Eventually the elected body will split into a faction that represents business interests and a faction that trades entitlements for votes.
What makes you think that a faction that represents business interests does not also trade entitlements for votes? The real problem is that ALL factions in a democracy demonstrate the universal human tendency to take benefits today and put off obligations for the future.
But that's the 'free market' right? Things will work out perfect in the end because of people's self-interest. The free market tells us that it's impossible for bad things to happen.
What makes you think that a faction that represents business interests does not also trade entitlements for votes? The real problem is that ALL factions in a democracy demonstrate the universal human tendency to take benefits today and put off obligations for the future.