Direct Democracy - making democracy immune to capitalist corruption
It is generally believed or perceived that democracy as is currently practised in all its variations is as good as it gets – and that any shortcomings in its function is due to the all-too-human susceptibility of our politicians to corruption; that barring some tweaking here and there, it needs no major changes or augmentation.
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What is called democracy is only one version of democracy. Its specific name is representative democracy; and as its name spells out, it involves people voting in representatives who take part in the debating and passing of legislation on the people’s behalf.
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Capitalism, or more specifically, the share owned corporations, has found that it can manage our elected representatives and the legislatures, in order to secure control of the political discourse. As I will show in outline, the rise of the share owned corporation (simply called ‘corporation’ in this article) parallels the rise of representative democracy. The corporation is the doppelganger to representative democracy. For those familiar with JRR Tolkien’s The Lord of the Rings, it is what Gollum is to Frodo. The latter has a noble, unegotistical goal; the former slinks in its dark egotism, no longer knowing how to be human/hobbit. The corporation, as an artificial person, has pretty much severed its connection to its humanity and totally lost its conscience. It is, as some people have called it, a psychopathic entity. The Frodo in us must bring Gollum to heel.
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Voting with a conscience – it doesn’t happen with a political party
Let us examine what the underlying principles are, or should be, in representative democracy. To begin with, when one votes, one votes according to one’s conscience, which is to say, one votes according to how one judges things to be right or wrong. Capitalism says that we vote purely on egotistical grounds, on what we can get out of a collective decision. There is no ‘objective truth’ to the debate on whether we vote with our conscience or out of egotism. It is a case of ‘your choice will say what it is’. In other words, if you think that voting is based on egotism, you contribute to making it so. If you carry the ideal that voting is based on conscience, then you likewise contribute to making it so. This decision carries with it a moral dimension. I assume in this article that you, the reader, are choosing the latter.
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Representative democracy means that between the voters and the objectives of legislative decisions, we have elected representatives interposing. Ideally, if one votes with one’s conscience, one would like to imagine that our representatives, for all the shortcomings of their understanding of the world, also vote according to their conscience. This will not happen when one votes for the vast majority of political parties. The major political parties are hierarchical affairs. The rank and file elected members of these political parties are well paid rubber stampers of decision making that does not involve them much. The party has directives that are on the whole made without consultation of the rank and file. This is very easy to argue – for why would political parties have such a thing as a party whip if the whip is not there to whip members into line; to pressure them to support principles for reasons other than the dictates of conscience?
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See the ethical illogic? We may vote with our conscience, but our elected representatives themselves do not vote with their conscience. So if decisions do not derive from the elected representatives, where do they come from? Where are the decisions made, which are then channeled via party whips to ensure collective support for a particular policy? Broadly speaking, the ultimate source of decision making rests with some corporate influence.
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With their massive financial power, the corporations cooperate with, control, and cajole, political parties to make the process of representative democracy become a farce. I hardly need to spell out the multifarious ways the corporations can do this: old boys’ networking in which favours are traded, plain bribery, ludicrously paid consultancy jobs post-politics with no work involved, legalised party donations, the revolving door syndrome, and so on.
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Why do I single out the corporation for special treatment? I have identified three key sectors that govern the capitalist economy - banks, corporations and the military (their respective factors of production being Capital, Labour and Land). However banks and the institutions that profit from the military (such as weapons manufacturers and oil companies that need the military to destabilise/overthrow governments) are corporations themselves. All this power is channeled through the form of corporations in order to hobble the process of democracy.
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An illustration may help clarify the process I am trying to explain. Below is a cartoon image showing voter/citizen A and a set of legislation that he would like to partake in by voting. Between A and the legislation is a politician P who was elected in A’s electorate. P is part of a political party PP. PP has to pander somewhat to voters like A in order to get elected by offering some carrots just prior to election time. However corporations – who are artificial persons - have inveigled their way into party politics much more strongly than the sum of voters like A. The result is that the legislation that get passed (or even debated) are much more amenable to the wishes of corporations than to the voters like A.
