Mises Wire
Sergio Lopez

This year, more than sixty countries will hold or have already held elections; a quarter of the population will participate in democracy. Most people in the free world would consider that a victory for liberalism (“liberalism” in the traditional meaning of the word, not the corrupted definition used in the United States). Democracy is often staged as the epitome of freedom and prosperity, a noble system where the voices of the people not only reign supreme, but a system assumed to possess inherent virtue and morality.

However, behind the idealized version of democracy and behind the curtains of this great virtue lie a myriad of flaws and contradictions that will not only defy its idealized image as a moral example of freedom and prosperity, but will also show that democracy is just a tool for governance, and a deeply flawed tool at that.

The Rationality of Ignorance

It is important to understand what drives the votes of the electorate. Democracy professes to empower individuals to shape their own destiny, granting the opportunity to choose their future through the ballot box. However, the harsh truth is that the individual power of a vote is minuscule, especially in countries as big as the United States. Thousands of people will cast their vote, and the probability that your individual vote will be the one that makes a difference is a fraction of a fraction. Most people will discern the value of their own vote, consciously or subconsciously, and will realize the futility of investing the time, effort, and money into understanding the intricacies of the electoral programs and policy proposals offered by the different candidates.

In other words, the benefit of voting with knowledge and full awareness is diluted by the thousands of voters. Instead, most people vote based on emotions and instincts, often swayed by superficial rhetoric. This transforms the electoral process, which ideally should be a platform for the best ideas, into a mere popularity contest devoid of substantive intellectual rigor. Antagonistic arguments prevail, shaping the outcome with little regard for the profound issues at hand and contributing to the perpetuation of banality in political discourse.


For most countries, the term for the executive power is around four to five years; it is a way of making sure that the current government will leave and that the people have a chance to choose a new leader. This is a noble sentiment that prevents autocratic regimes and changes the dynamics of power every time. However, it is also one of the most damaging flaws of democracy.

The pursuit of power within a democracy brings a shortsightedness of action. Elected officials are ensnared by the prospect of reelection, shaping their actions to maximize short-term gains and voter appeal (perhaps why parasitical politicians are so fond of Keynesian economists). Long-term considerations and prudent governance are sacrificed, perpetuating a cycle of myopic decision-making.

Privileged Interest Groups

It is a fundamental truth about humanity that every individual is different, and every individual has his own interests and preferences. Then it should be no surprise that networks of privileged interest groups are formed. Lobbies desire to achieve advantages, subsidies, and benefits from the government at hand. A government that is deeply influenced by the short-term and by getting as many votes as possible to win in the short-term will no doubt make deals with these privileged interest groups that promise support in exchange for benefits that will undoubtedly damage the nation and the economy in the middle—and long-term.

In The Road to Serfdom, Friedrich von Hayek, speaking about socialism and National Socialism, said:

"They knew that the strongest group which rallied enough supporters in favor of a new hierarchical order of society, and which frankly promised privileges to the classes to which it appealed, was likely to obtain the support of all those who were disappointed because they had been promised equality but found that they had merely furthered the interests of a particular class."

This is a sentiment that is not only true to socialists and national socialists, but to all parties that are actively seeking power through democracy.

Unbinding Representation

Influenced by the desire for power and the shortsightedness already mentioned, politicians will make all kinds of promises and lofty commitments to gain enough support for another term. Yet, once elected, there exists little to hold these representatives accountable for their rhetoric, especially if they are in their last-possible term. False promises dissolve into the ether, creating a perpetual cycle of disappointment that has rendered the trust of the public in the honesty of its leaders null as well as conditioning the public in disappointment and compliance.

Useful Voting

A phenomenon caused by the constant disappointment in the politicians of term is that the electorate participates in a negative way. Instead of voting for the option that they consider the best for a nation, they vote against that which they consider the worst. Even if the second-most-popular option is terrible, instead of voting for someone who knows what he is doing, the electorate will vote for the option that has the highest probability of beating the terrible option, creating a cycle of bad leader after bad leader and strengthening bipartisanism.

Inefficient Bureaucracy

It is important to understand that the government is just made up of people. The problem lies in the fact that government people within democratic structures lack incentives to be efficient. Absent the market-driven incentives that propel efficiency and innovation, government agencies languish in a state of complacency and mediocrity. Bureaucrats clamor for increased resources, many times out of good intentions. All agencies believe that they are essential and need more resources and more employees, creating a never-ending growth in government size that saps the vitality of the economy.

Democracy: A Tool, Not a Virtue

For Ludwig von Mises, there was only one argument for democracy—that is, that it is the only system that allows for a peaceful change in power. He writes:

"There is, therefore, in every form of polity a means for making the government at least ultimately dependent on the will of the governed, viz., civil war, revolution, insurrection. But it is just this expedient that liberalism wants to avoid. There can be no lasting economic improvement if the peaceful course of affairs is continually interrupted by internal struggles. . . .

Here is where the social function performed by democracy finds its point of application. Democracy is that form of political constitution which makes possible the adaptation of the government to the wishes of the governed without violent struggles. If in a democratic state the government is no longer being conducted as the majority of the population would have it, no civil war is necessary to put into office those who are willing to work to suit the majority. By means of elections and parliamentary arrangements, the change of government is executed smoothly and without friction, violence, or bloodshed."

It is a fair assertion, and it might be true that it is the best way to avoid violence in the face of a power change. However, for that argument to hold validity, we must admit that the existence of absolute power is a given. Etymologically derived from “demos” (people) and “cratos” (rule), democracy embodies the concept of absolute power vested in the populace. History has demonstrated time and again that any form of absolute government, democratic or otherwise, inevitably succumbs to corruption and tyranny.

The flaws inherent within the democratic system render it self-destructive, and the pursuit of power and the perpetuation of privilege pave the way for ever-increasing government intervention. In an article by economist Jesus Huerta de Soto, he writes:

"In democratic contexts particularly, the combined effect of the action of privileged interest groups, the phenomena of government shortsightedness and vote buying, the megalomaniacal nature of politicians, and the irresponsibility and blindness of bureaucracies amounts to a dangerously unstable and explosive cocktail. This mixture is continually shaken by social, economic, and political crises which, paradoxically, politicians and social “leaders” never fail to use as justification for subsequent doses of intervention, and these merely create new problems while exacerbating existing ones even further."

It is a harsh truth for many, but it must be accepted. Democracy, in the traditional sense, is not good or virtuous; it is merely a tool for governance. The argument of its superiority could be made, just as for monarchy and dictatorships, that they are utilitarian modes of government, and government is inherently control.

The true essence of liberty finds its embodiment not in the halls of government but in the marketplace. Through voluntary exchange and consumer choice, individuals exert their preferences and allocate resources with unparalleled efficiency. Free from the shackles of political interference, the market fosters the emergence of prosperity, making it imperative to differentiate democracy from liberty.


Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.