Tuesday, 15 February 2011

Direct Democracy!

As part of David Cameron's Big Society policy the Prime Minister advocates that petitions with over 100,000 names should be debated by Parliament. Perhaps before introducing a system of direct democracy into our parliamentary system Cameron should learn the lessons from the not so Golden State of California where Guy Adams warns us that, "...in the Golden States's decline into misery, there probably lies a lesson for us all."

This is what Adams had to say on the effect of direct democracy on the governance of the state of California:
California's greatest mistakes, however, came as a result of its obsession with "direct democracy". In rules designed to put citizens at the heart of government, small interest groups were allowed to create new laws by electoral "ballot measures". Any "proposition" that can attract the support of a few hundred thousand people prepared to sign a petition can then be put to voters in a referendum. If more than 50 per cent of them support it, that "proposition" becomes law.

In theory, this concept sounds empowering. In practice, it has in recent decades resulted in legislative chaos. Ballot papers on election day run to dozens of pages, with referendums on anything from gay marriage to drug legalisation. And dozens of measures, passed over the years by different generations of voters, have left State government paralysed, and unable to properly manage its finances.

Property tax, a mainstay of revenues, was frozen for many residents in the 1970s, as a result of one public vote. Income tax cannot be raised unless two-thirds of lawmakers agree thanks to another ballot measure, passed in the 1980s. A raft of further referendums endorsed by the people control California's spending to the extent that only a only a quarter of its entire budget is considered "discretionary". The rest is already earmarked for a particular cause. Endless business legislation has driven employers to greener pastures.

In this environment, the only way Governors of California can balance their financial books has, for decades, been via borrowing. As a result, even servicing the state's public debt now costs around 10 per cent of all its tax revenue. So in 2008, when a faltering global economy further decimated tax revenues, the already-teetering state was pushed to the brink of bankruptcy, and left unable to protect its most vulnerable citizens.

All of which should be mulled over by architects of Mr Cameron's Big Society. The British Prime Minister is fond of "direct democracy" and has touted plans for Parliament to debate petitions that receive more than 100,000 signatures. This no doubt sounds like a wonderful idea. But it is wrong to think it will produce better laws. California shows that, when an electorate is empowered to make everyday decisions, it tends to vote selfishly. People want low taxes, but expensive services. They vote emotively, and often bad laws. The Golden State may be many time zones from Westminster, and its sun-drenched beaches can feel like they belong to another planet.

So here we have it, another one of Cameron's 'big ideas' blown totally out of the water!

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