Winston Churchill once said that “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” The current effectiveness of the US government does make one wonder if that is even true. The principle behind democracy is essentially utilitarian – a majority or at least a plurality decides on the course of the state. However, implicit in this assumption is that the utility function for individuals match their participation function.
For example, consider environmental regulation. The utility function for the amount of allowable emissions of some harmful pollutant like mercury for most people will be downward sloping – most people would increase their utility the less the pollutant is emitted. However, for a small minority of polluters it will be upward sloping with a much steeper slope. Let’s say that the sum of the utility gained for the bulk of the population for strong regulation is greater than that gained by the few polluters for weak regulation. If the democratic voice one has in affecting policy is proportional to the summed utility then the smaller gain for the many will outweigh the larger gain to the few. Unfortunately, this is not usually case. More often, the translation of utility to legislation and regulation is not proportional but passes through a very nonlinear participation function with a sharp threshold. The bulk of the population is below the threshold so they provide little or no voice on the issue. The minority utility is above the threshold and provides a very loud voice which dominates the result. Our laws are thus systematically biased to protecting the interests of special interest groups.
The way out of this trap is to either align everyone’s utility functions or to linearize the participation functions. We could try to use regulation to dampen the effectiveness of minority participation functions or use public information campaigns to change utility functions or increase the participation functions of the silent majority. Variations of these methods have been tried with varying degrees of success. Then there is always the old install a benevolent dictator who respects the views of the majority. That one really doesn’t have a good track record though.