|Changing our constitution to establish public choice
Part 1 of this article described how macroeconomic policy benefits those who earn their income from physical and financial asset market transactions. Those who do not participate in these markets hold around 85% of the votes. The question arises as to how can the constitutional provisions be changed to a participatory process of policy design based on a genuine public choice.
This is a topic that is seldom aired but is of fundamental importance to a future marked by improved wellbeing and peaceful coexistence.
Under our party system there is no plurality associated with policy choices and there is a tendency to dismiss real income disparity as the result of "free market operations". This default position attempts to diminish and marginalise the mutual concern most constituents have for one another. This is, in the end, a moral question of the degree to which we, as a nation, are prepared to tolerate stark differences in wellbeing and opportunities within our national community. Do voters really desire an ethical basis for decision making on the policies that affect us all?
In part 1 a rough calculation estimated that around 15% of the constituents in the country who hold about 15% of the vote, earn their incomes as a function of physical and financial asset transactions. Monetary policy, and in particular quantitative easing (QE) has resulted in this group enjoying a relatively rapid rise in their income and wealth.
The Power Strategy
Below is verbatim Section 3 of Chapter 14, entitled "The Power Strategy" in the book, "The Briton's Quest for Freedom - Our unfinished journey..."3.
The far left strategists never seemed to perceive the family-based reasons for their difficulties in increasing their levels of support. The far left, those favouring the continued "class struggle" and state control over the means of production, began to review their options. Like Stalin in post-war Russia, leaders in all communist countries had long since abandoned any pretence at supporting a class struggle. Socialism had become a buzzword cynically applied by a single political party as the justification of its dominance of the economy and lives of the people and, of course, keeping the party bosses in a state of good living. The name of the game was to keep the political party in power; almost at any cost.
Neil Kinnock, the leader of the Labour party, decided that the challenge facing the party was how to gain and remain in power. With the collaboration of the New Marxist movement, Neil Kinnock developed a radical change in approach for the Labour party. This was to substitute the former political philosophy referred to as socialism and the ideological basis associated with the so-called class struggle with a strategy to change the party image by appealing directly to consumerism and identity concepts (54). This new approach has been referred to as the power strategy (55).
Kinnock had already introduced the power strategy in the general elections of 1987 and 1992, but in the popular mind, Labour was, largely as a result of the miners' strikes, associated with extremism. Tony Benn of the left mounted a leadership challenge to Neil Kinnock in 1988 but Kinnock survived. This served to demonstrate how far the marginalisation of the left had progressed within the Labour party.
For the 1992 election, Kinnock had applied a more professional public relations front aided by Peter Mandelson. What did become evident was that the lack of reference to strong political dogma and ideals by the new Labour party succeeded in taking the wind out of the sails of the Conservative party campaigns. The Conservatives appeared to be old style politics with a strong philosophical undertone. Labour came across more as a rational management team relatively free of political dogma. As a result, the election result improved for Labour but the continuing popularity of the Conservative party still won the day. In spite of Neil Kinnock's effective revolution within the Labour party he seemed to be, as a party leader, unelectable.
Proof of concept acted out in Central Europe
The presence and direct influence of the New Marxist movement on the Labour party seemed to wither in the UK with the initial false starts for the power strategy with two election failures. However their influence and ideas seemed to gain ground in Europe. Indeed, the first practical demonstration of the success of the power strategy occurred in the early 1990s in Central Europe. East and Central European Marxist politicians in ex-Russian satellites, with little sympathy for participatory democracy, were able, on the basis of public relations exercises of simply renaming their parties and to switch their identity from being that of totalitarians to that of being free marketeers and democrats. Such politicians did not change their fundamental political outlooks they simply did what was necessary to stay in power. They succeeded in being elected as democratic governments and the salvation of those whom they had oppressed just days before. This process was associated with effective press censorship as a result of several leading politicians having a particular tendency to sue journalists who published truthful statements concerning their past. Many journalists ended up in prison; to be expected when police chiefs and judges have their jobs as a result of political party patronage.
