Higher Time Preferences in Parliamentary-Style Democracies

[ThatOldGuy]

Because of this post, I looked up third parties and (allegedly) had a realization.

I ordered Democracy: The God That Failed (have not yet read it) and have been anticipating in doing so fairly soon. From what I have read (based on forum posts and summaries of the book on MisesWiki) Hoppe argues that the very existence of a state heightens the time-preference to govern the market. This is because the politicians have no interest in property values or wealth except that which can get them reelected or pursue their own interests. As such, the politician is more of a caretaker than a property owner and, based on this recognition, Hoppe states that he favors a monarchy over a democracy given this difference between the two systems if he was asked to choose between the two. This argument complements what he has written in A Theory of Socialism and Capitalism as well as The Economics and Ethics of Private Property and can be realized with reflection that the state is a product of socialism not capitalism.

In the United States, the two party system holds sway. By the way elections are decided nationally and in most states, the candidate with the majority is the victor and the candidate with the minority is told better luck next time. Apart from the United States, most other countries assign representation according to percentage vote and minorities form coalitions to lead the state.

Last night, well more like very early this morning to be honest, I considered the thought that perhaps parliamentary-style democracies heighten the time preference of the state relative to a state where fewer parties are capable of governing. The monarch is the closest that a state can mimic an owner of a nation (given that he is a singular interest on the use of a nation’s --“his”–resources; this is the closest a state can come to an exclusive owner of resources).

The more vested interests there are in governing the greater is the incentive for each party to take the resources of the state for their own interests and receive the most from them in the briefest amount of time possible. As the management of a nations wealth deviates from a singular vested interest, the incentives for maintaining and creating wealth are led more towards a tragedy of the commons dilemma (in the case of parliamentary democracies this would manifest in compromises, expediency and politics rule rather than judgments based on principle, values, and cost/benefit calculations–this is not to suggest that such elements do not exist in a dual party system, only that they occur to a lesser extent in a dual-party system) as the interests span from a monarch, to a dual-party system (third parties exist, but have virtually no influence in the nation’s affairs), to a parliament (many parties can viably have a say in the management of the nation’s affairs).

Thoughts?

[No2statism]

I agree that a parliament would make things even worse. However, a confederation is less painful than a monarchy.

[Truth_and_Liberty]

It’s been a while since I read D:TGTF, but it seems to me you are mixing up two different arguments in your post. Hoppe’s point about time preference, IIRC, is that if a ruler has a short term length, then he will act with high time-preference to get as much as he can while he is in power because he’s going be replaced soon. The reason monarchy > democracy here is not anything to do with there being more special interests involved. It is that a monarch, by definition, has a very long term length, while a ruler in a democracy has a shorter term length.

This point can be seen by imagining what affect it would have if the U.S. elected a new President every two years, or every year. He would have do his work (i.e. looting) as quick as he can while he has the chance. On the other hand, imagine U.S. Presidents had 10-year terms. Then you might find that he “goes easy” near the beginning of his term, so that he doesn’t destroy the economy too much, so there is plenty more loot available for later in his term. Then you could imagine having lifetime-tenured Presidents. Then take that one step further and assume that the President is replaced by his son when he dies and you have a King, with the lowest time-preference of all (actually he might have an even lower time-preference if he could choose who replaces him).

The thing about special interests and tragedy-of-the-commons is a different axis altogether. At one end you have a state which has (for want of a better term) a high extent of enfranchisement, meaning there are a lot of snouts in the trough. At the other end you have a state where one single person is the only ‘special interest’ that the state is catering to. All other things being equal, you would expect a state with a high extent of enfranchisement to act with higher time-preference than one with a lower extent of enfranchisement. Now, it may be that there is a correlation where monarchies tend to have low enfranchisement and democracies tend to have high enfranchisement, but this is not necessarily the case. This extent-of-enfranchisement axis is really independent of the term-limit-axis.

I think if you want to compare a parliamentary to a representative government in terms of what time preference they are likely to have, you would have to analyse these two things separately. I don’t remember Hoppe talking about this extent of enfranchisement. If he did, I’m sure he has a nicer term for what I mean.

[ThatOldGuy]

@Graham Wright

Hoppe’s point about time preference, IIRC, is that if a ruler has a short term length, then he will act with high time-preference to get as much as he can while he is in power because he’s going be replaced soon.

I think this is where I sort of blend the two arguments:

This is because the politicians have no interest in property values or wealth except that which can get them reelected or pursue their own interests.

