Bring Home The Revolution


Readers tuning in for their weekly instalment of personal finance tips may want to look away now…because this week we will be sorting out British politics. Yes, really! 🙂

Getting rich is simple. Its just not easy…partly because some things aren’t meant to be easy and partly because of how our society is set up.

So we have to think about broader questions of our values, psychology…and even politics.

Wait! Come back!

For capitalism to work its magic and deliver the incredible benefits of wealth creation and compounding, we need a political system that provides economic and personal freedom, social justice and has broad democratic support from all sections of society.

It has been brought to the attention of The Escape Artist that the recent performance of politicians here leaves room for improvement. So today, I’m summarising the ideas of journalist Jonathan Freedland from his book Bring Home The Revolution.

Freedland makes the case for taking the good bits of American political culture and its written constitution (based on the ideas of British liberals in the eighteenth century) and bringing them back home.

Here’s my summary of his suggestions:

1. Power to The People

The British constitution still runs on the basis of “The Crown in Parliament” where power flows from the top down.

This is a historical legacy. British history from 1066 to 2016 is a series of steps from an absolute monarchy to an imperfect democracy. There’s a lot to be said for a step-by-step approach…but this left us some unfinished business.

We tamed an absolute monarchy but, in its place, we’re left with an over-powerful executive. A prime minister with a landslide majority in the House of Commons (from a minority of the popular vote) holds all the power that a tyrant King used to wield. And we have an establishment caste of bossy officials, judges and administrators that seem to think they are entitled to rule over us…without being elected.

In contrast, the American constitution works on the idea that power flows from the bottom up. The People are in charge and they “hire” (elect) politicians to do the work of running a government on their behalf.

2. More democracy

In a democracy, direct elections are the way to select people for public service. In America, every city of scale has a mayor and dozens of officials that are elected. There are fewer unelected bureaucrats, administrators and quangos.

Direct elections allow the will of the people to be expressed and brings accountability and greater local engagement.

Britain has already moved in this direction with the creation of a Mayor of London, local parliaments in Northern Ireland, Scotland and Wales plus national referenda for big constitutional questions such as devolution and EU membership (see points 4 and 6 below).

We could have more local elections for mayors and officials (e.g. senior police officers, CEOs of regional health trusts, housing associations etc)…these extra elections could be made more efficient and painless with online voting.

Some people will moan about more elections….but then one bloke I used to work with moaned when given an unexpected bonus because now he’d have to pay extra tax(!). Voting will not be compulsory. But if you don’t use your votes, you really shouldn’t complain about the outcomes.

3. A New Republic

If we really believe in meritocracy, equality of opportunity and social mobility then we need to make a few changes at the top. Its not fair or logical to have a hereditary monarchy that retains significant (but hidden) power.

We should separate the monarchy from the constitution. There should be no more Queen’s Speech at the opening of Parliament (she can still do her TV chat show at Christmas). The monarch should not be able to appoint the Prime Minister in a hung parliament (this happened as recently as 1931).

We don’t have to follow the French approach to dealing with royals. So there’s no need for the guillotine. We can keep the Royal Family with their benefits for tourism (valuable) and tabloid story generation (not so much). They can still open village fetes and supermarkets and live in Buckingham Palace and their various holiday homes (although they might want to read this).

4. Separation of Powers

We need more checks and balances and better separation of powers between the executive, the legislature and the judiciary.

What do I mean by that? The executive is the prime minister and the cabinet, who set policy and propose new laws.

The legislature is the voting assembly that makes the law. It discusses, reviews and votes on legislation. In the UK, this is the House of Commons.

The judiciary is the system of courts and judges that enforce the law, from local magistrates to the Supreme Court.

Britain has weak checks and balances. A prime minister with a “safe” majority in the Commons has almost unfettered power. This is dangerous for democracy and individual civil liberties.

Parliament should have 2 chambers. The House of Commons would remain as the primary chamber. We should have a new upper house (The Senate) which is democratically elected and has greater power to review and amend laws. This would replace the House of Lords with its unelected appointees and aristocrats. Parliamentary elections would be staggered so that elections for the upper house would be held during mid terms.

