Fragile by Design

Fragile by Design is written by two academics, Charles Calomiris and Stephen Haber, who set out to discover why some banking systems are unstable. MoneyWeek reported that
"They looked at five national case studies: the UK and the US (both democracies, yet prone to crisis); Canada (virtually crisis-free); Mexico (a crisis-prone autocracy); and Brazil (a bit of both).
"What they found was fascinating. Starting from the elegantly simple premise that a crisis occurs when banks hold too little capital and/or too many risky assets, the problem, logically, must be inadequate regulation. So their thesis is that regulatory standards and credit provision are "captured" by political special interests. While democracies generally fare better than autocracies, often this is just a matter of degree. Unfortunately it seems that boom/bust cycles are woven into the very fabric of US democracy."
Would Interactive Democracy change this?
Who knows, but it would change the game: power wouldn't be concentrated in a few hands; whistle blowers would be empowered; education about the banking system would be encouraged and transparency enhanced.
Why?
Because regulators would be more accountable to the electorate (who could call for their dismissal); anyone could create an initiative proposing changes; and the ensuing public debate, supported by probing journalism, professional bankers and academics, would shine a light on the system. This last point, that Interactive Democracy educates through debate, is my favourite advantage of direct democracy. It may also be more adaptable and less prone to opaque influence.
MoneyWeek's verdict on the book: "This is a great history of political interference in banking regulation - but a definitive analysis of the recent crisis it is not."

Inspired by MoneyWeek, 14 March 2014.

Interactive Democracy IS Education

I have heard it said that education is not just about imparting facts. It encourages people to think for themselves, to analyse, to create and to learn empathy.

I've also heard it said that learning should be life-long and not just for the youth.

In these senses Interactive Democracy IS education: it encourages and empowers people to think about issues, to analyse problems, to create solutions, to debate with each other and to learn from other people's experiences, thereby empathising with them.

The quality of the learning that comes from ID depends on the quality of the debate. The stories about each issue, the pros and cons, and the implications, should all be voiced through parliament and the media: leaders should be teachers.

But daft, amateurish and naive ideas, expressed through ePetitions, aren't a bad thing. Half baked proposals may inspire others to offer a better solution - a creative process.

Switzerland

Switzerland runs a form of Direct Democracy. You can read about it here.

It's interesting to note that their form of direct democracy has evolved over many centuries, suggesting that it can work amongst a populace with a medieval level of education.

One of the distinctions of the Swiss system is that votes are carried only by a combination of an overall majority and a majority of cantons (similar to counties). This may be especially important in Switzerland where areas are clearly and dramatically divided by mountains, and would have been especially important in the olden days when mobility was so much harder.

Brain Washing, Education, Values and Democracy

The worry is that any one organisation could brainwash a section of the population and attain a majority, thereby controlling the country. This may be easier to do with young, malleable minds, and makes me wonder about our system of education. Yet it's clear that participation in a modern education system, including alternative sources like online Master's degrees or vocational programs, are practically required if today's youth want to have comfortable future lives.

As a society, are our values inculcated in us through our education system?

Teaching values seems to me to be essential if we are to teach right from wrong, but then who chooses what is right and what is wrong? Maybe the only way to overcome this is to encourage children to think for themselves and to feel empathy for others. But that in its self is a value shaping statement.

Maybe a different way of looking at it is to itemise what values are required to make Interactive Democracy work:

• Freedom of thought
• Freedom of speech
• Empathy for others
• Critical respect for the majority decision