timelets

Professor Robert D. Cooter makes a case that the Founding Fathers understood how essential property rights were for a working democracy. Traditionally, rulers acquired wealth by using government power to confiscate property from their opponents. In a democracy, elections are designed to change the government (and legislators) from time to time. If the new government started confiscating property of the losing side, it would have strong incentives to keep its power and rig the next elections. Otherwise, it would face the prospects of losing everything, including property rights, to a successful challenger. As a result, once a party won the elections it would try to suppress its political opponents. (We just have seen how it worked in Putin's Russia and Yanukovich's Ukraine). A working democracy should not provide additional incentives for people to suppress opposition. If property rights are not guaranteed, the elections will only serve as just another means for preserving a dictatorship.

Who can resist the ruler's desire to grab his opponents' property? The answer is clear: independent courts, backed by armed citizens. Over time, all parties realize that independent courts' provide a valuable insurance against a catastrophic loss of property and work to strengthen the judiciary. Elections by themselves do not make a democracy. Rather, a democracy requires a combination of economic and political rights for the system to function.