5. Individual rights

When The People are sovereign, what we really mean is the majority of the people. We need protections for the minority. The American founding fathers realised that pure democracy required checks and balances to avoid a tyranny of the majority.

This is basically a British invention. As Freedland points out in politically incorrect terms, Brits first came up with the Magna Carta (1215) when the rest of the world was still in loincloths. The Magna Carta introduced limits on the power of the monarch to tax, to imprison and to govern without reference to free men. And the 1689 Bill of Rights built on this, setting out the rights of Parliament, including the requirement for regular parliaments, free elections and freedom of speech. It also set out rights of individuals including the prohibition of cruel and unusual punishment.

A modern bill of rights would boost free speech, legal equality between races and sexes, the right to practice religion (or not) and freedom of sexual choice. This would enshrine (and where necessary strengthen) existing freedoms and protect us against authoritarian governments or mob rule.

6. A written constitution

Once the Americans had declared the sovereignty of the people (point 1) and secured the rights of the minority (point 5), they wrote it down.

Americans knew that a written constitution was fundamental for the same reasons that a person buying a car needs an ownership certificate and a manual. A written constitution is important for open government because it lets everyone know how their system works.

Britain has no written constitution. What we have is a jumble of common law, traditions, protocols, statute, conventions and treaties.

If knowledge is power then people who don’t understand their own political system are powerless. All those archaic Westminster ceremonies (Black Rod, Robes, latin etc) have the effect of confusing ordinary people and persuading them to accept the appointment of a priesthood of self-interested experts to interpret the hidden and unwritten rules.

The constitution could still be changed but would require 2/3 majorities in both houses of parliament. This would represent a major improvement on our current situation where a single party with a simple majority in the Commons has the power to violate even our most basic liberties.

7. Local power

European Union officials used to talk a good game on “subsidiarity”, the sensible idea that decisions should be taken at the level of government as close to the citizens as possible. But sadly the Brussels machine looked like it was more interested in taking ever more power to the centre and this triggered a reaction from British voters (Brexit).

Subsidiarity should get put into effect in the UK as well as the EU.  Power should get delegated down to the regions wherever possible.

This would involve a big change in our political culture, switching emphasis from centralised government in Whitehall (or Brussels) to local councils, mayors and other locally elected public servants.

This would encourage greater maturity from the electorate as well as the media. We’d eventually stop whining about “postcode lotteries” and instead accept (or even celebrate) regional variations. In some ways this is nothing new, 100 years ago no one expected a hospital (or waste collection) in Edinburgh to be run exactly the same as a hospital (or waste collection) in Exeter. It’s absolutely possible to have regional variations in the National Health Service without privatising it.

In the US, different states and different counties retain significant powers (including tax raising powers). They can then choose different priorities and different solutions that are most appropriate for the local conditions.

This could be introduced over time in the UK on a tax neutral basis whereby increased local taxes levied by local government were matched with tax cuts by central government.

8. Civil society

Taking charge will mean breaking a long-held British habit. We will need to curb our instinct to look to the State, not ourselves, to solve our problems. Popular sovereignty and delegated local power entail not just rights but also responsibilities.

During most of history, we have looked upwards – first to our feudal master(s) and then to The State – as if to a benign parent ready to feed us and change our nappies “from the cradle to the grave”.

That needs to change. We should see that habit for what it is, a feudal leftover. The much loved welfare state has its roots in the old class system, in which a permanent elite felt obliged to look after a permanent proletariarat.

There is such a thing as society. So whilst we gradually shrink the more bloated aspects of the old welfare state, we should actively encourage the development of social capital, not for profit organisations (e.g. Vanguard) and volunteering.

9. A classless society

The Escape Artist has previously written how The British Class System has mostly been quietly dismantled. Unfortunately no all-staff memo was sent out confirming this. So these gradual changes have left many people a bit confused. The class system left behind a set of outdated limiting beliefs which hold back people in ways they are often unaware of.

