If you want to understand how democracy really works, there’s a fascinating referendum underway in Ohio serves as a textbook example of real non-mythological democracy.

Lysander Spooner says, "Social contract? I didn't sign shit."

The observant Lysander Spooner.

The myth of democracy is that the people join together in a social contract, relinquishing rights in exchange for government protection, and through the ballot box the people wisely deliberate and enact their will. This farcical social contract idea was thoroughly destroyed long ago by Lysander Spooner. But for now, let’s pretend the social contract exists and ask: does the ballot box fulfill it’s intended purposes?

Democracy: Not the Will of the People

It’s called issue 2, and if passed it will limit how much the Ohio government can pay for prescription drugs. It’s become the most expensive referendum campaign in the state’s history.

It’s obvious that the yes-vote side isn’t democratic. The issue was put on the ballot by Michael Weinstein, a millionaire from California with no personal connection to Ohio. Critics note that the four petitioners who put it on the ballot are employees of his AIDS Healthcare Foundation (AHF) and that, if passed, would give AHF-run pharmacies a competitive advantage over others due to unique special privileges the federal government grants the AHF under Medicaid 340B.

Astroturf campaign: when the government does something your industry doesn't like, rollout the feaux-populist rage to put a stop to it.

Or better yet: astroturf vs. astroturf.

So far the yes-vote campaign has raised about $16.7 million from the AHF. How much have Ohioans donated to help express their people’s will? A whopping $715!

But the no-vote side is much more interesting. The opposition ads are funded by a group called Ohioans Against the Deceptive Rx Issue LLC, which is a wholly owned subsidiary of Pharmaceutical Researchers and Manufacturers of America (PhRMA), a political lobby for the pharmaceutical industry. The nearly $60 million funding the no-vote is 100% from the PhRMA, so far having collected $0 from Ohioans.

In other words, neither side of this issue has actual Ohioans involved in it. “Democracy” in this case is Weinstein vs. drug companies using the ballot box to enact their will upon the people, an astroturf campaign on both sides.

Reverse Bastiat

The first time I heard an ad about this issue I was struck by how odd it was. It was the vote-no side. It spent lots of time describing all the predicted negative unintended side effects of the issue, that it’s risky and dangerous, that it could make millions of Ohioans pay more for drugs, that it is harmful for veterans (and of course you don’t hate veterans, do you?), etc. But not once did it say what the issue actually intended to do: limit how much the state government can pay for prescription drugs.

Frederic Bastiat: The effects you don't see are just as important as the effects you do see.Bastiat, as you might know, railed against economists who looked at what was visible (like who benefits from a minimum wage law) while ignoring what is unseen (who gets laid off or priced out of a job market from a minimum wage law). Here we have an ad trying its best to show us all the possible unseen negative consequences of the law while hiding what is seen. It was a reverse Bastiat!

It’s an effective tactic. Psychology shows us that the human mind does not like to be wrong. Once a voter associates a referendum with being risky and dangerous and bad for veterans, even when no evidence whatsoever is presented to support these claims, his mind is unlikely to change regardless of what evidence and facts might be presented to him later.

Manufactured Fake Opposition

More recently I have seen no-vote fliers that cite research from John McCarthy, the former head of Medicare in Ohio, as evidence that issue 2 will cause all sorts of problems. Newspapers quote McCarthy’s opposition as though he were a neutral authority figure. He is always referred to as a “former Medicaid director.” What the newspapers fail to tell us is that John McCarthy is being paid by PhRMA to say bad things about the referendum. His new job is CEO of Upshur Consulting, which was paid by the PhRMA to publish an opposition study. This is the same study that PhRMA cited as evidence for the claims in their ads.

The fliers also cite the ironically named “Analysis of Proposed Ohio Initiated Statute to Regulate State Prescription Drug Purchasing.” (It’s ironic since it’s anything but “Ohio initiated!”) After finding the full report I found this, too, was bought and paid for by PhRMA.

In sum, the big pharma lobby runs campaign ads via money laundered through a group named to sounds like it’s representing actual Ohio voters and cite their own PhRMA-funded papers as “neutral third party” opinions to support their claims. Ayn Rand is sometimes made fun of for her habit of quoting the fictional characters of her own novels as though they were real people supporting the points of her essays, but this takes it to a whole new level!

Back Room Dealing

It appears that PhRMA struck a deal with McCarthy to resign from his post and create a shell company to act as the puppet of the PhRMA, then use his position as former Medicare director to falsely appear to the media like a neutral 3rd party opposing the bill, pretending to have only the public’s best interest in mind.

The timing of McCarthy’s career change is quite suspicious. On September 30, 2016, the referendum was officially certified for the ballot. A few weeks later McCarthy resigned from his post with no reason given. A few weeks after quitting he suddenly had a new company Upshur Consulting up and running with himself as the CEO. In political newspeak, “consulting” means a company you pay to publish fake studies that confirm your agenda. So far as I can tell, McCarthy is the only documented employee of Upshur and the only thing Upshur Consulting has done is publish the study that PhRMA cites in its advertising.

Looks clear to me that his career change was funded and brokered by the PhRMA!

In Conclusion

This story is not about Ohio. This is about showing democracy in its raw real state, a shining example to the world of how democracy works. Book-club theorists can make democracy look great on paper, but we should judge democracy not by its theory but rather by it’s reality.

Two self-interested groups unrelated to Ohio asking Ohioans to decide whose will should be imposed upon them. Fake opposition and paid collusion with bureaucrats. This is not a problem of Ohio’s electoral system. This is what democracy looks like!

Democracy means everyone.

…except for you!