Please deactivate your conscience

Over the weekend I caught a glimpse of a weekly news-roundup on German television. The program is the Wochenspiegel, aired on the public ARD network, and they were running an item on opposition to Schröder's reform proposals. Opposition runs high on the left wing of his own SPD party, and the labor movement has been vocal in opposing the plans too. So they interviewed one of the SPD members of parliament who might vote against the plans. Unfortunately I can't remember the name of his guy, but one thing he said really struck me. Speaking of his threat to vote against the government, he said that in his 30 years of being a member of parliament for the SPD, he had used his conscience three times. He added something to the effect "so it's not like I do this very often."

And this is completely unremarkable. Not using his conscience is seen as a Right Thing To Do, because party discipline is much more important. Voting against the party line ("using your conscience") is very rare in most parliamentary democracies in Europe. The Party is most important. This is a result of the incentive structures in European politics, where parties are dominant. Proportional representation breaks the direct link between candidate and voter. More importantly, in order to advance your career in politics, you have to curry favor with the party, not the voter. Vote against the party and your future prospects take a nosedive, your career is in doubt. So absolute loyalty to the party line is essential.

This leads us to the absurd situation that a politician is interviewed on national TV and proudly proclaims that he's only used his conscience thrice in thirty years. And nobody thinks it's remarkable.

The flow of money

Which would you rather have, power or money? How about both? The irresistible combination of using other people's money for their own purposes is one of the things that makes politicians so loathsome. But the flow of money goes not only from politicians to their favored cuts of pork, but there is a flow back to politicians personally, which is the money that is used to finance their campaigns. But it is the combination of politicians having the power to do stuff and the backflow of money to them that makes for the current unsatisfactory contretemps.

In the American system, campaign donations are subject to various limits. There's hard and there's soft money, there are limits on third-party groups campainging on behalf of candidates, and the perennial subject of campaign finance reform ebbs and flows with the political tide. Compared to most European countries, campaigns in American elections are relatively unencumbered by government oversight, and campaign finance is a largely private affair. In many European countries, however, there are much stricter limits on campaign contributions and political parties often receive subsidies from the taxpayer. This means that my tax euros are being used to fund political parties I disagree vehemently with. This, advocates say, is a fair price to pay for a clean political system, that does not suffer from the money-driven influence peddling that befalls America.

Superficially this may be so, but in practice there's still plenty of collusion between Big Money and politicians in Europe, all the more pernicious because it's seldom out in the open as in the US. There campaign contributions are made public and can be studied; indeed, they can become parts of the election campaign itself. The influence-buying process in Europe is done behind closed doors and illegally. The list of underhanded political contributions is long. Big business is not only close to the government, in many cases it is (partially) owned by the government and its top executives are appointed by the government. Those appointees are usually benevolent in their favors, once they have their hands on the corporate accounts.

In France, the collusion between various governments and presidents was of gigantic proportions. In Italy, a whole generation of politicians was swept away in the investigation of tangentopoli, the wide-ranging corruption investigation that got off the ground in the early 90's. Now the Prime Minister of Italy, Silvio Berlusconi, is not in danger of being corrupted by big business; he is big business. A conflict of interest of this magnitude would never be allowed to stand in the US. In Germany, the Christian Democrat party was rocked by revelations that its long-time leader and German Chancellor Helmut Kohl had been involved in receiving illegal donations for the party. The Social Democrats of the SPD had a more recent run-in with bribes being paid to local politicians in Northrhine Westphalia in return for public works contracts. By outlawing certain types of contributions, the effect has been to drive them underground, not to eliminate them.

The flow of money is efficient, a bit like traffic. Soon after a new route around a congested area is discovered, traffic will divert from the congested route to the new one, and balance itself out over the two routes. But the flow of money is even stronger. It gushes forth from the highest peak and flows downward. Occasionally new laws may impede the old, well-worn routes for it to flow to the politicians waiting at the bottom of the mountain, but the flow will adjust. It's still going to go down, because that's where political gravity takes it.

