July 1, 2013
Mises was on to something essential when he wrote “When we call a capitalist society a consumers’ democracy we mean that the power to dispose of the means of production, which belongs to the entrepreneurs and capitalists, can only be acquired by means of the consumers’ ballot, held daily in the marketplace.”
The late William H. Peterson, with whom I had the good fortune to communicate, expanded upon this idea in a number of articles.
But this idea of market democracy or consumers’ democracy or dollar democracy is still too limited. It needs to be taken out of the economic realm and into the social-political-legal realm. To do that, we need only extract the essence of the concept. The underlying feature of market democracy is that each person makes his or her own choices of goods daily, and this is a “check and balance” on what entrepreneurs produce and capital markets fund to be produced. Then we need to consider that there are goods associated with social-political-legal systems. I purposely do not say what these might be because personal democracy views them as objects of choice that can vary among individuals. But one might think of them as arrangements having to do with rules, laws, and adjudication covering a range of interpersonal behaviors, or one might also think of them as involving specific goods having to do with such matters as security, protection, and defense.
Now think of extending this kind of personal choice into the personal choice of legal system, social system and governance system. Imagine a personal power to choose one’s operating systems in the realm of social-political-legal system. Such a power is the ultimate political check and balance, orders of magnitude more effective than the machinery of government arranged by the Framers, which we know today to be seriously defective.
If each person has the right to enter and leave a social-political-legal system, then a system that is not satisfying its clients or subscribers will lose them. One that satisfies its clients will retain them and possibly attract more. Power and territorial limits will stop being the criteria by which the people supplying the services of a system gain and number its adherents. Instead, the individual decisions of each person will contribute to shaping the observed systems that result. Each person will have social-political-legal systems from which to choose.
Our thinking is constrained by the terms appropriate to today’s monopolistic governments. Using that limited vocabulary, the closest we can come to the right to enter and leave a social-political-legal system of living with others is the term “personal secession”. Monopolistic states typically take a firm stance against subdividing into smaller political units, resulting in civil wars, but there are conditions and circumstances where such break-ups occur peacefully. The world has formally and informally recognized in some ways the right of a people to secede under certain conditions that the states impose.
The idea of personal secession goes much further. It goes as far as the concept of secession can possibly go. It acknowledges the right of each and every person to select a society, a system of law, and a political arrangement individually and not necessarily by being in a collective known as a “people”, although that is always a possibility.
Personal democracy can be defined by rewriting what Mises wrote. “When we call a society a personal democracy we mean that the power to supply legal, social and political systems, which belong to the entrepreneurs and capitalists, can only be acquired by means of the free personal choice of clients or subscribers, made at agreed-upon intervals.”
The immediate motivation for once again expressing this panarchy idea, this time in a different way that connects it with past ideas, is the stiff laws against terrorism passed by governments in America. These are being imposed on everyone, and they appear to be draconian, costly, senseless, cruel and discriminatory.
The terrorism laws are a sample — one instance — of the typical process by which elected representatives make and impose laws. A citizen has a right to speak out on issues and another right to vote or not vote on a series of candidates. A citizen has a right to run for office. A citizen has a right to move to another state or country. These are all not insignificant rights, won over the centuries. These comprise a portion of what is today meant by democracy. But they are far, far from personal democracy.
Again, we are constrained in our thought by the vocabulary. Today’s democracy is a qualified democracy. Let us call it “state democracy”. It is a democracy entirely linked to and emanating from the concept of a single state as the sole sovereign political unit. All the rights just mentioned have to do with the “citizen” of a state and a political system equated with that state and its machinery. A citizen is not a person with free choice of a social-political-legal system. A citizen is a designation of a state-limited and state-defined set of rights that each person finds he has, whether he likes it or not.
All the fancy speeches about freedom, democracy and spreading democracy throughout the world and all the high-toned rhetoric about the superiority of the American system are talking about state democracy. It is a conceptual error to equate state democracy with democracy. To see this, we need only note that state democracy is the polar opposite of personal democracy. State democracy is a monopoly imposed within territorial bounds by numbering persons as citizens and allowing no or very limited choice of social-political-legal system. It is democracy through individual voting and some rules about determining voting outcomes that each person takes as given by and large. Personal democracy is defined by a right of each person to choose a social-political-legal system without territorial bounds. Again there is individual choice but it is not constrained to a vote within a political system or to the other rights that come with state democracy. The choice is a decision to participate and join, and it may involve spending resources and accepting obligations voluntarily. The only common element in these two democracy concepts is that of individual choice. In state democracy, that choice is highly constrained and within bounds that lie beyond individual choice. In personal democracy, the choice is much wider, like that one has in free markets.
The shape and content of the resulting social landscape, political landscape and legal landscape are results of each person’s acting as a client or subscriber or buyer or demander, as in a market. These are neither pre-determined nor imposed as in a state democracy. No system of political voting is imposed. No constitution is imposed. No borders are imposed. No citizenship is imposed. A person chooses to join or not join, and that is the essential in personal democracy.
If a set of people wished to live under laws that imposed 50-year sentences for shooting bullets into a car, they could do that with personal democracy. They would have to live with the costs and benefits of such laws. They would not be imposing them on their non-subscribers. By the same token, if a set of people wished to live under laws that required restoration of damaged property as the result of such actions, they could do that, and they too would have to live with the costs and benefits of such laws.
With communications being what they are and with the right to subscribe and unsubscribe from a system, there will be competition among systems. There will be checks and balances arising from personal democracy. There will be trials and errors. There will be mistakes. But if people can subscribe and unsubscribe, they can benefit from the competition by learning.
State democracy is based on the principle of state sovereignty. The state’s power prevails. The citizens as a group and linked by particular political arrangements are associated with this sovereignty. Whatever the basis of this sovereignty is, nothing can stand in its way when a law or rule is formulated, passed and enforced. There is no check and balance from outside the system. One can only exercise the limited rights of protest, voting, moving and running for office that the state allows. State democracy is a limited democracy. It is a monopolistic democracy.
The incentive for individuals living in state democracy is to gain control over the machinery of government and to use it to one’s personal advantage by forming coalitions that pass laws that one wants. This in a nutshell is the history of American government and of all similar state democracies and it is the reason why their defects become worse and worse over time generally, until they perhaps experience some catastrophe and people start out fresh.
Personal democracy opens up the closed system that is state democracy. The incentive is for each person to choose what he or she regards as good. There is no means of capturing a government to the mass detriment of subscribers. They will simply unsubscribe.
The system or systems that produce happiness are unknown. Some elements may remain the same. Others change. Human life and happiness has not reached a culmination or finality in today’s system of state democracies. The time is coming when we will jettison state democracy with all of its glaring defects. We will be looking for alternatives that are better. Resurrecting the monopoly state democracy with a new constitution is one alternative. But why bother? The result could only be a mish-mash of compromises satisfying no one and placing a strait jacket on everyone.
Personal democracy is the goal we should bear in mind and for which we should strive.
Michael S. Rozeff is a retired Professor of Finance living in East Amherst, New York. He is the author of the free e-book Essays on American Empire: Liberty vs. Domination and the free e-book The U.S. Constitution and Money: Corruption and Decline.