Large Quantities of Small Rules Are Lethal. Individually, each discrete government rule may seem logical and benign, just like each little leech in a pond is benign to a human. However, a bucket full of leeches will suck all the blood from an adult human in about five minutes. This same principle applies in many areas of our lives. For example, bacterial and viral infections are usually non-lethal when small numbers of these microorganisms invade our bodies, but they can kill any living creature within hours if they’re allowed to grow into large quantities.
Sucking All the Life Out of the U.S. Economy and its Citizens. Anybody who has ever suffered from a computer virus knows how a bunch of small programs running in the background can suck up a computer’s resources until it crashes or becomes so sluggish that it can no longer do anything productive. The reason large quantities of small things are so lethal is because they devour all available resources—one microscopic slurp at a time—until there is no longer sufficient resources to sustain life. This is exactly how the federal laws of the U.S. Government are sucking all the life out of the U.S. economy and its citizens.
Presidential Governments Attract Political Investors. “Presidential governments” like the United States, Afghanistan, Nigeria, Eritrea, Venezuela, Brazil, Congo, Sierra Leone, Argentina, and virtually all other corruption-plagued nations incentivize special interest groups to perceive national elections as an investment. Private interest groups in these countries are willing to invest millions or billions of dollars into elections or engage in deadly coups and destructive sabotage because they know that as soon as their favorite congressperson, senator, or president wins, they will have two-to-six years or more to exploit that politician’s power over the entire country. In contrast, “parliamentary governments” like Canada, Norway, Denmark, Sweden, Luxembourg, Netherlands, New Zealand, United Kingdom, among others, can form and dissolve their governing coalitions without waiting years for the next election cycle; so there is no incentive for special interest groups to spend millions or billions of dollars trying to help any particular politician to get elected.
Presidential Governments Encourage Corruption and Oppression. Given the many ways that government officials within a presidential system can manipulate legislation and regulations to reward their most loyal donors, this creates many opportunities for their donors to receive a valuable return on their investment in the form of preferential tax breaks, lenient or non-existent regulations, and various forms of social and corporate welfare. Of course, all these kickbacks can only come at the expense of other citizens who are forced to suffer the economic and social consequences associated with the government’s largess to special interest groups. This results in capital and income imbalances throughout the economy, which leads to large income disparities between the rich and poor and many other political, social and cultural consequences.
The Vicious Cycle. Politicians in presidential systems have far more incentives than their parliamentary system counterparts to exploit the consequences of their own incompetence and corruption, often with the intent of magnifying the divisions within society. This incentivizes special interest groups throughout the society to donate to influential politicians, hoping to position themselves closer to the levers of governmental power to achieve an incremental advantage over their competitors. This creates a vicious cycle of corruption, political oppression, social upheaval, and economic instability, which has nothing to do with the normal gyrations of a “business cycle”; it is the boom-and-bust vortex of a hijacked economy. This vicious cycle is the fundamental problem with the U.S. political system and it’s the same problem that plagues all presidential governments, which have much higher levels of systemic corruption compared to their parliamentary government counterparts.[1]
The Fallacy of the Responsible Voter. I’ve heard several thoughtful and well-intending people argue that governments should limit their citizens’ right to vote based on more restrictive criteria, such as property ownership, income, marital status, education level, or some other factor. This premise is based on the assumption that citizens will feel a greater feeling of accountability to the political process if they have more to lose, which would lead to higher quality governance. This is actually how the Founder’s originally designed the U.S. voting system—only white, male, property owners were allowed to vote. Aside from the cultural impossibility of implementing such a system in today’s world, restricted suffrage does absolutely nothing to fix the fundamental cause of political corruption.
Restrictive Suffrage Does Not Fix Corruption in a Presidential System. No matter how restrictive the voting process is, if the voting occurs within the context of a presidential government, there will always be a self-serving subset of eligible voters who will be able to invest in politicians who are eager to exchange their power over legislation for campaign financing. This inevitably results in the same degeneration of institutional integrity that all presidential governments on Earth suffer from today.
It’s Not the Money; It’s Distorted Incentives in the Congress & Presidency. Please don’t misinterpret my statements above as merely another argument for campaign finance reform. Campaign finance reform will do absolutely nothing to fix the problem. I’m making a much deeper point about the fundamental incentives that politicians have while serving in public office within the context of a presidential system and the length of time that politicians have to exploit their elected office for personal gain. This dynamic can only be truly understood after understanding the profoundly different systemic incentive structures that exist between presidential and parliamentary systems of governance.
