Last week, the most comprehensive (and expensive) deal so far was put together by the European Union to save Greece (not to mention the rest of us) from uncontrolled default. Billed (naturally) as the deal that would solve all of Europe’s problems, it was inevitably oversold; yet it was a serious and worthy effort to draw a line under the Greek debt crisis and prevent the spread of the Greek disease to other countries. The deal would write off a portion of Greece’s debt and underwrite banks and governments that may be thrown into difficulties as a result. Markets rallied, as they always do when a little tension is relieved, then slid downward again once the financial dealers of the world returned to work the next day, having consumed a little too much cocaine and fine wine the night before.
Then the unexpected happened: Greek Prime Minister Papandreou decided, without even first warning his cabinet or other EU leaders, to call a referendum on the deal. Europe’s leaders were mortified, as were Papandreou’s fellow cabinet ministers, and of course the markets. The decision was bizarre at many levels. Greeks have been hugely punished for the atrocious financial management of Greek governments (mostly not Papandreou’s, but the conservative administration that preceded it). Incomes have fallen by a shocking amount in a short time, and many Greeks are unable to make ends meet. But the decision was a moronic one: it was impossible to organise a referendum before Greece was owed €8bn from the EU, meaning it would have to default on some debts, and be unable to pay public workers at a time when they are already living on the bread line. It was a slap in the face for other EU countries (chiefly Germany) who were keeping Greece afloat at their own, huge, expense. And the concept of the referendum itself was simply moronic – the Greek people would effectively be asked whether to face financial hardship or the meltdown of their democracy. One can’t help but sympathise with Papandreou who is under unbelievable pressure, but the decision seemed to show he had lost the plot completely.
A rebellion in the government forced Papandreou to U-turn and the referendum was cancelled again within a few days.
I had tweeted that the referendum decision was moronic, and was met with a response from a number of tweeters, left and right, that I was “opposing democracy” or “opposing the right of the Greek people to decide”. I’m not ideologically opposed to referendums, but I can’t think of many cases where they make sense. We (in most of Europe and the US) have representative democracies rather than direct democracies for good reason: most of the population don’t have the time or the inclination to inform themselves on complex issues, nor should they have to – that’s why we have professional politicians, and provide them with the funding to employ economists, historians, political scientists, statisticians and so on.
Attempts by economists to quantify the options have put the cost of preventing a crash at €1tn to €2tn – a mind-blowing amount of cash. Attempts to quantify the alternative are difficult, as chaos is basically unpredictable: would the EU unravel? Would that lead to trade wars or actual wars? The only firm answer seems to be that the cost of not saving Greece would be many times higher than of saving it. Does it make sense to allow the people to make that decision?
The question would seem simple enough: Should Greece accept or reject the EU deal? But more honestly, it would say: Should Greece continue with this pain and try to turn the economy around, or should we face economic collapse, a likely military coup, and drag the rest of Europe down with us? Is it ethical to give Greeks a say as to whether Italy, Spain, France and eventually the rest of Europe down with it? What right do they have to decide that? In reality, Greeks had their say years ago: they elected weak or corrupt leaders who failed to tax the wealthy, and who funded improved lifestyles for the Greek people using cheap loans from European banks. It’s harsh, but it happened. Why not give the Norwegians a referendum on whether it should be sunnier in mid-winter? Surely they have the right to decide that? It would be equally nonsensical – the poor Greek people need and deserve leaders who will make tough but informed decisions on their behalf, not useless paper exercises of “choice” when there is no choice.
The nationalistic British right is becoming equally agitated in their demand for a referendum on whether Britain should leave the EU. If you listen to the small minority who actually understand the implications of that choice, you’ll hear that an exit would cause huge, lasting damage to the British economy. A referendum may fairly be phrased: Do you want to see a large cut in your standard of living or not? To which the average Brit may actually make an informed decision. But masking that as “do you want to exit the European Union?” would be another question which 90% of the population is unqualified to answer. You could, of course, make voting contingent on demonstrating a good understanding of the economic and historical issues – which thankfully would exclude most of the electorate. But if you did that, why not just ask those people who are actually qualified instead?
Earlier this year, the British people heavily rejected the Alternative Vote, a minor change to our voting system that would have improved the quality of our democratic process and given us more of a say over who governs us. It was a moronic decision – but how were most voters to know that? They took their lead from the moronic tabloid newspapers. And they represented the interests of the two main political parties, which would have lost their power duopoly under the new system. So rather than spend time and money asking the electorate, why not just ask unelected newspaper owners instead? It would be fast, cheap and give exactly the same result.
Referendums allow the mob to decide, and the mob is easily swung. Two years ago in Switzerland (which runs a system of direct democracy), the people voted to ban the building of tall towers. But not all tall towers: specifically those attached to mosques, also known as minarets. The Swiss, not the most racially diverse people, basically ran an exercise in minority-lynching, in full public view. Democracy at its best? If democracy is another word for lynching, I’ll give it a miss, thanks. As a member of the Jewish minority comprising about 0.3% of the UK population, the thought of such a system of “democracy” makes me queasy.
And look at California: the state adopted a system of direct democracy, allowing measures to be added to every ballot and voted on in each election. Given that most people have little time to research every ballot proposition, the propositions that make it are usually backed by big money interests. In trying to give more power to the people, California instead gave more power to wealthy vested interests. The results? More people in prison (thus profiting prison operators and prison unions). And the biggest debt of any US state. Why? Because people, quite naturally, vote for better services but no tax rises. Who wouldn’t?
Wouldn’t I like referendums on issues of concern to me? It may have been nice to stop the Iraq war from going ahead, for example. Except, we wouldn’t have been able to stop it. If a referendum was called, we’d have been bombarded by the media with the same lies and fear that MPs were, and the majority of people, unable to separate fact from fiction, would have buckled and voted for war. Love or hate our MPs, and moronic as many of them are, they’re still far better informed on world issues than the average Brit. They took the wrong decision on Iraq. So would have most British people.
There are many ways to improve our democracies: elected employee representatives on corporate boards, the right to recall our representatives, freedom of information so journalists can tell us what our politicians are up to, and proportional forms of voting so no vote is wasted. But referendums? They don’t improve democracy, they’re just a straightforward race to the bottom.