Post Brexit UK is seeing higher skilled labour entering from non-EU countries to support a range of services (public and other) – success
It's Wednesday and so before we get to the music segment we have time to…
This is Part 3 (and final) in the series which examines the robustness of claims made by two British academics about the desirability of the British government (particularly Labour) adopting further fiscal constraints on their flexibility to advance well-being in that nation. Part 3 further develops the critique and focuses on the validity of tightening voluntary constraints on government and outsourcing key parts of the fiscal policy development process to so-called ‘independent’ fiscal councils or boards. We conclude that these suggestions would further entrench the neoliberal dominance of government policy and reduce its capacity to serve the wider interest. In effect, taking this sort of advice would be counterproductive for British Labour, which really needs to to further break out of its recent Blairite neoliberal past and present a truly progressive manifesto to the British people that will force the Tories to move closer to the centre and squeeze the extreme right-wing elements. This will require more than articulating progressive-sounding social and environmental policies. It will require more than proposals to renationalise the railways. Effectively, British Labour has to reframe the macroeconomic debate and eschew the sort of reasoning that the mainstream of my profession offers. It must, in my view, embrace Modern Monetary Theory (MMT) principles to free itself from the shackles of all the neoliberal mumbo jumbo that the New Keynesians continually offer as economic verities. The reality is the the New Keynesian approach has one output – an elaborate litany of lies.
The previous Parts to this series:
1. Part 1.
2. Part 2.
In Part 1, we noted that one discussion paper that seems to have influenced the Shadow British Chancellor was published on May 20, 2014 as Discussion Paper No. 429 from the National Institute of Economic and Social Research.
The NIESR paper – Issues in the Design of Fiscal Policy Rules – was written by Jonathan Portes (who at the time of writing was the Director of the NIESR before he was ‘let go’) and an Oxford academic, Simon Wren-Lewis.
Part 1 considered the applicability of so-called New Keynesian models to determining what is best policy practice in the real world.
We concluded that the approach is incapable of serving that type of function and any specific, concrete policy advice that commentators claim is derived from ‘optimising’, ‘micro-founded’ New Keynesian models is really just an assertion of their ideological perspectives and the deductions they draw from that outlook.
In Part 2 of the discussion, I examined more specifically, how the authors attempted to use the New Keynesian theory as an authority for specific policy conclusions, which they essentially admit (not in those words) cannot, in fact, be derived from the ‘optimal’ theory.
Now for Part 3.
Portes and SWL suggest that governments have been trashing the prosperity for future generations because they have engaged in “deficit bias” over the last several decades.
The observation that fiscal deficits have been more or less continuous and public debt ratios have risen since the 1970s is sufficient in their eyes to substantiate that position.
One of the several explanations given by the Portes and SWL for the “deficit bias” that I introduced in – Part 2 – of this miniseries of blog posts, is related to what mainstream economists call the “time inconsistency” problem.
This ‘problem’ relates to a situation where a policy maker makes a statement that it will cut the fiscal deficit at some point in the future. The decision is ‘time consistent’, if by the time we arrive at that future time, the policy maker has the same incentive to maintain the previous commitment as when they made the commitment.
But if the time arrives to cut spending or increase taxes and the government finds it is no longer as enthusiastic then the situation is called ‘time inconsistent’.
Mainstream macroeconomics (New Keynesians and others) consider this situation to be the anathema of sound policy practice.
What mainstream economists have claimed is that the political cycle always gets in the way of sensible economic policy decision making, by which they mean running fiscal surpluses (except, if they are deficit doves, where they allow for temporary deficits in times of recession or war).
Any temporary deficits should be ‘paid back’ (through higher taxes and/or lower spending) as soon as possible to restore the bias towards balance or surpluses.
Their solution: Corral fiscal policy in technical rules that constrain flexibility.
But even better combine these technical rules with the outsourcing of policy or procedures that allow an ‘independent’ panel of ‘experts’ (technocrats) to bring political pressure on government to head off any recalcitrance (“deficit bias”).
