How democracy goes bad

How can majoritarian politics durably sustain policies harmful to majority interests?

The most popular way to resolve this puzzle is to blame special interests for undermining the democratic process.The main problem with this account, however, is that public opinion research—not to mention everyday conversation—routinely finds that the policies that economists do not like are popular. The plot thickens.

One striking feature of the Bastiat-Mises view is that politicians are actually tightly constrained by public opinion. On their account, democratic competition keeps elected officials in line; if they deviate from majority preferences, they lose elections and their jobs.

[T]he politician must give the people what they wish to get, very much as a businessman must supply the customers with the things they wish to acquire.


According to Bastiat and Mises, systematically mistaken economic beliefs—or, as Bastiat terms them, "sophisms," are widespread. Public opinions are not bright.

Ignorance of opportunity cost. Its members favor wasteful government programs because they fail to consider the alternative uses of wasted resources. They want a large military in peacetime because they implicitly assume that there is nothing else for discharged soldiers to do. They favor fruitless public works projects to "create jobs," not realizing that the taxes required to fund these projects destroy as many jobs as they create.

When one of these fundamental errors... becomes firmly established as a conventional judgment, unquestionably accepted and agreed to by everybody, it tends to proceed from theory to practice, from thought to action.The further the average citizen's views are from the truth, the lower the quality of policy.


Democracy guarantees a system of government in accordance with the wishes and plans of the majority. But it cannot prevent majorities from falling victim to erroneous ideas and from adopting inappropriate policies which not only fail to realize the ends aimed at but result in disaster.


The ultimate foundation of modern protectionism and of the striving for economic autarky(自给自足) of each country is to be found in this mistaken belief that they are the best means to make every citizen, or at least the immense majority of them, richer, totally disregarding comparative advantage and economies of scales.