Even the dynamics of party politics transgress the principles of democracy. Men and women work in various groups, large and small, to achieve something. This is on account of the fact that what is achieved as a whole is greater than the sum of the parts; and intrinsic to this dynamic is the principle of division of labour. In a legislature, there is no intrinsic need for a division of labour. Every elected representative should be weighing up issues as best he/she can – perhaps seeking advice and information from others, but otherwise not needing to be in a party to take the measure of things. In other words, there is no argument for a division of labour within a political party such as is to be found in companies.
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It is to the advantage of a collective entity that its members work cooperatively with each other. But how does this work out for a political party? As noted above, we would like that our elected representatives have a responsibility to serve their electorate, or the citizenry as a whole, by voting out of their conscience. By cooperating with one another in the framework of a political party, what happens is that self-interest takes precedence over the people’s wants and needs – the very people who they are meant to be representing. One member wants a key ministerial position. Another member will support him if he returns another favour. Other members become known as fixers and are the persons to go to arrange and trade favours; and so on. Seen from the principles of democracy, the level of wheeling and dealing and horse trading descends to farcical and tragic levels.
I do not by any means advocate the termination of representative democracy, but I would put it to you that voting for a political party, one with a hierarchical structure and that utilises a party whip, is itself a transgression of the principles behind democratic ideals.
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Equality and equity in the battle between democracy and Capitalism
‘Equality’ and ‘equity’ are two words that have a similar etymological origin in jurisprudence. https://www.etymonline.com/word/equity has this to say on the origin of the word equity:
early 14c., "quality of being equal or fair, impartiality in dealing with others," from Old French equite (13c.), from Latin aequitatem (nominative aequitas) "equality, uniformity, conformity, symmetry; fairness, equal rights; kindness, moderation," from aequus "even, just, equal".
Today the word equity in commerce is often used to describe stock ownership. Originally it would have denoted a right to a return on one’s investment – a pecuniary right. At some point it became conflated with the right to have a say – voting right. In this process, an economic power annexes a political/legal power. Voting right is attached to ownership of equity.
The corporation is a legal entity, an artificial person, which gets its rights and recognition through the legal/political authority of the state. A corporation’s charter is sanctioned and authorised by the state. Therefore the laws contained in a corporate charter can be considered a subset of the national laws. In principle, the state’s laws are created through a democratic process which gives equality of persons through the right to vote. However consider the contradiction inherent in the artificial persons that the state’s laws give birth to: the right to vote is attached to ownership of equity.
In a certain respect this rather strange, ‘abstract’ issue is at the heart of the battle between democracy and Capitalism. The former gives voting rights to persons in equal measures; the latter gives voting rights to ownership of equity. The latter enables the rich (those with more equity) more say than the poor. The corporations know how to turn this power into a weapon to subvert the democratic practices of the nation state (as illustrated in the image above). It would probably be too draconian, and perhaps illegal, to outlaw voting rights based on equity ownership; however, the nation state should not be fostering (through the banking system) the existence of artificial persons that gives voting rights to ownership of equity.
The two tools for democracy to bring the corporations under control
There are two systemic changes available for society to make itself immune to the capitalist virus – one of an economic nature, the other of a political nature.
In various articles in this website on the practices of a commons bank (including the homepage), I have said that a commons bank would not loan money to a corporation. Whatever genuine (non-speculative) economic activities that a corporation does, or intend to do, can be done much better by a profit sharing cooperative – from the point of view of transparency, efficiency, productivity, and so on. Therefore, under commons banking, eventually the corporations will fade away from lack of credit. They can still borrow from other private parties and finance companies but it will not be on the basis of credit creation since the commons will have claimed credit creation as its monopoly right. The fearsome beast that the corporations are as a whole is easily tamed by such an easy-to-understand process - the claim of the commons to the monopoly right to credit creation.