I always laugh when I read New Keynesian babble about ‘independent expert panels’ being desirable.
Even the philospher kings in Plato’s utopian city of Kallipolis had “wisdom” and “true knowledge” (ideas behind the form).
In Book 6 of the – Republic – Plato introduces the characteristics that the kings must have to be benelovent rulers:
… but that the true pilot must pay attention to the year and seasons and sky and stars and winds, and whatever else belongs to his art, if he intends to be really qualified for the command of a ship, and that he must and will be the steerer, whether other people like or not …
Note these ‘qualities’ all pertain to be able to comprehend the real world rather than an imaginery world that the pilot might like to dream about as if it existed.
These ‘qualities’ are severely lacking in applications of New Keynesian models.
The problem with claiming that a fiscal council is independent is that that the formal membership or not of the political level of government is somewhat beside the point.
The problem is the neoliberal Groupthink that dominates.
So, if we stack a ‘fiscal council’ with mainstream economists we don’t get ‘independent’ analysis. We get Groupthink. Just look at the track record of the IMF.
The point is that these characters know that by forcing governments to at least listen to some formally constituted body the political process will be biased towards accepting the prevailing neoliberal ideology.
Which draws on anything but an understanding of the real world (the “wind”, “stars” etc).
The introduction of the “time inconsistency” concept into economic analysis came at a time when Monetarists were seeking to disabuse governments of using discretionary fiscal policy.
They claimed that such discretion was fraught (including as a result of the “time inconsistency”) and, as a result, the macroeconomic policy emphasis should shift to monetary policy, with the primary goal being to pursue an ‘inflation target’ with the decision-making boards of central banks supposedly ‘independent’ of the political process.
Then stack the boards with neoliberals and QED. Austerity bias established and elevated levels of labour underutilisation emerge.
By outsourcing (depoloticising) policy to these unelected and unaccountable bodies, the mainstream macroeconomists then claimed that policy would always be ‘time consistent’ – not tainted by politics.
Portes and Wren-Lewis rehearse the usual mainstream mantra in this regard:
In almost all major developed economies (and many developing ones) policymakers have sought to address these potential issues by delegating monetary policy to independent central banks …
Given the perceived success of the independence/target model for monetary policy – at least up to the Great Recession – there has been increased interest among policymakers in applying this model, at least in part, to fiscal policy … The two remedies which are generally suggested are fiscal councils and fiscal rules. We discuss fiscal councils in a later section, but here we do the same for fiscal rules.
First, democracies are meant to reflect the will of the people, which can evolve over time. That will should drive the policy design at any point in time.
Should people determine via the ballot box that they no longer want a particular policy regime, despite the government in a previous period setting it up, then that is an exercise and consequence of democracy.
Having unelected and unaccountable technocrats force policies upon a nation that the people do not want sounds more like the ‘dictatorship’ that that crazy US banker dude (quoted in Part 2) was on about.
Each generation should be able to determine what fiscal policies parameters pertain to them. That is a strength not a ‘sub-optimal’ outcome.
Second, quite apart from the ideological biases that are reflected in the way government stack the monetary policy boards, the central banks are not ‘independent’ and monetary policy can never be independent of fiscal policy given the monetary implications of net fiscal positions, which the central bank has to manage each day via its liquidity operations.
Please read my blog posts (among others) for more discussion on this point:
1. The sham of central bank independence (December 23, 2014) – for more discussion on this point.
2. The consolidated government – treasury and central bank (August 20, 2010).
3. Central bank independence – another faux agenda (May 26, 2010).
Third, the claim that inflation targetting achieved its aims – more stable and lower inflation, higher GDP growth rates etc – (their reference to the Great Moderation) – does not accord with the research findings.
In this blog post – The Great Moderation myth (January 24, 2010) – I noted that we considered this question in detail in my 2008 book with Joan Muysken – Full Employment abandoned,
The conclusions we drew from an extensive literature analysis and our own empirical work are:
The work I have done in this field which is summarised (with references) in the book show that the Great Moderation was actually associated with higher sacrifice ratios.
