Why are democracies repeatedly getting into trouble after a certain time? That was already the case with the ancient Greeks. In principle, this is due to the minimal principle:

The conditioning of man according to the minimum principle, that is, the endeavour to obtain as much as possible for as little effort as possible, is reasonable in evolutionary terms. It has ensured that we are always on the lookout for aids and methods to generate more profit with less effort. This in turn has led to the fact that, thanks to technology, the average person in most countries today can live in a prosperity that was previously only accessible to privileged upper classes.

If this disposition now meets with political power, a problem arises: politics can promise benefits due to the state’s monopoly on the use of force, which seem to cost the recipients nothing.

From their point of view, this is advantageous: no effort, but still profit = good business. All short-term advantages, zeitgeist fashions, promises without counterperformance and similar “free” political offers are in demand by the majority. Of course somebody has to pay for it in the end, but one of the most important “services” of politics is to disguise such relationships. In theory, this problem can be overcome by using reason and persuasion; in practice, the minimal principle is stronger. Politicians or regents who advocate cuts in benefits are sooner or later voted out of office or replaced.

Otto von Bismarck, the famous German chancellor and inventor of the welfare state, logically called it “state socialism”. At the end of his life he drew the following conclusion:

“It is possible that once I am dead, our policy will perish. But state socialism is cramming its way through. Anyone who takes up this thought will come to the helm.”

political cycle

The following, recurring pattern results from these insights:

  1. Almost all people want to increase their standard of living. They want to do this in the simplest possible way.
  2. The easiest way to increase your material standard of living is to take something away from others.
  3. Most, however, find it difficult to simply march into a shop and take goods without payment or take their neighbor’s money.
  4. It is easier for them to hire a third party to do the job, who will tell them that the whole thing is legal and who will also wrap the mantle of morality.
  5. That is why people turn to the state. For the state is the only institution that is allowed to take away the fruits of others’ labor unpunished. However, this does not change the character of the process which, in the same society, would otherwise constitute theft or robbery (“Thou shalt not steal”). That’s the real “populism” nobody talks about.
  6. Governments and politicians serve these wishes, otherwise they will be voted out or removed in favor of those who do so.
  7. Gradually more and more social groups find out how to use the power of the state for their own purposes. The state, not economic activity, becomes the main source for raising your standard of living.
  8. Fewer and fewer people end up working in the productive sector. Fight over distribution intensifies and public debt grows.
  9. Finally, the state runs out of money. The resulting crisis leads to radical reforms or even systemic changes. The whole process starts anew.

Unfortunately, the dynamics described here also ensure that the state interferes more and more in private life. The possibility of leading one’s life according to one’s own taste, and thus human diversity par excellence, is becoming increasingly restricted. Since in democracies in particular, but not only there, almost every interest group tries to take their personal wishes into account, the number of laws, the tax burden and the national debt inevitably increase over time.

How do we solve this? By implementing a stable system, in which the rules are defined in a mutual contract that cannot be unilaterally changed. By running governments as efficiently as we run companies, giving them a balanced set of incentives. By providing citizens with maximum self-determination, through a voluntary governance framework and full freedom of exit.
In other words: By creating Free Private Cities.

Interested in Free Private Cities?
Then read our book Free Private Cities: Making Governments Compete for You