Friday, January 20, 2012

Faltering democracies

Buttonwood has a piece about the tendency of the "rationally irrational" majority (which does not take an interest in the details of politics) to have systematic biases - including an anti-market bias, and a view that favors short term make-work schemes over the improvements in productivity which underlie long-term prosperity. Democracy, it seems, is fatally flawed; it remains to be seen whether the established democracies of the West can survive.

Technocrats have taken over in Greece (too late!) and Italy. In the United Kingdom, Conservative Prime Minister David Cameron has made some progress in trying to undo the disastrous legacy of previous Labour governments. And in Spain a conservative government was voted in late last year to replace the socialists.

The mildly entertaining democratic processes of the United States lumber on, and (who knows?) they might result in an administration which begins the Sisyphean process of turning the country around. The next question would be whether the electorate would continue to support a President and a Congress committed to making hard, and (if the research Buttonwood alludes to is correct) unpopular, decisions in the interests of productivity and long-term prosperity.