LIMITS OF DEMOCRACY

4/21/07

 

A. Why politicians don’t address some issues:  It is obvious that politicians usually cannot get elected by raising energy costs or taxes, or by cutting social security, Medicare, and other welfare programs.  However, politicians might win by limiting child welfare to no more than two children per mother who can prove she will have no more children.  A growing welfare population which can vote is destroying the economies of many countries.  Politicians might also be able to restrict voting to non-welfare legal citizens.

 

B. Economic solutions:  Clearly in a democracy, voters want more than they can pay for and politicians will tend to give the voters what they want.  The only real controls on spending in a democracy are lower income and higher costs.  Foreign competition reduces US income mainly by having lower wages.  High US wages and benefits encourage US companies to seek cheaper labor through immigration, outsourcing, and relocation. Immigration will tend to lower business wages, but also increases population growth and demand for government services, especially if the immigrants can vote.  In an ideal world, all countries would have about the same, near zero, population growth rates and the same GDP/capita which would minimize population growth, outsourcing, and immigration.  Encouraging all women to have two, or fewer, children by eliminating tax deductions for children (certainly no more than two) and limiting welfare to only two children per woman could be a major means for increasing the GDP/capita in poor countries, and reducing energy demand, trade issues, and immigration in rich countries.  However, it is unlikely that population control will eliminate a world-wide need to develop alternative and nuclear power sources (Energy and GDP).  The relative costs of various power sources will determine the investments countries make in power generation, transmission, and means of transportation.  Economic decisions in the US and abroad will deal with the issues which voters and politicians cannot address in a democracy.

 

C. Are overpopulation, popular democracy, and a market economy compatible?  Since politicians in a democracy tend to grant more welfare than the economy can support and overpopulation tends to increase the demand for welfare, overpopulated democracies will tend to deplete savings and reduce incentives to work hard and be creative.   A strong market economy seems to require personal incentives, a balance of population, productive workers, and resources.  If the population is too large, welfare must be limited.  Can democracies limit welfare?  Would it be possible to have a popular democracy and a strong market economy in China or India?  Will it be possible in Europe and the US in the future? 

 

As any population reduces its birth rate, there will be a decrease in the number of workers per retiree.  It will be shortsighted to maintain a high birth rate in order to maintain excessive retirement benefits.  In fact, the ratio of workers to dependents (children plus aged) is higher in wealthy countries than in poor countries because birth rates are higher in poor countries (CIA ages.htm).  All countries need to address what level of GDP/capita they wish to reach and increase their GDP and reduce their birth rate to reach that goal.  Western democracies are not addressing this issue well.

 

D. Observational data and criteria for a successful democracy:  Fareed Zakaria (2003) summarized the historical data in his book, “The Future of Freedom: Illiberal Democracy at Home and Abroad,” on page 70: “Thirty-two democratic regimes have existed at incomes above roughly $9,000 (per person per year) for a combined total of 736 years.  Not one has died.  By contrast, of the 69 democratic regimes that were poorer, 39 failed – a death rate of 56 percent.”  The sample of 61 countries with populations of at least 15 million used in this study is summarized in CIA gini.htm.  The Gini Income Distribution Index alone is clearly useless for predicting GDP/capita.  However, if the Gini Index is between 30 and 45 and is combined with a low crude birth rate, one would expect that the GDP/capita would be above $9,000 or capable of reaching it soon.  If the crude birth rate is above about 14 births/1000, the GDP/capita is less likely to reach $9,000 for any value of the Gini Index.  The current exceptions are all below $15,000/person/year and have high Gini Index values.  The crude birth rate is a much better predictor of GDP/capita (CIA births.htm).

 

To survive, a popular democracy must maintain a workable balance between demands for welfare and personal incentives needed to maintain a viable market economy.  Remaining competitive in the world economy is what counter balances the tendency of politicians to grant more welfare to win votes.  Gini Index values below about 30 are likely to be associated with broad welfare programs which tend to reduce economic productivity and lead to loss of capital to other countries and to a slow decline in GDP/capita.  A Gini Index value above about 45 usually indicates extreme concentration of wealth and most of the population lives in poverty.   In a poor democracy, the poor are likely to elect a popular leader who promises more welfare, but soon becomes a despot.   In an overpopulated country, the ambitious person has only two choices: (a) migrate to a country with more possibilities, or (b) form, or join, an oligarchy and concentrate wealth in the poor country at the expense of the majority.  Workers create their own worst enemy, overpopulation, by having too many children!

 

Russia and the former Soviet states must cope with a history of welfare and poor work incentives.  China and India will come under extreme public pressure to become welfare states unless they can reduce their populations to match their real labor needs.  Western Europe and the United States will have to control welfare to maintain, or increase, work incentives in the presence of excess labor worldwide.  Southeast Asia, The Middle East, Africa, and Latin America are clearly in danger of being ruled by despots or becoming very poor welfare states unless they reduce their birth rates and populations quickly.  There is likely to be a huge surplus of cheap labor and a shortage of cheap energy for many decades.  Human population control is needed now, but will soon become essential.  How we choose to balance energy needs, GDP, and population will largely determine the future of our world (Heaven.htm).

 

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