Why Britain should copy Switzerland's referendums

Matthew Lynn has written a piece in MoneyWeek (21/11/14): "Why Britain should copy Switzerland's referendums". Available here.
I'm a fan of the Swiss democratic model. But I'm also a fan of bringing it into the 21st Century by using the internet to make voting cheap and convenient. Interactive Democracy would also facilitate structured debates that could be analysed by voter (age, sex, occupation) and location, allowing voters to aggregate the views of doctors on healthcare issues, for example. Anyone could contribute proposals or initiatives with everyone able to add plus, minus and interesting points and voting if they agree or disagree with each, prioritising and clarifying the issues. Such a system would tap into the creativity and intellect of the population without favour or bias and could, in the future, be considered an important part of our national infrastructure, utilised by many organisations for their own internal issues, as well as at every level of politics.
You can see a mock up of what the ID site could look like by clicking here.

Budgeting in Switzerland

There has been some concern expressed amongst the financial press that promises made to Scotland will cause budgetary uncertainty and devalue Britain as an economic safe haven (click here). But Switzerland shows that that need not be the case. The OECD published this detailed analysis in 2005. Things may have changed since but reading it reveals a number of things. They have a constitutional commitment to debt containment. The limits are defined mathematically and compensate for the business cycle. 75% of the budget is transferred to sub-national government and social security funds. It's complicated, but shows how detailed financial policy can be implemented in a direct democracy federation by elected, often part time, politicians.
The report also provides a succinct summary of Switzerland's constitutional history:-

"Switzerland came into existence as a national State in the first half of the 19th century as a consequence of a process of political integration of 25 regional communities known as “cantons”. This process culminated in the establishment of the first federal constitution in 1848. This constitution was based on a compromise between a liberal Protestant majority, mostly living in a small number of populous cantons, and a Catholic conservative minority, mostly living in a large number of thinly populated cantons. The rights of the minority were protected through constitutional provisions that guarantee the competences of the cantons and limit the responsibilities of the Federation and through cantonal representation in the federal political system, particularly in the Council of States (the upper chamber of Parliament)."

And it summarises their unique system:-

"The Swiss budgeting system is characterised by three special features that differentiate it from most other OECD countries:
● the political environment, characterised by direct democracy (referendums), federalism and a tradition/system of achieving consensus;
● the debt containment rule, which is a constitutional provision mandating a balanced budget over a business cycle (structural balance);● the nature of the Swiss federal budget as a transfer budget."

Ineffective Democracy

Could one of the reasons for a substantial number of Scots wanting to split from the UK be that we have an ineffective democracy? On several occasions I've seen and heard interviews with Scots who point out that in the last election they only returned one Conservative MP yet are now lead by a Conservative Prime Minister (in a Conservative/Liberal Democrat coalition).
Would the earlier introduction of new powers for Scotland's parliament have avoided the devolution referendum? It may have done.
Would Direct Democracy, like Switzerland, have empowered Scots? Probably. The Swiss have long prospered with a system of Cantons speaking different languages and doing local government.
Seen in this light, the possible break up of the UK can be seen as an indictment of our political system by the Unionist side. Too little, too late. Too central, too out of touch.

Culture - The Ultimate Group Think

In "Cultures and Organisations: Software of the Mind" Professor Geert Hofstede published his research into the differences and similarities between more than 70 countries. The research has been updated since the original publication in 1990 and you can compare countries using Hofstede's website, click here.
For example Russia is significantly different to Britain in its acceptance of Power differences between people, suggesting tall hierarchies; and uncertainty avoidance, suggesting a need for politicians to do what they say they are going to do. This may provide some perspective on the Crimean situation. While our own parliament does its own groupthinking in terms of policy, as I described in my last post, it may also be automatically blind to cultural differences (as we all tend to be).
As Switzerland is probably the preeminent example of direct democracy it is also interesting to compare their culture with our own. Click here for Switzerland's cultural fingerprint. You will see that the UK culture values individualism much more than the Swiss who have a noticeably stronger preference for uncertainty avoidance. Otherwise they are similar. Perhaps it is the Power Distance measure that has the most impact on the acceptability of direct democracy (click here for the PD definition). On this measure Switzerland and the UK are almost identical (1% difference).

