Referendum Revenge

Putting A Safety Valve on Democracy

In the wake of last year’s dramatic vote on the Greek bailout and ahead of the Brexit showdown, referendums are getting a bad rap. Last week, in an article called “Let the people fail to decide,” The Economist noted that such votes can “lead to incoherent policies” and so “fewer would be better.” Not to be undone, John Kay of the Financial Times warned against the tendency to “confuse democracy with populism,” drawing from the British statesman Edmund Burke’s famous speech in 1774 in which he argued “your representative owes you, not only his industry, but his judgment: and he betrays, instead of serving you, if he sacrifices it to your opinion.”

Are they missing anything?

To start, we should remind ourselves that democracy derives from the ancient Greek meaning ‘the power of the people’ (demos (the people) and kratia (rule, power). Whatever drawbacks referendums may have, they are the only true form of democracy. The political system of government in Britain, as in most countries, is a ‘republic’, where power resides with representatives, a full layer removed, who are supposed to follow the preferences and will of their constituents.

Switzerland is the closest to what Aristotle, Plato and Socrates had in mind when democracy was conceived. Americans proudly recite Lincoln’s famous democratic battle cry: ‘Government for the people, by the people and of the people, - but in fact this is a better description of the Swiss model. The country has had 611 referendums since it was established in 1848 on issues ranging from abortion to asking taxpayers to pay for the children’s national zoo.

No system is perfect. Referendums are disruptive; laborious; and can be abused if issues qualify too easily. The yes or no nature of the decisions makes it easier for majorities to ride roughshod over minority interests. People also need to exercise

sufficient care to form their judgement on the matter at hand, and then make the effort to vote.

Sometimes they make things messier: In 2014 Swiss voters approved by a slim majority a referendum to limit immigration, in violation of the country's agreement with the European Union. The EU says the vote could jeopardise Switzerland's access to the European market and it remains to be seen whether treaties can be renegotiated. Voter turnout rates average about 42% in Switzerland, lower than for candidate elections, since voting on issues requires greater effort. Though turnout can be very high for important and hotly debated issues. The turnout was 64% for instance for the immigration’ initiative mentioned above

There are, however considerable advantages to having a dose of referendums that collectively prevail. Wary of mob rule, the ancient Greeks felt direct democracy vet anger and act as circuit breakers to placate crowds from throwing rocks as may occur at the forthcoming Republican National Convention in Cleveland. The debate and choice deals with an issue rather than choosing a personality or a party. Just follow a few days of press coverage in the US or Britain and compare the emphasis on ad hominem attacks rather than debate about policy content and differences proposed by the candidates.

Referendums engage people directly by obliging them to have ‘skin in the game’. It is easy to blame a politician for disappointing us, but who is to blame when we’ve made the choice ourselves? As an outside observer to politics in Britain, some of the best thinking and writing I’ve seen has occurred in the lead-up to the Brexit vote, though many felt initially the issue was too trivial to debate. This shows us that people care and care is the foundation for any well-functioning democracy.

Most importantly, referendums mitigate against three of the most toxic features of republics. Elected officials have incentives to overpromise and under-deliver; so disappointment is programmed. They are also encouraged to accelerate the benefits of now and postpone the payment to later; a sure cause of punishment for future generations. Third, lobbying, to some a euphemism for bribery, is more cost effective when a few politicians can be swayed to support a particular interest. Convincing large numbers of people requires greater transparency and more intense deliberation. The crux of the Enlightenment was that people will form the right judgements if only exposed to sufficient facts and rigorous debate. Juergen Habermas, the famous German philosopher, felt ‘the better the debate, the better the decision’. This may have even inspired the founders of The Economist when they penned their mantra: ‘to take part in a severe contest between intelligence which presses forward, and an unworthy, timid ignorance obstructing our progress’.

Switzerland, that bastion of popular votes, has ranked as the most economically competitive country in the world for seven years running by the World Economic Forum. It has among the lowest rates of unemployment, crime, public deficits, and CO2 emissions. It has among the highest per capita incomes, confidence levels in its government, and funding of its pension schemes. The Economist even ranked it last year as the country in which one would most wish to be born (without seeming to fully understand what has made it this way). The Swiss have achieved this in good part by repeatedly voting in referendums against shorter work weeks; enforcing a debt moratorium on parliament; passing laws to encourage the use of renewable energy; and even voting to increase taxes necessary to become more fiscally sound.

Compare that to the record of republics in the United Kingdom and elsewhere. The deficiencies it would reveal may explain why people of the United Kingdom, United States, and elsewhere are increasingly frustrated with their political systems

that are more dependent on representatives. Fewer than three in ten Americans trust their federal government (slightly higher than the level of trust in a used car salesperson), down precipitously from nearly eight in ten one generation ago, according to Pew Research Center. The United Kingdom has experienced a more moderate, yet similar decline.

If nations were able to attract the quality of candidates of Edmund Burke’s stature then there might not be a need for referendums. But that seems unrealistic. The Swiss model turns the equation on its head on the premise that there are too few Edmund Burkes alive and we should not rely on them anyway. The robustness of a system is measured by how much abuse it can withstand. It is far better to engineer a system to ensure that politicians, even the inferior ones, manage to serve their constituents interests. Referendums can be decisive in this respect. Yet The Economist criticised referendums because “they tend to make politicians look as if they do not know what they are doing.”

Precisely. Swiss can call referendums to challenge and reverse legislation passed by parliament. This has happened historically only 2% of the time, according to

Laurent Bernard, a political scientist at the University of Zurich. (Around six percent of the laws passed by parliament have been challenged by referendum so far, with 178 referendums.) But the very possibility of repudiation, and the embarrassment that ensues, is why challenges are so rare and thus may be the most effective control to ensure that what parliament does is what people want.

Switzerland is not alone. Sweden voted against using the Euro in 2003; Chile voted for free schooling for everyone in 2011; New Zealand opposed a partial privatization of public-owned companies in 2013; Uruguay decided not to lower the of criminal responsibility to 16 years in 2014, Ireland refused to abolish its Senate in 2013, and Bulgaria accepted the construction of a nuclear plant in 2013.

These successes show that the people as a whole are often a more reliable source of wisdom and outcome than any group of politicians. In each instance, referendums have not been a substitute for republics, but an alloy to strengthen their steel.

At a time when people are increasingly disappointed with their political systems it is a good time to reflect on what has gone wrong and experiment with ways to fix it. Studying successful systems and reverse engineering has usually been a tried and true method of achieving progress.

Republics may find that more ‘democracy’ is better than less.