Innovation and Growth Cycles David Levine

Gordon Tullock on voting with your feet


Federalism and transitional economies


Puerto Rico’s economy can’t handle the federal minimum wage

Democracy in Australia

Vindicating my long-standing view that anybody can get into Parliament as long as they’re not a Trot, the Animal Justice Party has been elected to the New South Wales Legislative Council last month.

The federal and state upper houses in Australia a democracy at its finest with the voters getting what they voted for, good and hard. These upper houses are powerful, with the ability to reject any bill with varying limitations on their ability to reject or amend money bills in a few of the upper houses.

Many Australian voters – at least 20% now – don’t like the major parties , including the Greens so they vote for a wide range of minor parties and independents in upper house elections if only as a protest vote that will go back to the major parties if they lift their game. Voters don’t have this option of vote splitting and protest voting in Queensland because a Labour government abolish their upper house in the 1930s in the name of democracy.

All but one of the Australian federal and state upper houses is elected by proportional representation, often with the option of a group ticket. That is, instead of filling out every box to cast a valid vote, you vote above the line put in a 1 against party you prefer.

Under group ticket voting, the party whose group you voted for decides how your preferences are distributed, which plays a vital role in deciding who gets elected. More importantly, the small parties engage in preference swapping so that they accumulated enough second and subsequent preference votes to win the last seat.

The Tasmanian Legislative Council is the exception to proportional representation in Australian upper houses with 15 single member constituencies. Naturally, 12 of these 15 legislative councillors are independents. That’s a little bit low by historic standards in my home state were normally the political parties have no success in getting members elected to the Tasmanian upper house.

Minor parties and independents control the balance of power in most Australian upper houses, including the Federal Senate.

The 40 member Victorian Legislative Council is a mixed bag with the balance of power depending on which particular combination of Green plus minor party legislative councillors get together to support the governing Labour Party government. I must admire the Vote 1 Local Jobs party as a brand name.

In the 42 member New South Wales Legislative Council, the Liberal National Party government relies on the god squad and anti-pornography campaigners in the Christian Democratic Party for the balance of power. If they fall short, they can always turn to the Shooters and Fishers party.

In the 22 member South Australian Legislative Council, neither of the major parties are particularly popular, nor are the South Australian Greens. To pass a bill with 12 votes, the Labour Party government must string together its seven members with a combination of the South Australian Greens, the Family First Party, Dignity for Disability, an independent and the Nick Xenophon team. Good luck.

In the Western Australian Legislative Council, the Liberal National party government has a majority, so what the Western Australian Greens and the Shooters and Fishers Party legislative councillors think don’t matter that much.

The Western Australian Legislative Council is the only upper house in Australia elected all at one time for four-year terms. For the other upper houses, half of each is elected at each lower house election for six or eight years terms. Tasmania is again the exception to this with two or three of their legislative councillors elected every year for six-year terms.

In the 76 strong Federal Senate, what could not be a more mixed bags of independents, minor parties and minor party defectors and renegades control the balance of power.

The strength of democracy lies in the ability of small groups of concerned and thoughtful citizens to band together and change things by running for office and winning elections.

That is how new Australian parties in the 20th century such as the Australian Labour Party, the Country Party, Democratic Labour Party, Australian Democrats and Greens changed Australia. Most of these parties started in someone’s living room, full of concerned citizens aggrieved with the status quo.

In the 21st century, Australian democracy could not be more democratic, with a wide range of totally obscure new political parties winning seats in the state upper houses and Federal Senate at every election.

In a democracy, we resolve our differences by trying to persuade each other and voting at elections.

The Australian Federal democracy with upper houses elected through proportional representation show that democracy could not be stronger or work any better.

In Australia, it is possible for just about anyone except a Trot to win a seat at the next election on issues that are important to them because they don’t need that many others to share their concerns and aspirations to win that last upper house seat on preferences.

In which States is marijuana legal?


What happens when a metropolitan area has way too many governments – The Washington Post

fragmented municipal government

The OECD, in a report on the "Metropolitan Century" we’ve just entered, found across all of its member countries that when you double the number of municipalities per 100,000 residents within a single metropolitan area, regional labour productivity falls by 5 to 6 percent.

In short: the more little governments you have, the less productive the entire local economy is.

via What happens when a metropolitan area has way too many governments – The Washington Post.

The first 6 months of marijuana decriminalisation in Colorado


What should governments do?


Unfettered power loses its shine when it must be shared with your opponents for more than a brief time

The rotation of power is common in democracies, and the worst rise to the top, so it is wise to design constitutional safeguards to minimise the damage done when those crazies to the right or left of you get their chance in office, as they will.

Too many policies and ideas of the Left assume that they are the face of the future, rather than just another political party that will hold power as often as not.

Privatisation and deregulation is a lot slower in a federal system with an effective upper house elected by proportional representation. Regulatory powers and public asset ownership is spread over different levels of federations, with different parties always in power at various levels at the same time, all worried about losing office by going to far away from what the majority wants.

The will of the people is constantly tested and measured in a federal system with elections at one level or another every year or so contested on a mix of local and national issues. Any failings of privatisation or deregulation in pioneering jurisdictions would quickly become apparent and would not be copied by the rest of the country. These errors could be undone where they originated by incoming progressive governments.

The Left may want to protect the rights of the unpopular and the unpleasant, and to want constitutional safeguards to slow an impassioned majority down is, in part, because they could be next if they lose the next election to the latest right-wing populist.

In a unitary unicameral parliament, those crazies to the right or left of you are tempered by an occasional general election only every 3 to 5 years. Little wonder that UK Labor reconsidered devolution, an assembly for London, and regional government after 15 years of Maggie Thatcher, good and hard, with her unfettered right to ask the house of commons to make or unmake any law whatsoever.

Developing positive alternatives on the Left includes what to do about the rotation of power and fettered versus unfettered parliamentary and executive power. The failure of the Left to develop its own constitutional political economy is a major strategic shortcoming. Frequenting wine bars, cafes and blogs muttering to each other ‘our day will come, our day will come’ is not enough.

State power was something that the classical liberals feared, and the problem of constitutional design is insuring that such power would be effectively limited.

Sovereignty must be split among several levels of collective authority; federalism was designed to allow for a decentralization of coercive state power.

At each level of authority, separate functional branches of government were deliberately placed in continued tension, one with the other. The legislative branch is further restricted by the establishment of two strong houses, each of which organised on a separate principle of representation

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