Keith Rankin's Thursday Column
Parliament: Polypoly or Duopoly?
16 August 2001
Economics extols the marketplace. Markets work best when there is competition. The best name for competition is polypoly ("many sellers"). This contrasts with monopoly, duopoly, oligopoly: one, two, few sellers.
MMP, like other forms of proportional representation, is political polypoly. Many parties put their wares in front of the voting public. MPs are elected in proportion to the support each party receives. The only barrier to entry is the 5% threshold.
There are large parties that are the political equivalent of chain-stores, and smaller "boutique" parties. The result of this competitive contestable political process is that almost everyone's interests are represented in Parliament. And that minority interests are not over-represented.
It is beyond comprehension that an orthodox economist could be opposed to polypoly, be it economic polypoly or political polypoly. How could a market economist refute the virtues of maximal competition?
Yet an economist called Stuart Marshall is reported (here and here) to be trying to undermine proportional representation. He is petitioning for a referendum that will ask the question "Should a binding referendum be held to decide the future voting system, based on a Parliament of 99 MPs?"
To many, this will appear to be just a repeat of the unfortunate Robertson referendum that sought to misuse the democratic process to reduce the level of democracy in New Zealand. However the Marshall question is actually about changing the voting system, while seeking to use the 99 MP issue as a Trojan Horse. Further, given Marshall's close connection - through the "Citizens' Majority Trust" - with NBR editor Graeme Hunt, it is clear that Marshall's real agenda is to "get rid of" proportional representation. Anti- MMP fanatics like Hunt (who has written a book on the subject that is riddled with factual errors), the real agenda is to remove effective competition from the political process in New Zealand. Hunt and Marshall both know that MMP cannot function with 32 list MPs and 67 electorate MPs.
At least the "bring back Buck" campaign was honest. The "bring back first- past-the-post" campaign is totally dishonest, riding on the back of endemic political cynicism, weasel words, and perceptions unintentionally created by the media that proportional representation has (in some undefined sense) failed.
Of course proportional representation has failed in the sense that it hasn't created an earthly paradise in Aotearoa. But that's hardly a reason to bring back an electoral system that was so unpopular by 1992 that fewer than 200,000 people voted to retain it. Proportional representation was successful in bringing young New Zealanders to the polling booths (to vote Green having seen Nandor on TV). Contrast our turnout with the pathetic turnout in Britain this year.
Stuart Marshall and Graeme Hunt should come clean. What political change are they really trying to engineer? What are they for? Are they for some alternative electoral system that would be lucky to get 5% support in an opinion poll? Or are they for the restoration of the duopoly (ie 2-party) system that was comprehensively rejected by a referendum that followed an extensive public debate? And, as an Act Party member, does Marshall wish to destroy his own party along with a desire to destroy the Greens, the Alliance, NZ First and United?
A political duopoly is not a proper democracy. A duopoly is a form of market failure. Just ask any real economist.
It is National who will benefit most if the boutique parties are destroyed; if the Parliament is reduced by 21 "minor party" MPs. (Ironically, the small party MPs who are most at risk of losing their jobs if there is another change to the electoral system tend to be the best behaved.)
On a more general level, what should happen when people use the democratic process to dismantle or diminish their democracy? Call it catch-23. My answer is that it is legitimate to reject a democratic decision that has negative repercussions for democracy. People who vote for less democracy obviously don't care much about democracy, so therefore they should not care if their vote to reduce democracy is ignored.
Once achieved, political polypoly - the competitive political marketplace - needs to be protected from the interests that prefer political monopoly or duopoly.
If Adolf Hitler had run referendums on the holocaust or the burning of Parliament, and a majority of the German people had supported those referendums, would that in itself have justified those two atrocities?
There are still some people who think that the earth is flat. Let's put that issue to a binding referendum? That's democracy. Isn't it?
published on Scoop at www.scoop.co.nz/stories/HL0108/S00090.htm
published feedback at www.scoop.co.nz/stories/HL0108/S000103.htm
What a silly little tirade Keith Rankin unleashed this morning on the subject of Political Polypoly.
