The Heart of the US Election

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A real debate is emerging in America’s presidential electioncampaign. It is superficially about health care and taxes. More fundamentally,it is about democracy and free enterprise.
Democracy and free enterprise appear to be mutuallyreinforcing – it is hard to think of any flourishing democracy that is not amarket economy. Moreover, while a number of nominally socialist economies haveembraced free enterprise (or “socialism with Chinese characteristics,” as theChinese Communist Party would say), it seems to be only a matter of time beforethey are forced to become more democratic.
Yet it is not clear a priori why democracy and freeenterprise should be mutually supportive. After all, democracy impliesregarding individuals as equal and treating them assuch, with every adult getting an equal vote, whereas free enterpriseempowers individuals based on how much economic value they create and how muchproperty they own.
What prevents the median voterin a democracy from voting to dispossess therich and successful? And why do the latter not erodethe political power of the former? Echoes of such a tension are playing out as President Barack Obama tries totap into middle-class anger, while former Massachusetts governor Mitt Romney appealsto disgruntled businesspeople.
One reason that the medianvoter rationally agrees to protect the property of the rich may be thatshe sees the rich as more efficient managers of that property. So, to theextent that the rich are self-made, and have come out winners in a fair,competitive, and transparent market, society may be better off allowing them toown and manage their wealth, while getting a reasonable share as taxes. Themore, however, that the rich are seen as idle or crooked– as having simply inherited or, worse, gained their wealth nefariously – the more the median voter should bewilling to vote for tough regulations and punitivetaxes on them.
In today’s Russia,for example, property rights do not enjoy widespread popular support, becauseso many of the country’s fabulously wealthy oligarchs are seen as having acquired their wealththrough dubious means. They grew richbecause they managed the system, not because they managed their businesseswell. When the government goes after a rich oil tycoonlike Mikhail Khodorkovsky, few voices are raised in protest. And, as the rich kowtow to the authorities to protect their wealth,a strong check on official arbitrarinessdisappears. Government is free to become more autocratic.
Now consider a competitive free-enterprise system with alevel playing field for all. Such a system generally tends to permit the mostefficient to acquire wealth. The fairness of the competition improvesperceptions of legitimacy.
Moreover, under conditions of fair competition, the processof creative destruction tends to pull down badly managed inherited wealth,replacing it with new and dynamic wealth. Great inequality, built up overgenerations, does not become a source of great popular resentment.
On the contrary, everyone can dream that they, too, willbecome rich.
When such aspirations seem plausible, the system gainsadded democratic support. The rich, confident of popular legitimacy, can thenuse the independence that accompanies wealth to limit arbitrary government andprotect democracy. Free enterprise and democracy sustain each other.
There is a popular belief that democratic systems supportproperty and enterprise because votes and legislators can be bought, and thecapitalists have the money. But that view is probably wrong. As Russiasuggests, without popular support, wealth is protected only by increasinglycoercive measures. Ultimately, such a system loses any vestigeof either democracy or free enterprise.
Back, then, to America’s presidential election.The recent crisis, followed by huge bailouts of financial institutions, hasraised questions about how at least one segment of business – the bankers –make their money. As the misdeeds of “banksters” come to light, the system no longerseems fair.
Moreover, the American Dream seems to be slipping out of reach, in part because a goodeducation, which seems to be the passport toprosperity, is increasingly unaffordable for many in the middle class. This erodes support for the free-enterprise system.
Obama understands this, which explains his appeal to, andfocus on, the middle class. He is the standard bearerfor democracy.
On the other hand, successful professionals andentrepreneurs believe that they have come by their wealth legitimately. Theyare the working rich, and dislike thegrowing burden of regulations and the prospect of higher taxes. They feel likethey are being blamed for their success, and they resent it. Romney understandsthat America’sstrength relies heavily on free enterprise.
Ordinarily, there would be no contest here. The weight ofvotes in the middle class would carry the day.The middle class, however, is divided: some want to protect whateverentitlements and property they already have, while others want the governmentto give them a fairer chance. Moreover, the Supreme Court’s Citizens Uniteddecision in 2010, which allows unlimited independent political expenditure byorganizations like corporations or unions, has helped Romney more than Obama.
Whatever the outcome of the election, the tension betweendemocracy and free enterprise that is central to it does not bode well for either. A free-enterprise systemthat is sustained only by the moneyed powerof the successful is not stable, and unlikely to remain vibrant for long.
The United States needs to restore the possibility ofachieving the American Dream for its middle class, even while it reaffirms thehistorically light regulation and relatively low tax burden that have allowedenterprise to flourish. The virtue of democracy is that debate may lead to justsuch a consensus. We can only hope.

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关键词：Election heart Elect The CTI emerging Chinese health number appear

A real debate is emerging in America’s presidential electioncampaign. It is superficially about health care and taxes. More fundamentally,it is about democracy and free enterprise.Democracy and free enterprise appear to be mutually reinforcing – it ishard to think of any flourishing democracy that is not a market economy. democracy implies regardingindividuals as equal and treating them as such,with every adult getting an equal vote, whereas free enterprise empowersindividuals based on how much economic value they create and how much propertythey own.(definition of democracy and free enterprise)
What prevents the median voter in ademocracy from voting to dispossess the richand successful?One reason that the median voterrationally agrees to protect the property of the rich may be that she sees therich as more efficient managers of that property.So, to the extent that the rich are self-made, and have come out winnersin a fair, competitive, and transparent market, society may be better offallowing them to own and manage their wealth, while getting a reasonable shareas taxes.(why median voters faver the riches)
Now consider a competitive free-enterprise system with alevel playing field for all. Such a system generally tends to permit the mostefficient to acquire wealth. The fairness of the competition improvesperceptions of legitimacy.Moreover, under conditions of fair competition, the processof creative destruction tends to pull down badly managed inherited wealth,replacing it with new and dynamic wealth. Great inequality, built up overgenerations, does not become a source of great popular resentment.When such aspirations seem plausible, the system gainsadded democratic support. The rich, confident of popular legitimacy, can thenuse the independence that accompanies wealth to limit arbitrary government andprotect democracy. Free enterprise and democracy sustain each other.( Usually, democracy and free enterprise will reinforce each other)
But now the American Dream seems to be slipping out of reach, in part because a goodeducation, which seems to be the passport toprosperity, is increasingly unaffordable for many in the middle class. This erodes support for the free-enterprise system.Obama understands this, which explains his appeal to, andfocus on, the middle class. He is the standard bearerfor democracy.On the other hand, successful professionals and entrepreneurs believethat they have come by their wealth legitimately. They are the working rich, and dislike the growing burden ofregulations and the prospect of higher taxes. They feel like they are beingblamed for their success, and they resent it. Romney understands that America’sstrength relies heavily on free enterprise.(but now they are conflicting by obama representing the democracy(equality) and Romney representing free enterprise( less regulation))

Whatever the outcome of the election, the tension between democracy andfree enterprise that is central to it does not bodewell for either.