Rational debates and historical processes

Socrates was one of the great Greek philosophers. He lived around 400 BC. He is seen as the founder of the practise of rational debates. A rational debate is a discussion between two or more people holding different views who wish to establish the truth with the use of reasoned arguments. Socrates saw truth as the highest value and he thought that it could be found through reason and logic in discussions. Many people believe that rational debate is the best way to decide about which course of action needs to be taken. Many people also believe that they are right, so that a rational debate will prove them right. That’s why it isn’t easy to have rational debates.

In his famous dialogues Socrates acted as if he was ignorant. If you are willing to concede that you are ignorant then you may be willing to learn. Socrates was willing to teach this willingness to learn. Willingness to learn is the key to progress. The Scientific Revolution took off after European scientists came to accept their ignorance. This happened after European sailors discovered America, a continent they didn’t know of. European scientists started to ask themselves what more they didn’t know of. And so they began to investigate anything they could think of. After 500 years science has completely altered the way we live.

hegel
Georg Wilhelm Friedrich Hegel

Georg Wilhelm Friedrich Hegel came up with a scheme for arguments. He also applied it on the course of history. Hegel lived around the year 1800. He believed in progress like most European scientists at the time. His idea was that resolving a conflict of opposing sides can lead to progress in rational debates, but also in history in general. In most cases both parties in a debate or a conflict have valid arguments. Hegel thought that an argument develops in three stages. First, someone will come up with a proposition. Then someone else will bring in an opposing idea. If both have valid arguments, are willing to listen to each other, and understand each other’s arguments, then a rational debate between them can lead to a better understanding of the situation. This can become a proposition in a new argument.

An example can illustrate this. Suppose that Adam Smith and Karl Marx meet in a conference hall. Smith argues that capitalism and free markets are great because they create a lot of wealth while goods are distributed efficiently. Marx then says that the living conditions for workers are miserable and that goods are distributed unfairly. He then says that workers should take control over the factories. Smith would then object by saying that workers will turn out to be poor entrepreneurs. If both are willing to consider each other’s ideas, they might agree that capitalism is a great way of creating wealth, but that there should be minimum wages, unemployment benefits, laws protecting workers, and state pensions. After they agree a third person might enter the debate and say that unemployment benefits are expensive and can make workers lazy. This could be the beginning of a new debate. The outcome may be term limits to benefits and bureaucrats overseeing the use of these benefits.

But this is not how history progresses in reality. Issues are often resolved in a historical process that involves conflict. In many cases people do not listen to each others arguments nor is it easy to foresee the consequences of many choices. And it is also not obvious that resolving an historical conflict would lead to progress. Karl Marx believed that Hegelian dialectic would prove him right like many people believe that rational discussion will prove them right. Marx used Hegel’s ideas to promote class struggle. Marxism promoted social conflict as the way of resolving issues. And so communists tried to take over countries with military force or agitation. In developing countries communist insurgencies sometimes were mixed up with a struggle for national liberation. To Marxists, Hegelian dialectic became a tool in the war on capitalism, and later on, to liberate marginalised groups from social injustice by political means.

In the nineteenth century workers didn’t appear to benefit from the capitalist system. It was hard to figure out how socialism would work out in practise so it may have been necessary to try it out. A country called the Soviet Union tried socialism for seven decades. If you look for the Soviet Union on a map, you probably will not find it. That isn’t because it is such a small country but because it doesn’t exist any more. The Soviet Union was dismantled because its leadership realised that the socialist economy performed poorly. With the benefit of hindsight the flaws of socialism are obvious, but if it hadn’t been tried out, many people may still believe that it is a good idea. Nevertheless socialism may work well in specific situations. For instance, health care in socialist Cuba is cheap and effective compared to the United States. Life expectancy in the United States and Cuba is nearly the same. But perhaps Cubans are healthier than people in the United States because they can’t afford fast food.

Marx had valid concerns regarding the plight of workers. These were resolved in a peaceful historical process and led to the introduction of labour regulations, minimum wages and pensions in the democratic societies of Western Europe. This process took many years. As a consequence the economies of these societies came to have a mixture of capitalist and socialist features. A rational debate could develop in these societies because there was freedom of expression. The Soviet Union was a dictatorship so there wasn’t much of a rational discussion going on there. Progress in history often requires experimenting. At first there was capitalism but conditions for workers were poor. And so pure socialism was tried out but the results were poor. In the meantime many societies found a middle way that was believed to be a combination of the best elements of both ideas. This is progress in history the way Hegel might have liked it.