The Internet Usenet scene has a useful little rule called the 'Nazi' rule. In essence, when a list or thread participant makes an appeal that such-and-such is what the Nazi's or Hitler would have done, the list moderator 'calls' the offender and closes the topic of discussion. Underlying this rule is the simple proposition that arguments supported by such appeals to emotion and prejudice have irrecoverably left the realm of reasoned and considered debate.
Once can't help but feel that Mr. Rankin's latest column comparing a hypothesised German approval of Hitler's holocaust policies and an electoral referendum in New Zealand has certainly left that realm of reasoned debate.
Many questions are left begging.
For instance, are there no difference between the spheres of economics and politics? Do we not as individuals fill roles as producers, consumers and citizens and make tradeoffs among them?
Our relative economic power is vastly different, dependant as it is on our individual access to resources and information. Our political power seems to be much more equal. We each have a vote to spend, whether we're a bigoted redneck, a chattering Wellington liberal luddite or a Remuera business tycoon stubbing his cigar out on the back of the poor.
Questioning his underlying assumptions even further, can Mr. Rankin not see how imperfect his vaunted political competition really is? What exactly are we choosing between? As an analogy, four oil companies sharing one petrol refinery are vigorously decried as a nasty cartel. Whether its two or five parties in one parliament, the competition is still imperfect when the citizen is unable to choose between competing jurisdictions or even opt out altogether. Barring emigration, all we have is the option to choose what group or groups of self selected lunatics will run the asylum.
Is it so difficult to consider the possibility that politics is not some noble marketplace of worthy ideas and consider it as the fractious melding and bickering of special interests, all competing for the common resources, or similarly, as a vehicle by which flawed individuals can pursue the very human desires for status, power and significance?. Or, most importantly for the masses, that is it the mechanism by which the elites can conduct their revolutions without guns and the proles can get on with the business of their daily lives.
So much for the hypothesis of politics as a free marketplace.
Mr. Rankin is at his most contradictory when he discusses the nature of the opposition to MMP. Having romanticised democracy he then emotively describes one Mr. Stuart Marshall (an orthodox economist, as opposed to a catholic or protestant one I presume) as "...trying to undermine proportional representation". Mr. Marshall is not carrying a gun as you would expect. No he is doing it via the nefarious process of 'petitioning'.
This terrible crime of petitioning is tantamount to "...misusing the democratic process.." clearly an evil that citizens need to be protected from and I nominate Mr. Rankin be the man to decide which acts of free speech and the exercise of Citizen Initiated Referendum 'rights' are to be called as misuse.
Mr. Rankin makes the useful point that the wording does conflate two separate propositions and that proposed electoral changes ride in on the back of the universal scorn for parliamentarians.
This is a small matter when considered up against other referendum howlers such as the Norm Withers referendum which frankly was indecipherable but reaped great support and the Fire-fighters referendum which from memory went something like "are you prepared to let babies die in burning agony so that the government can avoid giving the firemen a raise".
It is certainly an interesting question as to what action should be taken when democracy is threatened. A consensus among political philosophers of the Bertrand Russell ilk, would seem to be that we are entitled to 'reach for our guns' when the capacity to have bloodless transitions between those we chose to govern us is removed or threatened.
Is that test even close to being met by an orthodox economist raising a petition? I suggest that the exercise of free speech is best met by more free speech.
Mr. Rankin seems completely unaware of the vast body of literature that covers the sensible and important debates on our role as consumer and citizen, the nature of democracy and the tyranny of the majority, and the tradeoffs required inside a democracy between paralysis and action, stability and dynamism, individual and community.
I am aware that one could drive buses through some of my previous arguments, however in the words of Dr. Sam Johnston, nonsense can only be argued with more nonsense.
Mr. Rankin, I call you for the rhetorical fallacy of 'Nazi'.
published rejoinder at www.scoop.co.nz/stories/HL0108/S000109.htm
Gordon King's reply to my column Parliament: Polypoly or Duopoly would have been a useful contribution to the debate about the issues I raised were it not for the blatantly ad hominem opening paragraph.
