Democracy takes the faint whispers of benevolence in the human heart, the faint whispers that are so often lost in the market place, and multiplies them many fold, so democracies have benevolent governments.
This contrasts with the market driven by self-interest. The market fosters efficiency and progress because it drives the participants to produce and consume efficiently.
But in many societies the market operates under the benevolent direction of democracy. The world's first market economy was in the world's first democracy, ancient Athens. In the two and a half millennia that followed democracies always ordered a large portion of their economy through the market. The combination of benevolent and just government and an efficient and progressive economy has proved to be a success.
This actually makes considerable sense. Markets produce goods. Goods are by their nature good, so we want to produce them efficiently.
Governments work through coercion. If you break the law you can be put in jail. In past centuries the government might execute, torture, or maim, you. These could be reasonably called bads. We do not want to efficiently produce bads. We do not want efficient coercion.
Combined democracy and the market create benevolence, justice, efficiency, and progress. This is not a radical's dream, or a recently implemented social experiment. These twin institutions, born together in ancient Athens, fraternal twins because they are very different, have achieved two and a half thousand years of success. We should rely on them in the future.
The above thoughts on democracy and the market are part of a much larger theory of how the Western Institutions came to be. I have now put this on line.
Here is an index to my other pages on economics, and a short review of my qualifications in this field.
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Last updated March 12, 2020
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