracy proved to be the more effective form of tyranny." (03-02-11)

The present article is an elaboration upon this thought.

At first blush it might be thought that communism, of the sort practiced in the Eastern Bloc, Maoist China, Cuba, or Southeast Asia, was clearly the preeminent, textbook form of modern totalitarianism. Everything, after all, was controlled. The state extracted virtually all the wealth produced, and the people living in those countries were plainly no more than abject slaves.

And therein lay the rub. In order to be deemed a superior form of totalitarian control, a system must be sustainable. Communism proved itself unsustainable over the long haul, for two important reasons:
  1. Since it negated the possibility of retaining the fruits of one's labor, the incentive to produce was almost completely destroyed. The slogan of Soviet labor was: "We pretend to work and they pretend to pay us." This retarded any meaningful economic growth.
  2. Since the nature of what they were suffering from was abundantly clear, the disaffected in the communist system always sought to find ways around the system, rather than to work within it. This explains the rampant growth of black markets conducted in foreign currencies which characterized the late Soviet period.
In short, while total, iron-fisted control might seem the natural preferred choice for a tyrannical ruling class dedicated to human farming(external link), in actuality it doesn't help to discourage your livestock from working, or to motivate them to walk off the farm when they inevitably become dissatisfied with their lot.

Let's compare and contrast communism with the "middle way" of social democracy. Mid way, that is, between actual freedom and utter totalitarianism. In democratic socialism the yoke of controls is less burdensome, but nevertheless sufficient to provide the ruling class (the farmers) with a great deal of ability to extract and redirect resources from the farm's operations, as well as controlling and regulating the activities of the farm's human livestock. However, the democratic model does not suffer from the two principal failings of communism cited above. Let's look at why.

Allowing individuals to run businesses for profit, to choose their own careers, and to keep at least a substantial portion of their profits and wages, increases the total productivity of the farm, and consequently the rake-off of the farmers. Just as a farmer growing grain or vegetables will leave spaces between the rows and individual plants in order to maximize the yield from the field as a whole, so the human farmer leaves some "space" around the human livestock. This space takes the form of after-tax earnings and so-called civil liberties. If you can convince your slaves that they're working for themselves, and that they're free people with a long list of rights, the simple fact is that they'll work a lot harder for you. As Goethe put it, "None are more hopelessly enslaved than those who falsely believe they are free."

This space-between-the-rows idea was clearly manifested in the 1980s in the USA, when the Reagan administration implemented the theories of economist Arthur Laffer by simplifying the tax code and reducing the historically much higher tax rates paid by the wealthiest income quintiles. This was done with the expressed intent of maximizing federal government revenue, despite the fact that the obvious effect in the near term would be to forgo revenue which would otherwise have been collected. The Laffer Curve(external link) predicted that reducing taxes would stimulate economic growth, thus enabling the government to collect in future a larger sum of revenue, representing a smaller percentage of a much larger economic pie. The graphical representation looks like this:

graphical depiction of the theory promoted by economist Arthur Laffer

Laffer's idea was not new, of course; it apparently dates back to at least the 14th century. What's striking is that the Reagan administration was supposedly a regime of small-government conservatives who wanted to shrink government and promote individual liberty and prosperity. And yet here they were, explicitly trying to maximize the tax revenue which government would ultimately be able to extract from the private sector. The parabolic curve drawn by Laffer looks something like a boob, and 1980s economics wonks were openly trying to find the fullest part of it so they could attach the government firmly to the nipple. (And these guys were the conservatives!)

Almost thirty years later, the US federal government has grown into the most monstrous, bloated, and powerful bureaucracy ever created in human history. It has also built the deadliest military in history, a Mordor-on-the-Potomac that bestrides and bedevils the globe(external link) and has murdered millions worldwide. Not being content with maximizing current tax collections, it has run up debts in excess of US GDP (debt recently broke $15T), and even mortgaged future tax collections to the tune of more than $114 trillion. Entire future generations of livestock have been sold into slavery before they've even been born.

Which brings us to the second point on which democracy is more resilient than communism. What do the human livestock do in the democratic system, when they see things beginning to fall apart, their incomes falling, their jobs lost or endangered, and their standard of living eroding? Why, they go all in for political activism, of course! They write letters to their public officials. They donate to candidates for office and political action committees. They form Tea Parties. They even "occupy" public buildings. And even at that rate, not all of them are demanding less government control over their lives. Quite a few, such as the Occupy Wall Street movement, are actually lobbying for more government intervention, such as a mandatory $20/hr. minimum wage which will be paid irrespective of employment!

The democratic political system has completely blinded these people in several important ways. First, they are frequently unable to perceive that it's the mismanagement by the farmers that's wrecking the farm. They'll blame "corporations" without noticing that it was government which empowered the corporations to do the things for which they blame them. Second, the fact that all previous elections to "throw the bums out" have unanimously failed to make any worthwhile difference, completely escapes them. (Remember the "Contract With America" in the glorious "Republican Revolution" of 1994?) Third, they don't recognize that even if all their activism actually produced a meaningful rollback of the state, it would only serve to pave the way for an even larger and more corrupt state in the future. Freedom metastasizes the cancer of the state (which is really the principle underlying Laffer's ideas). Worst of all, by stubbornly believing in the political system as an avenue for change, they refuse even to consider the avenue which would work to set them free and improve their lives.

What avenue is that? Why, alternative markets of course. Free minds and free markets operating outside the control of the state. Interestingly, this was one of the first resorts of slaves under communism. They were never dumb enough to think that they could improve their lot by complaining and working within the system. Truly there is some solace in seeing clearly the nature of your oppression. Today this strategy is called agorism(external link). And today we have tools available to pursue it, as never before. Here are just a few to pique your interest.

In the history of communism, agorism eventually grew so prevalent that the unofficial economy outweighed the official economy. When that happened, the farmers realized that they had to dump the official system and let the underground economy bubble up to the surface, then try to get control of it and turn it into the new aboveground economy. This is essentially what occurred. By contrast, most democratic states still don't possess well-developed agorist undergrounds, outside of illegal goods -- despite the fact that these states are becoming more like the former communist regimes all the time. This neglect is almost certainly due to the pervasive trap of politics.

In order to break the cycle, democracies need to develop parallel agorist economies just as the communist bloc did. But this time, when the official economy eventually snuffs out, the groundwork must be laid so that the farmers can nevermore seize control of the new economy. Thanks to the technologies now available, this outcome is achievable.

"Liberty is a state of mind that does not require the indulgence of others." -- Louis E. Carabini, 2008