Think piece: Democracy and the economy
The old balance struck between rich and poor in a democracy has been circumvented, says Madsen Pirie. A third option, to borrow from the voters of tomorrow, has given politicians around the world a blank cheque to spend their way into oblivion.
Most societies have a tension between rich and poor. Many of the ancient Greek city states chose sides in wars and disputes depending on whether they were oligarchies, ruled by the rich, or democracies, which gave citizens the vote, although not women, slaves or resident foreigners.
Even within democratic societies there has always been a tension. The poor are more numerous and have more voting power; the rich have more resources and can use them to influence opinions. In many democracies there is at least one party broadly sympathetic to the interests of those with wealth to protect, and at least one committed to a broader distribution of that wealth.
Both are restrained by circumstance. If the wealth of the few is inaccessible to the many, and there are scant opportunities for people to see their lives improved, there is the possibility of social unrest and upheaval, not something most wealthy people would wish to see. [Continue reading]