Ideologies like socialism and capitalism are models of society that describe how society can be organised. Models are simplifications or abstractions but they can be useful. Models can help us to organise our thoughts so that we can figure out which ideas are useful and under what circumstances. People who adhere to a specific ideology tend to be poor problem solvers. There is a saying for that: “If your only tool is a hammer then every problem looks like a nail.”

popper
Karl Popper

Science works in a similar fashion. A philosopher named Karl Popper came up with a scheme for scientific progress. He believed that scientific progress is achieved by theories replacing each other. Scientists in a specific field often work with theories. You may not be surprised to learn about that. So let’s call one of those theories the Old Theory. The Old Theory works fine in most situations but sometimes it doesn’t. Most scientists at first ignore the glitches like weird readings on their instruments because the Old Theory has proven to be very useful. They may convince themselves that the unexplained measurements were caused by faulty instruments. As more and more experiments indicate that there’s something wrong with the Old Theory, some scientists start to question it.

Then one of them then comes up with a revolutionary New Theory that explains a lot more than the previous Old Theory, including the unexplained readings on the instruments. At first most scientists have their doubts because the New Theory is so revolutionary. They feel that only a crazy person could think of it. But as experiments confirm the New Theory, and because the New Theory explains a lot of things the Old Theory couldn’t, scientists embrace it and the Old Theory gets abandoned. In this case there is also an argument going on between two sides, but the New Theory is superior to the Old Theory. In social sciences and economics both schemes occur. There is progress in theories but also a debate between different approaches that might be resolved in a Hegelian fashion.

An example might explain the thoughts of Popper. Around 1680 the mathematician Isaac Newton worked out a few laws that explain the motion of objects. Newton’s laws tell us that objects fall to ground and don’t float in the sky. It may seem rather pointless to make laws telling us that but his laws have other applications too. For instance, they can explain how the Earth orbits around the Sun. Newton presented his laws in a few nice mathematical formulas so that it became possible to calculate how long it would take before a stone hits the ground if you drop it from the top of the Eiffel Tower. And that’s really cool.

Over the years scientists developed more precise instruments. After a few centuries they found some measurements they couldn’t explain. These were only small deviations from the values you could calculate with the use of Newton’s formulas so scientists didn’t worry much at first. But a physicist named Albert Einstein took these glitches seriously and he developed a theory that explained the curious readings on the instruments but also the motion of objects, so that this new theory explained more. Scientists were sceptical at first and Einstein was a weirdo, but when experiments confirmed his theory, they finally embraced it.

A reasoned debate seems the best way of figuring out what to do. And sometimes you need experiments to check whether or not some assumption or theory is correct. Trying out socialism in the Soviet Union was an experiment that killed millions of people. For instance, there were famines in the 1930s in the Ukraine. Hence, we should be very careful as to what kinds of social experiments we engage in. Yet, we shouldn’t forget that millions of people died of capitalism too, simply because capitalists didn’t profit from letting these people live.

In theory reasoned debates are more common in science than in politics but scientists need research budgets that are provided by businesses and governments. The things scientists investigate are often determined by governments and businesses and the outcomes of scientific research can be influenced by the interests of those who fund the research. And so the results of research projects are not always what you might expect from a reasoned and unbiased investigation. For instance, in the United States there are several think tanks that do all kinds of political and economic research. The research of liberal think tanks tends to support liberal views while the research of conservative think tanks tends to support conservative views, and that might not surprise you.

Even when actions taken are based on the outcome of rational debates, this often leads to new issues that have to be resolved in subsequent debates. People may think about what these new issues might be and what the solutions for these issues could be. Yet the issues that arise are often difficult to foresee, and it is even harder to think of how they will be resolved. Marx thought he could predict the future. Using the scheme of Hegel, he thought he could predict how history would play out. Many people make the same mistake. They think they somehow know what will happen in the future.

Marx believed in progress like Hegel did. And many people still do believe that there is progress. Yet this is not so obvious. There should be some point to the general direction of history otherwise you can’t call it progress. To put it all into perspective, you can ask yourself: “Are we happier now than our parents were fifty years ago?”

Even if that is not true, it doesn’t contradict the case for using rational debates to resolve social issues. In such a debate any argument can be made. That can be frustrating because there are many stupid ideas. Sadly, it is not always obvious which ideas are stupid and which are not. And then there are several techniques to frustrate debates used in situations of conflict between opposing sides. Progress is more likely to happen if the debate is open and honest. For a rational debate to flourish, all parties involved must feel free to speak. Absence of violence and absence of the threat of violence are basic preconditions for such a debate to take place.

There’s something that should make us cautious. Technology is progressing and it is about to completely alter human existence. Humans may be about transform themselves into a new kind of beings who live for thousands of years and entertain themselves in their own virtual realities in which they can do as they please. If this technology becomes cheap then everyone may be able to enjoy it. Politics as well as economics may become meaningless as a consequence. For the time being it can be worthwhile to aim for social progress using rational debates. It can mean a huge difference as to how we may enter this new period.

