Democratic Representation and the Services Factor

While I agree that democracy is an important component of economic growth, present day fiscal policies mostly contribute to additional growth up to a point, once economies become services oriented. More specifically, increases in fiscal velocity don't necessarily expand general equilibrium capacity, especially when they need to maintain a secondary market spectrum. Much about growth and productivity depends on how services are organized and designed. Why do so many basic service activities rely on high income forms of production and consumption, for instance? This framework makes it difficult to discern what true services marketplace potential may actually consist of.

Since so many time based services are closely defined quality product, a stark contrast in income based production and consumption has emerged, which leaves little room for lower income levels to contribute to democratic societies. Should lower income groups remain prohibited from creating their own service corollaries, democratic representation may be increasingly called into question.

Fortunately the United States didn't face this acute services conundrum in its earlier history. Indeed, modern democratic society became possible in part due to circumstance whereby citizens had freedom to generate the vast majority of their own services. Few with limited income really needed to vote for governments to provide something that many were already able to provide on their own. Nevertheless, over time, special interests here (just as elsewhere) gained preferential treatment from Washington, which in turn gradually reduced what citizens could legitimately create for themselves.

More than a century and a half earlier, Alexis de Tocqueville doubted democratic representation in part because of the services the poor would demand, should they dominate the vote. In "Democracy in America", he described three classes (rich, middle and poor) and questioned whether democracy was an economical approach given existing inequalities. First he noted that should the rich make the laws (via the vote), economizing public money wouldn't be problematic since their taxation would be of minimal effect. And if the middle classes were instead responsible for lawmaking,

Then one can be sure that they would not raise extravagant taxes, for there is nothing as disastrous as a heavy levy on a small fortune. 

What if the poor carried the majority of the vote?

Countries, therefore, where lawmaking falls exclusively to the lot of the poor cannot hope for much economy in public expenditure; expenses will always be considerable, because either taxes cannot touch those who vote for them or because they are assessed in a way to prevent that. In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.

Even though there are numerous reasons why such thinking is flawed, his arguments still hold weight today in some respects. Nevertheless, a newly formed United States was likely willing to embrace representative democracy in part because its own citizens bore responsible for the majority of services production. These earlier similarities in resource utilization, created a majority which held a similar voice and could assume a more precise level of societal responsibility.

Wide disparities in income today have changed the calculus greatly. Yet despite the fact it's not feasible to represent entire populations on similar terms (particularly in large nations), there are still ways to bring democratic representation closer to disparate income groupings. The creation of uniquely defined equilibrium for non tradable sector activity, would allow similarly inclined groups to contribute to their communities on more equal terms. Even though some sorting already takes place at upper income levels, innovation in environment design could more closely reflect the capacity of all income ranges. Such an approach could do much to preserve representative democracy - not to mention direct democracy for local service generation - in the foreseeable future