New Labour & the power strategy
Following the unexpected 1992 election defeat, John Smith became the new leader of the Labour party. The Labour party agonized over the reasons for their defeat in 1992. Labour had not completely shaken the image of being in favour of strong centralized state control and ownership of means of production. One of the persistent issues raised by the Conservatives seemed to affect some voters, this was the view that a Labour government would cause a flight of foreign investment and scare away new British private investment. There was a need to produce an image of being more responsive to private business concerns. Tony Blair worked to water down the text of Clause IV to extinguish the commitment by the Labour party to the ownership of the means of production (49). Behind the scenes the arguments to dilute or remove Clause IV were simple and pure power strategy talk founded on the need to gain and stay in power. The repeated question was, "do you want another decade of Conservative rule?" Anthony Crosland's arguments that power rested in the hands of the managers of industry and not the owners became a basis for the Labour party saying to the unions and those supporting Clause IV, "trust us we can achieve the same control through centralized government policies." The Labour party's "Clause IV moment", as it came to be known, was therefore far less of a trauma than many outside the Labour party realized; the media exaggerated the extent of the "struggle".
Gordon Brown began a disciplined process of reshaping the economic policy agenda within the party. He did this by introducing a pro-forma budgetary approach (56) to purposely reduced the size of the apparent "visible" public spending plans of his shadow cabinet colleagues. This also initiated a process where he began to control the whole economic agenda of the party, and indirectly the relative scope and effectiveness of policies in most of the other portfolios. These activities were complemented by occasional meetings with financial and business leaders in the City of London. This helped Labour's proposals for governance to appear to be more prudent and more in line with an image of being less orientated to centralization and to be more business-friendly.
In 1994 John Smith died. Initially there had been a general feeling that Gordon Brown would be the next leader of the Labour party but a colleague, Tony Blair, who had been rising rapidly through the party, decided to run for leader. Brown and Blair had both been first elected in 1983 and in broad terms were identified with slightly different natural groupings within the party. An election contest between Brown and Blair would therefore have risked the possibility of a significant split within the party and potentially the destruction of Neil Kinnock's investment in preparing the foundation for New Labour. As a result it would seem that there was an agreement (57) to avoid this possibility with Tony Blair becoming the only leadership contender of the pair. Tony Blair became the leader of the party.
Following the impressive demonstration of the feasibility of the power strategy in Central Europe, the first real test in the United Kingdom occurred during the 1997 general election. This took up the legacy of Kinnock's work and orientation but under Tony Blair. Although not a political philosophy or approach to governance invented by Tony Blair it has been dubbed "Blairism" with Tony Blair taking full advantage of the broad concept to gain power and to ride out his own brand of leadership. The New Labour support Blair enjoyed within the party was essentially founded on Kinnock's former efforts. Very much aware of the importance of the public relations dimension of New Labour, Blair consolidated his anti-left credentials by pressuring within the party to marginalize the so-called old Labour left. On the other hand he kept one or two individuals who he perceived to be "safe" within the shadow cabinet, such as Clare Short and Jack Straw, so as to keep the broad party left contingent in line. New Labour won the 1997 general election.
(54) - ref: The New Marxists & Kinnock - Ann Talbot, "UK Foreign Secretary Jack Straw rants against Trotskyism", International Committee on the 4th International, 29 November 2004, WSWS.
(55) - ref: The Power strategy. McNeill, H.W., "The rise & fall of Power Politics - Part 1", Real News, October 2006, APE, wa.
Wage earners, employed by the supply side production of goods and services sectors have seen their real incomes, on average, decline. As a result, the contingent of voters holding around 85% of the vote are being prejudiced by macroeconomic policies which provides incentives for a transfer of wealth from this group to a group who hold about 15% of the vote.
