Many analyists characterize democracy and markets as opposing systems. The political equality of citizens contends against the inequality conferred by economic strength. They claim that democracy encourages fairness; in contrast, the marketplace allows persons with more funds greater power. The essence of democracy is the equality of humanity: one person, one vote. The essence of the marketplace is the unequal power of money: one dollar, one vote. This article asserts that this key difference between democracy and markets does not represent a disagreement over the nature of “fairness.” Instead, the disparate methods of allocating “votes” result from practical problems rooted in a core variation between the goods produced by the two systems. Democracy should generate public goods (i.e. goods generating externalities). In contrast, markets should generate private goods (i.e. goods which, at least in theory, do not generate externalities). The principle that every person's vote is equal reduces externalities. Since the marketplace lacks such externalities, it has no need of this externalitiy-reducing feature. In sum, the difference in vote allocation is a practical choice, not a moral error.
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