November 2001

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The Fundamentals of Democratic Reform: Part II

by Gordon Gibson

This is the second of several articles setting out a context for thinking about democratic reform. The first article discussed the state of Canadian democracy, and why reflecting upon ways to improve it is a useful task. This article will discuss the most basic reality in the field, namely, that in many areas the real need is not for more democratic government, but much less. And it will caution that the task of reformers is tougher than usually admitted.

On humility: the American biologist, Garrett Hardin, coined the phrase (speaking of complex systems) that, "You can’t do just one thing." What he meant was that any change you make will inevitably work through the system to make other changes. For example, in our field of democratic reform, you can’t just change the electoral system. At a very minimum, changing the electoral system will affect how Parliament works, the relationship between the executive and the legislative branches, the kinds of laws that get passed, and the relationship between the federal and provincial governments. Yet advocates of electoral reform are almost invariably silent on these downstream effects.

In any constitutional area, one of the most powerful rules at work is the Law of Unintended Consequences. Things may not work out as planned. Our most famous historical example is the "confederation" set up by Sir John A. Macdonald. Sir John A. didn’t really want even a federation, much less a looser confederation. An admirer of Britain, and deeply troubled by the horrible experience of the just-ended US Civil War, what he really wanted was a unitary state. Never mind, he would accept the Quebec and Maritime realities and leave the provinces room for matters of a strictly local nature—or so he thought.

But no one had ever before married a federal system and the British Parliamentary System (BPS). The BPS tends to centralize power, above all in the executive branch. However, Sir John A. created not one, but (at the time) five executive branches, of which only one was resident in Ottawa. The provincial executives quickly took like ducks to water to the centralization of their own power, and in the process challenged that of Ottawa. The aggressive provincial governments of Mowat in Ontario and Mercier in Quebec, along with the sympathetic ear of the highest court for Canada at the time, the Privy Council in London, quickly turned Sir John’s plan on its head. Decentralization became the rule until the economic and military disasters of the Great Depression and the Second World War. Recentralization flowed from those experiences; decentralization is again the tide of today, not just in Canada but in the world.

As a more recent, simpler example, many Canadian political parties thought they were bringing democracy to their own operations by adopting a "universal ballot" to choose their leaders, whereby every party member, of whatever duration, of whatever provenance, had one vote to cast. This was in marked distinction to previous practice where either the fulltime professionals (the Caucus) or the engaged, longtime militants (as elected convention delegates) chose the leader.

No one thought at the time that the net result of this might be to create a new kind of leader who, with impunity, could ignore his or her caucus and the senior members of the party by claiming that he had a "mandate from the grassroots," absolute and inviolate (meaning, in effect, that he could do whatever he wanted). The universal ballot system, therefore, turned out to be the opposite (or, at the very best, a retrogression) of democracy.

But there is a second great force lurking in the constitutional thicket, and that is the Law of Equal and Opposite Reaction. While reformers may see great virtue in democratic reform, those benefiting from the current system— those I call the "gatekeepers to reform" because they have the power to say yea or nay—think that system is just fine. For a Prime Minister, any system that elected and then thrust him or her to an allpowerful top role is something that works pretty well. All of those who owe their influence, station, and jobs to the current system will normally support that system, fearful that more talented or vengeful successors might turf them out.

The gatekeepers may bend with the wind—may appoint an "Ethics Commissioner" as a current example—with no intention of supporting any real change. In other words, one sums up "humility" thus: change is very hard to make stick, and very unpredictable in its effect if you do. That is no reason not to try reform, but it is deep reason to do it thoughtfully and sincerely.

Through the careless linguistics of a generation of politicians and commentators, most people talk as if "democracy" and "freedom" were synonymous. This is not true. Democracy is not the same as freedom. Indeed, democracy sometimes is the enemy of freedom.

One characterization of democracy is "government with the consent of the governed." For some of the governed some of the time, that is true. That is the fairer face. The darker face of democracy lies in this fact: democracy is the name given to the institutionalized oppression of minorities by the majority. Indeed, given that most governments in Canada are elected with a good deal less that 50 percent of those voting, let alone the total vote, it can even be the oppression of the majority by a minority! And since the rules of Parliament allow for an elected dictatorship between elections, that governing "minority" may be not much larger than the Prime Minister’s Office establishment.

So democracy is only, as Churchill famously put it, the least bad system of any that have been tried. But there is a better way of making most of the decisions in a free society.