Mr King is right to say that "free speech is best met by more free speech". My piece was both free and provocative, but, in raising some important issues that needed raising, is no "silly tirade".
He acknowledges that the issue of political versus economic competition is an interesting and important issue. He also acknowledges the deceptive nature of the referendum wording proposed by Stuart Marshall. Marshall's is an anti- MMP referendum posing as a pro-99 MPs referendum. King also concedes that the other Citizens Initiated Referendums that we have had so far have been completely worthless exercises in democracy, on account of either leading or "indecipherable" questions. And he agrees with me that it "is certainly an interesting question as to what action should be taken when democracy is threatened".
King's main criticism of me arises from his misunderstanding the "Hitler" illustration that I used. I was in no way comparing Stuart Marshall, Graeme Hunt or Margaret Robinson with Adolf Hitler. Rather, because Hitler's anti- democratic misdeeds are well known and extreme, they can be usefully used as illustrations, much as writers from 1400 to 1900 tended to allude to Greek and Roman mythology and history to provide examples to illustrate their points.
Because Hitler's misdeeds were grossly anti-democratic, most people would accept that they should not have been perpetrated, even if they had had some form of democratic endorsement.
The anti-democratic misdeeds of the NZ anti-proportional-representation lobby are of a much milder nature. Nevertheless they can be stated to be anti- democratic for at least two reasons. The first reason is that the arguments presented to the 2000/01 Select Committee, and to the 1986 Royal Commission, substantially favour proportional representation as being more democratic than the two-party "first-past-the-post" system that still prevails in elections to Britain's House of Commons. The second reason lies in the reluctance of the anti-MMP lobby to come clean in their public statements about what kind of system of representation they favour over proportional representation.
Hence the "catch-23" principle (the problem arising from the use of democratic methods to remove or diminish democracy) - illustrated with Hitler's burning of the Reichstag example - is applicable to Stuart Marshall's referendum proposal.
To answer some of Mr King's other points. It is true that a 7-party parliament is hardly perfect political competition; superficially it's oligopoly rather than polypoly. It must be noted though that competition is as much about contestability - about minimisation of the barriers to entry - as it is about the actual number of suppliers in the market at a single point in time. With MMP, the entry hurdle for new nationwide parties is 5% nationwide support - higher than for many other proportional systems, but lower than the STV alternative that some people want. Under FPP, the hurdle was really above 20% (although by-elections had created situations in which parties like Social Credit could win and retain seats through tactical voting). In 1984 the New Zealand Party got 12% of the nationwide vote and didn't come close to winning a seat.
In practice, FPP was a non-contestable duopoly. MMP on the other hand is a contestable oligopoly, close enough to being what I called a "political polypoly".
I accept Gordon King's point that the arguments for competition in economic markets does not necessarily translate to political markets. (Without actually saying so, he acknowledged that the inherent privateness of neoclassical economics clashes with the underlying publicness of politics.) Actually, on account of this need for public representation, the need to avoid imperfect competition in politics may well be stronger than the equivalent need in economics. Even some orthodox (synonym "neoclassical"; antonym "heterodox" [not "catholic" nor "protestant"]) economists will concede that the free economic market is often far from "noble".
I think it's somewhat unreasonable to accuse me of having no knowledge of "the vast body of literature that covers the sensible and important debates on our role as consumer and citizen, the nature of democracy ...". After all, I was only writing a 900-word column, not a PhD thesis. Of course, like Mr King, I could not possibly have perfect knowledge of all of the literature of political and economic philosophy.
I agree with Mr King that some people do drop names and phrases like "Hitler", "fascism", "Stalinism", "Polish shipyard", "Albania of the south", "basket case" and "banana republic" as a way of avoiding reasoned argument. I would like to assure him and Scoop readers that I did not do this. I am innocent of the "rhetorical fallacy of 'Nazi'".
published response to rejoinder at www.scoop.co.nz/stories/HL0108/S000126.htm
Keith Rankin has prepared a thoughtful rebuttal to my sceptical piece on politics as a 'perfect' market.
