Public Choice Theory and Lords Reform

While preparing my partial study, Reform of the Senate of Canada: A Progressive Conservative Perspective, it struck me how amenable public choice theory is for Anglo-Canadian proponents of appointed upper chambers. This appeared to be an unexplored avenue well-worth following up, and the result is House of Lords reform: lessons from public choice theory.

Public choice — the application of economics to politics — has two main principles:

First, it argues that we are all motivated primarily by self-interest, whether in our private or public personas. An elected upper chamber, therefore, will not automatically be more selflessly devoted to the commonweal than an appointed chamber — indeed, on this point, who can fault the existing body? — and, given the incentives to solicit votes by offering electoral inducements, may be an even worse example of institutional democracy.

Second, in acknowledging the fact that markets are imperfect, public choice teaches that the answer is not necessarily to be found in the State: that ‘government failure’ is a more intractable problem than its market counterpart. Elected upper chambers, therefore, are no panacea for what ails us politically. In fact, they are probably a far worse option than the appointed chambers in the Westminster parliamentary tradition, especially for those who favour limited government and fear ever-more State intrusion into personal liberty.

(It puzzles me why libertarians disproportionately advocate for an elected upper chamber, unless, as anarcho-capitalists, they mischievously wish to undermine the political process through a ‘scorched-earth-policy’ approach, where the legislative work in both lower and upper houses grinds to a halt through deadlock.

Significant, too, is the tension between utilitarian, majoritarian democracy versus deontological questions of natural rights, to which more government will contribute and which libertarians — theoretically at least — should oppose in the name of freedom.)

I apply these public choice principles to the composition of the House of Lords, in my blog column for the British think-tank Institute of Economic Affairs. My thanks to Richard Wellings and Philip Booth for their assistance. An in-depth analysis will be published in Economic Affairs this autumn.

Click here for my full argument.

A Royal Example for Progressive Conservatism

This week, the Queen began a week-long homecoming to Canada. On the 1st of July, she and the Duke of Edinburgh will be in the nation’s capital to celebrate Dominion Day, marking 143 years since the enactment of the British North America Act and Canadian Confederation.

Yet the United Kingdom and Canada have more in common than Queen Elizabeth II and constitutional monarchy: the rule of law, parliamentary government, and inter-twined histories are just a few political realities shared by these two Commonwealth members (and countless others). Both countries are also witness to the successful exploits of One Nation Tory politics—‘progressive conservatism’—of which the Victorian prime ministers, Benjamin Disraeli and Sir John A. Macdonald, were master practitioners.

The monarch, serving in Walter Bagehot’s ‘dignified capacity’, is above the hurly-burly of partisan politics, and offers to all parties the benefit of its accumulated wisdom, signified by its prerogatives rights to be consulted, to encourage, and to warn. ‘The nation is divided into parties, but the crown is of no party.’ Nevertheless, the monarchy represents two ideals that have especial resonance for progressive conservatism: limited government and the obligatory State.

Limited government, as historians will attest, is predominantly a Whig tenet. But when the alternative on the political spectrum is the all-encompassing State, setting limits to legitimate government becomes no less a conservative principle, too. King Louis XIV is rumoured to have boasted, ‘L’état, c’est moi’, setting up visions of material and financial rapacious as the ends of absolute monarchy, though this is not necessarily the case, according to Hans-Hermann Hoppe.

Professor Hoppe is a libertarian economist (or ‘anarcho-capitalist’) and, true, if he had his druthers, there would be no State at all, but simply free people co-operating voluntarily amongst themselves. That being said, he believes that monarchical government has a valuable lesson to teach democracies: ‘if one has to choose between two evils, a monarchical state or a democratic state, then monarchies have certain advantages.’

Because everybody knew I cannot become a king, there was resistance against attempts on the part of kings to increase taxes and to increase exploitation of their subjects. Under democracy, the illusion arises that we all rule ourselves even though it should be perfectly clear, of course, that also under a democracy there exists rulers and people who are ruled. But because of the fact that everybody can potentially become a public employee, the illusion of “we rule ourselves” arises and this then leads to a reduction of the resistance that existed vis-à-vis kings when it came to the attempt of increasing tax revenue.

A king sits on the throne with only the impediments of old age to curtail the longevity of his reign; he views public lands as personal property, to be passed on to his heirs, and tends it with care and with an eye for its future prosperity. Likewise, his subjects, knowing that they will never directly partake of the royal bounty, are jealous of their own property rights. A relationship of mutual (if wary) respect is established, which is reflected in restricted policies of appropriation and aggression: an overzealous king must always fear the loss of popular support and ensuing revolution. Monarchy thus inculcates, after its own fashion, the conservative beliefs in personal freedom, property ownership, and the modest State.

