The Phoney War in NZ politics

In my last post I wrote about how MMP is the world's worst electoral system, but I have to concede that it has one positive attribute (which NotPC points out in this post on Winston Peters) that following every election there is a period of no-government (well, strictly speaking, 'caretaker' government) while the political parties jostle and negotiate to form a coalition. During this political equivalent of the Phoney War, the Wellington political establishment is in a stalemate and no decisions are made on anything of consequence, and that is a very good thing.

The New Zealand Parliament at any time has five hundred pieces of legislation in the pipeline from conception to royal assent. It is a relentless sausage machine that spits out laws that affect all of our lives, often in significant and negative ways. The sheer volume of legislation going through the machine at any time defies belief and no one could seriously argue that all five hundred bills currently in the works are critically important to the functioning of our society. Anything that slows down such a relentless machine cannot be a bad thing.

We need to constrain the ability of our governments to pass legislation. New Zealand has no upper house (having abolished it in 1951) or other constitutional checks on the ability of the House of Representatives to make laws. I have written before about how I like the Texas approach, where the legislature meets for no more than 90 days every two years, which means it simply doesn't have the time to pass too much legislation and has to be very selective in which laws it passes. This is surely one of the reasons Texas has been one of the few success stories in a moribund American economy in recent years.

I hope the coalition negotiations surpass in length those after the 1996 election, which took more than two months. In fact, if those involved could draw out the negotiations for about three years, the country would be much better for it.

The World's Dumbest Electoral System

New Zealand has the world's dumbest electoral system. Saying such a thing in this country provokes the same reaction as when you say, "the world is not suffering catastrophic global warming", but sometimes one must speak truth to power. There is a reason why only one country in the world had the system before New Zealand adopted it and that country (Germany) has special historical reasons for having a system that ensures no single political party can ever govern alone.

Under our Mixed Member Proportional (MMP) system, you get two votes - the first determines who becomes your local electorate member of parliament, the second is for the party you prefer. The complication comes from the fact that it is the party vote alone that determines the make-up of parliament, which means the electorate vote counts for nothing in terms of legislative power. In effect, winning electorate seats costs a party list seats. A party can get into parliament if they get at least 5% of the party vote even if they have no electorate seats, or if a party gets at least one electorate seats, it's party vote counts as well even if it gets less than 5% support. Confused? Well, you are not alone - by some estimates, 80% of New Zealand voters do not understand how the system works.

The complexity of the system produces some weird effects. Consider the following two scenarios. 

In the first scenario, a centre-left government comprising Labour, New Zealand First and Greens is the most likely outcome because even though National has far more seats than Labour, the latter will be able to form a coalition with fellow opposition parties the Greens and New Zealand First (note that for the sake of simplicity I have ignored smaller parties and the impact of the race-based Maori electorates, which further complicate the picture).

The second scenario is almost exactly the same as the first except that the Greens get 0.1% fewer votes. This means they would be wiped out because they did not reach the magic 5% threshold to get party list seats in parliament (assuming, as is likely the case, they do not win any electorate seats). National would have an overall majority of seats and be able to form a government. So, 0.1% of the votes can completely change the outcome and make the difference between significant representation in parliament for a minor party or none at all. 

The libertarian ACT Party, which is polling at 0.3% in the latest poll, will likely have at least one seat in the next parliament because they will win the Epsom electorate, whereas the Green Party, which is hovering around 5%, may get none. As a libertarian, that is an outcome I would like to see but it is hardly fair.

The system could be easily fixed by separating the effects of the two types of vote. The party vote should determine only the proportion of the party list seats rather than the overall make-up of parliament. In other words, winning an electorate seat wouldn't cost you a party list seat. I believe this is exactly how most New Zealanders imagine MMP works, so it would be aligning the system with expectations. Under this proposal, the 5% threshold could be abolished - or at least lowered to level needed to get one party list seat - and this would eliminate the bizarre effects outlined in the second scenario above.

It is time for a change in our electoral system.

Capitalism is about trust

I was listening to Canadian psychologist Jordan Peterson's podcast the other day and he touched on a subject I found really interesting - the importance of trust networks in business transactions. He was talking about eBay (and it is equally true of New Zealand's equivalent, TradeMe) which, when it started out, had third party agents who would guarantee delivery of the goods people had purchased and payment to the seller. Very quickly those agents became redundant for the simple reason that the vast majority of people trading on the site were honest, often scrupulously so. This has been my personal experience - in fact, I have never had a trade in which I wasn't largely satisfied with the result.

eBay works on reputation, which it has formalised in its feedback ratings, but even without a track record of good ratings, the buyers and sellers tend to deal with each other with honesty and trust. I am not sure why people would be surprised by this as it is the common experience of most people in business. Even in the second decade of the 21st Century, many business deals are still sealed with nothing more than a handshake or, at most, emails of offer and acceptance, and in the vast majority of cases there is never a dispute that can't be resolved with a telephone call. I have had my own consulting business for about twenty years and incredibly I have never not been paid for services delivered (although sometimes I have needed to chase payment) and I have never had a dispute over the quality of the services I have delivered. I accept that the nature of my business is one that is especially dependent on personal relationships but I am sure most businesspeople, at least in civilised Western nations, could cite similar experience.