I’ve not yet read D:TGTF, but I guessed that Hoppe would talk about the tragedy of the commons. The idea of a state itself mixes tragedy of the commons with, as Hoppe’s novel argument states, high time preference relative to term lengths of agents of the state. While I focused a bit more on the tragedy of the commons in the latter half of my post, I was trying to thread together Hoppe’s point (the summary you’ve submitted above) while replacing “ruler” with “party.” Obviously, a party cannot “act” in any praxeologically meaningful sense, but the association of politicians within a third-party that is, for once, part of a majority coalition in a parliament would seem to heighten the time preference of the politicians in that party if they now find themselves as the government for whatever term period.

I’m not dealing specifically with regard to the length of time of the term that this hypothetical third-party has, but rather that, say, for once in the party’s existence the historically minority party is part of a majority coalition in the legislature; now say that there are a few of such minority parties with representation in the legislature.

Ex.There has never been a member of the Green Party of the United States in Congress. November 2012 comes along and there’s a Green from a small district in California in the House of Representatives who won the election by a very narrow margin over both the Democratic and Republican candidates. Would this representative have any more incentives than a member of the two major parties to pursue policies with greater interest or otherwise express a higher time-preference than a politician of one of the two major parties?

@Graham Wright

The thing about special interests and tragedy-of-the-commons is a different axis altogether.

While I see your point, I wouldn’t necessarily agree that interests (I am not specifically talking about special interests here) and the tragedy of the commons problem are wholly separate issues. Isn’t the crux of the tragedy of the commons that there is no property ownership of the good in question and that such lack of ownership provides an incentive for higher consumption over preservation? I’d sum my thoughts on this that competing interests for a scarce, unowned resource results in higher time-preference than what would follow if the resource were owned and rationed according to pricing. Just as farmers can compete for use of an unowned pasture for their livestock, so too can politicians vie for the use of tax funds for their pet-projects.

@Graham Wright

All other things being equal, you would expect a state with a high extent of enfranchisement to act with higher time-preference than one with a lower extent of enfranchisement. Now, it may be that there is a correlation where monarchies tend to have low enfranchisement and democracies tend to have high enfranchisement, but this is not necessarily the case.

The boldened part is what I’m trying to get at, specifically that this is more of a theoretical necessity rather than a correlation. This may or may not be contained within Hoppe’s argument in D:TGTF. I’m deviating from how Hoppe applies time-preference in the state (regarding term limits) to historical representation in the state, specifically regarding minority parties (would this even matter, what effects could this have on time-preference of the state, is this likely to make time-preference of a multiple party democracy higher than a two party democracy etc.)

[Anenome]

…can be realized with reflection that the state is a product of socialism not capitalism.

This is because we think of states as they are today, meaning democratic.

The problem is that democracy and the notion of majority rule are inherently socialistic and predicated on the socialist-ethic, that the collective should be greater than the group and can override the will of the individual.

In any such state where the locus of control rests with the collective, it is a socialist state and will always tend towards socialism, and this has been equally true in the US.

However, it may be possible to create a state predicated on the individualist-ethic, where the locus of control rests with each individual over himself. Where majority does not rule a dissenting minority, but where the individual rules solely himself.

Such a society would continue to exhibit individualism and have no tendency towards socialism–in theory.

And you would call such a place an autarchic republic.

I disagree with Hoppe’s tongue-in-cheek suggestion that a king would be better. Perhaps it would or not. But I don’t think Hoppe has ever considered the possibility of autarchy, and neither have most anarchists.

[ThatOldGuy]

@Anenome

The problem is that democracy and the notion of majority rule are inherently socialistic and predicated on the socialist-ethic, that the collective should be greater than the group and can override the will of the individual.

Could you define the boldened words and comment specifically on how “the collective” differs from “the group?”

As I’ve read, socialism is defined as the transfer of property titles from producers and contractors to nonproducers and noncontractors (often using the tools of the state -aggression- as a medium). As such, any institution that can be defined as a state (a firm with the absolute monopoly of force in a territory, as well as the distinction as ultimate arbitrator in a territory) is a product of socialism–whether it is called a republic or democracy is irrelevant.

@Anenome

However, it may be possible to create a state predicated on the individualist-ethic, where the locus of control rests with each individual over himself. Where majority does not rule a dissenting minority, but where the individual rules solely himself.

Such a society would continue to exhibit individualism and have no tendency towards socialism–in theory.

And you would call such a place an autarchic republic.

Sounds more like anarchy.

