This course has been about the nature and limitations of democratic government, especially in the United States.

1. We have compared GOVERNMENT with MARKETS, and you have been given several ways to think about and analyze the proper balance between them.

• You have been given a way of thinking about what happens outside the sphere of government rules for society. That is, we have discussed markets as a way of making collective decisions. (empirical assessment and facts)
• You have been given ways to assess and evaluate the balance between markets and government. (values)

3.  We have compared REPRESENTATIVE and DIRECT democracy, Most of the discussion has been about representative government. Only occasionally have we discussed direct democracy, (as in the recognition of the results of state or local referenda).

• You have seen that choices presented to the people in referenda or initiatives are binary, which means that those participating can speak clearly about their preferences without the complications that come from more than two choices.
• However, this does not completely resolve that complication, because the choice of which binary alternatives rules out many others.
• Referenda avoid the agency problem (#3), at least for making as opposed to implementing the decision.
• However, they may be especially vulnerable to problems #1 (violations of rights), #2 (power of special interests or factions) and #4 (misguided preferences and unanticipated consequences).

• Majorities that are large enough and strong enough will prevail under any institutions of representative government, (and probably under all but the most repressive dictatorships).
• Think of this in terms of the fundamental equation.
• But on all but a few issues, such sizeable and strong majorities do not exist. Preferences are diverse enough that alternative institutions can make a difference in processing them into outcomes.
• As you have repeatedly seen, when preferences are divided, there are many different possibilities outcomes that are not a MAJORITY RULE EQUILIBRIUM (MRE).

REGARDING THE FOUR PROBLEMS:

1. Violations of individual and minority rights.

• By virtue of being systematically responsive to majority rule, democratic government may be inherently threatening to individual and minority rights.
• However, in my view the greatest threats to such rights come from authoritarian and dictatorial governments. Does any non-democratic country have a better human rights record than most democratic countries?

• This too is not unique to democratic institutions. Are democratic institutions more vulnerable than non-democratic governments? Making governments accountable to the people inherently makes them vulnerable to groups and interests.
• Is there a way to limit the influence of special interests or factions without limiting the influence of legitimate interests? (Was Federalist 10 correct?)

• Agency is a universal problem of a complex society. It is not unique to government or to democratic government.
• Democratic governments are designed to minimize problems of agency. You might say that this is one of their main goals.
• The endless process of reform of institutions that were once the result of previous reforms will continue to refine the responses to the generic problems of agency, and to the problems that result from previous choices of institutions.

• In a free society, we tend to think that each person is the best judge of their own interest. However, consider "The Fable, " and the possibility of "false consciousness." (Karl Marx may have been right about something.)
• Occasionally majorities in the US or elsewhere favor things that are considered by some to be reprehensible. Examples are majorities in favor of segregation of races, or subordination of races, or subordination of women, or that being handicapped is something to hide and ignore.
• Is what the people want always or necessarily right? The Framers did not begin to think so. What do you think?
• Standards and beliefs on what is fair or right change over time. Are there any things that we now think that subsequent generations will think are archaic or reprehensible?