As the famous story goes, when Ben Franklin left Independence Hall after the Constitutional Convention in 1787, Mrs. Powel of Philadelphia had a question she wanted answered.

“Well Doctor, what have we got, a republic or a monarchy?”

Franklin replied, “A republic, if you can keep it.”

No one today (well, seemingly other than the current president) wants a monarchy. However, too many call our once-Republic a “democracy”. They love the idea of the will of the people, directly determined by vote and imposed by force of law.

The primary argument against this form of government is that it’s tyranny. A majority has no right to take away the rights of any individual, no matter how unpopular he may be. However, that is precisely the consequence of giving the people the power to vote for anything, with no constitutional limits to the power of government.

Let’s explore another argument against democracy. I just published an article critical of a gold initiative in Switzerland. Of course, I favor the re-monetization of gold. That is not why I think the initiative will do more harm than good. I looked at the economics of the banking system, and concluded that the law could cause bank insolvencies. If the banks fail, there goes the people’s money.

No layman would see the problem, unless an expert explains it. Indeed, a hundred thousand laymen signed the petition to put this initiative on the ballot. They simply want to move towards the gold standard and stop their central bank’s endless currency debasement, and robbery of the saver.

Too often, scoundrels hide behind their proclaimed good intentions, which is typically an appeal to collectivism. Then they claim the bad outcome was unintended. It’s disingenuous. If you hike the minimum wage, for example, you will cause higher unemployment. Workers who produce less than the cutoff are always laid off.

In the case of the Swiss gold initiative, the promoters are appealing to honesty and justice. I do not doubt the good intentions of the people behind this initiative. I am sure they mean well. Whether their intentions are good or not, the law has bad consequences. It’s based on an economic mistake.

This exemplifies another fundamental and irreparable flaw in democracy. Even well intentioned people have limited knowledge. No one can be an expert in everything. Yet, that is precisely what democracy requires. It assumes that because the people have an interest in the outcome, they know what will lead to good outcomes.

If your car breaks down, do you sample the opinions of nearby motorists, in order to know how to fix it? If you are sick, do you ask for medical advice from other patients in the hospital ward? No, you call a mechanic or a doctor. What if your monetary system is broken down and sick? Everyone suffers from the monetary disease, but that doesn’t make them experts in monetary economics. In the same way, motorists or patients are not experts in engines or healthcare. In order to work, Democracy depends on everyone being an expert in everything.

This is one more reason why your life should not be ruled by the decisions of others. Even when those decisions truly are well intentioned, they can still hurt you. Democracy is not the right form of government.

This is why the Founding Fathers gave us a republic.

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Keith Weiner

Keither Weiner is the founder of the Gold Standard Institute USA ( in Phoenix, Arizona, and CEO of precious metals fund manager Monetary Metals. He created DiamondWare, a technology company which he sold to Nortel Networks in 2008. He writes about money, credit and gold. Visit his site at