This raises the question as to the role of constitution in preventing this type of distortion, induced by economic policies, when one vision of democracy is that laws and directives should prevent the actions of economic actors prejudicing the ability of other actors to pursue their objectives. However, in this case, we have policy creating a state of affairs which assists physical and financial asset holders pursue their objectives in a way that is prejudicial to the majority. The principal reason for this reality is the constitutional detail of who is elected and how they are elected to the legislature and policy-making levels of decision making.
The democratic deficit as an inability to accommodate majority interests
Governments are made up of elected politicians who are members of political parties. However, British political parties are tiny private organizations with a total membership of less than 1.25% of the voters in the country. In addition, for want of resources, political parties are easily captured and controlled by whoever funds the activities of the party. Those with funds to "invest" in supporting political parties tend to be more wealthy individuals and companies and, as has been explained, these tend to include those who deal in assets and finance. On the other hand, organizations, who wish to bring about change in terms of real wages can create contributory groups such as labour unions who then have funds to invest in other political parties. In both cases political parties will tend to advocate policies that support the interests of their benefactors.
Power to corporations and benefactors and not to the people
Given the impact of monetary policies over the last 50 years, it is understandable why politics has been so contentious as well as unproductive. Contentious because there is little common or shared interests expressed by those funding political parties and unproductive because in constitutional terms the size of the parties does not reflect the composition or the aspirations of the majority. At the same time most people are aware of the tiny and therefore unrepresentative nature of the political parties.
Containing a membership of less that 1.25% of the total electorate means political parties do not possess the intellectual critical mass to achieve a vision of a national interest. As a result, they depend on anonymous sources of policy proposals who are often supported financially by the party benefactors.
The power of patronage of Prime Ministers means that from within a very limited range of options, political parties end up with decisions being taken based on a group think made up of a tiny number of individuals where the probability of such decisions representing the needs of the majority is highly unlikely.
The Power Strategy
In the 1970s, the New Marxists brought forward a strategy which has since been adopted by the two main political parties in the United Kingdom. The name of the game is to gain power and stay in power. The case of the Labour party is described in the box on the right. This meant an abandonment of any strong ideological motivations but rather the application of identify themes designed to please everyone; otherwise known as dog whistle politics. Although designed in collaboration with Neil Kinnock, he was unable win elections in spite of Margaret Thatcher's fall from grace at the hands of her own party. This agenda was taken up by Tony Blair and following the 1997 election and then practiced by the Conservatives since 2010 in coalition and in 2015 becoming a single party government.
The reality is that with public relations consultants, the media and benefactor interests at heart all of the political parties have become dog whistlers gaining voter support by giving the impression they are in favour of a salad of identity themes. However, the most serious problem with identity politics is that it is not possible to deliver all such promises. Therefore, what appears in manifestos drafted to gain the vote, does not appear in the form of legislation or in subsequent decisions by government. Whereas with a large parliamentary majority it might be assumed to be one where all manifesto commitments would be carried out, in reality, political parties seem to consider large majorities in parliament to enable them to ignore manifesto pledges and to vote through many acts which were never put to the public.
Power to the people?
The subheading of the Power Commission Report title of "Power" (1972) was "To the People". One of the reasons put forward for political parties ignoring the Power Commission report was that it called for policy development to become more participatory. Clearly an anathema to the interests of political party benefactors. However, it should have been plain to see that the nature of the controls over political parties makes them oddities rather and not in tune with national requirements. In terms of contemporary needs they are inadequate and no longer the essential components of democratic processes of the type the population has been led to believe exist.
The game of representation
One of the ploys, very apparent in parliamentary exchanges, besides the obviously arranged "interventions to make a point", is the constant reference to the names of constituencies which gives an impression of "representation" so the "Honorable Member of [name of constituency]" maintains an image of comprehensive representation of the view of the constituents from the constituency concerned. There is very little relationship between the MP's role in sorting out problems of constituents who raise them and their role in governance. Most MPs have no detailed idea of the views of their constituency as a result of the first-past-the-post electoral system resulting in them having no particular interest in the needs of those who did not vote for them. When it comes to critical votes in parliament the party Whips will ensure MPs vote as the party has decided as opposed to any view that their constituents might have. It is this party pressure which attempts to keep policy decisions in line with their benefactor's and voting block interests which results in the notion of constituency representation somewhat of a farce.
