The Free Market is the Democratic Republic

• John Vandivier

This article is a bit of political philosophy. Basically, I argue that a free market combines principals of democracy and republicanism.

Plato's The Republic is the place where any real discussion of republicanism begins, but few Republicans have ever glanced at a word of it. From The Republic through today, republicanism has been equivalent to elitism. This may sound like an insult, but it's not. Elitism is often underappreciated.

Who are the elites? They are the powerful. The attack comes in when we say that some person has power they don't deserve, but this is really only a subset of the elites. Many of the powerful do deserve their power. I don't want to have a long discussion of how we know whether some person deserves something, but I will quickly point to a few widely known and used ideas throughout history:

  1. Divine Rights. Especially, the Divine Right of Kings, but our Founding Fathers recognized that all men do, in fact, have Divine Rights. Life, liberty, and the pursuit of happiness can be considered divine rights.
  2. De Facto Rights. If you can do something then you have the right to do it. Perhaps not in a moral sense, but in a real sense. If a person has power then they have a de facto right to that power. Who is going to take it away? Take it if you can. It's almost as if to say, 'might makes right.'
  3. Meritocracy. If you work to earn something then you deserve it.
Those three ideas are all significantly related and often overlap. Note that a libertarian view of rights is essentially a subset of the republican view of rights. Libertarian rights emphasize the right to do as you please and the right to own what you earn. Republicanism additionally emphasizes the legitimacy of a person's original position and environment.

Democracy, going back to old times again, has always been rule by the people. Every person should have a voice, and the whole voice of the people should rule. Reasons include:

  1. People are inherently equal.
  2. The group is inherently greater than the individual.
  3. Government grants rights, but should do so in accord with the will of the people.
It is often thought that the free market is subversive to democracy because the powerful will be powerful. In other words, the politically influential will have a greater say, or the rich will have a greater say, and so on. In short, the argument is that pure democracy will devolve into anarchy or authoritarianism.

What I want to suggest is that pure democracy will turn to anarchy over time, but that this is an evolution and not a devolution. The natural evolution of democracy into anarchy is the result of the market expressing its own preference for republicanism. In short, anarcho-capitalism is the union of a democracy and a republic.

A capitalistic anarchy is the union of a democracy and a republic in at least 3 ways:

  1. In a capitalistic anarchy, democracies and republics can exist simultaneously. That is, the same geographic area can have two separate governments. The people may chose which government they subscribe to.
  2. In a capitalistic anarchy, democratic principals are upheld. People are inherently equal in the sense that they have an equal opportunity to participate in the market. The market, a group of people, is perpetually more powerful than any particular individual. Governments do grant rights, but you are allowed to choose your own government. As a result, governments are far more sensitive to catering to the needs of the individual. Social preference is maximized in the free market.
  3. In a capitalistic anarchy, republican principals are upheld. The elites are the most powerful, but they arrive at such power by making other people even better off through the market, not monopolistic state arbitration. Moreover, consider that the market itself is a divine hand. The divine hand idea can be seen as an advancement on the divine right idea. God doesn't merely set the world up and let it go on its own, he is perpetually and continually involved. So theological and meritocratic principals are maximized in the free market ideology.
I have previously stated that the founding fathers were proto-anarchists and this idea that the free market is a democratic republic further strengthens this thesis. Our founding fathers wanted a democratic republic. They wanted a government which recognized both sets of principals. In fact, Thomas Jefferson and James Madison founded the Democratic-Republican Party.

The Democratic-Republican Party later devolved as the different subgroups could not each get what they want. My theory is that they couldn't get what they want because the U.S. political system was created in a way that fundamentally prohibits the unity of those principals, but I don't think that the principals are irreconcilable per se.

I think a free market reconciles these issues. I do not think it is the only solution either. I think a benevolent dictator with a homogenous sympathetic culture would do the trick as well. Maybe there are other solutions I haven't considered. The best solution in my mind is the free market approach for the time being.