But, I guess that if one asserts something enough times then the likes of Portes and SWL will at least believe it themselves. But then belief is just delusion.
It has become mainstream dogma that central bank independence ‘exists’ and ‘worked’ so it is hardly surprising that this depoliticisation has not also spawned increasing pressure to have “fiscal councils”.
It is just self-fulfilling logic.
But the main reason ‘fiscal councils’ or any outsourcing of fiscal policy to unelected and unaccountables technocrats should never be considered or implemented is that the strategy fundamentally breaches our notion of democracy.
At any rate, Portes and Wren-Lewis think fiscal rules are appropriate as a “disciplining device” on a “non-benevolent government”, one that “seeks to “exploit future generations” by running deficits on a steady-state basis.
Kids bearing the excesses of their parents type argument.
They admit that the rules will be moot because such a nasty government can always manipulate data and reclassify spending etc to get around the rules.
The theme of the Portes-SWL approach is that (a) there is an ‘optimal’ fiscal approach specified in economic theory that a “benevolent” government (one that doesn’t trash the prosperity of the grandkids!) would follow.
However, they assert that governments have demonstrated they are not benevolent – how? Because there has been a ‘deficit bias’ since the 1970s.
They don’t seem to understand that this period coincided with the end of the Bretton Woods system, which freed fiscal policy from the constraints of having to defend an agreed exchange rate parity. That point is significant but evades them.
They call this difference between the ‘optimal’ approach and the flawed approach (‘deficit bias’) a “tension between design principles”.
The tension is that the bad government needs to be “disciplined” by sub-optimal fiscal rules and if it was good it could follow some other rules.
Yes, it is crazy stuff really.
In Section 4 of the paper, Portes and SWL introduce an array of “Alternative types of fiscal rule” to see how “this tension between design principles might play out in terms of specific forms of fiscal rule”.
Among the array of “optimal government behaviour” are adjustment equations that force a government to inflict austerity when there is a discrepancy between “the actual and the target debt to GDP ratio”.
Portes and SWL find ” two major problems with rules of this type as a means of disciplining governments, or providing an incentive for a government to behave in a benevolent manner.”
1. The evil government might simply ignore the rule and “spend more, or tax less, than the rule implies”. Gosh, that would be evil. Portes and SWL want rules that “punish” naughty governments. There is a sort of morality play implicit here.
They don’t trust us (voters) to ‘discipline’ a government that fails to advance our well-being. Instead they want some technocrats to do that. The problem is that history tells us that the goals of the technocrats are unlikely to be commensurate with the goals (and well-being) of Society in general.
It is clear that the fiscal rules etc that have been imposed over the last several decades have favoured global capital – just the rising inequality and the flat real wages growth – indicates which segment the system is benefitting.
In general, there is an extraordinary distrust of democracy exhibited by proponents of fiscal rules and councils. Despite using microeconmic foundations in their models (which assert that individuals act in their best interest and know what is good for them), these characters intrinsically think that governments are bad and we (the voters) will not change their behaviour.
2. The optimal “debt target … is unlikely to be achieved within the lifetime of a government” and governments like to achieve things apparently.
They then engage in a detailed discussion of a government chasing its own tail (the “optimal debt ratio”) and not getting there and voters getting angry with it.
Outer space sort of stuff.
But think about it.
The first problem they raise is that the government will blithely ignore the target, but the second problem is that it will not be able to achieve it within the political cycle.
But, what is missing from all of this is the definition of an ‘optimal debt ratio’ in the first place. That is what the spreadsheet kings (Rogoff and Reinhardt) tried to sell everyone – 80 or 90 per cent.
As good as throwing a dart to determine it.
They claim next that:
… the appropriate deficit target will depend on both the target level of debt and the extent of any initial excess debt.
Not even close.
The appropriate deficit target is whatever is required to ensure the savings desires of the non-government sector are achieved at a full employment level of output.