Isn’t autarky just a characterization of a society (or individual) as economically self-sufficient? How is this any different from current protectionist measures which virtually every state maintains to whatever degree?

@Anenome

And you would call such a place an autarchic republic.

So there’s a collective or no? The post to which the hyperlink leads describes several reforms that acft would make for the state, but doesn’t seem relevent to “autarchic republic” (which appears nowhere on that thread).

@Anenome

I disagree with Hoppe’s tongue-in-cheek suggestion that a king would be better. Perhaps it would or not.

I haven’t read the book, so I can’t say this for certain, but, having read Hoppe, I doubt that his ‘suggestion’ that ‘a king would be better [than a democratic state]’ is anything close to ‘tongue-in-cheek.’ More likely is that he compares the effects that praxeological laws have on politicians within a democracy relative to a monarchy and makes a decision of his preference based on his theory.

@Anenome

But I don’t think Hoppe has ever considered the possibility of autarchy, and neither have most anarchists.

Mises has discussed autarky at length (Rothbard and Hoppe to lesser extents), as has our resident anarcho-autarkist.

[Anenome]

@ThatOldGuy

@Anenome

The problem is that democracy and the notion of majority rule are inherently socialistic and predicated on the socialist-ethic, that the collective should be greater than the group and can override the will of the individual.

Could you define the boldened words and comment specifically on how “the collective” differs from “the group?”

That’s a typo. The word ‘group’ should be ‘individual.’ I can see how that was confusing. That should explain it, no?

@ThatOldGuy

As I’ve read, socialism is defined as the transfer of property titles from producers and contractors to nonproducers and noncontractors (often using the tools of the state -aggression- as a medium). As such, any institution that can be defined as a state (a firm with the absolute monopoly of force in a territory, as well as the distinction as ultimate arbitrator in a territory) is a product of socialism.

The autarchy I propose first of all does not have an absolute monopoly on force but a conditional monopoly–conditional on voluntary acceptance of that jurisdiction–because jurisdictions in this autarchy would not be able to engage in what I call citizen-capture, which is the ability to force citizens to accept their laws or else leave the jurisdiction.

By that I mean that citizens in an autarchy would have a new political right drawn as a corollary from the right of free association, and it is the right of political-secession or micro-secession (since one leaves only a city-jurisdiction, not the whole political order).

The adjunct concept to this is that jurisdictional property boundaries would not be set in place for all time and instead are made up entirely of the property boundaries of those citizens which have voluntarily accepted that jurisdiction, and they are free to leave it at any time (secede) and join/form/refrain another jurisdiction. At the same time, in my proposed autarchic republic, taxation against someone’s will is constitutionally prohibited.

So, I think that leaves you either in the role of suggesting that what I propose is either not a state, or expands the concept of what a state can be.

@ThatOldGuy

@Anenome

However, it may be possible to create a state predicated on the individualist-ethic, where the locus of control rests with each individual over himself. Where majority does not rule a dissenting minority, but where the individual rules solely himself.

Such a society would continue to exhibit individualism and have no tendency towards socialism–in theory.

And you would call such a place an autarchic republic.

Sounds more like anarchy.

Exactly, but there is a crucial difference. Anarchist propose replacing the state with nothing, a negative political order. This has been our mistake. We need to put in place a political order which positively asserts our views positively. Absent that, there will always be a political vacuum in which will spring up multitudes of statist entities. Such is unavoidable.

At the same time, there are a couple essential functions for a state to perform, three things: being a criminal and civil court of last resort, and maintaining national defense. However, this would all be financed voluntarily, and non-monopolistic.

@ThatOldGuy

@Anenome

And you would call such a place an autarchic republic.

So there’s a collective or no? The post to which the hyperlink leads describes several reforms that acft would make for the state, but doesn’t seem relevent to “autarchic republic” (which appears nowhere on that thread).

If you read from my first post in that thread you’ll find the main of the proposal, though I wasn’t using that term then.

The collective is only this: a confederal national government which has one sole function: to enforce voluntaryism and support the protection of individual rights.

Essentially, the charter cities would be left alone and free to do as they like. There’s no national legislature. But if there arise accusations of aggression on the part of a city towards its people, the confed would be able to prosecute and invade if need be, though the invaded-jurisdiction would be tried by a jury of its peers, not the confed.

@ThatOldGuy

@Anenome

But I don’t think Hoppe has ever considered the possibility of autarchy, and neither have most anarchists.

Mises has discussed autarky (Rothbard and Hoppe to lesser extents), as has our own anarchoautarkist.

