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LVRG ScrapbookSaturday, August 15, 2009:

Democracy as we know it makes cronyism inevitable

Contrary to Peter Costello's latest pontifications in the Fairfax press, sticking to “broad policy” that “applies equally to people of like circumstances” does not prevent cronyism in government, but merely ensures that the legislators will be bought and blackmailed on larger issues by larger coalitions of interests. And on Costello's watch as Treasurer of the Commonwealth of Australia, the winning coalitions had to be big.

The GST was a victory for big business over small business because it maximized compliance costs, which are proportionally more onerous for smaller enterprises.

The discounting of capital gains, but not of income from capital or labour, was a victory for owners of appreciating assets (land, natural resources, natural monopolies, and government-created privileges) at the expense of owners of depreciating assets (buildings, plant and machinery) and providers of labour. That one could qualify for the discount without producing anything (e.g. building a house or floating a company) was a further victory for owners of appreciating assets, which appreciate precisely because they cannot be privately produced. That the basic First Home Owners' Grant was available for purchases of 2nd-hand homes fits into the same pattern.

Digital TV spectrum was given away to the established analog telecasters, rather than auctioned, because no major political party could afford to incur the wrath of the TV networks.

The media do not counteract the influence of special interests, but rather reinforce it, because they themselves are special interests (as the last example shows) and are beholden to other special interests, namely advertisers, who want high ratings or circulations, especially among people with high spending power, which comes from membership of special interest groups, especially those that own appreciating assets. It's a closed loop.

“What surprises me”, says Costello, “is that people fail to understand the connection between government intervention in the economy and the influence of money in politics. The one spawns the other.” They fail to understand because Costello puts half the cart before the horse and forgets the other half: the influence of money spawns government intervention or non-intervention.

And the influence of money arises because of universal suffrage, which maximizes the number of electors to whom candidates must deliver their messages and therefore maximizes the cost of successful candidacy. Universal suffrage, portrayed as the essence of democracy, is in fact an ingenious device for turning democracy into plutocracy.

The solution is what I call convened-sample suffrage: Instead of taking the issues to the voters, bring the voters to the issues; that is, convene a sample of the voters to hear and cross-examine the candidates, and then let that sample vote on behalf of the entire electorate, choosing the candidate(s) that the entire electorate would have chosen if all eligible voters had been present to hear the arguments.

Yes, this process would introduce a sampling error. But democracy with a sampling error is better than no democracy at all.

[Posted by Gavin R. Putland at tribune.grputland.com, Aug.15, 2009. Relocated Apr.5, 2012. Link updated Jan.16, 2015.]

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