The purpose of fiscal policy is not to ‘hit’ a specific deficit target defined within its own parameters or in terms of some ‘debt’ ratio.
The purpose of fiscal policy is to promote well-being of the people, which includes sustaining full employment.
That is what I discussed in this blog post – The full employment fiscal deficit condition (April 13, 2011).
Even within their own logic that says a deficit target is better than a debt target because it is “easier to achieve the target over the lifetime of the government” we see deep flaws.
An economic cycle will rarely coincide with a political cycle (the span between elections). We have seen the problems that Eurozone governments encountered by trying to force obedience to a fiscal rule within a political cycle.
The point is that trying to meet some artificial target, when the outcome is beyond the scope of the government anyway is fraught and, as we have seen, biases fiscal policy towards being pro-cyclical, which is the anathema of responsible fiscal practice.
Portes and SWL implicitly admit this.
They consider a government caught with a recessionary shock in the final year of their tenure having to impose excessive cuts to meet the target.
But, apparently, cutting the fiscal deficit during a recession would be “less suboptimal” than trying to cut the debt ratio.
So bang our head with a 5kg hammer rather than a 20kg hammer. Less suboptimal!
The overall problem remains though. What is the “optimal debt” level for a government that doesn’t need to issue it in the first place?
There is a plethora of similar rules proposed by they authors. None of which have any traction once we understand the actual capacities of the government.
In the interests of finishing this series, I will leave them at that.
Their final section elaborates further on their claim that fiscal councils are desirable in conjunction with the use of fiscal rules.
These councils will monitor, forecast, call out broken promises, expose lies, and all the rest of it.
They admit that where a nation has a non-benevolent government (one that is trashing the grandkids future by running deficits):
The presence of a fiscal council can reduce those risks, to the extent that the council has sufficient political capital that any rebuke would involve the government in political costs.
The problem is that these councils will be ideology watchdogs, given they will be stacked with neoliberal economists.
The conservative corporate bias that is present in the existing fiscal councils that have been established in various nations is testament to that.
Imagine a government decides to introduce a Job Guarantee.
How long would it be before the ‘fiscal council’ started pumping out reports and press releases claiming it would ‘cost’ too much, the government would be ruining the prosperity of future generations, that bond markets will see that it runs out of money, that the workers employed in the program would be doing nothing productive, that …, that …, that …, that!
That input would not provide sound analysis to help the public determine whether the policy was appropriate or not.
As it stands, there is a bevy of ‘fiscal councils’ embedded in the financial media and the big think tanks, that pump out nonsense like this every day and negatively influence the political process.
I was talking to someone this morning about the sales tax increases in Japan in 1997 that pushed it back towards recession. The government then was pressured by the sort of characters that would be appointed to fiscal councils to introduce a sales tax hike to bring down the deficit.
The deficit was fine and doing its job to support growth and non-government saving. Attempting to cut it was the worst thing the government of the time could have done. And sure enough the obvious happened.
Another point that interests me here is the role of academia. Historically, our role was to bear witness to governments and their behaviour. To provide ‘independent’ scrutiny. That role was one of the reasons that tenure was introduced – to allow us security of employment no matter what we said about governments or other powerful entities.
It didn’t guarantee a pluralism of view being expressed but it made it more likely.
These days, academics have largely lost tenure (in many nations) and are bullied by managerial bosses into virtual silence for fear that Government Ministers will ring up their institutions and damage their prospects if they speak out openly.
It is far better to restore the security of employment in universities and require a diversity of employment in departments such as economics, to ensure this scrutiny continues.
That is a far better way to improve the political debate than creating a fiscal council and stack it with like-minded neoliberals.
Anyway, Wren-Lewis was out on Twitter last week claiming I was not a serious economist and was ideologically resistant.
Then he got all precious claiming he was being attacked personally by various MMT tweeters (not me) when one of them told him to take three years off and actually put in the hard yards to get a PhD! He somehow gained a chair without one.
