Democracy is robbing us of our freedoms

Democracy doesn't protect our freedoms, claim Tom Miers and Craig Smith – it is steadily undermining them, as governments seek to win power by bribing voters with their own money. As a result, the West could be headed for a long, slow decline, says Merryn Somerset Webb.

With the state of our public sector and the expectations we have of our public sector in mind, I am reading Democracy and the Fall of the West by Tom Miers and Craig Smith.

It is short, simple, and offers a theory that to non-Daily Reckoning readers at least, will come as quite shocking. According to Miers and Craig, the idea that democracy somehow solves the great puzzle of mankind how to make sure that our rulers have a legimate mandate and work for the interests of the community has turned out to be nonsense.

Instead, modern democracy has undermined our freedoms to the extent that it is "undermining the foundations of the West's success in a way that will inevitably cause its decline and fall." These days the governments of the West don't work for us: instead they have returned our countries to the "normal condition of history," one in which "powerful governments compete to achieve political goals at the expense of both the individual and political society."

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It is heady stuff but I think well worth a read. I've looked at a small part of the flaws in modern democracy here before, but this is a pretty comprehensive demolition of the system we currently think makes us free.

The basic point? "Democracy is no guarantor of liberty because voters often want to take away the liberties of others and will vote accordingly." It is contentious stuff but well worth a read.

Back to the public sector. Chapterfour of Democracy and the Fall of the West focuses on Democracy and the Big State. I think we have all figured out by now that democracy has been the driver in the explosion in the cost and scope of government. Politicians hoping to be re-elected have to promise stuff and then at least take a stab at delivering it, using tax payers' money to so: so much so that even back in 1985 Milton Friedman was noting that "since the 1930s the technique of buying votes with the voters' own money has been expanded to an extent undreamed of by earlier politicians."

So we all end up colluding in the expansion of the state and "democratic government results in a remorseless cycle of taxation and regulation." The effects aren't good. They have given us our horribly inefficient Soviet-style "free-at-the-point-of-delivery" health and education systems so bad that they both operate alongside shadow markets where parents and patients pay not to have to use them.

Then there is the benefits system which offers a "powerful disincentive not to work." That's bad for the economy in general, but it also means that the government has to indulge in "double intervention" introducing a minimum wage in order to encourage people to work.

And of course it has a social impact too. We probably all agree that it isn't good for the able-bodied and minded to be dependent on the state, but when money is provided by the state which makes no moral judgement on its recipients a "culture of entitlement rather than duty" tends to creep in (something readers of the Daily Mail can see exemplified on its pages most days).

Next up? Social breakdown. And then more intervention. The state creates the conditions for "irresponsible lifestyles" and then intervenes to try and prevent them (via rules on smoking, alcohol licensing and a legion of freedom-restricting bans and regulations).

How do we fix all this? Miers and Smith think we could have a go at dealing with welfare at least by distributing cash to everyone equally. That cash could then be used to buy all the services of the state (health, education housing and so on) on an equal basis from private providers. Think of it as being a bit like child benefit used to be where everyone gets the cash and can use it to "freely buy essentials for their children from ordinary private suppliers."

But they don't see that as very likely to happen, or even as much of a start to putting us back on the right road. Instead, their conclusion is a pretty miserable one. The West might not "fall" in a catastrophic kind of a way, but odds are that we have set the stage for a "prolonged sunset" as the institutional advantages bestowed upon us by our "one-time liberalism are fully dissipated."

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.