How can we ensure that parliaments are representative and governments are accountable?

An update of my views on the topic has now been published by "On Line Opinion":



‘In a really equal democracy, every or any section would be represented, not disproportionately, but proportionately. A majority of the electors would always have a majority of the representatives; but a minority of the electors would always have a minority of the representatives. Man for man they would be as fully represented as the majority. Unless they are, there is not equal government, but a government of inequality and privilege: one part of the people rule over the rest: there is a part whose fair and equal share of influence in the representation is withheld from them; contrary to all just government, but, above all, contrary to the principle of democracy, which professes equality as its very root and foundation’ (J S Mill, Representative Government, Chapter 7, 1861).

Some famous person has probably written in support of strong executive government which dominates parliament and is held in check only by periodical elections (as well as an independent judiciary etc) but I don’t know where to find an appropriate quote. Those who have commented on such a system have tended to refer to it disparagingly as an elective dictatorship. However, I think it is possible to defend a system that tends to deliver the governing party a substantial majority of seats on the grounds that it results in more accountable government than a proportional system in which no party has a clear majority. A government that dominates parliament cannot claim that it has not implemented its promises to the electorate because of obstruction by other parties. It has to wear the electoral consequences of its own actions.

The point I am trying to make is that while proportional representation might be a desirable characteristic of a parliament, it is undesirable to have a system of government in which parties go to the polls to seek endorsement of their policies and then, after the election, enter into negotiations to decide what policies the temporary coalition of parties forming the government will actually seek to implement. Parties forming such temporary coalitions tend to blame each other for poor outcomes and electors find it hard to tell who is responsible for what.

Various compromises between proportional representation and elective dictatorship are possible. One possibility is the reinforced proportional representation system used in Greece under which the party which wins the largest number of seats in parliament is allocated additional seats so that it more likely to be able to form a majority in its own right. Leaving aside the obvious point that it is difficult to envisage that Greece’s recent economic performance could have been much worse without this reinforcement of proportional representation, an arbitrary adjustment to numbers of seats seems somewhat inelegant (if not undemocratic).

Another possibility is to have a bi-cameral system with the government being formed in the lower house, elected on the basis of a system that usually produces workable majorities for a governing party or stable coalition (e.g. single member electorates) and an upper house, acting as a house of review, elected using proportional representation. As recent events in the UK show, single member electorates cannot always ensure that the party winning the largest number of votes is able to govern by itself (or even to form part of the government for that matter). But single member electorates have a reasonable track record in producing stable and accountable governments. This system has the added advantage of allowing voters to vote for a person to represent their locality rather than for a party (or party list).

Luke Malpass and Oliver Marc Hartwich have recently advocated a bi-cameral system, such as I have just described, to replace the single chamber proportional representation system in New Zealand (CIS Policy Monograph 109). This is also the system that we have in Australia.

So, does the Australian system provide the best possible compromise between a representative parliament and an accountable government? I don’t think so, because it gives too much power to the upper house. The Australian Constitution contains a sensible procedure to resolve a deadlock between the upper and lower houses of parliament – a joint meeting of both houses – but joint sittings can occur only after a double-dissolution election.

I think the requirement for an election to resolve deadlocks between the two houses of parliament tends to work against accountable government because it enables governments to blame obstruction in the Senate for failure to implement policies. Before going down the double-dissolution path governments have to consider the possibility that they will lose such elections or be returned to power with more obstructive upper houses than they had before. Although there are half a dozen occasions in Australian history when governments have brought on double-dissolution elections, they have been defeated on about half those occasions. A joint sitting of both houses of parliament has occurred on only one occasion.

Given the difficulty of amending the Australian Constitution it seems that we will have to continue to live with the adverse consequences for government accountability of the requirement for elections to resolve deadlocks. We can, however, take some solace from the fact that the election requirement has the virtue of providing a test of the extent to which governments have the courage of their convictions. The value of such a test has recently been highlighted by the current government’s decision not to trigger a double-dissolution election on the bill to establish a carbon emissions trading system in Australia.