Again reference is made to the fact that the political parties in total only possess 1.25% of members from the electorate and some of these are not voters. So the whole concept of representation is quite preposterous. The notion of political parties applying a more rational approach to identifying gaps and needs facing the country and together coming up with one nation policies is alien and dangerous to the survival of British political parties because benefactors would withdraw funding.
Factions, ideologies and economic policy
The power strategy adopted by all political parties means that during the last 50 years, consumerism and identity-based logic has come to dominate economic policy as well as human values. This has been driven by those who benefit most in the form of a small faction of increasingly wealthy individuals who are also political party benefactors and owners of media organizations. The shifting of the centre of gravity of "economic thought" has meant much economic theory has drifted in this direction and academic organizations becoming increasingly dependent on private companies and benefactors have tended to gain income by focusing on a narrowing range of themes that support the interests and ideological perspectives of the same benefactors and parties they support.
There is no alternative
The narrowing perspectives in the content and orientation in the teaching of economics, supporting theories that are hardly supported by mounting evidence, is coming to a head in the sense that derived policy has intensified the benefits of a small faction while prejuidicing an increasing proportion of the remaining 85% of voters who are wage earners. The general awareness of this fact has increased. This is not to say that some of those working as wage-earners in the asset transaction sectors do not receive high wages, some do, but the proportion of the electorate benefiting directly from macroeconomic policies remains very small. By far the biggest problem is that the government remains wedded to this approach to economics and the opposition is attempting to apply the power strategy, once again, to align itself with the very same approach to economics. What is happening here is that this is having the tendency of crystallizing the prophesy that "There is no alternative" in economic terms. However, since during the last 50 years, most real wages have declined, while the physical and financial asset dealers have thrived, it is more than evident that the our two main political parties are not able to manage the economy to reduce the existing income and wealth disparity. They therefore both fail to uphold the constitutional principles of promoting the freedom of all to pursue their objectives. Each pursues their objectives but the outcomes demonstrate a distortion with the freedoms of a tiny faction being better protected that those of the majority as a direct result of economic policies enacted by our political parties in government. Economic policies are imposed through a legislative framework and yet most consider all to be equal under the law when this is demonstrably not the case. The laws and regulation pertaining to economics and monetary policy are, for many, arbitrary impositions.
Why the party is over
In practical terms Britain's political parties are not set up to resolve national problems but rather the problems of factions. The benefactor dominance in terms of funding and influence over media content indicates that, to make progress, the electorate would be advised to accept that the party is over because they serve no useful purpose in delivering for the majority. The solution lies in the hands of constituents who need to organize the creation of a mass participation in a one nation political approach organized to avoid the hazards to first-past-the-post and which should not need tactical voting. Mass participation requires a different approach to economics based on factual evidence and a thorough review to seek alternatives, rather than rely on the output of "think tanks" funded by the current party benefactors.
It is self-evident that the performance of policies over the last 50 years, during which the majority did not benefit as much as a specific minority, the mantra that "There is no alternative" (TINA) is an affront to the whole spirit and objective of democracy which is to base decisions on alternatives brought by those who are prepared to exercise objective and independent thought to the solutions of identified gaps and needs.
The persistence of the drone of TINA is the gasp of those who feel threatened by other constituents whose wellbeing is not being currently insufficiently supported. In order to maintain this state it is becoming very evident that there are attempt to censor by not reporting any communications that attempt to suggest alternatives. The result is a media and rather expensive funding initiative supporting university chairs and organizations who are prepared to maintain TINA as a mainstream position. However, the result of such financial investment is the generation of increasing level of ignorance that damages public discourse rather than enabling the exchange of useful facts and advances in useful knowledge.