Fixing a Broken Presidential Government. The only way to fix a presidential government is to impose unavoidable, fear-inducing mechanisms of personal accountability so that politicians feel truly accountable for their actions. At the very least, these mechanisms of accountability should include: term limits, severe financial penalties for verifiable gross negligence, severe ill-gotten wealth disgorgement penalties, felonious convictions and prison time for bad-faith legislation and regulation, and meaningful restrictions on the revolving door that enables politicians to exploit their taxpayer-funded public service for private gain after completing their term in office.[2]
What is Wrong with “Representative Democracy”? This is like asking, “What is wrong with Capitalism?” There’s nothing fundamentally “wrong” with either of these systems—they’re simply social frameworks for allocating scarce human and material resources. However, problems begin when these systems cease to conform to their actual definition and purpose. For example, Capitalism ceases to be Capitalism when special interests capture a government’s legislative and regulatory processes; at this point, the economy has devolved into Crony Capitalism, a Kleptocracy, Plutocracy, or some other economic system, but it’s certainly no longer Capitalism. Blaming Capitalism because it has been degraded by corrupt, incompetent, or impotent politicians into some other economic creature is illogical. The same is true of Representative Democracy: The moment a governmental body is no longer representative of the people being governed, it’s no longer Representative Democracy; at this point, the government has devolved into something that feels increasingly authoritarian, alien, and punitive to the people being governed, while a small number of special interest groups feel the government is working fine for their narrow interests.
Nations Don’t Collapse Because of Excessive Representation. I’m not aware of any empirical evidence of any nation throughout human history that has collapsed because its government was too representative of its citizens’ wishes. In contrast, the collapse of every nation that I’ve studied can be directly traced to the self-serving ambition, hubris, and specific bad-faith actions of a tiny number of politicians, kings, emperors, and dictators who expropriated wealth from the general public to preferentially distribute it to a tiny number of private special interest groups. And there is a growing body of empirical evidence today from several nonpartisan research groups that demonstrates Democracy—even Direct Democracy!—works just fine when the integrity of the structure of government itself (i.e., the legislative, regulatory, and judicial processes) is not degraded into a commodity that self-serving politicians can exploit and sell to their favorite special interest groups for private gain.[3]
Switzerland’s Direct Democracy: The Most Effective Government on Earth. Switzerland’s Federal Council and Federal Assembly have term-based federal election cycles, but their legislative system is directly accountable to a system of Direct Democracy. This system empowers Swiss citizens to efficiently repeal dubious laws that do not serve their interests. Direct Democracy eliminates the incentive for special interest groups to spend large sums of money on elections because they know they can’t control the federal government or cram toxic laws down the collective throat of the Swiss citizenry. The Swiss system provides more continuity in the administration of government than a parliamentary system without reducing the power of the citizens to hold their elected officials accountable. Given that the Swiss Government has enjoyed the most stable political and economic environment on Earth since 1848 and has delivered the highest quality of life for the broadest number of its citizens for decades, I believe the Swiss have the best national governmental system on Earth today.
Who Has the Most Power Over Your Neighborhood Drug Market? Let’s assume for a moment that crack cocaine is bad. Your neighborhood is filled with crack addicts. Hundreds of crack zombies are stumbling down your street, convulsing from painful withdrawal symptoms. They have no money to pay for food or shelter because they can’t break their expensive physiological addiction. Maybe you’re one of them, but at least one of them is in your family. Who do you blame for this tragic state of affairs: the users or the suppliers? Who has more power over your neighborhood drug market: your addicted child or the drug dealers?
Who Should We Blame: Political Drug Users or Political Drug Suppliers? Now, replace “drug dealer” with “politician” and “drug user” with “corporation.” Who should we blame for governmental dysfunction and corruption: politicians (the “suppliers” of government dysfunction and corruption) or corporations (the “users” of government dysfunction and corruption)? Yes, we should blame politicians who exploit their power to sell dysfunction/corruption to special interest groups (corporations, rich people, etc.) in exchange for the campaign donations that keep their illicit racket going. Once you understand this reality, which I call the “Regulatory Protection Racket”, there is no longer any mystery about what is wrong with the USG and how it can be fixed.[4]
Notes:
[1] For extensive empirical data on the comparative virtues and vices of presidential vs. parliamentary systems, see the Swedish report by Bo Rothstein: “The Quality of Government Institute. Report for the first ten years of a Research Programme at University of Gothenburg”.
[2] In my books I have written much more extensively about the specific technical mechanisms that are necessary to fix the U.S. Government. To the surprise and delight of many, the solution does not require a Constitutional amendment or any new laws.
[3] See the inspiring and pioneering work by the Quality of Government (QoG) Institute, which was born at the University of Gothenburg, Sweden. Their quantitative and comparative measurements of national policy outcomes and the quality of governance across dozens of countries and hundreds of discrete governance quality metrics is providing new and profound insight into many age-old questions associated to the nature and performance of governments and their relationship with their citizens.
[4] I’ve written extensively about this particular topic in my books.
About Ferris Eanfar
Ferris Eanfar has over 20 years of experience in technical, financial, media, and government intelligence environments. He has written dozens of articles and several books in the fields of Economics, Crypto-Economics, and International Political Economy, including Broken Capitalism: This Is How We Fix It and GINI: Capitalism, Cryptocurrencies & the Battle for Human Rights and the Global Governance Scorecard. Ferris is a cofounder of the Gini Foundation, which builds unique cryptocurrency systems to protect human rights, among other benefits; and the CEO of the AngelPay Foundation, a nonprofit financial services company with a mission to “return wealth and power to the creators of value.” To learn more about Ferris, please visit the About Ferris page.Visit Ferris on:
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