The 1% has a responsibility to treat the 99% as adults (and the 99% have the same responsibility). That means being more honest and giving everyone the opportunity and the incentives to work hard, climb the ladder and reap the rewards…rather than paying people to sit on the sofa watching daytime TV on sink housing estates.

As we move away from the old paternalistic welfare state, we’ll need more civic engagement and a new approach to equality. Freedland suggests that our model should be the American Dream: social mobility and equality of opportunity (not outcome).

10. A New British Identity

If Britain were to take the 9 steps above, it will have constructed a shared national project and patriotism based on ideas not blood. It would help to gradually heal some of the lingering divides between different groups and different regions…caused by historical class divisions, past inequalities and injustices.

This stuff would take time and it wouldn’t make life perfect…but let’s get real…why would you expect perfection? The question is whether this would help protect our freedoms and improve the quality of outcomes delivered by our political system over time?

I’m a Yes on that.

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  1. Hi TEA, I bought that book s/h for £2.32 on Amazon after you recommended it in an earlier post so I think I get marks for frugality there 🙂 I’m hoarding it for my summer holiday reading though, so am resisting reading it for now.

    Looks good, although i don’t see how the various vested interests will be persuaded to let go?

    1. Yes, there will be vested interests that resist / slow these changes but I think they’ll eventually have to yield to the inevitable…the same way that Kings / Queens tried to cling to absolute power in the past but were forced to share it in a series of reforms over time. And our votes can maybe accelerate the process in the meantime…

  2. mrspickypincher · · Reply

    Oh wow! Thanks for putting this together. I’m American, so it was very eye-opening to learn these things about our cousins across the pond!

  3. A lot of points in this article seem to be looking to the American system of government for inspiration. That seems to be working well for them, so why not?

  4. For me, reading this reminded me of Winston Churchill’s famous quote: ““Democracy is the worst form of government, except for all the others.” Aristotle points something similar out too because democracy in the purest sense can lead to a sort of “mob rule.” Sometimes people, as a whole, don’t know what’s best for them and best for human kind, especially with the long-term perspective in mind. So things they do, to benefit them today, may not work out well for future generations for example. It’s an inherent selfishness since today’s needs may seem more urgent than the needs of people they don’t even know living hundreds of years from now.

  5. wephway · · Reply

    I agree with a lot of what you say about democracy, the balance of power and so on. But I think you need to be careful when you talk about class and social mobility. Have a look at this comic strip:

    Don’t get me wrong, you’ve clearly done well to get to where you are and should be applauded for that but don’t underestimate how much luck you needed along the way.

    There’s a great book I’d really recommend called ‘Capital in the 21st Century’ by Thomas Piketty in which he talks a lot about class and inequality and the direction of travel for society in the UK and the US. Suffice to say it doesn’t look good. Class is making a comeback and equality of opportunity (if it ever existed) is disappearing fast.

  6. The Austrian · · Reply

    Very interesting ideas. Unfortunately though, more democracy doesn’t necessarily lead to better democracy. The US is itself a political and legal basket-case, isn’t it? E.g. because their constitution is in a written, inviolable form, the ‘right to bear arms’ has resulted in an untold thousands of unnecessary deaths. And they actually have a deeply entrenched class system, probably made worse by the assumption that in a meritocracy the rich must be more talented than everyone else – leading to a billionaire weirdo like Trump in the White House. There’s also profound corruption in the form of vast subsidies for moribund industries and for agriculture, and pork-barrel politics – the naked buying of votes by federal money being spent in areas whose representatives’ votes are needed by the executive; and that has always been the case (see the film Lincoln).

    The single most important point here is number 8, return to the individual, and to individual families, of their responsibilities. The US revolution came out of a society of independent, Protestant-minded farmers, traders and craftsmen, who wanted a low-tax, low-interference State, that (like them) hated debt and lived well within its means. We are now in the UK about as removed from that environment as we are from Alpha Centauri. 40% of the electorate have just voted for an unabashed socialist who plans to expand the involvement of the State, and its tax take, to levels of the 1970s. Most people, especially the young, simply do not want more personal responsibility – they want more ‘free’ goodies. And any reduction in the planned increase of govt spending is widely considered to be savage austerity that is directly responsible for killing people.