The second, political way to bring the corporations to heel is to strengthen the process of democracy by the practice of what is called direct democracy. Direct democracy allows any person or group to begin a petition to amend or annul an existing law, or to implement a new one. Once the petition garners support from a percentage of eligible voters (say 5-10%) the petition goes to a binding referendum. (At a national level, such a referendum is called a citizens’ initiated referendum). The referendum’s bill is passed with say, a two-thirds majority voting in favour of it. The legislatures (representative democracy) and the judiciary cannot overturn or override the outcome of such a referendum.
A few points to note: the requirement for a petition to be endorsed by a percentage of people; and the requirement for a referendum to be supported by a two-thirds majority; ensure that one does not have new laws which are voted on because they are the faddish flavour of the month. Society will genuinely want a change for it to pass through the rigours of the citizens-initiated referendum process. A two-thirds majority can be considered clear majority support for a bill. Contrast this with representative democracy in which, because of the way political parties make deals with each other, a bill may be passed by a political party which was voted for by less than half the people.
Let’s examine how direct democracy changes the above depiction of representative democracy. In the illustration below, we see that voters like A can initiate a referendum on an issue she thinks is important. If that petition goes to a referendum, A votes directly on it – this is represented by the green arrow. The legislatures and political parties are bypassed – and with them the corrupting influence of the corporations.
In The capitalist media – engineering consent I show how the mainstream media, being mostly a corporation itself and being dependent on corporate sponsorship in the form of advertising revenue, is subject to control by the plutocracy behind the corporations. Thus the corporations, and Capitalism as whole, can ‘engineer’ a kind of unwilling consent by those they rule over. In our time, with the ability to disseminate and access any amount of information via electronic means, the discourse on social issues is not monopolised by the mainstream media and the corporations. In other words, the debate over social issues and the necessary changes is outside of their ability to fully control (unless - take note - they can create a climate of fear, which cajoles the citizenry to abide by draconian and autocratic controls over society, and to hand over certain liberties to the state).
It may take quite a bit of imagination to realise the extent to which society can change for the better with direct democracy. I will offer here some dramatic examples. In countries where U.S. military bases (and even spy stations etcetera) are not wanted by the people, such bases can easily be tossed out with direct democracy. The U.S. government cannot even pretend to be protecting the interests of democracy any more when its military bases are turfed out by such a process. Citizens could easily close down operations by shell companies registered in tax havens with no clear owners. People might take back ownership of natural resources and only allow corporations to process (but not own) natural resources under contract. The transaction tax I discuss elsewhere could be implemented to make sure companies pay the same taxes that individuals do, and at the same time shut down all speculative activities in the economy. The gross invasion of privacy and infringement of civil liberties such as metadata collection would be closed down. And the biggest single law – the absolute game-changer – that could be passed: the commons takes control of its own central bank, practices commons banking, and denies credit creation rights to private banks. As I point out elsewhere, this will eventually lead to the demise of the corporations and the practice of private land ownership.
Direct democracy in the light of meta-historical developments
‘Meta-historical’ is defined by the Oxford Dictionary as “Lying beyond the scope of historical narrative or inquiry”. I wish to show in a very broad way that society has been through two ‘phases’, or categortes, of government; and that we are on the cusp of a third, in which direct democracy plays a major political role. Such a study really demands a rather large book akin to Karl Marx’s Capital in scope if not in size, in order to do it justice. In a condensed study such as this, nuanced and detailed ideas cannot be entered into.
In this discussion, I am discounting tribal societies as a form of ‘government’. I am looking at ‘structured societies’ which have some kind of bureaucratic-political management and have a class which does not immediately involve itself with food production and things like tools production, but are involved solely in the governance of society.
The first phase of such a structured society may be called monarchies. This is a highly hierarchical affair. In its pure form, the monarch has absolute power in decision making and obedience is mandatory down through the chain of command. Monarchies existed in a time when literacy and numeracy was not common. Even in the realm of the monarchic government, many things got passed on by word of mouth. This is important to know, as I will show.
