• Myths, Politicians and Money

    In 1989, the American political philosopher Francis Fukuyama published a famous essay which he called “The End of History”. In celebrating what he believed to be the more or less permanent triumph of liberal democracy, he saw the “free market” and democracy as not only compatible but as mutually supportive. The market was in his view the equivalent in economic terms of political democracy, achieving the same dispersal of economic power throughout society as democracy achieved in political terms. He saw no need for democracy to act as a restraint on “free-market” outcomes, and he saw no danger that the “free market” might in some ways prove inimical to effective democracy.

    He was confident that the rest of the world would flock to the democratic banner. Just over twenty years later, that expectation has been confounded. Confidence in democratic processes – both here and abroad – is at a low ebb. So, what has gone wrong?

    The seeds of the problem had already been sown by the time Fukuyama published his essay. The received wisdom of the immediate post-war years – that full employment should be the prime goal of economic policy, that collective public provision was needed to guarantee basic standards of essential services, and that market excesses would have to be restrained by careful regulation – had been replaced by new ideas.

    The individual, rather than society, was seen as the pivotal point of human endeavour and progress; writers like Hayek and Nozick questioned the need for or appropriateness of an extended role for government or the acceptability of meddling in “free” market solutions; redistributive taxation, the provision of taxpayer-funded benefits to the disadvantaged, and the power of organised labour came to be seen as obstacles to economic growth rather than as guarantees of an equitable distribution of wealth; economists like Milton Friedman questioned the efficacy in peacetime of Keynesian intervention and promoted the idea that macro-economic policy was really just a simple matter of controlling the money supply in order to restrain inflation; while global developments such as the oil-price shock of the early 1970s meant that inflation rather than full employment was seen as the primary issue for economic policy.

    Many of these ideas had been carried into government by Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom. The two leaders made common cause at the beginning of the 1980s in taking a step whose significance perhaps even they did not fully grasp at the time. The portentous decision was taken in the United States and in the United Kingdom to float their currencies and to remove exchange controls. The way was now clear not only for an explosion in international trade and foreign investment, but for a determined assault by international capital on the political power of democratically elected governments across the globe.

    The ability to move capital at will across national boundaries not only meant that international investors could bypass national governments but also enabled them to threaten such governments that they would lose essential investment if they did not comply with the investors’ demands. This shifted the balance of power dramatically back in the direction of capital, and set the seal on the triumph of those “free-market” principles of economic policy that became known as the “Washington consensus”.

    It became accepted that the “free market” was infallible and that its outcomes should not be challenged. Any attempt to second-guess the market would inevitably produce worse results. Everyone – it was thought – would be better off if the rich and powerful were subject to no restraint in manipulating the market to suit their own interests.

    But the whole point of democracy – that the legitimacy enjoyed by elected governments allowed them to defend the interests of ordinary people against the otherwise overwhelming economic power of those who dominated the market – was thereby lost.

    We see the outcomes of this shift all too clearly. Virtually the whole of the increased wealth of the last three decades has gone to the richest people in our society; poverty, even in the “rich” countries, has risen while inequality, with its attendant social ills, has widened; the rights of working people at work have been weakened; joblessness is endemic; and the “free market” free-for-all achieved its culmination in the global financial crisis.

    A “Europe” imposed by an elite and constructed in the image and to suit the interests of international capital has come unstuck and flounders in recession and unemployment. The austerity demanded by Europe’s leaders makes a bad situation worse. Popular support for the European Union has nosedived. Major decisions continue to be made by big corporations and not by elected governments. Faith in government and the democratic process is at a low ebb and attempts to consult the people on Europe’s future continue to be resisted.

    “History”, in other words, has continued to unfold. Very few seem to realise how thoroughly our civilisation has been transformed by the triumph of the “free-market” ideology. They do not see that western liberalism, which has informed, supported and extended human progress for perhaps 700 years, has now been supplanted by an aggressive self-interested doctrine of the individual which leaves no room for community and cooperation. Even the victims of this comprehensive and fundamental change seem hardly aware of what has happened.