More Democracy, More Socialism?

Douglas Carswell MP argues against the notion that more democracy means more socialism in his book "The End of Politics and the Birth of iDemocracy". He looks at the history of emancipation in a number of countries and examines the effect on government spending:
"Look at America. Almost every white adult male American had the vote since the era of Jacksonian democracy in the 1830s and 1840s. Yet throughout the whole of the nineteenth century, federal spending as a percentage of GDP never once rose above 3% of GDP during peacetime."
Carswell argues that this is because taxes were relatively flat and, as the many paid them, they voted to keep government small and/or cost effective. Yet in a full direct democracy the electorate can also vote on taxes, introducing the concern for some that they will plunder the wealthy. Switzerland, renown for its long history of direct democracy, has had referenda on taxes and may well do so again. But it turns out that they have a relatively small government, further disproving that more democracy leads to bloated government. Swiss government spending as a percentage of GDP is less than most western countries. For comparison here are the 2011 figures:

UK 47.3%
USA 38.9%
Switzerland 32%

(2011 Index of Economic Freedom^[9] by The Heritage Foundation and The Wall Street Journal, reported here.)

Electorate Votes Itself Endless Privileges

"Perhaps we have reached the limit of what is economically possible within a democracy. Now that the electorate has twigged that it can vote itself endless privileges, our leaders seem determined to feed the beast, even when the larder is bare. The younger generation is going to hate us."
This quote from Tim Price in MoneyWeek (15/03/13) neatly sums up a concern voiced by others. And, so the thought goes, giving more power to the economically illiterate electorate via direct democracy will result in financial armegedon.
Swiss direct democracy succinctly proves that is not necessarily so. In fact their economy is in far better shape than those of most western representative democracies. While the reasons for this may be multifactorial, perhaps one cause of Switzerland's success is that direct democracy educates the masses through debate, resulting in more mature politics and better decisions.
But another perspective is that politicians in a representative democracy actively persuade us that the "bribes" they offer in return for our support are affordable, against the better judgement of the majority of voters who successfully manage the complexities of their household budget and carefully consider the inheritence they would like to bequeath to their offspring. From this perspective politicans are dangerous stewards of the economy, driven to error by the competitive nature of representative democracy.
Or perhaps political ideologies are to blame: those notions counted self evident and held firmly by the party faithful. On the contrary, voters less immersed in political doctrine and informed by wide debate, may take a more realistic and less idealistic view.

European Social Values

This report on European Social Values encompasses a wide range of metrics.
According to page 19, 81% of Europeans believe that "people like them" have too little influence in government and only 34% know how to get their voice heard. The figures for the UK are 77% and 31%. Switzerland, reknown for its direct democracy, scored 65% and 46%. Surprisingly a whopping 67% of the Dutch know how to get their voice heard in politics.
This is particularly relevant to Interactive Democracy as a central tennant is empowerment.
From the same page, 75% of Europeans thought "People should involve themselves in politics and current affairs". 73% of Brits and 79% of Swiss agreed. On this metric Sweden came out top with 91%!
Overall the figures suggest the majority want more political power but don't know how to get it. Another observation is that political access is higher in the Netherlands, Finland, Sweden and Denmark than in the direct democracy of Switzerland, but I don't know why. Perhaps public meetings disempower while secret ballots free the individual from social pressure? In Interactive Democracy, voting from your PC may help to solve this problem.

Thanks to Amanda for identifying this report.

Inequality and Direct Democracy

One may assume that if we were all able to vote on every issue the vast majority, with low incomes, would claim the wealth held by the rich for themselves. They would vote for a vast redistribution.
Switzerland is the pre-eminent example of a direct democracy and this graph (data from the UN) shows that the top 20% of wealthy Swiss have 5.7 times more assets than the poorest 20%. They are in the middle of the range of countries with far more inequality than Japan (3.4) and far less than Singapore (9.7).
For more on inequality I'd recommend this TED talk by Richard Wilkinson. He highlights the multiplicity of social benefits, for the poor and rich, evident in more equal societies.