I laughed at his inconsistency. Maybe he needs an ‘independent’ council to advise him of when he is losing it!
That is enough for today!
(c) Copyright 2018 William Mitchell. All Rights Reserved.
This Post Has 25 Comments
Huh, a fiscal council, we have one of those. It managed to prove itself completely useless every single year of its short existence.
The Portes and Wren-Lewis paper made reference to an article by Teulings:
The article discusses three reasons the author believes that politicians prefer immediate austerity to long term structural reform. It seems to me that these same reasons might also apply to why politicians might not invoke an MMT style agenda. These reasons serve to highlight the difference in the way economists (of any persuasion) think and politicians think.
1. politicians believe that deferring budget reform could lead to bigger problems in the future.
2. politicians believe that if there is an argument for budgetary reform in the future why does not the same argument apply now.
3. politicians believe that voters believe the household budget principles apply to government budgets and that “voters reward politicians who do not mess up the budget”.
The problem for economists in dealing with budgetary issues is not necessarily economic but political.
Do you think if MMT removed the word ‘theory’ from its name there would be more acceptance of what it explains? In my mind the word ‘theory’ invites an argument and implies that there can be many different versions.
My memory of other blog posts by Bill is that appropriately targeted and appropriately sized cuts to discretionary government spending are a better inflation control measure than tax increases.
Yes, I understand that a Job Guarantee would act as an automatic stabiliser, but what assurance would we have that the JG alone would maintain price stability? There might be circumstances in which discretionary decisions are also required.
My question is what would be a good political and administrative process for:
1. Deciding that inflationary pressure is emerging.
2. Deciding how much government spending needs to be cut, and over what time frame.
3. Deciding where the spending cuts should fall.
Should the Cabinet make these judgement calls?
Should it be a statutory agency that makes these decisions?
What principles should guide these decisions?
There are sound epistemological reasons for calling it a theoretical framework, but I agree that for laypeople it is misleading to hear the word “theory” in the framework’s name.
I prefer the names Modern Monetary Systems or Modern Monetary Practice. Both are accurate terms and more forceful than using the word “theory”.
The creationists say “ah but it’s only a theory” when mentioning Darwinism. There are those who say the same thing about Einstein’s Theories of Special and General Relativity. The term theory in science doesn’t have quite the same nuance of meaning. It is possible that well known theories such as these may need some revision in the way Newton’s theories were. The revision didn’t make Newtonian mechanics obsolete. They are are still perfectly valid for most practical purposes.
So I think MMT is fine. We should bear in mind the possibility, even likelihood, that MMT will change. If the facts change we have to change our minds and keep our theories up to date too!
I just use the phrase “once you understand modern money”. I tend to avoid the term MMT outside of our grouping and academic discussion.
‘Understand Modern Money’ implies the other guy is old fashioned and doesn’t understand money.
SWL and Portes are old-fashioned political lobbyists who dress themselves up in the garb of credentialism.
“Yes, I understand that a Job Guarantee would act as an automatic stabiliser, but what assurance would we have that the JG alone would maintain price stability?”
Because that’s how it works dynamically. I explained the scenarios it in my last Medium piece, which funnily enough was a response to SWL.
Once you have a Job Guarantee you don’t have to rev the private sector engine to 18000 rpm to get enough jobs. There are always enough jobs. So you rev the engine a little lower in the private sector and let the JG fill in the gaps.
The budgetary process would involve determining across the nation how many people are on the JG across the nation and what the direction of travel in the numbers are.
In other words you budget with manpower, not money.
There’s a very good description of the changes to the government system required for maintaining full employment in “Full Employment in a Free Society”. The essence of the change to the budgetary process is the same, but most of it would be replaced by the dynamic auto-stabiliser of the Job Guarantee. It would be a ‘pull’ system, not a ‘push’ one of trying to manage expenditure across the nation in a central planning way.
