Addressing the Crisis of the Elite

A Bottom-Up Solution to the Global Democracy Crisis

by Joseph M. Firestone, New Economic Perspectives

Before the “no” vote on Scotland’s independence, The New York Times carried a post by Neil Irwin in The Upshot making the point that the then upcoming vote “shows a global crisis of the elites.” He argues that the independence drive reflects “… a conviction – one not ungrounded in reality – that the British ruling class has blundered through the last couple of decades.” He also thinks that this applies to the Eurozone and the United States to varying degrees, and is “. . . a defining feature of our time.”

Irwin then updated his first post, expanding it and recognizing the victory of the “no” votes in the referendum. His new post did not add anything essential to his “global crisis of the elites” diagnosis, so the references and quotations below come solely from his pre-vote post. But the points made apply equally well to his update.

To summarize his argument, for decades now, the elites in major modern, industrial nations have committed leadership blunders and created great discontent among the citizens of their nations, to the point where their polices have contributed to damaging their economies seriously, and the rise of popular resistance embodied in extremist parties and independence movements. Elites have had vast power, but have not lived up to their responsibilities to serve the people of their nations. Discontent with their actions and results is so high that many are questioning the legitimacy of the very governing institutions that claim to serve them, and are exhibiting a greater and greater willingness to do something about these institutions and the policies that they and the elites are generating. Scotland is but one example of that, and his implication is that more examples are in the offing.

It’s significant, some might say even remarkable, that Irwin’s article appeared in The New York Times, since it is a flat out criticism of elite leadership over a number of decades and a warning to elites to improve their performance or deal with the consequences. But I think it still misses the most important question. That question is whether there is a global crisis of elites or a global crisis of democracies? I’m afraid I think that the crisis of elite leadership is only a symptom of the underlying cause of a broader global crisis of democracy.

The Global Crisis of Democracy

Think about it. Irwin is describing a situation in which the elites have been failing their citizens for decades now, following neoliberal economic policies that have resulted in increasing inequality and the renewed appearance of extreme economic instability, and doing this while they continuously mislead the public about their poor performance, using the power of the money that supports them and permeates the mass media.

The ability to easily mislead was on display in the Scotland referendum. The major UK-centered parties conjured up currency difficulties they insisted Scotland would surely encounter if they became independent and needed to leave the pound sterling. They frightened people about what would happen to their pensions. They raised issues of national security related to terrorism. And this propaganda was effective in swinging “yes” votes away from the movement toward Scotland’s independence, ultimately defeating the referendum. But, of course, with 45% of the population voting in favor of independence, the elites’ rear guard power play won’t end widespread support for independence.

None of these issues was real.  Scotland was in a position to establish its own sovereign fiat currency and acquire the policy space they need to end unemployment and the austerity regime the UK has been imposing on them. Pensions could have been guaranteed by a Scottish Government with the authority to create that fiat currency in whatever amounts would have been necessary to support the necessary fiscal policies to accomplish this. National security could have been protected through cooperation with other nations, including the UK, since all have an interest in protecting their own nations from terrorism, including doing what can be done to prevent “terrorists” from infiltrating bordering nations.

Whatever their failings in Scotland and in various nations around the world, and however much they mislead most citizens, the same elites still survive. They still remain in control of their nations – especially their political, financial and economic institutions – as well as international institutions and the global financial system.

And the overwhelming popular discontent with both the political elites and political institutions has not yet served to generate movements that are powerful enough to dislodge them at the polls; even though the claimed signal advantage of democracy over other forms of government is the ability of people in democracies to replace political elites who won’t serve the people’s interests with leaders who will – without bloodshed and in an orderly fashion.

The failure of democratic institutions is the reason why we have elites that commit blunder after blunder, but are never replaced by more competent leaders who do respect the popular will. It’s the reason for Irwin’s global elite crisis. There would be no such crisis if badly performing elites could be easily replaced. But they can’t. Top leaders may come and go in modern nations, but slightly lower level officials, advisers, and consultants, still at the commanding heights of power, remain the same.

Deliver the government to one party or another and leadership at the top changes, but the same or people with very similar views are still called upon to staff the government or advise it. They survive government after government. They move to the non-profits. They move to the international organizations. They go into large corporations for awhile. But they are never retired from the elite circles of governance, even when it seems that they appear to be near senility.

And regardless of past failures, they keep getting appointed to serve new governments on grounds that they have valuable experience or have learned lessons from their previous bad experiences. In present day democracies, past failures provide the qualifications they need for future failures. And yesterday’s failed leader is preferred to today’s new leader with new ideas.

So, the inescapable conclusion is that there is something wrong with modern democracies: namely, that their institutions are no longer effective at performing their essential function of replacing “bad or incompetent rulers” bloodlessly, when that needs to be done.