The popular impression of those not in business is that capitalism is dog-eat-dog and everyone is out to rip off everyone else. In my experience this couldn't be further from the truth. Businesspeople are generally incredibly ethical. This shouldn't be a surprise because capitalism by definition is all about voluntary relationships between people and no one wants to engage with another person they do not trust, particularly when there is a financial cost. A free market very quickly exposes fraudulent, shoddy and inadequate products and services, particularly in these days of social media and rating websites like Yelp. A restaurant that gives its customers poor service or a roofer who leaves a home owner with a leaky roof is likely to be exposed online very quickly. On the flip side, good quality products and services are extolled to the world.

The exception is in markets where there is a government imposed monopoly or cartel. Obvious examples of this are the airline industry and health sector, which are so regulated and controlled that you could hardly call them free markets. We endure appalling service in both industries, largely without complaint because complaining would be futile. The other sector where poor service is uncomplainingly accepted is government itself. We often put up with appalling treatment by government agencies and accept that we have no alternative or even the right not to use the services offered.

Government also undermines the trust we see in free markets indirectly through welfare and income redistribution policies. When you get something for nothing through state welfare, you don't need those trust networks that business people rely on. The idea of a fair exchange is corrupted because the state promotes a sense of entitlement - that poor people have a natural right to the earnings of taxpayers - which undermines the integrity of people on both sides of the transfer. There is not even the sense of generosity and gratitude that results from acts of charity. Welfare debases human relationships, which is, I think, the reason why crimes like child abuse are so high amongst welfare dependents, even compared with working people with the same income (see for example this report [PDF]).

Capitalism, perhaps ironically in view of many, brings out the best of human nature.

Campaign finance laws are a subversion of democracy

I watched with interest last week as Gareth Morgan's The Opportunities Party took Television New Zealand to court seeking to overturn the network's decision not to invite Morgan to the televised election debate between the leaders of New Zealand's minor parties. I have nothing but contempt for Morgan because of his naive support for the evil North Korean regime (as Liberty Scott blogged about here) and his ill-informed comments on a range of other subjects such as Israel and terrorism. He has what is perhaps the stupidest policy ever to come out of a New Zealand political party, that of taxing non-income earning assets based on a nominal rate of return, which would mean income-poor people such as the elderly would have to sell their homes.

The fact that Morgan is a fool does not mean he shouldn't have the same opportunities to promote his stupid policies as the other political parties, and this raises the issue of the legal constraints on political funding in this country and in much of the Western world. You can be as dumb as Gareth Morgan and still appreciate that the existing major political parties have a vested interest in keeping small parties from promoting their policies. Incumbent governments, particularly those of a left-wing bent (who believe, perhaps falsely, that they are less likely to attract wealthy benefactors), restrict challengers' access to state and private media and impose campaign funding restrictions that benefit themselves.

In New Zealand we have laws limiting and requiring disclosure of campaign contributions, although the authorities here have been reluctant to prosecute breaches, as for example when the incumbent government broke the law in the 2005 Labour Party 'pledge card' case. We also have state funding for campaign advertising on television and other media and this is allocated on the basis of support for the parties at previous elections, which significantly handicaps any new or emergent party. These laws are made worse by the discriminatory treatment of smaller political parties by media organisations such as Television New Zealand (which, incidentally, is state-owned).

The campaign finance laws in America are particularly onerous, as exemplified by the jailing in 2014 of conservative commentator Dinesh D'Souza for making an undeclared political donation, and the US Government's attempts to stop organisations contributing to political debate, which was thwarted by Supreme Court in the Citizens United case. The court decided in that case that campaign contributions are a form of political speech and organisations have the same right to free speech enshrined in the First Amendment as individuals. The American television networks also treat smaller parties with disdain, which was particularly evident in the US Presidential campaigns with the discriminatory treatment of the Libertarian Party's Gary Johnson and Green Party's Jill Stein.

The argument in favour of political funding laws is that they even out the playing field because otherwise a few rich people could heavily influence an election by buying up huge amounts of advertising in the mainstream media. I think this overvalues the role of the mainstream media in elections, particularly in this day when one Youtube commentator can have more viewers than a television network, and it is patronising of voters, who are far less influenced by media campaigns than people think (witness the fact that Donald Trump won the presidency with a fraction of the television advertising spend of Hillary Clinton).

