Politicians and commentators make a lot of noise about their points of disagreement. But such disagreements are typically trivial. Should the top rate of income tax be 50% or 45%? Should we have slightly more council houses or slightly fewer? Precisely how should the management of the tax-funded, free-at-the-point-of-use NHS be arranged?
The current disagreements between the Conservative Party and the Labour Party are no greater than you would expect between factions within a single, centre-left party. After five years of a Conservative-led government, state regulation of industry continues to grow, the national debt continues to increase and government spending is 44% of GDP, higher now than in the last year of the previous Labour government.
David Cameron has said that his guiding principle is: “Those who can should, and those who can’t, we will always help”. This is simply a clumsy restatement of the Marxist slogan: “From each according to his ability, to each according to his need.”
It may seem incredible to hear a Conservative prime minister espouse such an idea, but his actions provide no reason to doubt him. On the contrary, we have every reason to take him at his word. For it is practically impossible for any politician to deviate far from Mr Cameron’s avowed Marxist principle.
To see why, imagine a small town, Marxville, with three inhabitants. Peter and Paul each earn £25,000 a year and Mary earns £100,000. Their combined income is therefore £150,000. How should it be spent?
Here are two proposals: (1) Let Peter, Paul and Mary each spend their own money as they choose, or (2) have the government pool their money and spend it on them equally, effectively giving each an income of £50,000.
My guess is that Mary will prefer the first proposal and that Peter and Paul will prefer the second. If Marxville is a democracy, Peter and Paul are in luck; their two votes will beat Mary’s one vote, the second proposal will be adopted, and they will each receive £25,000 from Mary.
“Vote for me and I will take richer people’s money and give it to you.” Two simple facts about Marxville, and all modern democracies, make this proposition an electoral winner: all adults have a vote and most people earn less than the average income. Redistributing from those on higher incomes to those on lower incomes can buy more votes than it loses.
Such redistribution of wealth may be “social justice”, as its advocates claim. But that is irrelevant. Even if it were no more than legalised theft, it would still be a popular policy. That’s why, despite supposed ideology, Britain’s Conservatives have long favoured progressive taxation and the welfare state, and now even peddle the Marxist slogans that justify them.
Of course, the Marxville parable is too simple. In real democracies politicians do not promise to reallocate incomes perfectly evenly. Even after tax and government spending, those who earn more usually still end up with more. This reflects no moral qualms on the part of politicians but only expediency. Perfect redistribution, or anything close to it, leads to economic ruin, as it destroys incentives to invest and to work. Politicians must be sufficiently restrained in their redistribution to ensure that there will still be some wealth to redistribute.
Temporarily blinded to economic reality, usually by their burning desire to be elected, politicians sometimes overshoot with redistribution, burdening the productive sector with unsustainable levels of taxation or debt. These politicians – or, usually, their successors – are then forced to cut back on their “largesse”. But no government can cut very far or for very long. The democratic imperative to buy votes with “social justice” will always reassert itself and take us slightly beyond the economic limit, as it did in Britain in the 1970s, and as it surely will again once economic stability returns.
The Marxville parable is also too simple in the majoritarian picture it paints. Large modern democracies are more complicated. Though adult citizens have one vote each, some have a disproportionate influence on politicians’ electoral prospects. Those from marginal constituencies, swing voters, large party donors and members of supposedly special groups (such as artists, farmers and bank creditors), can extract privileges at the expense of the majority.
These special electoral relationships are usually what distinguish political parties from one another. The British Labour Party is still close to the trades unions, for example, and the Conservatives to rural interest groups. Yet for all the loyalty, loathing and emotional heat that these associations sometimes generate, they are now mere details in the constrained redistributive policies common to all parties. They provide parties with different “flavours”, like the difference between sugar coating and chocolate on a doughnut, but they do not change the underlying policy dough.
In short, we are stuck. No democratic government can unravel the welfare state without losing power. And none can much extend it without wrecking the economy. We have arrived at the end of democracy.
Image credit: vnysia