100 Brazilian real

Currency

Self determination

A currency is the money that is in use within a nation. US dollars, Chinese renminbi, Korean won and Brazilian real are all currency. A national currency promotes national self-determination. It allows a nation to pursue its own economic policies, although the options are limited by market forces.

Local or regional currencies can supplement national currencies, most notably when communities or regions are closely integrated and want to achieve some economic independence. A supranational currency like the euro reduces national economic independence. The issue of self-determination makes currency a political subject.

Reserve currency

Reserve currencies facilitate international trade. In the past decades the US dollar was the reserve currency. This arrangement allowed the United States to enjoy a higher living standard and military paid for by foreign nations.

On the other hand foreign nations had a competitive advantage. This harmed US businesses. By buying US Dollars foreign competitors of the United States were able to suppress the exchange rate of their currency and sell their products cheaper.

Furthermore, the reserve status of the US Dollar made the FED responsible for the international banking system. The FED had to rescue foreign banks during the financial crisis of 2008 so that the US taxpayer backed up foreign banks.

International Currency Unit

It may be better that the international reserve currency is not a national currency. The future International Currency Unit can be a weighed average of national currencies. It may require an international central bank to guarantee stability in the international financial system. As long as central banks make political decisions, an international central bank would be a troublesome construct.

Only when central banks do not set interest rates and do not print currency, it might be feasible to introduce an international central bank. This might be possible when the International Currency Unit is a Natural Money currency. The underlying currencies may need to be Natural Money currencies too. With Natural Money interest rates are not set by central banks so the role of central banks is reduced.

50 euro
50 euro

The euro

The euro is a unique experiment. The nations of the euro zone are sovereign but have given up their national currencies. This produced political and economic tensions. Countries in Northern Europe feel that they have to pay for the debts of Southern Europe while countries in Southern Europe feel they are faced with austerity dictated by Northern Europe. The available options appear making the eurozone a federation like the United States or reverting to national currencies.

Returning to national currencies doesn’t have to end the euro. National currencies can be introduced alongside the euro. Alternatively, the euro can become a weighted average of the national currencies making up the euro zone. Existing balances in euro will remain in euro. In the latter case the future euro would look like the proposed International Currency Unit. It could be a step towards introducing an international currency and an international central bank.

Cryptocurrencies

Cryptocurrencies are debt-free and do not need a central bank. They promise an alternative payment system independent from governments and banks as well as an alternative way to issue stock. Proponents of private currencies believe that private currencies like cryptocurrencies can supplement or even replace existing currencies issued by governments and central banks.

Currency is important for political self-determination so governments have usurped the prerogative to issue currencies. Private currencies can undermine the power of governments. Cryptocurrencies also facilitate crime, scams and tax evasion, so they their use is likely to become regulated or even banned in the future. Governments may also start to issue cryptocurrencies themselves.

Until now cryptocurrencies have not been stable. Payments are cumbersome and prone to fraud. Regular currencies don’t have these disadvantages. Cryptocurrencies without a holding tax don’t allow for negative interest rates. As negative interest rates may be needed to ensure a stable economy without crises, these currencies may not be suitable as a means of payment.

The assembly of the canton Glarus

Swiss democracy

In the interest of the people

For a society to function, it needs a kind of order only a government can provide. Over time more and more people came to believe that a government should work in the interest of its citizens. That is quite a leap as traditionally governments were a kind of crime syndicate providing a protection racket. Citizens paid taxes to a lord or a king who provided them with security against other other lords, kings and ordinary criminals.

Even today many governments more or less resemble crime syndicates. They are oligarchies working in the interest of those in power. Government officials often take bribes too. Except for Northwest Europe, Switzerland, Canada and New Zealand, governments range from a bit corrupt to very corrupt. Even when the government isn’t corrupt, citizens often feel that it doesn’t work in their interest.

country-corruption-map
corruption per country (flaxen = most clean, crimson = most corrupt)

The above graph from Transparency International gives an indication of the corruption in each country. Poverty is seen as a cause of corruption but corruption is also a cause of poverty. If a country suffers from corruption, money is diverted to unproductive people. Investors will be wary of making investments so interest rates need to be higher to attract capital. This makes fewer investments profitable and the country will be poorer.

Main features

The Swiss have the most trust in their government.1 Probably that is because of some of the unique features of Swiss democracy. The Swiss combine representative democracy with direct democracy. The government and parliament administrate the country but if citizens feel the need to take matters in their own hand, this is always possible.