What we need is an anti-polticial-gravity device. The reason big money seeks to influence politicians is because their decisions can be hugely profitable for the donors, or spell disaster for those who sit out the money-slinging contest. Spending money on politicians is the behavior of an economically rational actor. Trying to outlaw economically rational behavior is bound to fail; one has to remove the underlying incentive for the money to flow in the first place. And again, that brings me to the point that policians and the state should far less power than they have now. Eliminate the politicians' ability to bring instant wealth or ruin on a business, and businesses will find better ways to spend their money.

More on democracy

Thanks to the link at Bjørn Stærk's blog, there have been some interesting comments to my two posts below (here and here.)

In a comment Håkon writes:

There are benefits with the european system:
It is not as vulnerable to pork barrel politics, as the candidates are more dependant on the party doing well in general more than their ability to grab money for huge misguided projects.

Pork barrel politics certainly is a big problem in the American system. When in five thousand years archeologists and paleolinguists try to reconstruct contemporary English, they'll probably use Robert Byrd as the word for pork. And here, in this authentic late 20th century menu, you can see the references to breaded Byrd cutlets with fried potatoes... Perhaps we should just rename West Virginia to Byrdsylvania and be done with it. To be fair, pork is an inherent feature of the American political system as it stands now, although few have mastered the art of pork as well as Robert Byrd. But it is something that affects both parties and is an inevitable consequence of the process of canvassing for votes. If you support $1 million in my district, I'll throw in some subsidies for you. And that is a problem.

However, pork exists in Europe too, although it is more diffuse and less traceable to individual politicians. But I do disagree that this leads to fewer "huge misguided projects." In fact, I would argue to contrary. As American pork is localized, it usually tends to consist of small portions. When you add those small portions up, it's a huge chunk of money. Bigger pork comes into being when Congressmen team up to try to get a certain cut of pork for their constituencies. At some point, there is a line where you cross from pork to policy. It may be misguided policy, but it's no longer pork. (At least, I associate pork with relatively small but numerous attacks on the taxpayer's wallet.) There is a European analogon too, but it is less blatant. Well-connected politicians will be able to pull strings to get pork for their friends.

The European system instead facilitates large projects. Perhaps pork is no longer the right word to describe them, but political leaders can become enamored of certain huge projects and will use their position to push them through, even if they don't make sense. One good example is the Betuwelijn in the Netherlands, a railway link connecting the port of Rotterdam with the industrial region of the Ruhr in Germany. It's widely unpopular, and studies are now showing that the enormous infrastructure cost is not going to be recouped in any reasonable timeframe. Existing raillinks can do the job just as well. But the project is being pushed through anyway, since so much political capital has already been spent on it. Even a change of government has not made a difference.

But I guess that is somewhat tangential to the original point. Pork in the US system is indeed more of a problem than in Europe. Within the current system, a number of reforms could be introduced to counteract this. Stricter limits on what can be added to congressional bills might be one way, although I am not familiar with procedure and therefore have no idea whether this is feasible. The much-discussed presidential line item veto could also bring relief, allowing him to erase particularly blatant porky items.

But none of these remedies really cut to the heart of the problem, and that problem is that politicians have too much power. They can do too much. And once they can do something, they will do something, even if nothing needs to be done. Simply by having the option of disbursing pork, they will do it. In the comments below, Gunnar writes:

But the bigger question is "What is the purpose of government?" The American founding fathers asserted that the only proper purpose of government was to secure the individual rights of man. This is highest moral purpose of government. In the ideal then, the legislature could only pass legislation that better protects human rights, and could never violate them.

It is the ideal of life, liberty and the pursuit of happiness. That's an ideal that was never achieved, nor was it quite as narrowly defined as above. The preamble to the Constitution states

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

This implied a broader interpretation than merely securing individual rights. Section 8 then details some of the things that fit under "general welfare." But I am treading on dangerous ground here, since I am no constitutional expert. I would agree though that having a government whose sole purpose is to safeguard individual liberties is a good thing, and an ideal worth trying to attain. But the problem with ideals is that they tend to become unstuck when faced with reality. There are areas where conflicting rights will compete for supremacy, and some abridgement of rights is necessary in to make the greater structure work; raising taxes to provide for the common defense is an obvious example. Circumscribing the powers of Congress would be a step in the right direction, not only in the pragmatic sense of reducing pork, but also in the idealistic sense of bringing government back to its main task.

