… is from page 235 of the Appendix to the 1991 Liberty Press edition of Bruno Leoni’s 1961 volume, Freedom and the Law; specifically, it’s from an updated version – entitled “Voting Versus the Market” – of Leoni’s 1960 Il Politico essay “Political Decisions and Majority Rule”:
No procedural rule seems able to allow voters to act in the same flexible, independent, consistent, and efficient way as operators employing individual choice in the market. While it is true that both voting and operating in the market are individual actions, we are compelled, however, to conclude that voting is a kind of individual action that almost inevitably undergoes a kind of distortion in its use.
In short, while each losing voter individually exercises choice when he or she casts ballots for candidates or initiatives that wind up losing in elections to other candidates or initiatives, unlike in markets there is only one outcome per election. In a majority-rule election, the 49,999,999 people who voted (say) for the candidate who vowed to cut both tax rates and government spending are forced to pay higher taxes and to endure more government spending when 50,000,000 people vote for the candidate promising to raise taxes and government spending. Although (in this example) nearly half of the people prefer outcome not-X, they do not get not-X; they are forced to suffer X. And by a convention as misleading as it is familiar, most people – even those in the minority – refer to the victorious electoral outcome as “the people’s choice” or “the people’s will.” Are not the 49.9999995 percent (in this example) of the population who prefer not-X to X – many of whom probably detest X, and perhaps even regard X to be not only undesirable but downright immoral – not people? And are they not part of “the people”?
And even if we assume that this election wasn’t rigged and that the franchise is distributed in a way that we all regard as the best possible way for the franchise to be distributed, why count only the order of each voter’s preferences – that is, [X > not-X] or [X < not-X]? We know from our personal experience that our preferences include not only rank-orderings, such as [not-X > X], but also intensities. Suzy and Sam might each prefer X to not-X but the intensity of each of their preference might also be small. Indeed, Suzy and Sam might each be almost indifferent between X and not-X. In contrast, Sally might not only prefer not-X to X, but do so intensely. Therefore, in an election in which Suzy, Sam, and Sally are the only voters, X will win a majority of the votes. But because standard voting does not allow any voter to express the intensity of his or her preference, it is plainly incorrect to leap to the conclusion that X is here the will of the people (even if we are otherwise willing to regard the majority as “the people”).
In markets, minority interests are not forced to suffer the options that the majority chooses, and markets register not only the rank-orderings of consumers’ and suppliers’ preferences but also the intensities with with those preferences are held. Smith with a relatively rare taste for bitter stout beer can choose and drink bitter stout beer despite the fact that a majority of the population prefer (and choose, and drink) lighter beers such as Coors and Budweiser.
The above are only a small handful of the many problems that plague any argument – more typically, simply the assumption – that the imperfections of real-world markets justify corrective actions by democratically elected governments. The belief that governments – even ones that are democratically elected – can and will in general intervene into markets in ways that improve social welfare rests on the belief in miracles.