Switzerland uses direct democracy in the form of referendums more than any other country in the world. These referendums are binding, which means that the government must respect the outcome.2 The following types of referendums exist in Switzerland:

  • mandatory referendums on changes in the federal constitution
  • optional referendums on other federal laws that will be held when 50,000 eligible voters demand for it
  • similar rules exist on the state and communal levels, but the constitutions of the states deal with the specifics
  • citizens can propose a change in the constitution via a popular initiative, and the electorate can decide whether to accept the initiative, an alternative proposal from the government or parliament, or to keep things unchanged

Switzerland is a federation of 26 member states called cantons. The member states have a large degree of independence.

The Swiss constitution promotes making decisions at the lowest possible level and delegating power to a higher level if that is deemed beneficial.

The citizens of the Swiss states elect the Council of States (Senate) by majority vote. They can cast as many votes as there are vacant seats. Voters can propose representatives and influence the fractions of different political parties.

The Swiss elect their National Council (Congress) every four years by proportional representation. The people vote for a political party. Optionally they can vote for a specific person on the candidate list of the party.

Executive power has been distributed in Switzerland. The daily affairs of government are performed by the Federal Council consisting of seven members.

It is customary that all major political parties are represented in the Federal Council.

Constitutional changes need a double majority, which means that majority of the electorate as well as a majority of the cantons must support it.

Most Swiss communities use direct democracy to make decisions. In a few small cantons people can vote directly by the show of hands.

Evaluation

Combining representative democracy with direct democracy means that the citizens aren’t burdened with the daily affairs of government but still are in full control as they can vote on any issue when they feel that is needed.

Direct democracy allows for a more fine-grained alignment of government decisions with the wishes of the citizenry as on some issues the majority might be liberal and on some others it might be conservative.

Before laws are introduced, interest groups such as state governments, political parties and non-governmental organisations are consulted, and their concerns are taken into account. As referendums tend to come down to yes or no questions, this is important.

Proportional representation allows for multiple political parties that more closely match the preference of voters. New parties can emerge more easily. It also means that small shifts in voter preferences tend to have little effect on the political landscape.

Swiss voters can influence the make up of the political fractions of multiple political parties, which means that the people who are elected in parliament for a specific party are more likely to be acceptable to voters of other parties as well.

All major political parties work together in the Federal Council because there is little room to forward political agendas as citizens can always call for a referendum.

The use of direct democracy in Switzerland makes it less relevant who is in government so that political discussions tend to focus on issues and content rather than people and rhetoric. The Swiss tend to be well-informed about the issues that are at stake.

Proportional representation as opposed to win or lose elections foster cooperation between political parties as individual political parties mostly don’t have a majority so that they need to work with other parties to achieve their goals.

Proportional representation reduces the need to spend large amounts of money on political campaigns and other manipulations like gerrymandering, voter fraud and vote suppression as the effects of these actions tend to be limited.

Many countries have strict limits to political donations and campaign spending. Switzerland does not have these restrictions. This is not as harmful as it might be without proportional representation and referendums.

Direct democracy undermines the effects of lobbying for a law doesn’t pass if it is not supported by a majority of the voters. And so interest groups need to convince the citizenry rather than politicians in order to achieve their objectives.

In Switzerland the Congress represents the nation as a whole while the Senate represents the states. Hence, a decision needs the consent of a majority of the parliament of the nation as well as a majority of the cantons.

Most countries have a Congress and a Senate but many are unitary states and not federations like Switzerland. In unitary states the role of a Senate varies. For example, it can focus on protecting the constitution against laws that violate it.

Switzerland doesn’t have a Constitutional Court or Senate to protect the Constitution. There is no good safeguard of human rights. The majority can vote for stripping the rights of minorities. Switzerland is bound to the treaties it signed but better safeguards to protect human rights could be an improvement.

Conclusion

The Swiss are satisfied with their political system. And even though it has a few weak points, there is good reason to believe that other countries benefit from implementing a similar political system in which the citizens have the final say. Yet, different nations might opt for different versions of direct democracy.

Some people think that a better political system is possible. There are many ideas. The Swiss political system has proven to work in practise. It allows citizens to vote on proposals to alter and improve the political system. So even if a better system is possible, the Swiss political system may be the best way to get there.

To make direct democracy work, there are conditions that need to be met. The citizens must be informed, reasonably educated and willing to engage in rational discussions. Laws must be thoughtfully crafted as referendums often boil down to simple yes or no decisions. Mistakes can be made, but they can be learning opportunities as people need to deal with the consequences of their choices.

The Swiss federation can be a model for the European Union and the United States. By delegating responsibilities to the state level it might be possible to reduce bureaucracy in the federation while increasing the legitimacy of the centralised institutions. Swiss democracy might also be a model for a world government if that ever comes to pass.

Featured image: The assembly of the canton Glarus. Democracy International (2014). [copyright info]

1. Government at a Glance Fact Sheet OECD. (2013). [link]
2. Switzerland’s Direct Democracy. http://direct-democracy.geschichte-schweiz.ch/ [link]