    Fukuyama failed to recognise, in other words, that the threat to western democracy came from within those democracies themselves. It came from the greed and self-interest of the rich and powerful and their ability to manipulate the “free” market to their own advantage, but also from the quiescence and apathy of that much greater number who fail to understand that democracy is necessarily sidelined if the market cannot be challenged. The substance of democracy has been hollowed out, so that only the shell, the forms, remain, because we have not cherished and made a reality of what was our most valuable protection and greatest achievement.

    Bryan Gould

    19 September 2013

    This article is based on my new book, Myths, Politicians and Money and was published in the Yorkshire Post on 20 September

  • Consulting the People

    It cannot be said too often – democracy is about more than election day. Electing a government is only the beginning. What matters to a properly functioning democracy is whether the government, however decisive its election day mandate, continues to consult and reflect public opinion throughout its term and whether it exercises power in the interests of the whole country and not just a sectional interest. If it does not, we struggle with what Quintin Hogg once famously described as “an elective dictatorship.”

    We have had in the last few days a significant reminder of this principle. When the British Prime Minister wished to make the case for a strike on Syria, he did at least have the good sense to seek a mandate from Parliament. When the House of Commons declined to vote for military action, reflecting its sense of betrayal over what is now seen as Tony Blair’s false prospectus for the Iraq invasion, David Cameron had no option but to abandon his plans.

    This was a prime example of democracy in action – of the elected representatives of the people, mindful that they were accountable for their decisions to those who elected them, exercising their judgment in such a way as to represent the will of the people.

    The embarrassment caused to David Cameron was enough to give President Obama pause as well – and, though he is not constitutionally obliged to do so (under a different system of government), he too has decided that it would be prudent to seek the support of Congress before authorising an act of war.

    We need to look a little further afield for a significant instance of the difficulty caused when the forms of democracy are complied with but the substance is not. There has quite rightly been considerable anxiety in the West at the overthrow of President Morsi by the Egyptian army only a year after he had won what was by most accounts a reasonably fair election.

    No democrat can justify a military coup, particularly in a country which has suffered an army-backed dictatorship for so long and where hopes for democracy were so high; but the sad fact is that President Morsi came unstuck because he and his Muslim Brotherhood supporters believed that the whole meaning of democracy had been expressed on election day and that beyond that nothing could restrain them from imposing their will without regard for anyone else.

    The difficulty with this was that the Muslim Brotherhood’s will was to impose a religious state on the whole country. Not surprisingly, the large numbers who had voted in different directions and to whom a secular state was important were less than thrilled at this prospect. President Morsi may not, in other words, have been quite as democratic as he seemed.

    These varied instances from across the globe of how democracy should and should not work may seem to have little directly to do with us. We, after all, (along with the Scandinavian countries) consistently top international surveys of countries with the most effective democracy.

    We should not be so complacent. We now have several recent instances of our own government asserting that its mandate on election day means that it can now do what it pleases. John Key is keen to show that he is a “strong” leader who – having been elected with a (barely) working majority – is now not only entitled to do what he pleases, whatever the country thinks, but should be congratulated for doing so.

    It is not enough that opinion polls show, for example, that asset sales have been opposed since day one by a large majority of New Zealanders and that an impressive number have now succeeded in demanding a referendum on the issue. John Key has immediately made it clear that he will not act on any decision by the people that they want the asset sale programme halted. We are presumably meant to applaud this obstinacy and overlook the fact that we have a government that pays no regard to us.

    But there is an even more significant instance when the government is proceeding on an important issue without even bothering to let us into the secret of what it intends, let alone give us a voice in the outcome.

    The innocuous-sounding Trans Pacific Partnership may not be quite a matter of life and death, comparable to a decision to go to war; but its long-term consequences for this country could be almost as serious. The deal currently being negotiated in secret and scheduled to be finalised very soon will represent a hugely significant further step in the absorption of this country and its economy into a global economy dominated by big players.

