ZenPundit
Thursday, March 17, 2005
 
DEVELOPMENTS IN THE DEMOCRACY DEBATE

The inter-blog debate over the Pundita " Democracy Kit" Post has accelerated.

Marc Shulman had some incisive comments on fredom and affluence in response:

"Unless I'm totally misinterpreting her, Pundita's argument is that freedom is a luxury item that is affordable only by the (relatively) affluent, who have the time and energy to govern themselves in addition to working, eating, and sleeping. But does this assertion correspond to historical reality?

I think not. Leaving aside ancient Athens, democracy was introduced into the world by the United States of America. And what was our country like at the end of the eighteenth century? It was predominantly a nation of family farmers and individual tradesman, who worked from dawn to dusk. They were tired, but they toiled in a democracy."

I tend to agree. Poverty per se is not a bar to democratic practice nearly to the degree of other factors like say, culture or literacy. The early United States was relatively speaking, quite poor but it's literacy rates were high for the 1790's - higher than in Great Britain. Moreover while being cash-poor, early Americans were land-rich, with over one-third of white men being landed, compared to less than 5 % in the Mother Country. Moreover, most of those men who were landless were poor because they were young and most had good prospects for acquisition in the future. It was an optimistic culture that prized independence and acheivement -i.e. a culture and political economy that promoted social mobility.

In response to a comment by the ubiquitous praktike, Dave Schuyler at the Glittering Eye took a hard look at the economics of the early American Republic.

"In the comments section of the post on American Future, the ubiquitous praktike makes a typically sound contribution:

'...well, some people use $6K GDP per capita as a rule of thumb for when a democracy becomes viable. There are exceptions to this rule, of course, so I'm not sure it's strictly true. Look at Mali and Senegal, for instance.'

To which I responded “What was the per capita GDP in the United States in 1790?”. I realized I had the resources to answer my own question. The per capita real GDP in the United States in 1790 was $1,210 (stated in 2000 dollars). We weren't a rich country. Is democracy here viable? So far, so good. Stay tuned "

As I mentioned earlier, America was a cash-poor society in 1790 so Dave's figures understate the case for poor but viable democracies. Most common transactions at the time were handled in the form of " Book-Debt" in account books. Essentially, everyone extended a form of credit to their neighbors during what would otherwise be simple barter exchanges. With specie scarce and banknotes dangerously speculative, gold and silver coins were used primarily for purchases of land, slaves, court costs, taxes, medical services and major business investments by merchant bankers.

Even Thomas Jefferson, fabulously wealthy by the standards of the time, was not immune to cash-scarcity and ended up going irretreviably into debt, being unable to easily convert his wealth into liquid form to meet his expenses.

You can be a poor but proud democracy. Wealth alone is not determinative.
 
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