Lol, please don’t group me in with Freedom4me

Still, you can see how extremely rare any mention of autarchy is at all with a quick search of Mises literature section. You get barely two authors: one the Mises article you found (thanks!), and the gent whom I originarily heard of the concept from, Robert LeFevre.

However, in that article you link, Mises uses the term ‘autarky’ in that article in the context of individual nations, not individuals, and certainly not as a political system of autarchy such as I propose. For him, the term is shorthand for nations that are striving to be economically independent, such as the socialist economists encouraged African nations to be, as opposed to the advice we gave to Asia to openly trade.

“Autarky or economic self-sufficiency is a state of affairs where there is no foreign trade at all; every nation consumes only goods produced within its own borders. No contemporary nation is ready to admit openly that it strives toward autarky. But as every nation is anxious to restrict imports and as exports must needs fall concomitantly, we can characterize the economic policies of the last decade preceding the present war as autarkic.” ~Mises

Basically, he means economic protectionism.

Fortunately his use of the term did not catch on or I’d need a new descriptor for my proposal

[Truth_and_Liberty]

@ThatOldGuy

Isn’t the crux of the tragedy of the commons that there is no property ownership of the good in question and that such lack of ownership provides an incentive for higher consumption over preservation? I’d sum my thoughts on this that competing interests for a scarce, unowned resource results in higher time-preference than what would follow if the resource were owned and rationed according to pricing. Just as farmers can compete for use of an unowned pasture for their livestock, so too can politicians vie for the use of tax funds for their pet-projects.

Yes, actually I think you are right. There is a causal relation, not just a correlation. By definition, a monarch cares more than a democratic politician about the capital value of the country. This has two direct effects: 1) the politician is more likely to loot the country more for his own benefit, 2) the politician is less likely to be bothered about preventing other people from looting the country, too.

I’m deviating from how Hoppe applies time-preference in the state (regarding term limits) to historical representation in the state, specifically regarding minority parties (would this even matter, what effects could this have on time-preference of the state, is this likely to make time-preference of a multiple party democracy higher than a two party democracy etc.)

I have been thinking about this, but I haven’t reached a conclusion. I think the question to ask is: Is a small-party politician going to care more about the capital value of the country, or a big-party politician? I’m not sure there is a straight-forward answer to this. Possibly it could be said that a politician from a small party is less secure in his position than a big-party politician. This may cause him to have a higher time-preference, and get as much as he can while he can.

But on the other hand a politician from a small party might also be concerned with growing his party, keeping his party’s reputation, etc, so this may make him less likely to be corrupt. A small party politician might be more principled to begin with, on the basis that people who are overly concerned with “purity of the message” are more likely to be attracted to running third-party. Also since the chances of getting elected in a third-party are that much lower to begin with, being in a third-party itself may suggest the individual has a naturally lower time-preference. So I’m really not sure.

[ThatOldGuy]

While I do appreciate your thoughts, this is a topic different from the topic of this thread.

[Torsten]

This argument complements what he has written in A Theory of Socialism and Capitalism as well as The Economics and Ethics of Private Property and can be realized with reflection that the state is a product of socialism not capitalism.

Which is essentially non-sense as you need a state (or monopolist on violence) to enforce control over the means of production. Alternatively voluntary association with a community of goods would be thinkable. But why would they want a state then?

Capitalism (as historical phenomenon of the modern era) is of course the result of the emergence of the modern state, with rule of law, guarrantee of stability of legislation, internal piece etc.

[Merlin]

I’d say that parties are not people. The public mind is heterogeneous, and must be taken as it is. The change in electoral/political systems will not make that heterogeneity go away, but it will only incite it to aggregate within larger (and shakier) parties. The gamut of opinions that runs inside the Republicans Party (for example), from the neocons to Ron Paul, can be found scattered in several parties is Europe. And as parties are not individuals, but organizations that must cater to the interests of the individuals they represent, I do not see how trading two large parties with eight smaller ones will help. If anything, I’d say thing stand the other way around. My two cents anyway.

[ThatOldGuy]

Which is essentially non-sense as you need a state (or monopolist on violence) to enforce control over the means of production.

What? Why? Why do I need a state to enforce control over the means of production [which belong to whom?]?

Capitalism (as historical phenomenon of the modern era) is of course the result of the emergence of the modern state, with rule of law, guarrantee of stability of legislation, internal piece etc.

It is? I’ve actually read that capitalism has its origins in anarchy.