Double Disillusion

voteFirst there was Trump, then there was Brexit, then there was the Australian Senate. Not all developments of equal moment, though underlying each of them, we are invited to believe, is a common foundation: disenchantment with the political class. Lashed by the winds of globalisation and regarding our dwindling pay packets with alarm, we are turning our backs on the usual suspects and casting our votes for the rabblerousers. The major political parties are crumbling, as new parties, which used to pop up between them, are increasingly popping up on their flanks. The familiar political scenery is collapsing. The centre cannot hold.

Do these populist and nationalist insurgencies add up to a crisis of democracy, as is often claimed by political commentators? The Flemish-Belgian author David Van Reybrouck, prize-winning author of Congo, thinks they do, though he does not dismiss them as mere anti-politics. In his interesting and carefully argued book, Against Elections, he suggests that the world, and especially the West, is in the grip of what he calls ‘Democratic Fatigue Syndrome’ – the sense of some fundamental disconnect between representative democracy and the demos it’s supposed to represent. In order to restore confidence in democracy, he suggests, it is necessary to challenge our assumptions about it, and to formulate a different model.

Like all syndromes, DFS is a collection of symptoms, of which low voter turnout, declining party membership and political paralysis are just a handful. As for the diagnosis, Van Reybrouck identifies three very different explanations of the problem: the populist explanation (it’s the fault of the politicians); the technocratic explanation (it’s the fault of democracy); and the direct democracy explanation (it’s the fault of representative democracy). All these approaches have something to be said for them, but none is a sufficient explanation on its own, and too much emphasis on any one of them is liable to cause serious problems: demagoguery in the first instance, elitism in the second, and what Mill termed ‘the tyranny of the majority’ in the third. To put it another way: the first brings you Trump, the second Mario Monti, and the third Alfie Arcuri from The Voice singing ‘Cruel’.

But for Van Reybrouck there’s another problem: none of these approaches has sufficiently interrogated the nature and purpose of representation. In particular, none has considered the role elections play in modern democracies. The problem, argues Van Reybrouck, is not representative democracy but electoral-representative democracy.

What we have, in fact, is not democracy, so much as the ‘elected aristocracy’ that eighteenth-century thinkers such as Montesquieu, Rousseau and Diderot predicted would occur in a system based on delegation of responsibility. The election ‘fetish’, as Van Reybrouck calls it, has sanctioned a particular view of democracy in which the political class is self-selecting and the voters resigned to minimal influence. This view of democracy is now so ingrained – it is set down in the Universal Declaration of Human Rights – that few feel compelled to question it. Certainly the media is obsessed with elections; as Van Reybrouck notes, for the first time since the American and French Revolutions the next election has become more important than the last one.

And so Van Reybrouck makes a radical proposal. Instead of electing our representatives – or instead of electing all of them – why don’t we pick them through the drawing of lots? Why don’t we cut out the middlemen and go straight to the democratic source?

A crazy suggestion? Not at all, says Van Reybrouck, who reminds us that even Athenian democracy, though often characterised as a direct democracy, itself contained a strong element of ‘sortition’, and that both Venice and Florence experimented with the system. As for the question of whether or not such a system could operate on a modern scale, Van Reybrouck makes a strong case that it could, fleshing out his argument with a range of diagrams and practical suggestions. He even finds a number of modern examples in which it seems to have worked extremely well.

Compelling as his arguments are, however, I can’t help feeling that Van Reybrouck has rather misunderstood the problem to which his book is in part a response. This failing becomes conspicuous when he addresses himself to the European Union, and suggests that that institution, or set of institutions, might benefit from the introduction of a ‘House of Lots’ with the power to initiate legislation. This, he writes, would help to heal the ‘democratic deficit’ that everyone agrees is at the heart of the EU. But the EU’s democratic deficit is not a by-product of representative democracy; it’s a result of the fact that its parliament is little more than a rubber stamp for decisions taken at the executive level. The EU, writes Van Reybrouck, ‘offers shelter to member states that have the courage to innovate in ways that affect their democratic foundations’. No, what it does is to remove from those states responsibility for any decisions that matter – economic decisions, basically – and to punish states that question its policies of low inflation, fiscal austerity, and all the other economic goodies we associate with neoliberalism.

There is something, then, slightly too optimistic about Van Reybrouck’s democratic prescriptions. The populists are on the march in Europe, not because they’re unimpressed with the current crop of politicians, but because their wages and social infrastructure are collapsing. The EU’s democratic deficit is an aggravating factor, but it isn’t foundational, except insofar as ‘democracy’ is taken as the destination where everyone gets a fair share of the surplus, as opposed to a process whereby the major parties take turns to manage capitalism. DFS, in other words, is not a syndrome at all; it’s a symptom of an economic crisis. Van Reybrouck, who goes to all the trouble of establishing the bourgeois origins of representative democracy, nevertheless misses this broader reality.

Not so economist Martin Feil, who, in The Great Multi-national Tax Rort, describes the way we’re all being stiffed by the multinational corporations and their druids in the ‘big four’ accounting firms: PricewaterhouseCoopers, Ernst & Young, KPMG, and Deloitte. Never mind the Panama Papers, writes Feil in his introduction, this is where the real action is. As if in answer to those economic ‘rationalists’ who meet all demands for extra spending with the question ‘And where will the money come from?’ the book sets out in vertiginous detail precisely where (and to whom) it’s going …

It’s going, as you may already have noticed, into the pockets of the uber-rich. In particular, it’s going to the multinationals, who exploit the movement of goods and services in order to game the tax arrangements of individual states. The key mechanism used is ‘transfer pricing’, which Feil explains with exemplary clarity:

The multinationals have perfected the practice of selling to their global affiliates at prices that would send the affiliates bankrupt if they were left on their own, trying to recover their inflated import costs in the marketplace. The affiliates survive only because the banks of the world lend them money based on surety letters from their parent companies or regional head offices.

Because the affiliates operate at a loss, they don’t have to pay any tax to the state. Meanwhile, the parent companies are headquartered in low or non-tax jurisdictions. The fat cats grow fatter, the markets less competitive, and the government coffers emptier than a hedge fund manager’s heart.

Mapped in to Feil’s delineation of these shenanigans is a more general essay about free trade and protectionism as they relate to the Australian economy. In some ways this is the most interesting aspect of the book, but it is also feels like the most problematic. For while one takes Feil’s point that ‘free trade’ isn’t free at all in the sense that is implied by its spruikers, his attachment to the protectionism of the pre-Keating era has a decidedly rosy tint. At one point he even describes his book as a ‘lament’ for a lost Australia. I don’t think it’s going too far to say that not only are such sentiments shaky on their face, they’re also unlikely to prove constructive in a political environment where protectionism and nationalism are again on the same ticket.

For whatever the Trumps and the Hansons say, the challenge now is not to throw up the shutters but to turn globalisation to the benefit of all, as opposed to the super-wealthy few. Doing that will entail much radical thinking about both democracy and economics, and about the relationship between the two. These books, though not without their problems, are important contributions to that process.

David Van Reybrouck, Against Elections: The Case for Democracy

Bodley Head; $28; 200pp

Martin Feil, The Great Multi-national Tax Rort: How We’re All Being Robbed

Scribe; $32.99; 242pp

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First published in The Australian.