We have two ways of making decisions in Canada. One does not involve democracy at all. It is the free market, where decisions are made in their millions on a daily, precise, context-specific basis by the voluntary interaction of individuals with each other and with voluntary private sector organizations.

Thanks to the work of economists and philosophers over the years, we know quite a lot about free markets, and what makes them work well or badly. We know that competition is good, as is maximum information for the consumer (transparency), accountability (standards, liability, contract, and the rule of law) and clear incentives. Full, true, and plain disclosure is the general rule, whether what is being marketed is a stepladder or stock in a company.

The essence of a free market is that it is voluntary. Every transaction is mutually agreed upon. Of course, there is not complete freedom. One needs to buy food, but one can get the best buy through comparing the corner store, Safeway, Costco or the local farmers’ market. But there is a choice of supplier, and that keeps everyone reasonably honest.

But many decisions are not made in the free market but rather in the political market. That is where governance and democracy come in. The political market is where others make decisions for us, whether we agree or not. This is not a voluntary market; quite the contrary. It is based on coercion. The consumer has no choice as to what he will pay (i.e., taxes) and no choice as to what he will buy (i.e., the expenditures of government departments). Many of the choices forced upon consumers are not even easy to measure, not being denominated in dollars. This is the immense world of government regulation, which tells you what you can and cannot do in myriad ways. (Why can’t you legally pick up an American satellite for television entertainment, even if you pay for it? Why can’t you buy a can of soup with the information in only one language? Well, you can’t, that’s all. Don’t ask.)

The political, coercive market is unavoidable in some areas. We need a justice system, for example. Some things seem best done by government for practical reasons: the provision of national security, or a municipal road system. Other things, though probably fewer than usually believed, are arguably more efficiently done by government. Many scholars believe there is an "optimal size" for government, though there is much debate as to what this might be. It certainly varies with the size and technological sophistication of a society, as well as such things as general education of the public, especially literacy.

The political market is much less "efficient" than the free market, in terms of giving citizens something close to their preferred resource allocation and the "biggest bang for the buck." This is to be expected for the following reasons:

• The political market is not competitive. It is a monopoly, and moreover, an inescapable monopoly. You not only have only a sole supplier at its price, but you are forced to buy (through taxation).
• The political market is not transparent. Any stockbroker who signed a prospectus requiring "full, true, and plain disclosure" based on the standards of an election platform or even routine government policy statements would be in jail for providing insufficient or deliberately misleading information. This is considered clever in the political market, rather than illegal.
• The political market is not accountable, except in the grossest sense at election time. The consumer has no way to say, "I’ll take this defence policy, but not that one." Or, "You screwed up on providing hip replacements; I’m going down the road."
• The political market is chock full of perverse incentives. In the free market, people are dealing with their own assets and liabilities, and treat them with respect. In the political market, politicians are dealing with other people’s money and power, and so don’t treat them with as much respect. Public resources are deployed in a quest for votes (the currency of democracy) rather than in a quest for efficiency or even equity.

Given the above, it is not surprising that the output of the political market is not very satisfactory to most people. However, it is commonly believed that there is no alternative, which leads (and this is what leads to apathy) to the despair of, "What can you do?"

That is where size of government comes in. I recall as a young politician some 25 or so years ago being on a platform with Bob Stanfield, the great and wise leader of the Progressive Conservatives who was never able to outpolitic the faster and flashier Pierre Trudeau. We were at the University of Victoria, and the subject was parliamentary reform. All of us, save Mr. Stanfield, were full of the latest, brightest, and best ideas on parliamentary reform (and I do not wish to disparage the importance of such ideas). But the former premier and federal Tory leader had another point to make. The best and fastest way to parliamentary reform, he said, was for Parliament to do less. What he meant by that was that Parliament should restrict itself to doing the things it really needed to do. It would have more time and resources to do those things better, and leave the rest to the private sector.

To conclude, the three major steps of democratic reform are pretty clear. In order, they are:

1. Minimize the size of the governmental/coercive sector to whatever is "optimal"—which in this author’s view is considerably smaller than at present, but that is a respectable debate.
2. Where one must have government control, reduce the monopoly aspect of government through decentralization and the concept of subsidiarity.
3. Reform what is left through the traditional tools of electoral and parliamentary reform, including aspects of direct democracy and constitutional constraints.

The next article in this series will deal with step 2, subsidiarity.

[Note: Gordon Gibson will chair the conference Finally, Reforming Politics: The BC Blueprint on Thursday, November 22 in Vancouver. For more details, please see the ad on the inside front cover of this issue, or call 1-800-665-3558, ext. 578.] .

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