The election of Socialist Party candidate Francois
Hollande to the presidency of France epitomizes the sorry state of contemporary
democracy. By that, I don’t mean to imply that the French people should have
voted for the incumbent, Nicolas Sarkozy. Neither would be capable of solving
France’s intractable problems in a way acceptable to French voters, nor are the
problems with democracy unique to France. To varying degrees they exist
throughout Europe as well as here in the United States.
The first problem is: widespread economic illiteracy.
Hollande campaigned on a platform of economic growth and expanded job creation,
to be accomplished by raising taxes on the rich and increasing government
spending. Well, good luck with that one. Even Lord Keynes himself advocated
lowering taxes rather than raising them to stimulate economic activity. And the
record of net job creation via government stimulus is one of dismal failure.
Hollande’s program can’t work, and yet a majority of the French electorate voted
for it. How sad.
The second problem is the utter cynicism of today’s
politics. One wonders whether Hollande himself truly believes his own campaign
rhetoric. One senses that he knows that his socialistic policies would drive
France’s struggling economy into the ditch: According to the World Socialist
Web Site (www.wsws.org)—who were cheerleaders for Hollande’s campaign promises
of more tax & spending—Hollande’s team has told Reuters that he is going to
change course and “carry out reactionary policies ... and intensify social
cuts.”
The third problem is that people sometimes believe in
fairy tales. Who knows what Hollande believes or understands about economics,
but let’s give him credit for being politically astute. He understood that the
key to electoral success is to tell voters what they want to hear. In France’s
case (as in the recent elections in Greece and northern Germany) most people
are opposed to “austerity.” Hollande sized up the public mood and won the
presidency on the theme of, “You don’t want austerity, and under me, you won’t
have it.” That’s bunk. There is going to be “austerity” (in France and
elsewhere) whether the people want it or not.
The fourth problem is that the public is in denial about
reality. What is commonly called “austerity” is more accurately termed
“sobriety.” For years, people in the democracies have been voting themselves
economic freebies and subsidies—getting high on the drug of government wealth
transfers. They became addicted to politicians who promised and voted more and
more monetary fixes for their present and future desires. That means that
politicians who indulge voters’ fantasies and play along with the delusion that
the government is a bottomless cornucopia of goodies will have the electoral
advantage over those who are courageous enough to tell people the truth about
the hard choices that must be made.
What the voters didn’t reckon on—and what they are still
in denial about—is that just as a feel-good drug addiction eventually brings
one to the point where additional fixes could prove fatal, so the democratic
Santa Claus state has neared the breaking point. Either the binge stops—that
is, government spending and promises of future benefits are trimmed back—or the
system breaks down. The ineluctable fact is that there simply isn’t enough real
wealth in existence to make good on all these government promises. The penalty
for not facing up to this painful economic truth will be either a market
rejection of sovereign debt or a central bank “quantitative easing to infinity”
that debases the currency, either of which will convulse markets horribly.
The biggest problem underscored by the French election is
the degenerate state of modern democracy (with apologies to Aristotle and our
Founding Fathers, who would consider “degenerate democracy” a redundancy).
Democracy today is both childish and cannibalistic. It is childish in the sense
that masses of people believe that if they want something, all they need to do
is vote for it and they will get it—as if economic reality can be transformed
by a mere act of will, and government can conjure desired benefits out of thin
air. It is cannibalistic in that so many have fallen into a state of moral
depravity and pathetic impotence in which they believe that the only way they
can have the comfortable life is for government to take other people’s wealth
and give it to them.
Many people believe that government is the answer to
their problems. They are about to learn the painful lesson that government
isn’t the answer. I doubt many of them will recognize that their pain will be
self-inflicted. As H.L. Mencken once put it, “Democracy is the theory that the
common people know what they want and deserve to get it good and hard.” The
French, the Greeks, and a lot of other people living in democracies are about
to get a jolt of economic reality and sobriety “good and hard.”
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