I've spent the last week surveying the field of cognitive psychology. And whilst I had very little faith in Democracy prior, my reading has pretty much destroyed what little faith left I had in it.
The underlying, almost unspoken assumption in democratic theory (and economics as well) is that the average voter is both rational and objective, able to weigh and prudently consider the appropriate issues when it comes time to vote. Unfortunately, cognitive science seems to have accumulated a rather large body of empirical evidence which shows that most peoples' thinking processes aren't rational but intuitive. And as the cognitive scientists show, intuitive thinking is not rational thinking.
Keith Stanovich's book, What intelligence Tests Miss, provides an incomplete yet reasonable survey of field, and the emerging evidence strongly suggests that the average man is instinctively a cognitive miser (intuitive thinker). Now, intuitive thinking is not irrational thinking, rather it needs to be thought of as "roughly rational". It's "judgements", being determined by our affect and not by the laws of logic or data: The answer feels right.
For example, when asked which is heavier? A ton of bricks or a ton of feathers, a lot of people will instinctively state the feathers, and afterwards correct themselves. It appears that our mind forms associations, and uses these associations in a as the basis of an intuitive logic. Bricks are heavier than feathers and therefore the conclusion of the intuitive logic . It's only after consciously analysing the question that we realise that the two are the same. I'm not a Darwinian HBD type of guy, but you could see how this type of logic could come very handy in survival situations. In threatening situations, time is often of the essence, and sitting around trying to work out what is going on may have been counterproductive from the survival point of view. Sometimes its smarter to run first and think later.
Now, most cognitive psychologists seem to view cognitive miserliness in a negative light, seeing it at a sub-rational and "defective" form of thought, however, I view the matter differently. Given the almost universal prevalence of this type of thinking, it needs to be thought of as the default cognitive process of mankind. It's an efficient and computationally light type of thinking that is sufficient for the day to day tasks of life. We do things more by "feel" than by "logic". In fact, what probably happens is that logical actions which were cognitively appropriate for certain circumstance, become habituated, and applied to other similar circumstances. Most times this is inconsequential. Most times.
None of this is really new stuff. Advertisers have known for years that the way to convince people to buy their product was not to argue about it rationally but to present it in such a way that people would associate it with positive things. Apple Guy is cool. Windows Guy is a nerd. Getting into the complex details of the operating systems is only going to alienate a lot of the customers. Go with what the cool guy is buying because I'm not a nerd: Advertising is the manipulation of intuitive logic.
What cognitive psychology does show is that rationality takes some effort, and for most people it is an uncomfortable exercise. Hence, rationality tends to be deliberately avoided and as a result, is poorly exercised: The average man is deliberatively sloppy. From a systems point of view, this does not really matter s much when a man is the only person who suffers from the consequences of his actions, the real danger arises when this type of man is able to infect the governing process of the system as in a democracy. A irrational system is a system that will fail.
To the rational man, there is always a tradeoff between government spending and taxation, but to an intuitive man there is no such logic. To the intuitive man, when it comes time to vote, promises of lower taxes and higher social security payments are "no brainer", because both concepts are associated with pleasant thoughts, and hence there is no intuitive cognitive dissonance. Taxes, especially those paid by ourselves are always intuitively bad, no matter how justified, and are often resisted. Politicians who point out "inconvenient truths" are voted out in favour of the "feel good" politician. Sugar coated poison is preferred to bitter medicine. Democracy fails because the hard, yet necessary, decisions are intuitively wrong.
But the failure is not only political, it's cultural as well. The law is an both a reflection of culture and an agent of its change. When moral questions are put to the public vote, the intuitive mind wins over sober reflection. For example, the abortion argument was initially argued on "tough case" grounds, such as the rape victim impregnated, or the horribly deformed fetus. Even strong anti-abortionists can sympathise with the women in these circumstances, but rational (religious) thought would forbid the abortion whilst intuitive thought would permit it. In the end, a democracy votes for a utilitarian morality which ultimately corrupts the society.
Democracy fails because the underlying foundation of democracy, that man is a rational animal, is wrong. Very few men are consciously rational. It's not my opinion, it's an empirical fact.