F rom where does democracy come? Is rule "by the people, for the people" a telos–an ethical endpoint–as the great American civic faith would have us believe? Is it the most effective way to solve social problems–as John Dewey and the pragmatists argued? Or is it merely the worst system except for all the others, as Winston Churchill dismissively quipped?

These two important books–Economic Origins of Dictatorship and Democracy by Daron Acemoglu and James Robinson and A Free Nation Deep in Debt by James MacDonald–take an economic view, well-suited to a material age. They locate the origins of democracy not in ethics or social engineering, but as a side effect of the struggle for goods and services, wealth and market power. And yet, that is their only resemblance. They refer to few of the same facts and none of the same literature. Their uses of the term "economic" are totally dissimilar, and in that dissimilarity they reveal as much about the great divides within economics as they do about the origins and fate of democracy.

The contrast is, first of all, one of substance. One book associates democracy with the material temptations of populism: Democracy arises because it redistributes income to the masses. The other sees the democratic advantage in evolutionary and comparative perspective: Democracies survive and thrive because they beat out rival systems, most especially on the battlefield, history’s ultimate test of material capacity.

But behind the competing theses lies a deeper conflict of form. One book reflects the dominant spiritual tendencies of political science and neoclassical economics, rooted in methodological individualism and a presumption that institutions efficiently deliver what individuals want. The argument proceeds mathematically, by axiom and proof. Though the reference is broadly to democracy allied with capitalism, there is no discussion of credit, money, banking, financial markets, or other basic capitalist institutions. The approach is timeless and at best decorated here and there by corroborating fact.

The other book is a masterpiece of historical narrative, founded on an immense trove of numerical detail, drawn from the records of public finance and credit markets over millennia. Yet it is not the sort of "measurement without theory" that might be dismissed as redolent of the German Historical School. It is, rather, narrative in service of an idea. The contest between these works is thus as much a contest between the hypothetico-deductive and the evolutionary method, as it is between a "real" and a "monetary" view of economics, and as much between a theory of distribution and a theory focused on efficiency and growth. In short, they offer competing models for economics and political science. And the fact that one exemplifies mainstream practice in our great universities–while the other is product of an unknown outsider–casts a cruel light on the most favored patterns of thought in the contemporary ivory tower. And it makes one nostalgic for the days when those in the social sciences were interested in society–its progress and its prospects.

For Acemoglu and Robinson, an MIT economist and a Harvard political scientist, respectively, the word "economic" signifies the neo-Benthamite doctrine of "rational choice"–a theory of behavior rooted in the "well-defined preferences" of individuals over "outcomes or the consequences of their actions." To them, democracy is a process, not an end, and the preference for it is utilitarian and not a matter of values. Acemoglu and Robinson ask that we consider a group of individuals for whom democracy and non-democracy have the same consequences in all spheres, except that democracy generates more income for them; they naturally prefer more income to less. Therefore, we expect these individuals to prefer democracy to nondemocracy.

What does this grubby instrumentalism have to do with political systems? Acemoglu and Robinson do not argue that democracies are more efficient, yielding more income for everyone. Their argument is about distribution. But economics argues that distribution is mediated mainly by markets, not by governments. (The phenomenon of "rent-seeking"–mining government for favors–is an exception, but it is not specific to democracy.) So why should any group systematically prefer democracy for economic reasons?

For an explanation, Acemoglu and Robinson invoke the familiar mechanics of class conflict. All societies are divided into "elites" and "citizens." "Typically," Acemoglu and Robinson write, "there is political conflict between the elites and the citizens." The original version of the thought–"The history of all hitherto existing societies is the history of class struggles"–is not quoted, but the spirit is definitely kindred. Yet unlike Marx, Acemoglu and Robinson argue that the outcome of struggle is generally not revolution leading to proletarian dictatorship, but democracy. Wanting money, the citizens press for the vote. And, though revolutions obviously occur sometimes, democracy is simply a rational alternative: less costly to the elites, equally beneficial to the masses. In short, democracy arises because elites choose to concede it, rather than face the prospect of being disposed of unpleasantly. A few major social parameters, especially the previously existing degree of inequality, determine these relative benefits and costs. Very roughly, high degrees of inequality deepen class conflict and the resistance of elites to democracy, while very low degrees of inequality reduce the gains citizens expect from democratization. Somewhere in between there is a sweet spot, and there democracies grow.