    The reason FI is a distant dream for all but the highest earners, is that ordinary workers cannot save a meaningful amount of money as capital for themselves and their families when the State takes way more than half of most worker’s and business’s incomes (across income tax, Nat Ins, CGT, IHT, VAT, council tax, fuel duty, etc.); and despite that about £1 for every £6 the State spends is borrowed, i.e. the debt and interest will come from taxes our children will pay. Even to save up money is seen my many (most?) as immoral, because it is considered that other ‘needy’ people in society need that wealth to help them. Until that argument is won, the rest is window-dressing.

  7. Rowan Tree · · Reply

    wephway, I think you’re right. The Paula side of that comic strip describes my life, and only by extreme diligence and self denial have I achieved anything. My interest in personal finance came first from a need for survival and decent housing. Subsequently it has enabled me to retire early, but I fear I was too harsh and self denying on the way. I do wonder about the chances for the sick and disabled in our society.

    The middle class must have all moved here to the Shires and are doing very well, keeping the “wrong sort” out and keeping them down. Fortunately, I can be a social class chameleon.

    Keep up the good work, Mr Escape Artist, education and encouragement is the way.

  8. It looks like the book hasn’t dealt with one of the biggest issues with the British (and American) political system.

    i.e, the terribly unfair first-past-the-post (FPTP) voting system that is in use in both countries.

    Much fairer (though, also, more complicated) is the Single-Transferable-Vote (STV). First past the post leads directly to a two party state (like in UK and US), where most voters end up picking the party or candidate they hate the least (TEA as you pointed out recently you neither liked Theresa May or Jeremy Corybn – and I agree with you!). A vote on smaller parties/candidates is usually a waste in FPTP, and so the smaller parties wither and die.

    Single-Transferable-Vote is used in Australia and Ireland to name a few, and leads to proportional representation, and elected parliament that closely represents the wishes of the electorate.

    This is far better explained in the entertaining videos (using cute animals!)
    Problems with FPTP

    How single transferable vote is a solution:

    1. Thanks Damo. The book does touch on the question of First Past the Post vs Proportional Representation but, rightly or wrongly, Freedland comes to the conclusion that FPP would work better with more checks and balances from a stronger upper house.

      Personally, I would be happy to see some form of proportional representation if that meant more coalitions, more checks and balances and less scope for elective dictatorship.

      Just to clarify re May / Corbyn…the point I was making was that we voters shouldn’t judge (or complain about) politicians based on how attractive (or unattractive) we find them. Winston Churchill was not blessed with film star looks…and yet was arguably the best Prime Minister of the twentieth century.

  9. TEA, thank you for a really insightful post. I’m a resident of New York State (a small city of 15,500 called Gloversville about 50 miles WNW of Albany, NY, at the base of the Adirondack Mountains). I am a former city councilman – 10 years ago now – so have a moderate amount of knowledge of the topic of elections. One of the concerns I have with our system, which is rather in conflict with one of your statements, is that voting is not either mandatory or incentivized in some fashion.

    Nationally and locally, the number of people voting has dropped precipitously. Oh sure, certain elections, such as this last presidential election, can draw crowds. However, most elections get around 55% of registered voters nationally and less than 20% locally – and that’s of registered voters, not those who would be eligible to register, but don’t even bother.

    In my first election I ran unopposed for a seat on a council of a city that was $1,600,000 in the red (general fund deficit). You’d think there would be people crawling out of the woodwork to run for office to protest this travesty, if nothing else. Nope. Not only that, but when the votes were tallied, in a ward of the city (there are 6) with roughly 3000 registered voters, only 262 bothered to show up. Of those 262, only 143 voted for me.