Once you have a JG, you can see the economy as a sandwich. The first call is the required public provision. This is created on a tax and spend basis in the usual fashion. The private sector then gets to play with whatever is left, and then the Job Guarantee creates the ‘nice to have’ public provision with what is left on the table by the private sector.
On the subject of neo-liberal stupid think, there’s a nice example of that in the Financial Times today in an article entitled “George Osborne austerity target is hit….”. Well whoopee: we’ve attained the amount of austerity we were aiming for. I’m thrilled, as I’m sure are other readers of Billyblog.
Moreover, the small print of the article is very much as the headline suggests, i.e. deficits are portrayed as undesirable, and surpluses as desirable. The article shows no grasp of Keynes’s point that the deficit / surplus should be whatever brings full employment without too much inflation. I.e. deficits and surpluses are not inherently desirable or undesirable.
I bet the solution they come up with will be deficits of no more than 3% of GDP and government debt of not more than 60% of GDP.
This will provide for 1-2% inflation and general unemployment of 9% and youth unemployment of 20% just like in the rest of the EU.
A more self explanatory name might be better. Like “State Created Money” which challenges the assumption that is normally made that states already create the money in circulation.
Re just how opposed Wren-Lewis is to MMT, his latest article starts by saying “I like a lot about MMT”. I’ll probably leave a comment.
Re getting a comment published there, seems he waits about 12 to 24 hours after his articles are published, then publishes whatever comments have come in. He ignores comments arriving later. Presumably because he has a full time job and has limited time to devote to his blog.
Kinda irrelevant to the post, but I was pleased to see a reference to Plato, a favorite.
Use one’s demiurgical powers to develop a higher vision consistent with wisdom, prudence, and justice along with courage to maintain that vision in the face of pain, pleasure, fear or desire to transcend the everday reality of becoming and achieve the higher reality of being.
Nicholas, I like the word ‘system’ and ‘practice’ and I will try to use those instead of the word ‘theory’. The only problem is that when I refer people to YouTube it talks of ‘theory’! Then they say ‘Oh it is only a theory’.
Peter. I understand your reasoning for keeping the word ‘theory’. Change etc. But using the word ‘theory’ does not help the people understand. Bill’s talks are designed for the lay person to show us how the monetary system works. They are so good but then the word ‘theory’ is used and people get turned off. Nobody has the time to follow ‘theories’
I still see the words deficit and surplus as not describing what is happening to the non government sector.
All government spending injects dollars into the non government sector. Taxation deletes it.
When you look at the impact a surplus has on the non government sector it is a contraction.
When you look at the impact a deficit has on the non government sector it is an injection.
The word ‘deficit’ shows loss and the word ‘surplus’ shows a gain but the government can not lose or gain the currency it issues. I use injection and contraction.
I want Japan’s full employment, their fiscal policy apart from Abe’s neoliberal nonsense, their dynamic industries, their public private partnership model as practiced by the Ministry of Economy, Trade and Industry, their application of trade barriers where essential, their low levels of inequality and general social harmony. China’s fiscal deficit of 15% of GDP, their economic development policies and their impressive efforts to implement their version of a Green New Deal are praiseworthy. Germany’s strong manufacturing and emerging technologies sector, free high quality education, affordable universal healthcare and less speculation in property are also praiseworthy. Along with the common man and woman, I would have thought the business sector benefits more from the policies that brought about the above successes than the shovel fulls of neoliberal horse shit we always get.
International capital drives our lives and runs our current debased political system. International capital means the top few percent and they alone have benefited from national government austerity, rampant speculation in property and shares, crony capitalism, totally free trade and the rest of the neoliberal agenda. The host is dying and this parasite needs to be cut off and burned.
Ralph, Wren-Lewis is emeritus, hence, his work load is not very great, unless he deliberately takes it on himself.
@ Andreas Bimba, that’s like the old joke:
In Heaven the lovers are Italian, the cooks are French, the police are British, the mechanics are German, and everything is organised by the Swiss.
In Hell, the lovers are Swiss, the cooks are British, the police are German, the mechanics are French, and everything is organised by the Italians.