World Values Survey

According to the World Values Survey, 70% of values correlate with just the two dimensions shown in this chart, Traditional/Secular and Survival/Self Expression. (You can read the details here.)
The WVS may provide some insight into the cultural differences between nations with differing democratic or political systems. In particular, Switzerland, with its direct democracy, is shown to be more secular and more self expressive than Britain, but not massively so.
(According to Lars Tragardh, writing in The Guardian, Cameron has an interest in Sweden, which appears at the top right of this graph, high on self expression and secularism.)

Bankrupt Democracy

In a fascinating MoneyWeek article Tim Price wrote "A combination of western governments and those countries' banking sectors is effectively insolvent. The problem is one of democracy itself. The system sows the seeds of its own destruction when a critical mass of voters appreciates that it can vote itself privileges. Politicians who can rarely see further than the next election are happy to provide them. A state of entitlement then sets in, with the wealth-creating private sector crowded out and milked for taxes. In one sense government policy is predestined to fail because, as Mrs Thatcher observed, sooner or later the government runs out of your money."

This may be true for most western governments, but the same problems don't exist in Switzerland, which gives voters much more power. Surely, by Tim's analysis of cause and effect, Swiss voters, in their assumed selfishness, would have crashed their economy sooner. But it remains strong. Why? Because their system integrates everyone into a common society with shared responsibilities and, by being involved in politics, they educate themselves about the issues, the pros and cons, and come to balanced decisions. Interactive Democracy has every chance of doing the same.

("Eurozone governments are now too big to succeed" by Tim Price, MoneyWeek, 25/11/2011)

Democracy and the Fall of the West

Is democracy as doomed as the Dodo? asks Money Week on reviewing Craig Smith's and Tom Miers' "Democracy and the Fall of the West". Their basic point is "Democracy is no guarantor of liberty because voters often want to take away the liberties of others and will vote accordingly." It's not that they think that the West will crash dramatically but they forecast a "prolonged sunset". This idea runs contrary to Niall Ferguson's idea that the Property Owning Democracy was an essential "killer app." in the rise of the West.

It is clear that there has been no tyranny of the majority in Switzerland, where voters have far more power and responsibility than in other Western Democracies. And the Swiss enjoy one of the highest standards of living of any western country, with a cohesive and supportive society. So I suggest that it isn't Democracy per se that is at fault, but our version of it, corrupted from the ideal of personal responsibility and Citizenship by our disconnectedness from political power and the irresponsibility of spinning, vote hungry politicians.

Smith and Miers suggest that the problem of our expanding welfare system can be dealt with by distributing cash equally to all citizens to spend on welfare services from government or private providers. An interesting idea, though they despair of it ever happening. But it could be an Initiative in Interactive Democracy. However, ID goes further, it distributes political power more equally between citizens (analogous to distributing money in their example) and taps into their creative potential. It encourages innovation, responsibility, learning, adaptability and evolution.

Comparing Cultures

Geert Hofstede, of Maastricht University, compared cultures across many IBM subsidiaries in different countries. The results may provide some insight into the applicability of Swiss Direct Democracy to the UK. He used 5 criteria (only 4 for Switzerland):

1. Power Distance, a measurement of inequality as perceived from lower levels in the organisation, rated 35 in the UK and 34 in Switzerland. Pretty much the same.
2. Individualism was scored higher in the UK, 89, than in Switzerland, 68.
3. Masculinity rated the UK, 66, slightly less than Switzerland, 70.
4. Switzerland (58) rated higher than the UK (35) in Uncertainty Avoidance.
5. Finally, the UK (25) had a short term outlook but Switzerland wasn't measured.

