How to get policy right, in spite of democracy

Why do we get it wrong?

We all know the major reason, though political theorists neglect it. It is that decisions on many matters are determined by the political strategies and tactics of politicians rather than what is best for those most affected by those decisions.

In most matters the interests most strongly affected are minor interests, either the interests of a relatively small group or widely shared interests that for most of us are not matters of high priority. Good policy is what gives a fair go to all legitimate interests. Our interests change and are interconnected in very complex ways. In the long run it is best for all of us to get good solutions for the widest spectrum of interests.

That involves a lot of compromises. The best compromises are achieved by direct negotiation between those whose interests are strongly affected. If they want a genuine solution, rather than just a short-term win, they will strive to offer the other party a deal that is most attractive to them at least cost to themselves. When it works it can be very creative. Of course, it doesn't always work. In that case there must be recourse to arbitration.

In politics as it has been practiced so far in all sorts of systems, both authoritarian and democratic, the compromises that are made depend crucially on the political strategies of power-players, and only indirectly on the merits of the case. To accumulate power you trade your influence on a matter you do not care much about with another player who needs your support in return for their promise to support you on something that is important to you. If you are Obeid, you never lose an opportunity of putting somebody in your debt, maximizing your political capital. It is hardly surprising that the process so often leads to poor decisions.

Quite apart from crude corruption and the temptations of power, to get things done in politics one has to play the game, however noble your intentions. To get elected you have to succeed in convincing enough people that you can play the game better than your rivals, that what you promise is attractive and that you can and will keep your promises. (Even though we know that sometimes the problem with politicians is that they fail to keep their promises, and sometimes

that they keep them when they shouldn't).

It is not surprising that we think few politicians can meet our needs and that we tend to be sceptical about them. But we need to ask whether there is any way of getting a better decision-process

What are the alternatives?

We can never eliminate power-trading entirely. No matter how egalitarian our formal arrangements, some are going to be smarter and luckier than others, and they will use that power to get more power. The practical question is how to minimise its undesirable effects.

The classical remedy was monarchy or dictatorship. Not that the ruler was supposed to decide everything, but that he could and would intervene to override the political process whenever the common interests called for it. He could do this because he was not a player in the game. He owed nothing to anybody. That, of course, was an illusion. He always depended on his lieutenants. The monarch had his own interests, to glorify himself and perpetuate his dynasty, which were rarely in the interests of his subjects.

More fundamentally, the idea that there is some single purpose to which all other purposes must be subjected is illusory and pernicious. Bur it is very seductive. Laura Tingle in her Quarterly Essay, Great Expectations, held up as a model Magellan, inspiring and forcing his crew to persist in their single aim of circumnavigating the globe in the face of almost certain death. It is the seduction of war as the apotheosis of the nation. It is totalitarian.

A more plausible solution is to limit the power of the state to matters that affect everybody more or less equally and leave the pursuit of all other interests to the market. The great virtue of the market is that it leaves each participant free to make the best of his or her situation. Its great weakness is that very many are in the position of having nothing to trade that the market wants to buy. Since money makes money, in a free market the rich get richer and the poor get poorer. In a rapidly expanding economy, the poor may still improve their lot, but as resources get scarcer and the constraints of increasing population tighter that sort of growth tapers off and the market drives harder bargains.

Those who want to minimise the role of the state and maximise the role of the market rely on the needs of the incapacitated and the poor being met by charity and family solidarity. But the logic of market individualism undercuts such altruism. In some segments of the population crime becomes the only economically attractive option. When the state can mobilise enormous resources for war, one has to ask whether it cannot also mobilise the resources to assure a decent life to the needy. Isn't that an interest we all share?

The social democrat solution is to provide everybody with at least the minimum conditions that will enable them to compete in the market if they can and survive decently of they cannot. Sometimes that involves giving money, but principally providing some basic services in the form of public goods, equally accessible to everybody without their having to pay individually for their usage of them. Certainly there will be some freeloaders, but there are ways of minimising them.

This solution had some spectacular successes, especially in relatively homogenous communities, but it ran into difficulties. The services it provided are very labour-intensive and grew relatively more expensive than manufactured goods, putting a strain on the available resources. At the same time expected standards of education, health care and other social services continue to rise. Universal provision increasingly involved rationing. Ever more complex regulations to eliminate waste and fraud, squeezing the professionals involved and increasingly ad hoc political decisions made the system less and less attractive.

The way forward.

There are two main lines that must be developed. One is to recoup from those who can afford it the costs of the private benefits that they get from the system. That principle is already accepted, for example in the HECS scheme for tertiary graduates. Applying it is in its infancy, and it is certainly not easy. It must be extended to recognise that it is not just a matter of individuals but also of many partial communities, commercial interests, cultural activities and so on, who are specially advantaged by their use of services derived by the public sector.

We are familiar with the practice of subsidising specific industries by providing special infrastructure they need or subsidies to enable them to survive a crisis. When they go on to flourish the public purse rarely recoups its investment. We have to find ways of reversing the maxim: Socialise the losses, privatise the profits. The same applies in other areas.

The other line is to improve political decision-making. If my analysis of politics is sound, the solution is to put decisions about specific matters in the hands of those who have a substantial stake in the outcome. Wherever possible the decision-making body ought to be statistically representative of the various interests involved. Some of those interests may be antagonistic to each other, some indifferent and others harmonious. It is important to realise that each of us often has antagonistic interests in a particular matter, and that usually individuals can only resolve those conflicts from their own point of view in the light of particular proposal that have to take account of the interest of others. It not in my interest to push the solution that I would prefer if it means getting a much worse decision instead of a more acceptable one. So the same individual might score well as being representative of different interests.

Like the market, we should build up general decisions by interrelating more specific ones. A community is like an ecosystem in which the good functioning of the whole depends on the health and adaptability of its components. Where decisions in different areas need to coordinate, that calls for another level of negotiation.

Such bodies cannot be brought to life by legislation, even if legislation is necessary to legitimize them. Getting them accepted and working in practice has to be an evolutionary process working on existing institutions. There is already in Sydney the New Democracy Foundation, dedicated to promoting such initiatives, which has attracted the support of experienced politicians like Nick Greiner and Geoff Gallop. But the few attempts that have been made by politicians to introduce what I call demarchic bodies have been dismissed out of hand as simply a ploy to evade responsibility for hard decisions.

Perhaps the most promising possibility at this stage is for a political party to introduce them as a means of settling its policy decisions in specific areas of concern. Consultation in the form of surveys of what people are inclined to answer off the top of their head may tell you what they ideally would like, but not what they would choose if the looked hard and clear at the practicalities. If the ALP wants to re-establish itself as the dominant force in Australian politics, it should commit itself to policies that have been worked out not by factional power-play but by serious discussion among those most affected by those policies. It might even commit itself to introducing demarchic decision-procedures in certain specific areas when it regains power.