    Overseas corporations will have, for example, greater legal rights against our government than does any New Zealand individual or company; and future New Zealand governments will not be able to change that position even if they are elected to do so.

    By the time this secret deal is done, it will be too late for us to have any say. Does that sound like democracy to you?

    Bryan Gould

    4 September 2013

    This article was published in the NZ Herald on 6 September.

  • New Zealand’s Elective Dictatorship

    It was the Tory MP and peer, Quintin Hogg, later Lord Hailsham, who coined the phrase “elective dictatorship” to describe a government that – once elected – proceeds to ignore the wishes of the voters who elected it and to do whatever it wishes.

    His point was that there is much more to democracy than the casting of a vote once every few years. In a properly functioning democracy, government is held to account – not least in parliament – and its decisions debated and often contested on a day-to-day basis. A government claiming legitimacy for its actions and decisions will ensure that this is so.

    I was reminded of this important point when Nanaia Mahuta’s complaint about the inadequacy of facilities in our parliament for mothers with small babies was summarily dismissed by Rodney Hide in the Herald on Sunday. There was no problem, Hide asserted, because MPs did not need to be present in the debating chamber; they were required in parliament, not – it seems – to listen to, let alone participate in, the debate, but merely to act as lobby fodder.

    As long as they cast their votes at the appointed time, it didn’t matter if they knew what had been said in the debate or even if they knew what the debate was about.

    This offers a remarkable insight into how the current government and its allies view parliament and the democratic process. The notion that the elected members are there to exercise supervision and restraint over the executive – that the government needs to make and win reasoned arguments before making decisions – is obviously foreign to them.

    Perhaps we should not be surprised. John Key’s government has given ample evidence of the contempt in which it holds parliament. Its majority in that parliament is, after all, the product of a disreputable deal with John Banks and its determination to preserve that arrangement is evidenced by its summary rejection of the public’s demonstrated wish to see – in the interests of democracy – reforms of our MMP voting system.

    The government’s focus is clearly on preserving its majority, whatever the cost to effective democracy. And so little value is placed on parliamentary debate that the resort to “urgency” in passing legislation is now commonplace and has led to increasingly badly drafted law.

    It is increasingly clear that – whatever the principles of our constitution may say – the government is unwilling to tolerate interference, not just from parliament, but from any quarter. It has now taken to ignoring the advice it receives even from its own departments, as in the cases of the Crown Minerals Amendment Act and the decision allowing mining on the Denniston plateau.

    It has quite deliberately restricted the rights of citizens to go to law to contest government decisions, as in the shameful case of those who might wish to litigate the low level of remuneration paid to family carers. It has refused to publish the legal advice it has received on contentious issues like the criminalisation of protest against oil drilling on the high seas.

    John Key has repeatedly made the argument that a policy on asset sales that is manifestly opposed, on strong grounds, by a majority of New Zealanders should nevertheless proceed because he and his party won the 2011 election. This is as stark an instance of an “elective dictatorship” as one could wish (or not wish) to see.

    That argument has now been taken to even less defensible lengths on the issue of the Auckland convention centre. Not only are we told that the general election outcome means that the Prime Minister is free to strike whatever deal he wants to make with his big business cronies (in a secret process, in this instance, roundly criticised even by his parliamentary ally, Peter Dunne), but the Sky City boss then has the gall to jump on that bandwagon and to tell the public that the PM’s mandate means that they have no right to be heard.

    It is now clear that the only people who have any chance of influencing the Prime Minister in his otherwise unbridled use of power are the leaders of powerful business interests. Warner Brothers can extract tax concessions and law changes without breaking sweat; petroleum and mining companies can have protesters outlawed and environmental concerns set aside; Sky City can have gambling protections relaxed and a licence to print money extended till 2048 – and parliament is threatened that any successor government would incur heavy penalties if it tries to change that arrangement.

    A government that understands and values democracy would ensure that it was responsive at all times to the opinions of the voters. This is not to say that a government, including this one, cannot have its own way. But the strength of our democracy rest on assuring people of all views that they have at least been heard.