    In subsequent elections over the last 10 years, that level of participation, especially in off-year elections, has remained steady. The danger, here, is that if you are a candidate of a certain party and know this is always happening, you can also know that you can win just by convincing about as many people as you could fit in a smallish theater to come out to vote and turn the election. Strategies become unbelievably easy for packing the council with cronies and electing whoever you want to run for mayor.

    In essence, without two key requirements added to the voting process, what you claim to experience in the UK is defacto what we are already experiencing over here. Those two requirements would be:

    1. Mandatory testing. A person should only be allowed to vote if they can demonstrate a basic level of civic awareness. Currently, anyone over the age of 18 with a pulse and not burdened with a felony conviction can vote. In order to exercise my Second Amendment rights, I had to pass a background check, take required training courses and go before a judge to make sure I didn’t show signs of being a lunatic. Why, then, would the election of people who literally hold the power of life and death – in some cases globally – not be met with the same level of serious consideration?

    2. Incentivized voting. The idea here is that to encourage more people to go through the process of becoming a voter, one should make some sort of advantage to the task to make the task more palatable. In the same way “volunteer” firefighters over here are incentivized to volunteer by being given tuition discounts for college and tax breaks (is it really a volunteer activity is one is receiving a financial benefit?), why can’t people who actually vote be allowed to check a box on their state tax form for a fraction of a percent reduction in personal income taxes (or some other scheme)?

    I agree with those who don’t want to force people to participate. However, I’m very concerned that if participation levels keep dropping we’ll have the same oligarchical problems that we tried to escape with the revolution (arguably, we’re already there). All the fancy paperwork and written Constitutions in the world are worthless if those most strongly empowered by them stay home.

    Oh, and a comment regarding replacing the House of Lords with a Senate. Try not to screw that up like we did. The Senate was originally elected out of the legislature of the individual states. The idea here was that the popularly elected House of Representatives could be tempered in their passions by the longer termed essentially appointed representatives of each state (voted on in each state legislature, not by popular vote). When the 17th Amendment passed for direct election of Senators, the state legislatures lost their voice eliminating a crucial check and balance on federal power. Since 1913, we’ve seen federal encroachment at all levels. It is a direct result of the federal government not needing to work with the states any longer.

  10. The Rhino · · Reply

    @xsubsquid – interesting stuff, incredible about the no. of votes swinging elections!

    Idea (1) sounds dangerous and burdensome from an admin point of view to me. I think it has regressive overtones.

    Idea (2) sounds good, I’ve often thought it might be nice to try and nudge people to vote. My approach would be to have all voters entered into a lottery with some chunky cash prizes. I think that would be more attractive and less admin than having every voter entitled to a small tax rebate.

    1. Since all worthwhile politics, in my opinion, is identified through the art of compromise (or, as someone once put it, it was a good negotiation when both sides left the table mildly dissatisfied), I am willing to drop item one, the stick I’d love to beat a few lazy non voters with, in favor of the carrot approach of item two.

      So now that’s settled, we have only to solve Brexit, Trump and Kim Jong Un to have peace in our time! 😃

      I’ve been reading you quietly in the background for years. You and MMM have helped considerably in framing a worldview where less can mean more without serious sacrifice. I won’t say I’ve arrived at financial escape velocity. Sadly, I started very late digging my way out of the prison camp. Still, in about five years I’ll be biking, sailing and hiking (not necessarily in that order) around the US and Europe all thanks to this amazing mind shift.

      Thank you.

      1. xsubsquid – Thank you for the comments and the kind words!…I’d just like to make clear that The Rhino and me are 2 different people 🙂 but I actually agree with his comment on your 2 points

        1. Ah! My apologies. I didn’t even notice. I’m going to fall back on the “I’ve been up all night at work so I’m frazzled” defense.

  11. Hi TEA,

    This is my first time making a comment here after reading your blog for years. I just want to say, excellent article, very well written.

    It sounds like you want the UK to be more like America. Unfortunately, I think there is a better chance that America will become more like the UK instead.

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