In this discussion, there are a number of other issues I'd like to comment on, but feel too tired to write much about today. There's the role of money in politics, where there are some interesting comparisons to be made between the US and Europe. Another issue is that of the Supreme Court and the role of the judiciary. Finally, I'll have some thoughts on the wider reform of voting systems with some ideas for more direct democracy (and their problems).

The inevitability of political elites

In my previous scribblings below, I looked at the differences between the US and European systems of democracy, and especially at the gap that exists between electors and elected. The American system keeps the gap smaller than democracy in most European countries. But that is not to say that the American system is perfect, or even working well on an absolute scale. It's doing OK, but the distance between the politicians and voters is still substantial. Washington politicians are an elite, and even newly inducted Congressmen become assimilated by the political machine in DC. And America has its political dynasties too, such as the Kennedys and the Bushes.

So obviously, American democracy too has produced an elite. This is inevitable. No matter what implementation of democracy one chooses, the delegates that are sent to act on voters' behalf will be imbued with a sense of importance, which in time grows into the arrogance of power. But a country does need a political class. Somebody has to be President. Somebody has to negotiate on behalf of the country, sign treaties, command its armed forces. Even in a completely direct democracy these people will still have to exist. So the question is not so much whether a political elite will emerge, but how it can be contained so that it remains an approximately good representative of the people as a whole.

Keeping political careers short through term limits precludes professional politicians from becoming too entrenched in their jobs, but it is a blunt tool. The main way of keeping the politicians in check is to make them less important, give them fewer things to influence. And above all, put safeguards in check that limit the power they can arrogate. And secondly, to the extent that politicians need to be given power, it should be devolved as close to the local level as possible. The movement to repeal the 17th Amendment is a step in this direction.

As technology improves, it will become possible to hold electronic plebiscites with great frequency. That's the topic for the next article in this occasional series.

Government of the elite, by elite and for the elite

There was a discussion about the relative level of democracy between the US and Europe over at Bjørn Stærk's Blog. I can't seem to get the permalinks to work, but scroll down to the September 27th entry to see. [UPDATE: It's fixed now] I am not too concerned about he question how democratic Norway is compared to the US. Both countries have a democratic system in place, and indeed virtually all of Europe has functioning democracies. They may not always function well, but democracies they are.

Although it is dangerous to generalize, I am going to do it anyway to make my point without getting bogged down in too many details. There are a few big differences in the way the European democracies are structured compared to the American system. Three differences stand out:

1) Separation of the branches of government
2) The electoral system
3) The role of political parties

Most European countries have a parliamentary system. Elections are held for a parliament, and whoever can put together more than half of the votes there gets to form the government. The executive branch is closely intertwined with the legislative. In American terms, it's as if Congress would elect the President, rather than the Electoral College. Only France has a powerful directly elected president, but even there the government comes from the parliamentary majority. The cabinet reports the to Prime Minister, who forms a counterweight to the president. It is the cabinet which is the executive branch, and not the presidential staff. With a hostile National Assembly, a French President will be able to do much less than an American President faced with a Congress controlled by another party. With the executive being so closely tied to the legislative, the amount of parliamentary oversight is also less. By definition, the ruling party or coalition will be in charge of both. Similar arrangements exist in most European countries.

The ties binding politicians to political parties in Europe are also stronger than in the US. Voting can and does go along party lines, especially in controversial votes, but there are always plenty of members of Congress who'll cross the aisle on a particular issue. In many European parliaments a vote against the party whip is very rare. Party discipline is strictly enforced, to an extent that the whips in Congress can only dream of. The reason that it can be enforced goes to the heart of the biggest difference between European and US systems: politicians in Europe are loyal first and foremost to their party, and not to their voters. This also leads to much more ideologically unified parties in Europe. The variability in positions in either the Democratic or Republican parties is much larger than in any European party. A southern Democrat will have more in common with a southern Republican than with a Democrat from the Northeast.