    Our forefathers fought hard for our democracy. Whatever view we take of the government’s political stance, we betray that legacy if we fail to protest at the cavalier way in which democracy is now treated.

    Bryan Gould

    26 May 2013.

  • A Win for Labour and Democracy

    It is very much to Labour’s credit that they have put in place a more democratic set of internal rules across the board and that the outbreak of democracy now applies to the election of the leader as well. The events of recent days, however, suggest that the party has yet to understand fully or feel comfortable with the new procedures.
    The new electoral college, which extends the power to choose a leader to party members and affiliated bodies as well as to MPs, is modelled fairly closely on the procedures of the British Labour Party. In the UK, though, the leader faces an annual election; and it was the need to protect the party against frivolous or vexatious challenges to the leader that led to the requirement that a challenger would have to secure the nominations of at least 20% of the parliamentary party. It was that requirement I had to meet when I made my own bid for the leadership in 1992, following the resignation of the then leader, Neil Kinnock.
    In both the UK and more particularly New Zealand, though, MPs have given up their exclusive power to elect the leader with some reluctance. The fear is always that the wider party electorate could saddle the parliamentary party with a leader who did not enjoy the confidence of MPs.
    We saw something of this in the provision put to last week’s conference to the effect that the new democracy would apply only if 60% of MPs agreed that there should be an election. It was always unlikely that this restriction would survive long. You cannot show the dog the rabbit and then expect it to accept, as the rabbit is put back in the hat, that it was only for show. Delegates to the conference were virtually certain to twig that, under the proposed rule, the caucus had retained for itself the virtually unassailable power to decide whether democracy should apply or not.
    When the eminently predictable happened, however, and the delegates asserted themselves by demanding a lower barrier to the new democratic process, many people – and most of all the media – were apparently taken by surprise. The result was that a state of extreme excitement was engendered overnight. Suddenly, what had seemed a distant and uncertain prospect became – in the minds of many – a virtual certainty; there would be a challenge to David Shearer’s leadership.
    Sadly, many who should have known better enthusiastically played the roles assigned to them by slavering media. Victims and villains were quickly identified and condemned. “Strong” action was urged. Personal antipathies and grievances were widely aired.
    No better case for a wider electorate than just the caucus could have been made. On this evidence, a significant role for the party membership is long overdue, since they are less concerned about their career prospects or personal rivalries and more likely to focus instead on the need to elect a Labour government.
    Let us remind ourselves of where we have got to. There will be, irrespective of whether there is any actual or potential challenge, and as the rules provide, a vote in February to confirm or otherwise David Shearer’s leadership. On the back of his achievements so far, and the fact that he enjoyed a good conference and made an excellent speech, he should and will feel confident about the outcome of that vote.
    But the provision that there should be such a vote at least once in three years is there advisedly. The fact that it is to take place is in no sense evidence that a challenge is imminent. But, at the very least, it provides a kind of safety valve – an opportunity for any disaffection to be expressed in a secret ballot. As with any secret ballot, the participants have no obligation to disclose their intentions to the media, and certainly not three months in advance.
    If and when David Shearer is endorsed in that vote, the absence of any disaffection will have been established. Only in the unlikely event that the leader loses that vote will be there be a new election and only then will we know which contender (or more likely contenders) would put their names forward. And let us remind ourselves that harbouring leadership ambitions is hardly in itself a hanging offence.
    If these are recognised as the outcomes that are presumably desired and intended and they are handled with calmness and good sense, the Labour party has nothing to lose and much to gain from the new procedures. The party will in February most probably confirm that they have the right leader to lead them into the next general election, or will elect a new leader who they think could do a better job.
    In either event, the focus must be on replacing a government whose tribulations in 2012 and parliamentary arithmetic both strongly suggest is there for the taking. Party members should breathe through their noses and enjoy the process that they have ordained; it is, after all, democracy in practice.
    Bryan Gould
    21 November 2012

    This article was published in the NZ Herald on 23 November.

  • The “Best” System?