If the cherry-picking went wrong, you could end up with a Japanese live/work balance, Chinese style human rights, and German far right activism! ; )
It strikes me that the primary argument against perpetual deficit fear has to be that deficits are not what they think they are – a shortfall and a hole to fill, and that if the foreign and private sectors wish to accumulate the currency, there is no alternative to gov deficits. Someone must provide the deficit for another to save. And this all gets back to what money really is. The onus then has to be put back on the conventional wisdom spouters to explain why sectoral balances are not real, how all sectors can be in surplus, and how a currency is not a state-issued liability.
Mr Shigemitsu, ideally the democratic process should be good at picking the best cherries or at least learning eventually to stop picking sour or rotten ones.
Currently international capital is deciding which cherries are able to be picked and then takes these as well.
Andreas Bimba said on Saturday, March 3, 2018 at 7:18
I believe it’s an old anarchist slogan that “If voting changed anything, they’d abolish it”. Mrs Thatcher duly proved this in the 1980s by abolishing the Greater London Council because the voters of London insisted on voting in the quite left-wing (in those days) Ken Livingstone, of the London Labour Party.
It seems that it behoves us as democrats to try to work, each within our own country, for a better democratic system. Speaking from the UK, we could hardly have a worse democratic system. “First Past The Post”. Elections fixed at every 5 years (except when the Prime Minister goes for a hillside walk and decides otherwise…). Non-elected “upper” house of parliament (leading to appointed “cronies”, and bought and paid for seats); “constitutional” monarchy, which may not have any actual power, but whose “royal prerogative” (e.g. to declare war) can be appropriated by the Prime Minister of the day, i.e. virtual dictatorial power. It stinks. It could hardly be worse, so “Things can only get better”….
I thought’ fiat ‘was the given name to state money.
“not a serious economist” from SWL – outrageous! What despicable, infantile tactics. Shame on him. At least have respect for a worthy adversary. I bet Keynes never resorted to that with Hayek.
“Speaking from the UK, we could hardly have a worse democratic system.”
It’s actually a very effective democratic system because it gives power to people. All the other woolly liberal democratic systems gives power to politicians. The money then hires people to gridlock such a system. If you want to change anything you have to give near absolute power to them for a short period of time. Good people won’t bother running for office if they can’t do anything with it.
And the protection is that no parliament can bind a successor. So whatever one set does, when they lose the other set can reverse anything and everything if required.
If there is any improvement required to the UK system, it would be that constituencies should have a run off – to force there to be two sides and two sides only which requires a-priori compromise by the politicians and people then know what they are getting. And a none-of-the-above option so people can vote for a clear out.
The Lords and the Monarchy are useful because they are demonstrably illegitimate. So if they make a good suggestion it can be taken on board, and if they try to override things they can be ignored. All the upper chamber can do is slow things down – which brings the next election closer and a potential change of parliament. Having a set of people to advise who are not subject to election helps reduce the instances of pork barrelling – because they can introduce a delay.
Evolution regularly comes up with systems that look messy but actually work about as well as they can. Having seen the mess the alternatives have created in Europe, I’ll stick with the organic one.
Interesting comments Neil. I certainly agree that the perpetual stitch-ups that we see on the Continent are not a good advert for PR. The long drawn-out formation of the German government, recently concluded, is perhaps a case in point. And coalitions in this country have not proved a good advert for that form of government (I exclude wartime).
I’m not sure how well “no parliament can bind a successor” works in practice. After all, it took the Tories a long time to reverse Attlee’s nationalisations, and it will take Labour a long time to reverse Thatcher/Major/Cameron’s privatisations, and would anyone reverse Brexit (if it happens)?
And George Osborne did his best to enforce fiscal rectitude on future Chancellors.
I will meditate further on the thought of messily evolved systems working about as well as they can.
I think that one aspect of modern government that is hardly defensible is the power of lobbyists in Westminster, although that would also probably happen under whatever voting system we had, and with an elected upper house.