Postscript 1:
After reading a post by Tim Harford I have been reminded of Kenneth Arrow's impossibility theorem. Rather than wondering where to find a quote from some famous person supporting elective dictatorship I could have quoted Kenneth Arrow to the effect that whatever electoral system you use you will always end up with some form of dictatorship (although some forms of dictatorship are worse than others). The inference that I think should be drawn from Arrow's impossibility theorem is that markets are usually better than politics in producing outcomes that are beneficial for everyone.

Postscript 2:
Joseph Schumpeter qualifies as a famous person who emphasized the value of strong executive government. In Capitalism, Socialism and Democracy (1942) he wrote: 

"It is in fact obvious not only that proportional representation will offer opportunities for all sorts of idiosyncrasies to assert themselves but also that it may prevent democracy from producing efficient governments and thus prove a danger in times of stress. But before concluding that democracy becomes unworkable if its principle is carried out consistently, it is just as well to ask ourselves whether this principle really implies proportional representation. As a matter of fact it does not. If acceptance of leadership is the true function of the electorate's vote, the case for proportional representation collapses because its premises are no longer binding. The principle of democracy then merely means that the reins of government should be handed to those who command more support than do any of the competing individuals or teams".

I wrote more about Schumpeter's views of democracy here.

Which books should I recommend?

I am in the process of becoming an Amazon associate. This is unlikely to make me rich, but it is still worth doing to highlight some books relating to freedom and flourishing that I would like to recommend to readers.


Which books? When I started making a list I quickly noted around 30 titles, but the carousal widget that I had decided to use has room for only 10 books. So I have focussed on the books I would recommend to a person somewhat like myself – a person with a background in economic policy or business who is becoming increasingly interested in broad issues relating to human flourishing, including the role of liberty, the nature of happiness and the ethics of well-being.

My recommendations are not listed in any particular order. See the carousal (at right) for links to Amazon.

1. ‘Happiness: A History’, by Darrin McMahon.
This book traces the way ideas about happiness have changed through history. I particularly enjoyed his discussion of the inclusion of ‘pursuit of happiness’ in the US Declaration of Independence. There is a quote from the book in my post: Does the evolution of ideas about happiness intersect with the evolution of ideas about markets?

2. ‘Norms of Liberty’, by Douglas Rasmussen and Douglas Den Uyl.
Is liberty compatible with human flourishing? This book argues that not only is liberty compatible with human flourishing, it is also necessary because individual flourishing is an inherently self-directed activity. The book is not an easy read, but well worth the effort for anyone with any interest in political philosophy. The book is discussed briefly in my posts: Is freedom a necessary condition for human flourishing? and Why should we view individual rights as metanormative principles?

3. ‘Happiness: The science behind your smile’, by Daniel Nettle.
This little book provides an excellent introduction to the science of happiness. I particularly like Nettle’s discussion of different kinds of happiness and of the distinction between wanting and liking. Some comments relating to the book are included in posts here, here and here.

4. ‘The Logic of Life’, by Tim Harford.
This is my favourite among the spate of books that have been written over the last few years about the economics of everything. The basic idea is that if you want to understand how the world works keep in mind that people tend to respond to incentives. I have discussed the book here.

5. ‘Predictably Irrational’, by Dan Ariely.
This book is a good introduction to behavioural economics. Ariely describes experiments which show that we are often not as rational as we might think we are. I have discussed the book here.

6. ‘Well-being for Public Policy’, by Ed Diener, Richard Lucas, Ulrich Schimmack and John Helliwell.
This book probably has the best account currently available about the relevance of subjective well-being measures to consideration of public policy issues. I have some comments on the book here and here and in a review essay for ‘Policy’, Summer 2009-10.

7. ‘In Pursuit of Happiness and Good Government’, by Charles Murray.
This book was first published in 1988, but the views it presents are still highly relevant today. Anyone considering the potential relevance of happiness research to public policy should read this book. I have commented on the book here and here.