In a democracy, however, the tension between rulers and ruled is weakened, since it is widely held that ‘we are the government’. The limited government that constitutes the relationship of king and people morphs into the unlimited government of citizen legislators. Elected officials, holding office for the short-term—and with no concern for the circumstances of their political successors—more readily spend for immediate public gratification (and sometimes for the benefit of their associates and hangers-on). Furthermore, according to public choice theory, these leaders are more apt to spend on initiatives that will help them get re-elected. Citizens, meanwhile, who see themselves as possible office holders themselves one day, are less jealous in defending their rights. As many public works will benefit them, and with the tax burden spread among many, democratic welfare programmes are welcomed. Funding concerns are left to another day. Bagehot, in words that predate Hoppe, believed the Crown could provide a salutary counterweight:

But a wise and great constitutional monarch attempts no such vanities. His career is not in the air; he labours in the world of sober fact; he deals with schemes which can be effected—schemes which are desirable—schemes which are worth the cost.

These are the dangers of atrophied accountability and the evils of expanded government, that centuries of royal rule and experience can teach modern democratic States—but these lessons are wholly of a negative character: a caution against democratic government encroaching upon our rights. A more positive libertarian approach to the monarchy is to emphasis our natural rights as individuals, which no authority, royal or democratic, can morally infringe. ‘Governments are instituted among Men,’ in Jefferson’s immortal Declaration, ‘deriving their just Powers from the Consent of the Governed’. This is the truest sense of equality under the law. As Seán Cronin argued in ‘A Libertarian Defence of the Monarchy’:

But the most important, if least tangible benefit of a constitutional Monarchy, is that if forces [the First Minister] to refer to himself as ‘Her Majesty’s Prime Minister’. He is Her Majesty’s servant, and not just him but all politicians. The constant reminder that there is someone set above them, that they serve someone else, must have a salutary effect on the most arrogant mind. It is true that these are only symbolic words, and real power lies with the Prime Minister—as is perfectly proper, because we exert some control at least over his excesses. But anyone who doubts the importance of symbolic words in politics is ignoring the reality of what is, in favour of what they believe should be. [...] Better for my freedom, and yours, that our Head of State be a constitutional Monarch, able to rein in politicians but not to reign politically, than the alternative.

Admittedly, the United Kingdom and Canada are both constitutional monarchies, yet each has seen exploding deficits and crippling debt accumulation—where is the royal reproach when we need it? Obviously, the virtues of limited government need additional proponents than the example set by the monarchical model. Still, the relationship between the Crown and the premier is a symbol of the limits of power—whether exercised by the Crown or its ministers—a lesson not to be forgotten by prime ministers in relation to their cabinets and backbenchers, and duplicated by governments toward the people.

This is the conservative element in royalty and politics.

The Crown also serves as a symbol of the obligatory State. What do I mean by the obligatory State? Libertarians, as exemplified by Professor Hoppe, view the State as a coercive institution, compelling people through its laws and tax policies to redistribute property from those who generate wealth to those who don’t. True concern for the least advantaged, they argue, is exemplified by voluntary charity, given freely and without force.

Under the obligatory State, however, our natural relations, arising from time immemorial—‘no man is an island’—are understood as embodying more than the voluntary associations of civil society, as valuable as they are. As members of society we have obligations that transcend the here-and-now. ‘As the ends of such a partnership cannot be maintained in many generations,’ insisted Edmund Burke, ‘it becomes a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.’

Classical liberals, for instance, make the case that it is quite legitimate to pool our resources to pay for security services (domestic and foreign) and to establish a legal system. Yet if it’s permissible to establish government services in these affairs, why not go a step further to support community initiatives, as well? Why be bound by arbitrary definitions of State action? Why not progress to a more inclusive, more organic, point of view?

The question of the degree of government support will always arise, and it is important to remain vigilant about the insidious growth of welfare statism—ever mindful to resist majority tyranny over the minority—but that is no reason to spurn using the levers of government altogether to achieve community-approved goals. Even Simon Heffer, a Gladstonian liberal, advances a template of government activity that hews fairly closely to the One Nation Tory vision:

The state’s functions, in a compassionate and ordered society, can be confined to relatively few things. It should protect the public with a police force and armed services. It should provide education and health care, while perhaps finding ways to incentivise people to use non-state provision wherever possible. It should give the support that the elderly and the disabled require to live with dignity. It should see that public hygiene and essential infrastructure are maintained; and that’s about it. This requires a revolution in our way of viewing the state’s relationship with us.

The Monarchy, in addition to its own charitable causes, patronises voluntary organisations and honours those selfless volunteers who give of their time and skills for the public welfare. And as Head of State, the Crown sanctions those government activities that aim to help the young, the aged, and the disadvantaged. These are obligations we owe to each other as inter-dependent citizens, obligations that are beyond the finite abilities or comprehension of civil society—obligations that are as ageless as civil society itself—which, as the overseers of government, we direct our elected representatives to undertake on our behalf.

This is the progressive element in royalty and politics.

In British political history, the monarchy has deep and long-lasting roots—a tradition that spread throughout the Commonwealth and is nowhere more evident than in Canada. The Tory tradition, too, is strong in both countries. Together, the Crown and Conservatism stand for government limited to its proper sphere, in service to the people who are its governors; at the same time, the monarch and the Conservative party are proof that government has a legitimate role in offering progressive legislation that aids and embodies society’s aspirations for the Common Good.