The next phase, developing in fits and starts over history, may be described as rulership by legislatures and elected representatives – representative democracy. What used to be the territory called kingdoms have now evolved into nation-states. It is worthwhile to note that all the bureaucracy necessary to the running of the nation-state requires a large percentage of people to be literate. Broadly speaking, universal literacy and representative democracy have a parallel development. The latter requires the former; the former demands the latter – a well-informed populace will not tolerate the caprice of a monarch and will demand a say in government.
Incidentally, we can see where the corporation fits into this picture. The corporation requires a reliable and dependable set of laws to operate in. It cannot be subject to the caprice of a monarch. The corporation with its charter – which, as I have pointed out elsewhere, is a subset of the national laws – only really comes about with the nation state and representative democracy. As I have argued earlier, this offshoot of the nation-state, this artificial person, is subverting the principles of representative democracy itself.
Monarchs ruled by an authority that was perceived to be of a spiritual nature. The further back in history (or the farther east) one goes, the more one finds the perception that monarchs were either gods, or emissaries of a god. Just below the monarch as his ‘management team’ was the aristocracy. Like the monarch, they too believed that they had a superior spiritual nature over those they ruled. Some aristocrats today even think of themselves as having ‘blue blood’. The early monarchs actually had two kinds of management teams - one secular, one spiritual. The secular team was the aristocracy, the spiritual team consisted of a priestly caste. European history separated the two so that the (Catholic) Church became a team on its own, sometimes vying for power with the various kingdoms (with the pope as the absolutist monarch).
The rise of the nation state demanded a new class which may be called the ‘middle class’. ‘Middle class’ might have a number of meanings but I refer to a class whose professional life was based on the ability to read – whether they were public servants or business people who could read a legal document or a business contract, literacy was a common denominator of this middle class. Just as monarchic government is essentially based on the spiritual life; representative democracy, and the nation state, is based on the political life. We are on the cusp of creating a society in which a healthy economic life plays the key role in ‘governance’. In this new social form, the working class – which should be everyone – takes a direct role in government.
We as a society have come to a point where we do not need to be governed by a class other than ourselves, not even a class that has been elected out of ourselves. We can debate issues as well as our elected representatives because we can access all the information that they can. Just as representative democracy required near-universal literacy for its development (and vice-versa), so now that we are at the point of having universal access to information (and the universal ability to disseminate it), we are also at the point of yet a new kind of political life – we are ready for direct democracy. This is the political aspect – but only the political aspect – of the third phase of governance (I will explore the spiritual and economic aspect in a moment). Just as the upper class, the aristocracy, ruled in the first phase; just as the middle class ruled in the second phase; in the third phase, everyone should be part of the working class (because everyone should be working for a living if they are able-bodied or able-minded) and governance is directly by the working class.
Let’s summarise things in a table:
There are two entries in the table above that I have not commented on (the two boxes on the right of the third row). The ruling principle in the third phase I have identified as the economic life. In a certain sense, it has overtaken government, i.e. legislatures, as the dominant ruling principle of society. Capitalism is a nasty, illegitimate form of this economic rulership. What I have spelt out as a threefold economy is the correct healthy form.
A threefold economy also sets up for what has been called a threefold society – the bottom right entry in the table above. In an article titled A Threefold Society I spell out what I think such a society entails, but I will give a kind of summary here:
In a threefold society, the commons runs the economic life independent of the legislatures, i.e. what we think of as government. It oversees the collection of taxes (transaction tax and other taxes), it manages the commons bank and all that entails, it manages the issue of land rentals, and so on. This economic life also oversees the spending of commons money instead of the government. Such an economy cannot be run the same way as governments try to run the economy at the moment. It is much more participatory and inclusive of all individuals, and individual representatives from all sectors of the economy partake in the process of institutional decision making. Cooperation - and identifying needs and wants - between the sectors is key. The political life is restricted to the administration of political and legal issues and is no longer directly involved in matters economic and spiritual/cultural. The spiritual/cultural is free from political interference and oversight by government (except in odd instances such as sexual abuse within institutions). Included in the category of the spiritual/cultural life is the sphere of education. Education is no longer managed by the government in any way. The funding for the spiritual-cultural life and the political life comes out of the economic life.