This theory of causes implies a transition to democracy, which means that we need some way to divide the world between democracies and non-democracies. For Acemoglu and Robinson, this distinction is simply about suffrage. Democracy exists when "the people" vote for their government, in elections that incumbents occasionally lose. At that point, one is led to suppose that class conflict ends and history stops. Of course, this is a simplification. In real life, democracy is not an end-state but an ideal type. There are no countries where "everyone has the vote," and there is no hard-and-fast boundary between democracy and non-democracy. One group gains the franchise, then another, then another still. Class struggle goes on, and the history of democracy is a struggle toward democracy, a struggled to advance by degrees.

Four cases illustrate their argument: Britain, Argentina, Singapore, and South Africa. In nineteenth-century Britain, Acemoglu and Robinson argue, democracy consolidated because the class differences were relatively small (try telling that to Dickens), and the elites simply decided to accept the citizens’ policy preferences. In Argentina, inequality was higher and the costs of repression lower, so that democracy emerged but failed to consolidate: Cycles of democratization and repression result. In Singapore, low inequality and a low cost of repression preclude democracy: Rational citizens perceive that the struggle is not worth the trouble. In South Africa, finally, the authors argue that democratization occurred because the country became more egalitarian after the 1970s, lowering the cost to the white elites of conceding the vote to nonwhites.

This model implies and requires certain relationships in the data. British inequality in 1832 or 1928 must have been lower than in 1970s Argentina. Singapore today must be more egalitarian than Britain today. And South African inequality must have declined before 1994. Yet Acemoglu and Robinson cite no sources for these assertions of fact. And it turns out that the World Bank data set they do cite on other matters gives no support to them. That data set contains no "high quality" points for Argentina at all and none for Britain before 1950. It reports Singaporean inequality today to be substantially higher than British inequality today. South African inequality, among the world’s most prevalent, is given only for 1993 and 1994, giving no basis for belief in a decline in the previous 20 years.

Acemoglu and Robinson’s theory also runs afoul of many cases they do not discuss. For example, India is a highly unequal yet stable democracy, for which no place exists in their model. Scandinavia, barely mentioned here, is more egalitarian than Britain (or Singapore), yet stably democratic. The collapse of communism in Eastern Europe is another problem, as the low inequality of those countries should have repressed the desire for democracy, but obviously it didn’t.

Yes, sometimes the initiation of elections can be an elite concession to economic pressure from below. But a general theory of democracy requires more than that. It requires, especially, an account capable of explaining the grades and qualities of democracy, its ebb and flow over time, and its sometimes genuine and sometimes superficial nature. This Acemoglu and Robinson do not provide. Although they assemble facts prodigiously, one must unpleasantly conclude that when it comes to choosing the crucial ones, they have cherry-picked and also sometimes plucked "data" from thin air, in the service of selling an idea that is not so much wrong as it is far too simple. Acemoglu and Robinson’s single-minded dedication to their idea is manifest in the last two-thirds of this book, which are given over to game-theoretic models, presented in mathematical form. The models are of rational social choice–the decision, by "elites" and "citizens," between dictatorship" and "democracy." They are statements of pure theory; there is no further effort at evaluation, let alone critique. A typical example occurs on page 232:

Work of this kind raises grave questions. It is not so much incomprehensible as pointless. It actually isn’t incomprehensible, if you work hard enough, but the symbols are empty, and the description is not of a real society, but of an institutional vacuum, uninhabited by actual human beings, untracked by actual data. No measurement will ever test the theory. Words with real meaning, like "revolution," are conscripted as names for variables. The adjoining algebra serves heavily to intimidate and does very little to persuade. The presentation descends to parodies of jargon, enlivened by the absurd interjection of words like "clearly."