With the first-past-the-post system in the US, the electorate votes for a specific person, not a party. In the proportional representation systems of Europe, the vote goes to a party, which then decides which politicians get to serve in parliament. This is a crucial difference. To advance your carreer as a European politician, you have to make sure that you are popular within your party's structure. In America, you have to make sure you're popular with your voters. This ties together the points 2 and 3 above: European political parties can enforce discipline within their own ranks much more thoroughly, because they can punish dissent by ending troublemakers' carreers. But by moving the incentive for politicians away from pleasing the voters to pleasing the party hierarchy, there is a disconnect between the people they are supposed to represent and the politicians themselves. Since politicians are elected on a party list system, there is also little to bind voters to politicians. The concept of "my Senator" or "my Congressman" simply does not exist in a system of proportional respresentation. It works in both directions: politicians care much less about what people think, and people can't punish politicians effectively if they break their promises.

This is an essential feedback loop in American democracy, and the electoral system that leads to the party structure in Europe lacks this. Feedback is essential to keep a system working properly. The European system, with the power concentrated in party hierarchies leads inevitably to elite rule (which is not to say that the American system is perfect, but it suffers far less from this particular syndrome). The political elites in Europe can in many cases ignore the wishes of the electorate, as long as they agree amongst themselves. A good example was the creation of the euro, where large majorities in many countries were opposed to it, yet ratification of the Maastricht Treaty in parliament was hardly an issue, and passed with huge majorities. This big a divergence between popular opinion and its reflection in parliament could not exist in the US.

An argument often heard against the first-past-the-post system is that it is unfair. Parties or candidates might accumulate a significant proportion of the vote, but end up being underrepresented or even unrepresented in parliament. In Britain, which uses this system, the party that can garner about 42 to 45% of the vote usually ends up with a working majority in Parliament. Is this fair? It's unfair to the extent that it does not represent the proportion of the votes cast for political parties. It is fair in the sense that the candidate in each constituency with the most votes gets to represent it in Parliament. But the purpose of democracy is not to find a perfect reflection of party votes in parliament. The goal is to find a way to govern the country that represents popular opinion, results in workable governments and also maintains internal regional stability. This last point is exemplified by the Senate in the US. Wyoming with 500,000 inhabitants gets two Senators, just like California with 32,000,000.

In the end, I don't think it's possible to say a priori which system of democracy is best. It can only be judged by the results its produces, and in that sense the American systems works better. Although this will sounds hilarious to American readers, the chasm between politicans and voters in Europe is much larger. That's why the European political class has been able to move ahead with its European Union project, although not that many European voters want it. And that's also what's wrong with the European Union. If politicians are out of touch within their own countries, this goes doubly so for European politicians. They are the political class of the political class, with hardly any corrective feedback mechanism from the voters. That's also why the EU is in danger of failing eventually. At some point, the stress between voters and politicians becomes too big, and a discontinuity occurs, such as the emergence of the late Pim Fortuyn in the Netherlands, which then shakes up the party landscape and realigns political priorities. For a while, to some extent.

Proportional representation can also lead to stagnation. In Germany, most changes of government occurred because a small party, like the FDP, changed its coalition preference from the CDU to the SPD or vice versa. Getting a change of government as a result of an election is fairly rare. Even in the case Holland, where the LPF stormed onto the stage, the new government still has one of the parties from the previous government as a coalition partner. So the voters do have some influence, but it's usually marginal in that they can shift the political center of gravity a bit to the left or a bit to the right. But the hope for a clean break with the previous government seldom exists.

There is a wider institutional crisis developing in Europe, and especially in the European Union. The Democracy Puzzle is one part of it, because without more democratic legitimacy the EU is going fail. And although more remote, there is also a danger to the democratic legitimacy of the individual member states if the gap between the rulers and ruled remains as wide as it is.