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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