To deal with the least important issue of this worthy debate, Mr Rankin accuses me of opening with an ad hominem attack upon him. The ad hominem is an attack of a personal nature designed to undermine the value of the recipient's argument by calling attention to some unrelated personal attribute. "My opponent cannot talk knowledgeably about this subject because she is not a mother" is an example.
I have considered as to whether Mr Rankin has legitimate cause for affront or perhaps was merely reacting to my undisguised clarity of opinion. On balance I think the description of his original essay as a 'silly little tirade' quickly delivers to the reader the context for my opinion that the piece was ill considered and absolutist.
In support of this I would draw attention to some of Mr. Rankin's original characterisations such as Mr. Graeme Hunt as an "...anti-MMP fanatic..." This he may or may not be, but surely only in the same sense that Mr Rankin could be described as a pro-MMP fanatic. Further, Mr. Hunt's book on the subject is "...riddled with factual errors." Or the logical implication that Mr Stuart Marshall is either ignorant or a lunatic as it is apparently "...beyond comprehension that an orthodox economist could be opposed to polypoly..."
If I have engaged in ad hominem then I am in good company and, from a classical definition in particular, certainly the student at the foot of the master!
To the meat of the matter.
At the risk of boring the readers with a bout of scholasticism, I am somewhat at a loss to understand how he has characterised my argument as one of comparing Hunt, Marshall and Robinson to Hitler and accept unconditionally that he did not imply that. I am a little suspicious though, that his argument on the matter is an attempt at deflection from my central theme.
Any thinking individual could clearly see that the thrust of Mr Rankin's argument was that majority support (say of an electoral change reversal) should not magically deliver up that change if it is 'anti-democratic'. After arguing for his political polypoly (or MMP conveniently sidestepping the 5% thorn in the original essay) Mr Rankin concludes:
"Once achieved, political polypoly - the competitive political marketplace - needs to be protected from the interests that prefer political monopoly or duopoly."
"If Adolf Hitler had run referendums on the holocaust or the burning of Parliament, and a majority of the German people had supported those referendums, would that in itself have justified those two atrocities?"
"There are still some people who think that the earth is flat. Let's put that issue to a binding referendum? That's democracy. Isn't it?"
My contention is that that these lines are appeals to emotion and are used only to link the rightful 'horror' of Nazi abuse or distain for flat earth stupidity with what is perhaps thinking opposition to the merits of MMP or 'perfectly' proportional voting systems.
It is done with the sole intent of discrediting or demonising those who hold such views and it is an unworthy debating tactic.
In his Rejoinder Mr. Rankin takes the more reasonable line that "(t)he anti-democratic misdeeds of the NZ anti-proportional-representation lobby are of a much milder nature". Leaving aside the unproven and value loaded nature of the statement as a whole, if these misdeeds are much milder, why reel out the heavy guns?
His argument that similar comparisons were made in renaissance/enlightenment scholarship to classical antiquity is specious in that at least a millennium separated those periods, whereas there are still veteran's of Nazi atrocity alive today. The period still looms large in the collective conscious.
To some small matters.
I apologise for woefully inept attempt at ecumenical satire in describing economists and it would be unreasonable for me to expect any mercy from my protagonist. He did not disappoint.
Mr Rankin also makes the point that it is somewhat unreasonable to expect him to demonstrate in 900 words or less the extent of his reading on these complex subjects. I would like to be able to claim that my comment in this regard was a plea for some balance. Regrettably though I suspect that I read the phrase "x seems unaware of the vast body of literature on y ..." and thought I might try it out. Point well taken.
He is of course wrong that I don't have perfect knowledge (except in matters of spelling).
I apologise to readers and Mr. Rankin by stopping here at the conclusion of my rebuttal and failing to advance the argument further. I fear, however, that with the quality of Mr Rankin's debate much improved (as demonstrated in his Rejoinder) by having a whetstone on which to sharpen his sword, I should surrender the field before I am comprehensively outflanked.
© 2001 Keith Rankin
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