Democracy is Giving Way to the Market, and Ultimately to the Mob. James Madison Would be Appalled

By Andrew J. Hoffman

We, in this country, are turning away from the values of democracy, and turning toward the logic of the market in our civic sphere. Importantly, many don’t know the difference, viewing capitalism and democracy as one and the same; this is a grave error.

The values of democracy are giving way to the logic of the market.

How many Americans know that we live in a “representative democracy,” let alone what that means?  Those applying for US citizenship are taught this as it is spelled out on the US Citizenship and Immigration Service webpage, “The United States is a representative democracy. This means that our government is elected by citizens. Here, citizens vote for their government officials. These officials represent the citizens’ ideas and concerns in government.” James Madison, our fourth President who was instrumental in drafting the US Constitution, wrote that the role of a democracy is to:

“…refine and enlarge the public views, by passing them through the medium of a chosen body of citizens, whose wisdom may best discern the true interest of their country, and whose patriotism and love of justice will be least likely to sacrifice it to temporary or partial considerations.”  James Madison, Federalist Paper No. 10 (1787)

Nowhere in these statements is there any mention that every citizen’s view is equally valid or that democracy exists to serve the majority.  And yet, we can see our political system moving closer to one driven by market values.  For example, instead of allowing an institution’s members to decide whether controversial, even racist, speakers should address their community, many argue that we should let the market decide: “if no one comes to hear him speak, society will have spoken.”

We can also see this market logic play out in what our elected politics is becoming.  With gerrymandered districts and policy positions decided by polling and focus groups, politicians seek only to satisfy “their” constituent majority and operate under a false perception that they should not engage with alternative views.  If an issue becomes too thorny to handle, they turn it over to the general public through referenda which tend to warp the intended function of our government by turning decision making responsibilities over to the majority rules logic of the free market.

From there, the market goes into overdrive as the battle becomes not one of ideas and public interest, but of large and competing pocketbooks.  In 2018, more than $1.1 billion was spent in support and opposition to statewide ballot measures. California Proposition 8 set records for campaign spending with opponents putting an astonishing $111.4 million into the fight while proponents could only muster $18 million.

Taiwan learned this experience with new referendum elections in 2018, as well-funded campaigns of misinformation on the issue of same sex marriage shocked the country into voting “no” even though their courts had previously ruled that limiting marriage to heterosexual couples was unconstitutional.  Is this a democratic process that reflects the will of an informed electorate?  No.  The minority was oppressed by a misinformed majority. James Madison might have been appalled but not surprised:

“where a majority are united by a common sentiment, and have an opportunity, the rights of the minor party become insecure.” James Madison, Madison Debates (1787)

By turning democracy over to the market, we give in to a logic that is indifferent to the social value of the outcome. If enough consumers buy it, it has merit, regardless of whether those consumers benefit from the product, need it or are even harmed by it.  The market will never ask you to sacrifice for the greater good, focusing instead on your immediate and selfish needs. This unhealthy logic is heading toward something even more sinister.

Social media is amplifying the logic of the market to the whims of the mob.

While the logic of the market is taking over the civic sphere, social media is making things worse as journalists and politicians use Facebook likes and Twitter retweets for proxies of public opinion, and the public uses social media as a venue for civic discourse.  Unfortunately, social media facilitates a mob mentality that encourages anti-social behavior through its detachment and anonymity.  “Twitter storms” or “social media outrage” increasingly drive our social discourse where the over-riding mode is outrage, incivility, and zealotry, often based on incomplete information.  These behaviors and emotional perspectives are not conducive to the kind of tempered, thorough, and compromise-seeking discourse our form of government needs to function well.  It is far easier to express your feelings from the privacy of your computer than it is to do the hard work of engaging in democracy.  It will never be a replacement for the civic commons of face-to-face communication, traditional media, town hall meetings, public debates, and careful reflection.

Is our democracy becoming “a farce or tragedy or perhaps both”?

Roger McNamee warns that Facebook, Google, and other tech giants may represent “the greatest threat to the global order in my lifetime.”  The RAND Corporation calls the resultant “truth decay” an existential threat to our democracy.  James Madison might agree.

“A popular government without popular information or the means of acquiring it is but a prologue to farce or tragedy or perhaps both. Knowledge will forever govern ignorance, and a people who mean to be their own Governors must arm themselves with the power knowledge gives.” James Madison, Letter to W.T. Barry (1822).

There is no simple answer to end this essay; no handy bromide.  All we can do is identify the problem, revisit the basic values of our democracy, and attempt to rectify the situation.  We can begin by modeling the behavior we want from our elected leaders; educate ourselves and others on our role in the political process.  I see too many students who strive to make a difference in the world only through the economic sphere; start a business, create a new app, or influence the clout of a large corporation.  These may be valuable activities, but they must not preclude our roles as citizens and in the process, adding one more brick to the wall of market democracy.  We need to relearn the ideals of James Madison.

Photo by texan photography on Flickr


Andrew J. Hoffman is the Holcim (US) Professor of Sustainable Enterprise at the University of Michigan, with joint appointments in the Ross School of Business and the School of Environment and Sustainability.