Petőcz Kálmán (szerk.): National Populism and Slovak - Hungarian Relations in Slovakia 2006-2009 (Somorja, 2009)
Zsolt Gál: Argentina on the Danube - Populist Economic Policy as the Biggest Enemy of Sustainable Economic Growth
Zsolt Gál ri ty but based on prevailing force of the prejudiced and arrogant majority” (Hamilton et al, 2002, p. 116). A partial remedy according to Madison would be vastness and diversity of the federation in which a great number of factions, religions and parties would prevent any of them from gaining supremacy.3 Against tyranny of the majority, the founding fathers strove to put up a constitution that - in compliance with Charles Montesquieu’s ideas - introduced the principle of power division (into legislative, executive and judicial), a federal constitution in which powers are divided between the Union and individual states and the system of ‘checks and balances’, or balancing and mutual control between particular power constituencies and state institutions on various levels of government; also, it guaranteed fundamental human rights that are universal and inalienable in compliance with the concept of natural rights formulated by John Locke. After his journey to the United States in 1831-1832, a French political scientist, historian and politician Alexis de Tocqueville wrote a book titled Democracy in America that in great detail described, analyzed and compared the unique and young American democracy. Tocqueville also believed that the greatest threat to the system originated in omnipotence of the majority and related phenomena such as excessive centralism and expanding government powers along with meticulous and futile bureaucratic planning and paternalistic government. "If ever the free institutions of America are destroyed, that event may be attributed to the omnipotence of the majority, which may at some future time urge the minorities to desperation and oblige them to have recourse to physical force. Anarchy will then be the result, but it will have been brought about by despotism” (Tocqueville, 2009, p. 416). At the turn of the 19th and 20th century, a Swedish economist Knut Wickseil pointed out that the system of voting based on a simple majority might lead to the majority adopting a budget whose expenditures would benefit it while transferring the tax burden onto the minority that would always be outvoted (Johnson, 1997, p. 165). Gordon Tullock also argued that the system of majority voting might lead to the majority redistributing the minority’s resources and allotting them mostly to its own members, which would cause inefficient allocation of resources (Tullock, 1959, p. 579). In this case, the majority hinders overall economic effectiveness because tends to embrace redistribution of the minority’s resources even when its own benefits are lower than the minority’s costs. The other model of democratic decision-making known to modern political economy, i.e. that of lobby groups, also fails to achieve maximization of economic effectiveness. In this model, interest groups lobby the government into pursuing certain policies that benefit themselves at the expense 182
