How Information Destroys Dictators (Are Demagogues Next?)

I recently saw a presentation by economist Antony Davies on the basics of Public Choice Theory and the predictable problems with democratic systems.  Ant laid out the median voter theorem, then observed that national elections continue to get tighter and tighter as candidates become more and more similar in an effort to win the median voter.

This process is accelerated by the information age.  Candidates don’t have to determine a platform and then go try to sell it, hoping a large chunk of people already agree.  They don’t even have to study opinion research and craft a platform most likely to win.  They can A/B test in real time.  Campaigns can go to Twitter and try out some slogans or positions, they can react immediately and pivot their posture.  The old saw that politicians put their finger in the wind is true as ever, but fingers are no longer necessary when you have a digital weather vane plus anemometer streaming real-time measurements to your smartphone.

In other words, power hungry politicians are more accountable to the shifting moods of the public than ever.  Don’t get too excited.  This is far worse than a free and open market society in terms of decision-making and individual and public good.  People behave differently when voting or tweeting than they do when their own skin is in the game, and a system that caters to the costless whims of the majority is far scarier than a truly free society.

Still, it might be better than a pure dictatorship.  I suspect the days of a charismatic, strong leader who wins over throngs of people with good speeches are numbered.  Absent a better means of communication, societies rally around symbols because they can convey quickly a complex set of feelings and ideas.  They can also be more easily exploited.  Simplistic urges like nationalism, shared hatred of perceived enemies, moral crusades, and other dumbed down tales of us vs. them are the stuff of dreams for power-hungry tyrants.  Whip them up into a sense of unity around a common (often violent, envy-based) cause, and you can own the country.  This is harder than it’s ever been.

More and more citizens around the world can jump online and see pictures of their supposed enemies.  They can see the other side.  Humans seem to have limited compassion, and proximity is one of the rationing mechanisms.  The information age brings the world closer, and therefore makes compassion able to span the globe.  A fine speech about barbarians at the gate can create a wave of support for a hawkish autocrat, but when you can see those ‘barbarians’ with your own eyes, read their stories, and talk with them, it’s harder to get behind.

The ease with which information flows – what economists would call a reduction in transaction costs – is dramatically reshaping the way we do business, culture, life, and politics.  At first we’ll see political figures that appear more like focus-group generated spokespersons, as they get better at following the trends.  The switch from forceful dictator to savvy demagogue is perhaps a small improvement.  But I don’t think it will stop there.

This reduction in transaction costs also means all the things previously thought to be collective action problems solvable only through the clumsy and corrupt mechanisms of voting and politics can be tackled through voluntary markets.  Imagine your neighborhood HOA, instead of voting on higher fees for a new park, letting residents access a Kickstarter-like app where they can pledge an amount they’re willing to pay and the project only goes forward when it hits its goal?  The political figureheads and representatives can be eliminated just as Bitcoin eliminates financial gatekeepers.

The easier it is for individuals to connect and share ideas and goods with each other, the less powerful political gatekeepers trying to take their cut and regulate our relationships become.  Ultimately, information will beat oppression.

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