In the threefold cry from the French Revolution of ‘Liberty, Equality, Fraternity’ the principle of liberty (freedom) applies to the spiritual-cultural life; the principle of equality applies to the political life; the principle of fraternity (mutual aid) applies to the economic life. It is important to not mix up the three parts of the body social, so that for instance, the government does not try to run the economy (‘Communism’), nor does the economy try to run government (Capitalism).
How to make direct democracy institutionalised into the national statutes
Direct democracy can be practised at any level of government - global (i.e. the U.N.), national,state and regional, local. Because the national government controls so many factors of our lives, it is essential that we institutionalise direct democracy at that level. Given the resistance of corporations, the corporate media, and the established political parties to this practice, how can still get it into our law books? The following are my thoughts on this subject.
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One starts a political party with a difference. The party may start off with a set of principles or policies just to get the ball rolling, so to speak. Any eligible voter in the constituency may sign up as a member. Now any existing policy of the party is up for amendment or annulment via a member-initiated 'referendum', identical to a citizens-initiated referendum. A new policy can be adopted by the same method.
One does not have to worry too much that members might vote for the 'wrong' thing. One can trust that the principle involved - people participating and being included - is much stronger than the policy. Over time, as membership increases - which it will, as I will shortly show - the 'deviations' caused by the membership vote in an earlier period will be corrected by an expanded membership. If one wants to manipulate the debate so that the 'wrong' policy decisions are never made, then one falls victim to the same patriarchal mistake that the technocrats behind Capitalism (and Marxism) make - they believe they necessarily know better than the rabble and will manage things behind their backs for their own good. We need to create a society based on trust - and intrinsic to that is the trust that things will turn out all right in the end if people make the wrong choices, so long as they make their choices in freedom.
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Whether people like the existing policies of the party or not, they will want to join, simply because it is a platform where everything and anything can be discussed; and that through the party, they can actually have an input into policy debates. The same party can function at any level of government.
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The party has internal elections for representatives of each electorate. This is pretty much the form of representative democracy within the party. Each elected representative then goes on to become the candidate for the party in that electorate at the national elections (or whatever level of government it is). In national legislative debates, that party member may participate and vote as she chooses (mindful of her pre-election spiel), and according to her conscience, except in the instances where the direct democracy party she represents has made a policy decision already (which in one way or another has been through a direct democracy process). Thus what the (open) membership of the party wants to see in place is executed into national legislative debates and voting via the party.
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For the very reason that the party's policy decision making process is immune to capitalist corruption (who do you pay off in a direct democracy?), people will see that this party is not afraid to take on the corporations and has the legs to do it. They will see that it is a venue where their opinions matter. Though they may not be conscious of it up to this point, they will see that the painful issue of alienation is to a large extent addressed via the process of direct democracy.
Through internal debates and discussions, they will really see how disgusting and corrupt Capitalism is, and that genuine healthy alternatives exist. If this process is executed enthusiastically and carefully, I think it will put the party into power within three election cycles. Once elected, the party can vote direct democracy into national law, and more or less make itself obsolete.
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I should add that this exercise with a direct democracy party is made all the more powerful if it is combined with a grassroots initiated form of the Threefold Economy, a prototype version of which the author has begun with others in The Fractal Economy Cooperative. Such a project, among other things, will finance the direct democracy party; it will also give people a working model for how the national economy can be changed.
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Final thoughts for now
The advent of representative democracy with universal franchise was correctly seen by the aristocracy (and other wealthy landowners) as something in which they were going to lose their power grip on society. Even wealthy owners of corporations saw it this way. They fought against universal franchise. Today, when we really are at a point where the whole of society demands a direct part in decision making (and bypassing political parties and the corporations that control them), one can see that the ruling plutocracy will not cede this right without a fight. They have no legal footing to argue their cause; what they have is a lot of resources that enable them to control much of the discourse and the set of ideas running through our heads. It is a simple matter of waking up to what possibilities awaits us today.