Friday, October 9, 2009

"Output" democracy and paternalistic libertarianism

The "Ideas" section of Wednesday's Edmonton Journal featured a piece by Dr Bob Ascah titled "Smoothing Out the Boom and Bust." Ascah is currently director of the Institute for Public Economics at the University of Alberta. He notes that in 1982 "resource revenue was nearly four times the take from personal income taxes." Furthermore, "[r]esource revenue represented 2½ times the cost of health care and twice education expenditures." According to Ascah, in 1982 Premier Lougheed diverted resource revenue that would have gone into the Heritage Fund into general spending, and
Had the investment income been retained by the fund, the size of the Heritage Fund today would be $80 billion, compared with its current value of $13.8 billion
Ascah then moves forward in time to the turn of the millennium and rapidly increasing resource revenue to consider the "staggering" opportunity cost of this decade's spending spree. Behind these observations is Ascah's thesis that the government's fiscal policy has been aggravating the cycle instead of dampening it. He notes that "As private investment peaks, public investment is also peaking causing a "crowding out" effect resulting in higher construction costs in both the private and public sector." This is another excellent point that I had hoped to raise in the context of the affordable housing issue during last year's election.

In a note to another Wildroser this week I raised the possibility of the party adopting as part of its platform a major tax reform that would tax privilege savings and investment over consumption. "It wouldn't pass a referendum," was a response.

Coughing up policy for referendum is certainly one approach. There is another approach, however, the first step of which involves throwing a policy plank out before the media. The media then takes it before some "expert", who gives it the thumbs up or thumbs down. The media subsequently reports this verdict, and if it was thumbs up, the public concludes that the party is not just a mob. Note that under this approach, the party actually has a need for policy wonks as opposed to just pollsters and focus group organizers. The wonks' job would be to develop policy that can carry a narrative and win arguments come campaign time. This is policy that is typically NOT initially popular.

Dirk Kurbjuweit, writing for Der Spiegel, notes that
The scoundrels in Brussels have sold the European people a lot of things: a single market, the euro, the lifting of many border controls and, most recently, a binding global climate policy. These have all been good things, and they have helped make Europe an eminently livable continent. Despite the many dull moments and emotions that have been negative at best, the end result has been laudable.
Most of these improvements would have been held up, if not outright prevented, by referendums.

Yesterday, the frontpage of the Edmonton Journal was "Wildrose Support Blooms." The story described how a survey by U of Lethbridge political scientist Faron Ellis found Wildrose Alliance support in the province to be comparable to or even higher than that of the Alberta Liberals. Had this come out prior to the Glenmore by-election, I would have thought it a bombshell, but post-Glenmore, I didn't think there was much news here apart from what was in the cross-tabs.

Some of the crosstabs surprised and concerned me, since they seemed to support Ellis' contention that "One of the problems this party’s going to have is, they’re going to go down the populist road."

After the Irish rejected the Lisbon Treaty last year, one member of the European Parliament described the "No" movement as "a toxic cocktail of anti-globalisers, neocons, the clergy and Trotskyists."

A toxic cocktail of another flavour is what the Wildrose Alliance will become if the party continues down this "road."

It doesn't have to be this way. As a number of European observers have noted, the classical model of democratic legitimization from the bottom up (from the citizen to the state) is an obstacle to modernization not an engine of it. Wolfgang Hoffmann-Riem's notion of "no longer securing legitimization solely through institutions and processes, but also through results" is an example of
the theory of so-called "output" democracy, in which more weight is placed on the persuasive power of results than legitimization through "input" from democratic opinion-shaping processes within the population.

Wildrose support bloomed in the late summer of 2009 in large part because a result of consuming our natural resource revenues instead of saving them was the fueling of a pro-cyclical fiscal policy that aggravated the province's recession. We are not going to unwind this dynamic by submitting the painful components of the necessary adjustment to the public in referenda. California has already attempted this with "epic fail" results. Am I opposed to the self-determination of individual citizens? To an extent, yes: I've long believed that libertarianism is an incomplete and possibly naive philosophy. As David Brooks has noted, we have a crisis of economic morality, and the solution will ultimately involve making men moral. At the root of our problems is collective self-indulgence on a mass scale at the expense of future generations (of not only humans but animals and plants).

Harvard Law professor and Obama advisor Cass Sunstein partnered with economist Richard Thaler to write Nudge, a book whose wisdom about the value of building a "choice architecture" will be lost if all everyone can see (and object to) is the paternalistic element in Sunstein and Thaler's notion of "paternalistic libertarianism."


Anonymous said...

A though provoking post. I'm not sure that using the failures of the Lisbon treaty as an example of a failure of direct democracy is wise, but California is certainly a worthy example.

I find your linking of populism and direct democracy to libertarianism be problematic - libertarianism is ultimately about the sanctity and sovereignty of the idividual, while populism, improperly directed, can quickly become a dictatorship of the majority.

Brian Dell said...

Paternalism is opposed to all of populism, direct democracy, and libertarianism but I can appreciate how a libertarian would argue that there is no necessary relationship between libertarianism and direct democracy. Libertarians want a minimal state but whether that minimal state is governed by direct democracy or representative democracy could be an open question.