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I have spoken hitherto of the possibility that democracy may be a self-limiting disease, like measles. It is, perhaps, something more: it is self-devouring. One cannot observe it objectively without being impressed by its curious distrust of itself—its apparently ineradicable tendency to abandon its whole philosophy at the first sign of strain. I need not point to what happens invariably in democratic states when the national safety is menaced. All the great tribunes of democracy, on such occasions, convert themselves, by a process as simple as taking a deep breath, into despots of an almost fabulous ferocity.
It is now often said that democracy will not tolerate “capitalism.” If “capitalism” means here a competitive system based on free disposal over private property, it is far more important to realize that only within this system is democracy possible. When it becomes dominated by a collectivist creed, democracy will inevitably destroy itself.
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"Every form of government tends to perish by excess of its basic principle. Aristocracy ruins itself by limiting too narrowly the circle withing which power is confined; oligarchy ruins itself by the incautious for immediate wealth... But even democracy ruins itself by excess-of democracy. Its basic principle is the equal right of all to hold office and determine public policy. This is at first glance a delightful arrangement; it becomes disastrous because the people are not properly equipped by education to select the best rulers and the wisest courses... The upshot of such a democracy is tyranny or autocracy; the crowd so love flattery, it is so "hungry for honey," that at last the wiliest and most unscrupulous flatterer, calling himself the "protector of the people" rises to supreme power."
The American model – democracy – must be regarded as a historical error, economically as well as morally. Democracy promotes shortsightedness, capital waste, irresponsibility, and moral relativism. It leads to permanent compulsory income and wealth redistribution and legal uncertainty. It is counterproductive. It promotes demagoguery and egalitarianism. It is aggressive and potentially totalitarian internally, vis-à-vis its own population, as well as externally. In sum, it leads to a dramatic growth of state power, as manifested by the amount of parasitically – by means of taxation and expropriation – appropriated government income and wealth in relation to the amount of productively – through market exchange – acquired private income and wealth, and by the range and invasiveness of state legislation. Democracy is doomed to collapse, just as Soviet communism was doomed to collapse.
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