Majoritarianism, rationality, political risk etc

Three quotes from an old (TOI) Sacred Space column-

Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority.

Ayn Rand

A democrat need not believe that the majority will always reach a wise decision. He should however believe in the necessity of accepting the decision of the majority, be it wise or unwise, until such a time that the majority reaches another decision.

Bertrand Russell

The majority is never right… Who are the people that make up the biggest proportion of the population — the intelligent ones or the fools? I think we can agree it’s the fools, no matter where you go in this world, its the fools that form the overwhelming majority.

Henrik Ibsen

Rand is as clear and concise as ever, Russell captures the essence of democracy but is a fool for suggesting what he does, and Ibsen is bang on target with his cynicism.

Russell’s comment, and the idea behind it, is outrageous. 50% + 1 (in a two horse race) seems to be some magical number which automatically grants legitimacy to any action taken by the mob. If the mob says raping and plundering the remaining people is legal, then it is. The size of the mob is established as the standard of right and wrong. (Russell is so unconcerned about right and wrong that he refuses to apply that value judgment to the decisions, making use of “wise,” “unwise” and “another” instead.) That is what democracy is, the rule of the majority, the rule of the mob. Which doesn’t say much about the convictions of someone who “believes” in democracy and thereby calls himself a democrat. Herbert Spencer’s polemic on the subject, an extract from his Social Statics, is worth reading-

Of the political superstitions lately alluded to, none is so universally diffused as the notion that majorities are omnipotent. Under the impression that the preservation of order will ever require power to be wielded by some party, the moral sense of our time feels that such power cannot rightly be conferred on any but the largest moiety of society. It interprets literally the saying that “the voice of the people is the voice of God,” and transferring to the one the sacredness attached to the other, it concludes that from the will of the people, that is, of the majority, there can be no appeal. Yet is this belief entirely erroneous.

Suppose, for the sake of argument, that, struck by some Malthusian panic, a legislature duly representing public opinion were to enact that all children born during the next ten years should be drowned. Does any one think such an enactment would be warrantable? If not, there is evidently a limit to the power of a majority.

Suppose, again, that of two races living together — Celts and Saxons, for example — the most numerous determined to make the others their slaves. Would the authority of the greatest number be in such case valid? If not, there is something to which its authority must be subordinate.

Suppose, once more, that all men having incomes under £50 a year were to resolve upon reducing every income above that amount to their own standard, and appropriating the excess for public purposes. Could their resolution be justified? If not, it must be a third time confessed that there is a law to which the popular voice must defer…

There is another problem with the “majority” and it is not merely a political one. It will hide behind the “we are not infallible” excuse and perpetuate every kind of atrocity it can dream of. Fifty (or five hundred, the period is hardly relevant) years down the line, it will come to its senses, maybe apologize, and then will overcompensate for its mistakes thereby doing injustice to someone else. And at the same time it will commit some other atrocity which it will apologize for decades later, and so on… ad infinitum. What it can’t get done through politics, it accomplishes through ethics, or religion, or both. As Nietzsche writes in the aphorism I quoted the other day, the individual helps society screw him when he accepts its (flawed) moral standard. A Randian idea which describes this mess is the “sanction of the victim.”

I haven’t read any Ibsen, and so went looking for the source of the quote. Its from his play “An Enemy of the People.” The words of those of the protagonist, a Dr. Stockmann-

The majority is never right. Never, I tell you! That’s one of these lies in society that no free and intelligent man can help rebelling against. Who are the people that make up the biggest proportion of the population—the intelligent ones or the fools? I think we can agree it’s the fools, no matter where you go in this world, its the fools that form the overwhelming majority. But I will be damned if that means it’s right that the fools should dominate the intelligent. [Uproar and shouting.] Yes, yes, shout me down if you like, but you can’t deny it! The majority has the might—more’s the pity—but it hasn’t right. I am right—I and one or two other individuals like me. The minority is always right.

O&M quotes Krugman-

[Economists] turned a blind eye to the limitations of human rationality that often lead to bubbles and busts; to the problems of institutions that run amok; to the imperfections of markets — especially financial markets — that can cause the economy’s operating system to undergo sudden, unpredictable crashes; and to the dangers created when regulators don’t believe in regulation. . . . When it comes to the all-too-human problem of recessions and depressions, economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work perfectly.

In Krugman’s universe, being rational means being able to exactly predict who your great-great-great-great-great-grand-son will marry when he turns twenty five and also whether it will rain that day. No wonder he’s angry about economists building models based on the idea of man’s omniscience. They should replace it with models where its the bureaucrats, politicians and Krugman who benefit from such omniscience.

The Mises blog has a post on hyperinflation, and a warning-

The Dollar Meltdown include[s] several chapters on how Americans can preserve their wealth and personal sovereignty by converting their US dollars to hard assets such as various forms of gold, silver, and crude oil investments. But beware something like the Gold Reserve Act of 1934 where the Government made it a felony to possess gold and mandated that Americans turn it in for $20.67 – and then commanded that gold not be worth less than $35.00 – thereby fleecing Americans of $3 billion.

That’s something one would expect in a banana republic. Sudden diktats, edicts, or coups, which could wreck all calculations overnight. Political risk, it is called. But who says the USA isn’t one? Or India for that matter? A banana republic.

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