Before seeing these results I would have expected Power Distance and Uncertainty Avoidance to have been much lower in Switzerland. I imagine that Direct Democracy would flourish with a higher degree of equality and lower Power Distance score. Similarly, I would have assumed that frequent referendums would lead to greater uncertainty. However, we should be careful about using these results as they may be more associated with the local corporate culture than that exhibited in the general populace.

Marx on Switzerland?

Does anyone know if Karl Marx wrote about direct democracy and capitalism in Switzerland?
Though Switzerland is perceived as a conservative country with many wealthy capitalists it's political system is rooted in the communes. The Swiss have the highest per capita income anywhere in Europe, low taxes and low unemployment. Their currency is strong. They are ethnically and linguistically diverse, which doesn't seem to hinder them. If Marx were alive today, with the modern example Switzerland offers, would he have commented on how voter power (direct democracy style) can counter balance the ills of capitalism; and, looking at other countries, would he comment on how capital can corrupt representative democracy?
Perhaps he would have compared the money economy with the vote economy. On the one hand there is an unequal distribution of capital that flows where the owner decides, accumulating with a few, and on the other an equal distribution of votes, readily available to be cast in favour of fairness.
(Since writing these questions I've discovered this by Engels about the Swiss civil war: he rants bloodthirstily for centralisation.)

Too Many Evenings

'George Bernard Shaw once complained of communism that "it takes too many evenings". The same is true of democracy in Switzerland - or Swiss commune-ism, if you will. It takes a lot of evenings.'

"Direct Democracy in Switzerland" by Gregory A Fossedal

One way to assuage this "too much effort" problem may be to facilitate voters involvement as and when they have the time and inclination: the Internet provides a 24/7 system for debating and voting. But what if you would still rather do something else? Perhaps the default setting for your vote could be to transfer it to your Member of Parliament or some other politician of your choosing.

Effecting Currency

This article, from Money Week, explores the effect of politics and uncertainty on the currency markets. Would Interactive Democracy undermine these markets, and the countries international trading prospects, by begetting uncertainty?

Who knows? But Switzerland has operated Direct Democracy for many, many decades and is renown for its stability and economic success. Is this due to a culture of conservatism (as opposed to radicalism) or is it a function of a political system that balances power between leaders and voters?

Happiness Prospers in Democracy

Professor Bruno Frey has studied happiness in Switzerland, comparing one region (or Canton) with another. He concludes that "The better the opportunities for direct influence on political decisions per referendum are, the more satisfied the people will be." More here.

In his article "Happiness Prospers in Democracy", based on a survey of 6000 people in Switzerland, he writes

1. "the more developed the institutions of direct democracy, the happier the individuals are;
2. people derive procedural utility from the possibility of participating in the direct democratic process over and above a more favourable political outcome"

Bruno Frey is Professor of Economics at Zurich University. Here's his web site, which includes many articles.

Triggering a Referendum in Switzerland

In the Swiss system a federal referendum must be initiated if 50,000 people or 8 Cantons have petitioned to do so within 100 days.

Referendums within Cantons don't need so many people and may be triggered by other rules. For example if expenditure exceeds certain levels.

Referendums on changes to the constitution, or joining international organisations for trade or defence, require 100,000 signatures within 18 months.

In the past, the government has often initiated counter proposals that have won out. Reports suggest that even the threat of a citizens initiative has prompted the Swiss Parliament to reform the law without the need for a referendum.

More from wikipedia here.

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The proposed Interactive Democracy system could easily be modified to accommodate an ePetition with a certain trigger level, say 50,000 people. On the other hand, a system that allows the most popular petition to rise to the top of the list and be considered by Parliament, may have the effect of integrating those people interested in politics into the system. In particular, members of political parties would be likely to contribute their signatures and, therefore, have more say over Parliamentary business and the conduct of their Party.

Having a long list of ePetitions, some of which may be quite radical, may foster debate and initiate better, more creative proposals that rise to the top. All of which is much easier to do with an Internet based system. It will be interesting to see how Swiss Direct Democracy adapts to the web.

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.