Our Queen’s presence in Canada to celebrate Dominion Day is an opportunity to remember our continuing blessing under the Crown and our glorious progressive conservative legacy.

Vivent la reine et le pays du Canada!

Happy Dominion Day!

A Libertarian Defence of the Appointed Red Chamber

While conservative in my politics, I don’t consider myself a libertarian—being rather more in tune with the Tory values that exemplify the career of Canada’s first prime minister, Sir John A. Macdonald. Yet when thinking a bit about the fate of the Senate of Canada, and particularly about its method of composition, I begin to see the outline of a libertarian defence for appointing senators.

Recent weeks have been spent reading a number of seminal tracts in the libertarian tradition (a theme to which I shall return in future), and I can report with some confidence that it is divided into two main camps: moderates who adhere to what are commonly called classical liberal beliefs or minarchy (sometimes taken to be synonymous with modern conservatism) and those who are rather more radical in their principles, the philosophical anarchists (or ‘anarcho-capitalists’).

The first, while not exactly boosters for the status quo, will admit grudgingly that the State does have its uses. It adjudicates contracts between contesting parties and upholds security of person and property: by applying law and order for domestic disputes, and supplying the armed services against foreign invasion. Ideally, then, for this branch of libertarianism was coined the belief that ‘government is best which governs least’.

The second band of libertarians, no doubt, considers the first group soft. No form of government is acceptable to them. Social action is based upon voluntary agreements entered into freely. All transactions, therefore, take the form of simple market processes, ergo the ‘capitalist’ label. Anything not openly agreed to—and thence with no means of ‘opting-out’—is coercive and an affront to fundamental natural law and human rights.

But what has this to do, you ask, with the benefits of an appointed Red Chamber?

In the general outlines of libertarian thought—basically a paean to limited government—is where the genius of our existing Senate lies.

Surely I am raising a provocative paradox; wouldn’t a philosophy of freedom advocate for democratic senatorial representation, unfiltered through the prism of responsible government?

Yet, if your objective is less government, then your goal is not an elected Senate.

If your objective is less self-important legislators, less legislative gridlock, and less regulatory intrusion—all with the potential of inhibiting personal liberty—your goal is not to encourage their expansion. Your goal, as a libertarian, is to maintain what is by comparison a lesser obstacle to freedom.

Consider this an axiomatic warning: as surely as night follows day, a senator elected by popular will, with the wind in his sails and newfound electoral legitimacy conferred upon him, will feel duty-bound to live up to expectations to be as energetic and industrious as his colleagues in the House of Commons.

He will be constrained, by articles in the BNA Act, from introducing money bills in the Upper House, but that is the only constitutional restraint by which he will be bound.

By former convention the Senate was to act as a chamber of sober second thought, an evolutionary development because, lacking in directly democratic bona fides, the Senate was considered at best a complementary chamber in league with the confidence chamber that was the House of Commons. No more.

However, with a ballot-box mandate, the Senate will enjoy the full sanction of Canadian voters—more so, in fact, since the provinces have no greater number of senators than MPs; for instance, the present distribution of seats means that the twenty-four senators representing Ontario will wield a larger population-base, and greater clout, than the province’s 106 MPs.

At last, the Senate will become the equivalent in power of its nineteenth-century model, the House of Lords; this Canadian institution will fulfil, in word and deed, the dream of the Fathers of Confederation for ‘a Constitution similar in Principle to that of the United Kingdom.’

Ask David Lloyd George, though, how his People’s Budget fared in 1909 and 1910, as successive bills were voted down by the peers. The Parliament Act of 1911 is the answer. The powers of the obstructionist House of Lords were severely curtailed. And the Liberal government had it easy; its antagonists were hereditary in nature, not democratic.

The alternative to Senate reform favoured by some of the opposition parties is abolition. Certainly, from the anarcho-capitalist standpoint—that is, the ideal libertarian response to any form of meddling government—get rid of the irritant altogether. But does this make for less, more effective government, or an overall worse situation?

Who will scrutinise and improve legislation in a unicameral Parliament, when the Commons hasn’t the time to revise it now? How many, in the lower chamber of competing interests and egos, exemplify the experience and non-partisanship of the upper chamber?

Bad apples reside in both places, I know. But that is as much an argument against turning the Senate into a carbon-copy of the Commons as a whole-cloth condemnation of an institution that has counselled Parliament—and Canadians—well since 1867.

Faced by these prospects, the moderate libertarian answer is clear: If we must have governing institutions, then let them be the best institutions that we can have, undertaking the people’s business with a minimum of fuss and bother, both to themselves and the populace they serve.

Let us scorn an elected Senate as the self-aggrandising monstrosity of our nightmares and preserve our modest appointed Red Chamber.

This is one libertarian position to which even Sir John A. could raise a glass.

See Advocacy for Appointed Upper Chambers (pdf file) for more information.