I think the United States Supreme Court got it right for once - political donations are a form of speech and any impingement of them is a restriction on free speech and on freedom of association. I don't think the state should be limiting or contributing to political promotion and that current campaign finance laws are a subversion of democracy and individual rights. Furthermore, I don't believe anyone should have to publicly disclose political donations because this is a breach of the right to privacy. We have the right to vote in secret and this should extend to the contributions to those for whom we may vote.

When security trumps freedom

Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety ~ Benjamin Franklin

Many people find the idea of unfettered capitalism scary. Modern 'liberals', who support a high level of freedom in political, social and religious spheres, baulk at the idea of economic freedom on the basis that it fosters inequality. This is something that perplexes libertarians who believe that there is no such thing as freedom without economic freedom, and that if you are not free to choose how you make your living, what you consume and with whom you trade, you cannot be free in other areas of your life.

There are two reasons people do not want freedom in economic matters. The first is that they want others to take care of them. This is a natural tendency of human beings - after all, we spend the first decade or two of our lives being taken care by our parents and many find it a challenge crossing that threshold where they have to take responsibility for their own welfare. The modern welfare state makes it very easy for people to opt out of adulthood. We provide state-subsidised education to people well into their twenties and it is possible to live adequately on welfare benefits for the whole of one's life.

The second reason why people do not want freedom in economic matters is simple envy. People would rather not be free if it means someone will have more wealth than them. This is the malevolent and misanthropic motivation for socialism and the reason left-wingers tend to support higher taxes even when they are not necessary for fiscal reasons. They would rather everyone is worse off than allow a few to be better off than others. It is consistent with the Marxian worldview that sees human existence as a zero-sum game - that if I have more than you, I must have taken some of your share of the fixed pool of wealth.This is demonstrably a nonsense because if it were so, wealth per capita would never increase (as it has done exponentially for the last couple of centuries).

Whichever of these two motivations apply, the results are the same - a willingness to compromise freedom in the name of economic equality even if makes everyone worse off. This is what we are now seeing in Western societies - freedom is being abrogated in all spheres, including traditional touchstones such as freedom of speech and political association. Governments do not, and cannot, distinguish between the economic and social spheres when it comes to applying their authority, which is why socialism inexorably leads to dictatorship, the most recent example being Venezuela today. The left-wing ideal of political, social and religious freedom combined with high levels of economic control, is a case of wanting one's cake and eating it too.

Totalitarian instinct alive and well in New Zealand

Last weekend the New Zealand Deputy Prime Minister made some extraordinary comments at a press conference in announcing the ruling National Party's election policy on drugs. Paula Bennett, announcing a crackdown on criminal gangs manufacturing and dealing in illegal narcotics, said that the National Government, if re-elected, would give police the power to search the cars and houses of the most serious criminal gang members at any time, at the police's discretion. Bennett acknowledged that this would breach the human rights of the individuals concerned but justified the measure on the grounds that serious criminals "have fewer human rights than others". Prime Minister Bill English said he agreed with the proposal stating, "it's good that we don't have a written constitution it's enabled the country to deal with all sorts of issues in a practical effective way."

It is clear from these comments that neither English or Bennett understand the concept of human rights. They would do well to read Article 1 of the Universal Declaration of Human Rights, which says, "All human beings are born free and equal in dignity and rights." If they don't like that authority they could go to an older source, the United States Declaration of Independence, which states, "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights." Any other authoritative source says the same thing - rights are inherent, universal and equal in effect for all human beings. They are not entitlements to be granted or removed by governments at their discretion.

English and Bennett also fail to understand the purpose of a constitution, which is to constrain the government. Constitutions exist, often representing a long history of noble rebellion, because of the totalitarian instinct of all governments, just the sort of totalitarian instinct English and Bennett are now showing. The fact that New Zealand, like Britain, has a constitution based on inheritance and common law rather than a single written document, does not justify disregarding the rights it protects. The documents our constitution is based on, such as the Magna Carta Libertatum (Great Charter of Liberties - to give it its full and more appropriate name) and the English Bill of Rights, make it clear that all New Zealanders are entitled to due process under the law - exactly what Bennett and English seem only too ready to deny some of their citizens.

In my last post I wrote that despite this government's track record of enacting legislation that reduced the rights and freedoms of New Zealanders, I thought they were still the least bad choice in this month's election. I realise now that I was completely wrong. English and Bennett have shown their true colours and any government of which they are a part represents a serious threat to the freedom and democracy in this country. English has since tried to back-peddle on Bennett's comments about human rights, but this wasn't a mere mistake of language - the intent and rationale of what both of them said was clear and they were probably the most chilling words I have ever heard from New Zealand politicians.