DEMOCRACY AND ECONOMICS – A THOUGHT EXPERIMENT
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democracy: government by and for the people
economics: the systematic distribution of resources
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Imagine a big, gymnasium-size room with 100 people in it.
Imagine there is $1000 the 100 people can divide up among themselves
in any way that at least 51 of the people agree upon.
For instance, they might decide to give all 100 people $10 each,
or to give 50 people 15 and 50 people 5,
or any distribution at all that at least 51 of them approve.
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Suppose someone suggests the 100 people divide up the $1000
in the same proportions as wealth is distributed in the United States
(based on figures in the Federal Reserve Bank's 2001 Survey of Consumer Finances).
That distribution would work approximately like this:
Get 10 of the 100 people and have them sit together in one part of the room.
These 10 people will get 700 of the $1000.
Before moving to the next group, get 1 of the first 10 people to stand apart of the other 9 –
out of their total of $700, this 1 person will get $330.
Now get another group of 10.
They will share $130.
Now, form a group of 20 – they'll share $110.
Another group of 20 will share $40.
And finally, the remaining 40 people will get to share $3.
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So here's how it ends up:
# of people .......$ each gets
********* .........*********
1 .........................$ 330.00
9 ............................$ 41.10
10 ..........................$ 13.00
20 ..........................$ 5.50
20 ..........................$ 2.00
40 ..........................$ 0.075 (seven and a half cents)
100 ...................$1000.00
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THE KEY QUESTION:
Would 51 of the people in the room agree to this distribution?
It doesn't seem likely, does it? (Would even 25?)
HYPOTHESIS
for discussion and debate:
This distribution of wealth could not exist in a democracy.
Corollary:
The United States, where this distribution of wealth does in fact exist, is not a democracy.
The United States is at best some form of virtual democracy
(virtual meaning "existing in the abstract but not in fact").
My unfortunate conclusion:
There is a name for our form of government, but it's not democracy.
It's PLUTOCRACY
government by and for the wealthy.
Is this the society we want?
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notes and caveats:
* Figures are approximations based on Table 2 in Edward N. Wolff, Changes in Household Wealth in the 1980s and 1990s in the U.S. (Levy Economics Institute Working Paper No. 407 (May 2004))
[located at: http://www.levy.org/default.asp?view=publications_view&pubID=fca3a440ee]
And note that these numbers are from 2001, before the tax cuts favoring wealth, which will make the skewing toward the top even more dramatic.
* Of course, I don't pretend to have answers to the serious social questions implied by this experiment. Answers will necessarily be the products of social, rather than individual, understanding and action. This experiment is not intended to imply resources should be distributed equally to every household without regard to other factors, including skill, effort, etc. But it does imply the point that resources (wealth) are social products, products of the way we organize ourselves as a society, and of the individual (and 'corporate') roles and positions comprised by that society -- resources do not magically appear from individuals disengaged from social processes. And there appears to be no good reason to exclude key decisions as to how we should organize our production and distribution of resources from democratic control. Further, for me, the experiment implies that if we really governed ourselves democratically, we most likely would create a significantly less stratified and less plutocratic form of sociopolitical organization. Assuming most people agree that a less stratified/plutocratic society would be desirable, it remains the case that any overcoming of the reigning plutocratic organization will not be easy, probably coming only through a long-term project of social understanding and action. The idea behind the thought experiment is not to suggest solutions, but to contribute to the early stages of a necessary understanding, to identify a serious but somehow hidden problem that needs to be confronted by people of good will who believe in democracy.
* Use of the figure 51% to make an agreement in the experiment does not reflect my belief that key social decisions should be determined by simple majority. When consensus is not possible, I like the idea of 67%.
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posted by Art @ 10:02 PM
3 Comments:
Chris -- I posted a sort of an update in the caveat section that begins to address yr question -- at least by declining my own responsibility to come up with answers, altho I do have some ideas. I'll relate some more later, when I won't feel as guilty as avoiding work.
And if this is THE Chris F -- how's it going at yr new place?
And thanks to play jurist for posting yr comment here as well.
ps - replies to and comments on play jurist's comment, and additional comments by him, are at daily kos version of this post.
As far as it goes, this 'thought experiment' is instructive and worth thinking about. But it does have a serious flaw. There is only one room in the picture, both spatially and temporally. It is why the either/or of left-right, socialist/capitalist economics are engaged in a perpetual war, insisting that only the extinction of their opposite number can lead to success. I'm not speaking here of hybrids and variations. They also harbor the same assertion when examined. So you wind up with well-intended and sincere attempt to adjust for inequity with statements such as "I have been more focussed (sic) on individual rights and dignity than on broad worries about inequality"
It is, again, the expression of the seemingly perpetual war between the individual and the collective - either/or and attempts to reconcile them. Our language itself participates in this mischief of ever bending thought to one of these poles.
The very idea that there are options quite outside this field are difficult to contemplate. Marx and Smith become the alpha and omega of all thought. But suppose it isn't so? Consider this, if you will, as a small example:
Why must there only be one economic structure in a single society? A dominant one which we are forever trying to adjust to make it more compatible with the other (or overthrow it entirely)? Suppose, for example, there were two independent structures; one that managed the 'means of progress' the other that managed 'the means of survival' ?
I am only suggesting this as a way of demonstrating that our thought about these matters may be conditioned in ways that we hardly recognize. I've never heard of anyone, historically or otherwise suggesting a two-economy solution might resolve some of the most serious problems of society's quest for a rational self-managment. Have any of you? So, without, for the moment, asking 'how' or 'what', perhaps we might begin with asking why?
I do have one small example of how a two-economy society might be fashioned. It certainly isn't the best idea and may not even be very good. But I offer it as a demonstration that there is ground to be explored well beyond the universe of current thought and discussion. If you want to read and consider the matter further I can direct you to my essay (a napkin sketch, really) at:
https://www.facebook.com/home.php#!/note.php?note_id=162962670417237
'National Service Proposal - ending poverty and welfare with a single mechanism'
I hope this contributes something of value to the discussion.
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