It is self-evident that our political parties are not fit for purpose simply because they have extended the interests of their benefactors into a legal structure regulating economic and financial affairs. As a result of this structural bias, largely linked to monetary policy, this faction benefits. Clearly our constitution, in relation to the process of elections, formation of government, policy option identification and public choice, needs to change. It is notable that both the Labour and Conservative parties were taken aback by the success of Jeremy Corbyn's campaigning and creation of a mass involvement in politics and in particular a significant rise in the membership of the Labour party leading up to the 2017 election. However, a closer examination, shows that Corbyn did not follow, in general, the lines of any specific benefactors, but spoke of common issues facing the majority and he proposed solutions. Most of his support came from individual contributions as opposed to corporate contributions. This is why his campaign was so successful in attracting so many people. Rather than study this process as one that appeals to the majority and to work out how to align our political system to this sort of approach, the reaction has been for the initiation of legislative designs to attempt to kill such mass involvement by branding it to be a mass movement. The process has already started to brand such popular participation as a mass movement, without form of function, and therefore dangerous to democracy. However the threat is not to democracy but rather to the survival of political parties and their benefactors. This factional self-serving reaction reveals a lack of faith in the role of universal suffrage in providing a natural basis for a broader participatory democracy where policies become defined and decided through public choice. It is notable that this mentality is close to that of those who considered the 1832 Great Reform Act which raised universal suffrage in England to around 7% of the population to be as far as this process should go. Then the thinking was that providing the rabble with a say in the decisions that affect them was dangerous and would lead to them "getting above themselves" and ending up creating chaos. It should be noted that those who gained the vote in 1832 were qualified on the basis that they were asset owners in the form of a property. So the right to vote and influence politics was a privilege given to asset holders. It is this same mentality that pervades the body of our constitutional settlement today and it needs to change.
Towards a constitutional economics
A constitutional economics is a state of policy formation based on the rational analysis of facts and the identification of optimized solutions for any given circumstance requiring attention while making an effort to avoid the creation of differential benefits.
Towards a better constitutional settlement
The process whereby a participatory democracy should form a national government needs to start and remain "local" in order to maintain the representation of constituent interests. Rather than have people stand for election who have been branded, like soap powder, to "represent" a specific party or to be the "candidate" for a particular party, it makes more sense to have people who are independent and who undertake to represent the interests of the constituency rather than paying lip services to this and in reality representing a party, especially in parliamentary votes.
The likelihood of mass movements is a matter of concern for political parties because these can destroy the cosy relationship between benefactors, the party elites and the media. The defence is to accuse such movements of being extremist, that is, of the extreme right or left and therefore dangerous. Many are, largely as an emotional reaction to the demonstrative oblivious attitude of parties to the realities facing the population. Therefore before such movements build up momentum there have always been strong and often violent suppressions in order to save the party system but expressed as a "...defence of democractic traditions and freedom.
However, the question is less about a mass movement and rather one of mass participation. Because of the spread of interests, mass participation there is a need to balance general needs and specific minority needs, something political parties have enormous difficulty in satisfying.
I will post two documents soon that are updated sections from the book, "The Briton's Quest for Freedom .... Our unfinished journey2" which outline a proposed solution to this impasse which is neither left or right and certainlyno extreme, but rather a foundation for the establishment of a constitutional economic approach which is a fundamental requirement for this country to achieve a more equitable and sustainable growth in real incomes and general wellbeing following a 50 year downward real incomes spiral affecting the majority, Covid-19 and climate change.
1 Hector McNeill is director of SEEL-Systems Engineering Economics Lab
2 McNeill, H. W., "The Briton's Quest for Freedom ... Our unfinished journey", 418 pp., Hambrook Publishing Company, 2007, ISBN: 978-0-907833-01-7.
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