    In 1974, as a newly elected MP for Southampton Test in the British Parliament, I was interrupted mid-speech on one occasion by a Liberal from the benches opposite. “How can you claim to speak for the people of Southampton,” he demanded “when you got only 39% of the vote?”

    “Who would you replace me with?” I rejoined. “With the Liberal candidate, who got only 23%?”

    That summed up for me a powerful advantage of the first-past-the-post voting system. If the purpose of a general election is to send a representative for each community to Parliament (and a House of “Commons” is historically a house of “communities”), it is hard to go past the candidate to whom that community gave more votes than any other.

    The other great virtue of first-past-the-post is that it almost always produces a clear-cut winner. This is valuable in itself, but it also has a couple of further advantages. It means that the voters themselves – rather than deals done by the politicians after the votes are counted – decide the result. And the voters have that greatest of all powers in a democracy – the ability to throw out one government and to replace it with an identifiable and alternative government-in-waiting.

    These virtues of certainty and predictability could be contrasted with the confusion and uncertainty that so often followed general elections in countries that used proportional representation systems. It seemed often that the voters played only a bit part and that the real decisions were left to the manoeuvrings of the politicians after the election.

    In some countries, this meant that – however often the voters were asked – the outcome did not change. Post-war Italy, for example, had a record number of general elections, but the voters could never get rid of the Christian Democrats who simply came up with differing combinations of themselves and minor parties. In other countries, by contrast – and Israel was for a time a prime example – the results were completely arbitrary, with small, extreme parties often deciding who should form the government.

    For all these reasons, I remained committed while in Britain to the traditional first-past-the-post system. Indeed, I once sat on a Commission that was asked to recommend any changes that might be needed to the British electoral system. I confess that I was instrumental in ensuring that the Commission made no such recommendation.

    And I recall that, at the time of the 1993 New Zealand referendum on MMP, and while I was still in the UK, I was telephoned by the organisers of the anti-MMP campaign and asked for advice and a statement of support for their position. I would have voted against MMP in that referendum.

    Eighteen years later, I am older and, I hope, wiser. My reasons for seeing virtue in first-past-the-post seem to me still to be valid, and my concerns about the dangers of proportional representation still carry weight.

    But my experience of MMP has given me a greater appreciation of how its advantages stack up against the downsides of first-past-the-post. And what I now understand is that no system is ideal. Each has its strengths and weaknesses, and delivers its own particular benefits and drawbacks. In the forthcoming referendum, the question is not so much which system is “best” but rather, what do you want your system to deliver?

    MMP supporters have always promised that it will deliver a fairer and more representative parliament and a more effective voice for otherwise unrepresented minorities. That promise has largely been delivered. And MMP has also meant to an end to what Quintin Hogg famously called the “elective dictatorship” – the power of a party with a parliamentary majority (even if it obtained only a minority of the total votes) to do whatever it wants without regard to anyone else.

    MMP has meant that major government parties have been forced to take a more inclusive and conciliatory approach to other views and interests. They have seen the need to negotiate for support before introducing legislation, rather than relying on a parliamentary majority to ram it through – and that has meant, on the whole, better legislation and a more constructive parliament.

    But the major surprise is that, even with these advantages, MMP has not denied us a fairly straightforward choice between broadly right-of-centre and left-of-centre governments. We get, in other words, the best of both worlds; we have made the promised gains in the sense of a more equitable representation without sacrificing our ability to choose between readily identifiable options as to who should form the government. And we still have that essential power to throw one government out and replace it with another.

    This is not to say that MMP should be uncritically supported. No one watching the machinations in Epsom, for example, could say that change is not needed. I, for one, remain unhappy at the power exercised by party machines in deciding who should get into parliament via the party lists. And we need to watch carefully that fringe parties do not gain disproportionate influence over what our governments do.

    But, in deciding which way to vote in the forthcoming referendum, we can at least applaud the genius of the New Zealand electorate who have ensured that, without achieving anything like perfection, we have at least created a system that works pretty well.