Hamas, Palestine, and the Economics of Democracy--Posner
30/1/06 5:04 pµ
<p>President Bush has suggested that spreading democracy is the surest antidote to Islamist terrorism. He can draw on a literature that finds that democracies very rarely go to war with each other, although a conspicuous exception is the U.S. Civil War, since both the Union and the Confederacy were democracies.</p>
http://www.becker-posner-blog.com/archives/2006/01/hamas_palestine.html
President Bush has suggested that spreading democracy is the surest antidote to Islamist terrorism. He can draw on a literature that finds that democracies very rarely go to war with each other, although a conspicuous exception is the U.S. Civil War, since both the Union and the Confederacy were democracies."
Hamas, which has just won a majority in the parliament of the Palestinian proto-state, is a political party that has an armed terrorist wing and is pledged to the destruction of Israel. Can that surprising outcome of what appears to have been a genuinely free election be squared with the belief that democracy is the best antidote to war and terrorism?
The first thing to note is that one democratic election is not the equivalent of democracy. When Hitler in 1933 was asked by President Hindenburg to form a government, the processes of democracy appeared to be working. The Nazi Party was the largest party in the Reichstag; it was natural to invite its leader to form a government. Within months, Germany was a dictatorship. So the fact that Hamas has won power fairly and squarely does not necessarily portend the continuation of Palestinian democracy.
But suppose Palestine remains democratic. What can we look forward to? I don't think the question is answerable if democracy is analyzed realistically. The great economist Joseph Schumpeter sketched in his 1942 book Capitalism, Socialism, and Democracy what has come to be called the theory of "elite" or "procedural" or "competitive" democracy. In this concept, which I have elaborated in my book Law, Pragmatism, and Democracy (2003), and which seems to me descriptive of most modern democracies, including that of the United States, there is a governing class, consisting of people who compete for political office, and a citizen mass. The governing class corresponds to the selling side of an economic market, and the citizen mass to the consuming side. Instead of competing for sales, however, the members of the governing class compete for votes. The voters are largely ignorant of policy, just as consumers are ignorant of the inner workings of the products they buy. But the power of the electorate to turn elected officials out of office at the next election gives the officials an incentive to adopt policies that do not outrage public opinion and to administer the policies with some minimum of honesty and competence. It was Fatah's dramatic failure along these dimensions that opened the way to Hamas's surprisingly strong electoral showing. Hamas cleverly coupled armed resistance to Israel with the provision of social welfare services managed more efficiently and honestly than the services provided by the notoriously corrupt official Palestinian government, controlled by Fatah....
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Abstract: This paper summarizes the main findings of the recent studies that have constructed top income and wealth shares series over the century for a number of countries using tax statistics. Most countries experience a dramatic drop in top income shares in the first part of the century due to a precipitous drop in large wealth holdings during the wars and depression shocks. Top income shares do not recover in the immediate post war decades. However, over the last 30 years, top income shares have increased substantially in English speaking countries but not at all in continental Europe countries or Japan. This increase is due to an unprecedented surge in top wage incomes starting in the 1970s and accelerating in the 1990s. As a result, top wage earners have replaced capital income earners at the top of the income distribution in English speaking countries. We discuss the proposed explanations and the main questions that remain open.
Thoma reproduces what are by far the most interesting figures in Piketty and Saez, which show that the pretax income share of the top 1% of the American income distribution jumped from 8% in 1980 to 9% in 1985 to 13% in 1990 to 17% in 2000 to 14% today. Over the same period the income share of the next 4% has risen from 13% to 15%, and the income share of the still next 5% has stayed at 12%. The top tenth of the American income distribution increased its share from 33% in 1980 to 41% today--with three-quarters of that increase going to the top 1% and fully one-quarter of that increase going to the top 0.01%.
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