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Sunday, April 18, 2010

Tyranny of the Minority?

Some of you may need to read the title again. Democracy is often characterized and criticized as being a tyranny of the majority, meaning that any simple majority (> 50%) can impose its will on the rest of the citizens. However, public choice economics teaches us that representative democracy can sometimes be characterized as a tyranny of the minority, where a small group (usually referred to as an interest group) can impose its will on everyone else. How can this happen? Well this essay, titled 'Like Little Puffs of Smoke', gives some great (slightly hyperbolic) insight and explanations for how this happens.

Basically, small groups can sometimes influence poilcymakers in their favor because:
  • the benefits of their influence are more concentrated than the costs it imposes on the broader population
  • organizing costs are lower
  • the small group has greater access to policymakers
These factors help explain why politicians routinely vote for things that make one segment of the population better off while leaving the rest of us worse off. For a more eloquent/better presentation of this point read the essay I linked to above.

(HT Cafe Hayek)

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