Is democracy just a protest vote?

Politics is a zero-sum game. Or worse. You can redistribute wealth and you can get in the way of people creating it. But you can’t create wealth using the law. Only productivity improves GDP per capita. And laws restrict productivity.

This means voters will always be disappointed by their politically appointed bullyboys in the long run. No matter what the politicians’ promised policy is, it will cost more than it benefits.

In the political frenzy that is a modern democracy, each interest group tries to secure its share at the expense of others. In the end, the total costs dwarf any supposed benefits.

The right to healthcare takes away the rights of doctors

The right to welfare takes away money from those who work. The subsidisation of agriculture steals from other industries. Licensing increases prices and reduces quality. And all those public servants in departments have to be paid salaries to implement all of these disasters.

Of course, usually the government just borrows the money from someone. Government debt ratchets up slowly as this is the only way politicians can deliver a seemingly free lunch. For a while. When the debt gets too high and the blank cheque is in danger, people throw a hissy fit at the polls. It doesn’t matter what they vote for anymore if it can’t be paid for. So voting becomes about protest instead.

Perhaps this phenomenon explains the world’s political surprises of late. People are using democracy to protest vote instead of push their favourite set of policies.

Few people understood Brexit, but many voted for it. Few people realise what Jeremy Corbyn’s policies would do to the country. But the media summed up Theresa May’s and they weren’t popular. And so the election was anti-May, not pro-Corbyn.

It’s an international phenomenon. In Greece we had Syriza. Hillary Clinton’s proposed America was more of the same while a Donald Trump victory would humiliate her and her cronies. But the worm turned quickly on that one. Today, Trump’s disapproval ratings are at an all-time record-setting high of 60%. Emmanuel Macron and his party in France are brand new, so that was a protest vote too. Holland already has a long list of bizarre political parties, only one of which is Geert Wilders’. Only Italy seems to be bucking the trend with upstarts losing out in the local elections there recently.

It’s not just at the polls that people protest

In a survey, 25% of Americans said they’d boycotted businesses and products based on their political views and the business’ perceived political associations. Advertising Age reported the interesting results:

Some 34% of Republicans surveyed reported boycotting Nordstrom, for example, compared to 12% of Democrats. The study captured respondents in February, when the decision by the retailer to drop Ivanka Trump’s clothing line was in the headlines.

The survey also hit right around the time that Uber’s decision to cut prices during an airport taxi strike protesting the president’s travel ban sparked a #DeleteUber campaign. Some 32% of Democrats in the study said they boycotted Uber, compared to 13% of Republicans.

I think this is great news. Businesses should be held accountable for their actions. And the bottom line is the best way to do it.

The problem is that politicians are running a country, not a business. A protest vote is a great thing if it keeps a dangerous nincompoop out of office. But what if the replacement is worse? Protestors never consider this.

And what are the incentives for a politician if the protest vote is the dominant force in politics? The populism of Trump and the ideology of Corbyn?

Of course in democracy you don’t have a good choice of leaders. You have a selection of alternatives which are presented to you on a piece of paper. Rarely do people seem to vote for someone anymore. They vote to belong to a group, to spite someone else or to protest against what’s happening to their country.

This bodes ill for democracy and our nations. But it’s certainly been entertaining.

Can May keep it together?

May has turned the Brexit negotiations into a similar phenomenon to democracy itself. The least disastrous side will emerge the victor.

Early on it was clear the EU was a shambles. Now the UK is too.

May has lost two Brexit ministers and her party is plotting to encourage a soft Brexit. This is utterly baffling. May’s position that no deal is better than a bad one doesn’t mean she wants a hard Brexit. Surely she is in favour of a deal.

The only people who don’t want a negotiated Brexit are the ones who want to be vindicated in their prediction that a hard Brexit wouldn’t be a disaster at all. Like me.

Then again the definitions of soft and hard Brexit seem to have changed completely. A hard Brexit used to mean the failure to make a deal with the EU before the deadline, which would leave Britain stumbling out of the union. A soft Brexit was any sort of deal agreed upon by Britain and the EU before that point.

These days, the words are about the type of deal we might reach. A soft Brexit might include freedom of movement and staying in the customs union, while a hard Brexit does not.

Changing the meaning of words is a great way to change the debate. If a hard Brexit is just a version of a soft Brexit, then a soft Brexit is hardly a Brexit at all anymore. But it still appears to respect the referendum.

But what’s the point of a Brexit if we don’t escape the bad aspects of the EU, such as its restrictions on trade with the rest of the world?

The good news is that Steve Baker, the new number three in the Brexit ministry, understands this. He told Twitter that,

The language of hard vs soft Brexit is so misleading. We need a good, clean exit which minimises disruption and maximises opportunity.

He continued:

In other words, we need the ‘softest’ exit consistent with actually leaving and controlling laws, money, borders and trade, and that means delivering on the White Paper so [ministers] can get on with improving UK and global trade.

Huzzah!

The free market rules in Qatar

Whenever governments foul things up utterly, the free market really starts to shine. That’s why it’s vilified as the black market, smuggling and hoarding by governments. Freedom exposes control’s flaws and must be kept hidden by the controllers.

A great example has popped up in the spat over Qatar. A bundle of Islamic nations came together to sanction Qatar for its devious ways in sponsoring terrorism or exporting gas, or both, depending on who you ask.

But the Qataris on the ground are busy working around the sanctions. Bloomberg reports that businessman Moutaz Al Khayyat purchased 4,000 cows in Australia and the US and flew them into Qatar to jump-start a local dairy industry. By next month he hopes to meet about a third of local dairy demand with the airlifted cows. It cost him $8 million to move them.

Qatar previously relied on imports from its sanctioner Saudi Arabia. But capitalism quickly solved that problem.

Until next time,

Nick Hubble,
Capital & Conflict

Category: Geopolitics

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