8. ‘The Pursuit of Unhappiness’, by Daniel Haybron.
This book is a philosophical exercise in clear thinking about the nature of happiness. It is fairly difficult to read, but provides plenty of food for thought about the directions of well-being research. It also provides some grounds for concern about the direction in which western society may be heading. I discussed the book here, here, here and here.

9. ‘The Happiness Hypothesis’, by Jonathan Haidt.
Martin Seligman, author of ‘Authentic Happiness’ is quoted on the cover of the book as saying: ‘For the reader who seeks to understand happiness, my advice is: Begin with Haidt’. That is high praise from the author of another very good book. I particularly like Haidt’s view that some of the conditions for happiness come from within us and others require relationships with other people, our work and 'something larger' than ourselves. There are some references to Haidt’s book in my posts here and here.

10. ‘What is Good and Why, by Richard Kraut.
This is a highly readable book about ethics. The main purpose of the book is to establish that we should specify ‘for whom’ or ‘for what’ when we talk about what is good. Kraut presents a developmental view of human well-being. I discussed the book in posts here , here and here.

Should we ever play the man rather than the ball?

I don’t think there is any situation on the sporting field where players are justified in playing the man rather than the ball. Immediately after writing that I have begun to think of exceptions. An exception should obviously be made for technical infringements of the rules that that have become an accepted part of the way some games are played. Should an exception also be made for giving a particularly dirty player in the other team an elbow in the ribs? It might be possible to convince an impartial observer that this could not have happened to a nicer person, but that doesn’t mean that the behaviour should be condoned. If we allow that violations of the code of behaviour can justify retaliation we are likely to end up with an all-in brawl rather than a ball game.


In case anyone is wondering why I am writing about sport, I am just using an analogy to introduce a discussion of the ethics of ‘playing the man’ in discussions of public policy. The post has been prompted by the comment of another blogger, Jim Belshaw, that I made a ‘cruel’ remark about Australia’s prime minister, Kevin Rudd, in a recent post on my blog. I implied that Mr Rudd's argument that the proposed resource rent tax will be paid mainly by foreign investors is similar to the nationalistic rhetoric that Hugo Chavez, president of Venezuela, has used to justify nationalization policies. To add insult to injury I suggested that Hugo, who is famed for long-winded speeches, was less verbose than Kevin.

I regret that comment because my intention on this blog is to raise the tone of policy discussion rather than to lower it. I don’t feel apologetic towards Mr Rudd, however, because I acted in retaliation for his past behaviour. I think Mr Rudd has done more than most other contemporary Australian politicians to lower the tone of public policy discussion in this country.

In trying to explain myself I have made an assertion that I now have to justify. The way politics is played in Australia it is fairly common for politicians to mis-represent the views of other politicians and to attempt to demonize them. But most politicians tend to treat academics with some respect unless they involve themselves directly in politics. Apart from Mr Rudd I don’t think many other politicians in this country who have sought to mis-represent the views of a Nobel-prize winning economist or to demonize him or her. I am referring in particular to Mr Rudd’s misrepresentation of the views of Friedrich Hayek, which I have discussed in an earlier post: Why does Rudd persist in misrepresenting Hayek? (On reflection, I also regret the sarcasm in the last sentence of that post.) In my view the real reason Rudd misrepresents Hayek is so that he can falsely claim that political opponents who respect Hayek’s views are adopting an extreme position.

As I noted in the introduction, I don’t think violations of codes of behaviour justify retaliation in kind. This applies just as much to policy discussions as to sport. The most appropriate response to bad behaviour by political leaders is to make other people aware of it.

Will history judge Marx to have been right about the effects of technological progress on income distribution?

‘The instrument of labour, when it takes the form of a machine, immediately becomes a competitor of the workman himself. ... That portion of the working-class, thus by machinery rendered superfluous, i.e., no longer immediately necessary for the self-expansion of capital, either goes to the wall in the unequal contest of the old handicrafts and manufactures with machinery, or else floods all the more easily accessible branches of industry, swamps the labour-market, and sinks the price of labour-power below its value’ Karl Marx, Capital, 1887 (first English edition).

