The Political Market

Jude Wanniski in his seminal book The Way the World Works equates the political market with the economic marketplace.  If the market is efficient for goods and services, it is equally efficient at processing the known information surrounding a political election and arriving at the optimum outcome.

This view is not widely held or understood.  Republicans generally blame the loss of elections on uneducated, bought off voters swayed by government handouts and socialist policies.  Democrats equate Republican victories with xenophobic, atavistic, culturally backward voters afraid of change and the future.  Both views are of course nonsense based on cartoon stereotypes.  They are justifications for each political party’s inability to understand and adapt to the desires of the electorate.

All humans possess an innate desire for liberty and freedom.  The history of mankind is a progressive evolution in a trial-and-error process to advance society through the unlimited potential of individual ingenuity.  Liberty and freedom are essential ingredients for human progress.  The world continues to move toward democracy because it best meets this goal.  Freedom of the political marketplace that balances the needs of individuals and government in the same way that free markets balance the needs of buyers and sellers, defines democracy.  In both cases, the wisdom of the marketplace, when unfettered, produces an optimum outcome.  

The attempt to control information is only a perceived advantage.  Voters in aggregate are able to sort through known information in the same way economic markets can sort through all known information and arrive at the correct price.  The Soviet experiment at controlling information failed despite the unrestrained power of the state.  Entrenched, powerful interests fought Proposition 13, Reagan, Brexit, and multitudes of local issues.  Despite the consolidation of power that opposed these elections, voters handily approved results that best advanced their desires.  The balance of power that appears to accrue to the few media conglomerates is offset by the dispersion of information fomented by the internet and alternative media.  The establishment, along with their media megaphone, mainly influence disconnected politicians who are out of touch with the true wishes of their constituents.  

Wanniski sums up his political model in the first chapter of The Way the World Works. 

“The political model holds that the electorate is wiser than any of its component parts. Civilization progresses in a political dimension through the ability of politicians to read the desires of the electorate. Neither the press corps nor other “opinion leaders” influence the electorate, except in the sense of broadcasting the political menu. Their influence instead bears on the politicians, who look to opinion leaders for help in ascertaining the wishes of the electorate. The decline of a nation state or political unit is a sign of repeated failure of the political class to read the wishes of the electorate. Emigration is a sure sign of relative political failure. At the extreme, the electorate resorts to revolution, thereby adjusting the political framework and raising to power a new political class better able to read the desires of the electorate. Modern nation states have built into their political frameworks various safety valves that can bring about urgent corrections in the avoidance of violent revolution or war.” 

Democrats and Republicans have morphed into an indistinguishable governing body representing more the interests of the state than the individual.  Separating the major differences between the two establishment parties is becoming increasingly difficult.  Regardless of the party in power, for the last two decades we have gotten the same Fed, Treasury, growth in government, and blood and treasury draining wars.  As a result the electorate appropriately selected an outsider candidate to represent their interests against the establishment.

Citizens should not see this election as an anomaly indicating a regression in the political process.  This is the political marketplace at work, divining the interests of the electorate and working through the issues that affect our national and global community.  The power of democracy that allows politicians to divine the wishes of their constituents is working properly. Voters in aggregate will wisely sort this out as they always do.  The one stipulation is that an honest election is necessary to allow the political market to clear and its safety valve to operate.

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