I think that’s the point Irwin misses, because he focuses mainly on elite failures and not on institutional failures, except when he talks about the ill-served people and their increasing discontent with institutions. But, recognizing the issue of institutional failure, we can now focus on what, in modern democracies, seems to have failed. At one point in his post, Neil Irwin says:

But there are always people who have disagreements with the direction of policy in their nation; the whole point of a state is to have an apparatus that channels disparate preferences into one sound set of policy choices.

And that’s what modern democracies no longer have: institutions that can channel disparate preferences into policy choices. Modern democracies are now lacking the aggregation mechanisms to create policies satisfying the needs of most of their populations. Why is that?

Explaining the Crisis

There are many reasons for the crisis including at least these:

• Political parties no longer represent the middle class or the poor, or even the moderately prosperous. Increasingly they seem to represent only the interests of large corporations, wealthy individuals, and, of course their own leaderships and office holders.
• The mass media now seem to be composed of organizations that cover only the news and issues that the rich and large corporations want them to cover. They not only don’t state inconvenient truths, but won’t even debate inconvenient issues.
• Legislators and candidates represent the funders of their campaigns more than they represent their constituents. In fact, it often seems that the only constituents they do recognize are their funders.
• Institutions designed to limit the role of money in politics have failed, and there are no significant limitations on big money buying elections by driving up the cost of mass media advertising, and then funding only those candidates they find acceptable.
• Economic inequality has increased to such a degree that the rich have enormous quantities of excess wealth to spend on political campaigns and to exercise their new freedom to buy elections.
• Legal inequality has increased to such a degree that there are two systems of law. One enforces standards for most people and an entirely different one enforces entirely different standards on the wealthy and/or the powerful. We see this in the failure to prosecute financial frauds, supposedly out of fear that such prosecutions would de-stabilize the financial system. We also see it in the national security area in the US, where officials are not prosecuted, even though they’ve clearly broken laws, violated the fourth amendment and lied to Congress about these actions. And we see it when local police routinely violate and suppress constitutional rights. Our democracies seem to have forgotten “fiat justitia ruat caelum“, even though ignoring it strikes at the very fabric of democracy.

Re-Inventing Democracy: A Bottom-Up solution

So, if we don’t like these trends, what can we do to re-invent democracy? Commentators like Irwin and many others are evoking the spectre of extremist politics, and billionaires such as Nick Hanauer have warned that the pitchforks and perhaps bloodshed are coming. Fuel has been added to the fire by cross-national resistance movements and Thomas Piketty’s recent publication of his Capital in English, as well as those who imply that democracy will only be restored through resistance that carries with it the threat of violence. But is there a way in which our democratic institutions can be once again made effective in replacing failed leaders without bloodshed, by supplementing them with new institutions we can create and develop without having to work through political systems controlled by the failed elites, the corporations, and the very rich?

I think the answer is yes. I know of a global web platform now in development that can be brought online rapidly which, along with its members and participants will generate new voter-controlled institutions capable of countering the factors I’ve named earlier. This platform can empower U.S. voters, for example, across the spectrum, to join forces to replace poorly performing elites with leaders that will represent the people in time for the U.S. presidential and Congressional elections of 2016.

It can empower voters around the world to re-invent democracy in their countries by creating online voting blocs and electoral coalitions around common agendas set by bloc members after thorough discussion, debate and internal votes. These blocs can merge and create online coalitions, while reaching out continuously to increase their electoral strength by inviting new voters to join their online agenda setting, organizing and consensus building efforts, and participate actively in bloc and coalition decisions to run and elect common slates of candidates.

This platform provides voters who are revolting against the serial failures of their elites, an opportunity to informally but effectively re-structure governing institutions from the inside out – especially electoral institutions – without having to change their constitutions or re-write their electoral laws. It will be no more, but also no less, than a bottom-up re-invention of democracy. It will be led by voters whose vital interests may have been ignored by their governing elites for decades, but have now found a way to peacefully usher them out of office and replace them with their own democratically elected and accountable representatives.

If it had been in operation in the run up to the Scottish independence vote, there’s a very good chance that pro-independence voters could have reached out to undecided voters, and even certain segments of decided “no” voters far in advance of the independence vote to work through the issues that were preventing reluctant Scots from joining the “yes” movement. So, wavering and undecided voters would have been able to resist the propaganda of UK elites, political parties, media and celebrities, because they would have already organized themselves into an online voting bloc, whose members would have continuously shared their knowledge about the fallacies in the propaganda they were subject to from the UK elites and their allies.

They would have pooled their collective intelligence and figured out, for example, that the currency issue was a no brainer for them because an independent Scottish government could have created its own non-convertible fiat currency, with a floating exchange rate. They would have learned that the pension issue was also a false one, because nations with non-convertible fiat currencies with floating exchange rates can always fund pensions and provide enough money for the recipients to buy whatever was for sale in Scotland. They would have learned that the national security/terrorism objection to a “yes” vote was also just another scare tactic.

If you want to learn more about the project to bring this web platform for re-inventing democracy to fruition, and how it can restore the ability of democracies to change their leaders, then please go to reinventdemocracy.net, and reinventdemocracyfoundation.net for more information.