Since Marx wrote that, real wages have increased by massive amounts in industrialized countries. Authors of some books I have read recently suggest, however, that Marx’s predictions could end up being right in the end. Gregg Easterbrook warns that we should not take too much comfort from the fact that Marx’s predictions of gloom have not yet come true (‘Sonic Boom’, p 153; discussed here) and Jacques Attali suggests that tomorrows West will resemble today’s Africa (‘A brief history of the future’, discussed here).

In attempting to think our way around this question an obvious place to start is with the effects of technological progress on the demand for labour. This approach makes sense if labour can be assumed to be more or less homogeneous, that aggregate capital stock can be measured appropriately, that most income from capital tends to accrue to people with high incomes and that technological change is the only factor influencing income distribution. I’m actually not sure that any of those assumptions stand up to scrutiny, but let us keep the discussion as simple as possible to begin with.

As Marx observed, new technology often involves capital-intensive processes displacing labour-intensive processes, e.g. the use of power looms to replace hand looms in the textile industry at the beginning of the industrial revolution and, more recently, increased use of robot technology in car manufacture replacing labour-intensive assembly lines. This kind of technological change tends to increase the ratio of capital to labour. However, introduction of new technology often occurs through the introduction of superior capital equipment that replaces existing capital (or more efficient sources of energy, financing innovations, business practices etc) without necessarily increasing the ratio of capital to labour. Most importantly, new technology makes possible an increase in national product, or real national income, and with increased demand for factors of production, including labour.

The net effect of those factors on future demand for labour will depend partly on whether, on balance, the new technology is a closer substitute for labour than for existing capital equipment (and other factors of production). Further development of electronics and robotics, in particular, can be expected to displace a lot more manual and mental labour, but my guess is that before too long new technology will largely involve superior robots replacing inferior robots, leaving demand for human labour relatively unaffected. There are some parts of the economy where new technology is unlikely to have much effect at all on the ratio of capital to labour, e.g. symphony orchestras. (William Baumol made the point in the 1960s that a symphony orchestra does not become more productive by playing faster.)

Another important influence on the future demand for labour will be whether average incomes are likely to result in a changing pattern of consumer spending toward more on labour-intensive or more capital-intensive goods and services. My guess is that ‘real’ experience (of foreign travel etc.) will trump ‘virtual’ experience and that people will prefer to interact with other humans rather than robots to obtain services such as restaurant meals.

So, I think there are limits to the extent that technological progress will result in substitution of capital for labour. When we take into account the fact that labour is not homogeneous, that investment in human capital and investment in physical capital can be substitutes or complements, and that people embody new technology in the skills they acquire it is not even obvious that it is particularly helpful to think in terms of aggregate categories such as labour and capital.

It is probably more meaningful to consider demand for particular categories of labour e.g. unskilled labour. Perhaps it is reasonable to predict that demand for unskilled labour will continue to shrink, but even that is problematic if we define ‘unskilled’ in terms of lack of formal qualifications and overlook the possibility that inter-personal skills - often acquired without formal training - will become increasingly important.

The idea that there is a class of people who obtain their income from selling their labour (workers) and another class of people who obtain their income from ownership of capital (the idle rich) seems likely to become increasingly irrelevant. As working people invest for their retirement they will be increasingly buying shares in the robots that will earn the income they previously earned for themselves.

Technological progress is not the only factor influencing income distribution. Factors affecting the supply of labour, e.g. immigration, could have effects on wage rates in some countries that are as important as the effect of technological progress. Then there are the effects of globalization both in providing international competition for labour-intensive industries and, increasingly, new sources of innovation and competition for technology-intensive sectors of industrialized countries.

Finally, the taxing and spending policies of governments modify the effects of technological progress on income redistribution. If Marx turns out to have been right about technological progress, it seems likely that governments in democratic countries will come under increasing pressure to intervene further in income distribution to ensure that all groups have an opportunity to benefit from the fruits of technological progress.

However, my personal view is that history will probably continue to judge Marx to have been largely wrong about the effects of technological progress on income distribution.
Winton Bates