FOREWORD
It is tempting to begin by saying boldly that never before has the institution of Parliament been held in such low esteem; but the fact is that parliaments and parliamentarians have often -- perhaps usually -- been held in more or less affectionate contempt. Nevertheless, the lower houses of Westminster-style parliaments now seem unable to perform some of the principal functions classically ascribed to them. They serve as electoral colleges for choosing Prime Ministers or Premiers; as pools of manpower from which most Ministers must be chosen; and occasionally as a forum in which attention is drawn to deficiencies in proposed legislation. Members of parliament also perform useful though peripheral ombudsman work, assisting their constituents in their brushes with administrative machinery (the need for this work has increased with the size of government, and the volume of it has not been perceptibly diminished by the establishment of full-time ombudsmen). Finally, Question Time remains in most parliaments a valuable means of making the executive account for its actions (although questions are at least as often directed towards party-political games -- in Erich Berne's sense -- as towards the public interest).
Actual parliamentary debate, however, has become as ritualised as the courtship displays of rival tropical birds. It is extremely rare for the outcome of any vote to be determined other than by the weight of numbers of government and opposition; exceptions to this rule are as likely to be caused by illness, accident, confusion or somnolence as by deeper considerations. There may never have been a time when it was natural for real debate -- debate in which the outcome is uncertain -- to take place on the floor of the house rather than in smaller, secret conclaves; but the kind of discussion of policy, legislation and the public interest implicit in the traditional ideal of parliament has virtually disappeared from the open forum into the government party room and the cabinet -- where there is a natural tendency to identify party interest with the public interest.
It is entertaining to develop the thesis that the sickness of modern parliaments was contracted in the second quarter of the nineteenth century, and that the principal bacillae were the great Reform Bill and the case of Stockdale v. Hansard: that the elimination of the rotten boroughs made it impossible for the magnates to ensure that there was a leavening of capable if electorally unappealing MPs, and that accurate, legally privileged reporting of parliamentary debates ensured that the actual decisions would be taken away from the chamber (it is also likely that the ABC parliamentary transmissions have further vitiated debate by encouraging speakers to address not the topic but their distant electors).
Likewise the extension of the franchise can be seen as causing a simplification or debasement of public political debate, both by its tendency to lower the educational standard of the average elector and by the increase in the number of electors and consequent reduction, other things being equal, in the possibilities for contact between elector and representative. Other factors at work were what might be termed ideological economies of scale. As communications improved, illiteracy diminished, and the mass media developed in the later nineteenth century, so the importance of political parties increased relative to that of the individual MP, and Parliament's role tended to become that of legitimising decisions of the governing party. Further development of the mass media, especially television news which is dependent on very short statements from easily identifiable talking heads, has increased this concentration on parties and their leaders at the expense of considered discussion of the public interest inside or outside Parliament.
As Richard Wood points out, how little we now expect of Parliament was illustrated by the reaction to the National Economic Summit Conference of 1983, and to the Summit's taking place in the Chamber of the House of Representatives. Hardly anyone -- not even many MPs -- objected to this usurpation of the role and the home of the Parliament; those who did could base their objections only on tradition and on rather formal constitutional considerations. Rather than displacing Parliament, the Summit was filling a vacuum: filling it rather sparsely, as it turned out, for the Summit's outcome was no less predetermined than that of a House of Representatives debate. In the Summit as in the House, the Executive was firmly in control.
If Parliament is to be revived, its power must be increased relative to that of the Executive. Even if it might seem desirable to go back to the House of Commons of Pitt and Fox to do so, we cannot put the clock back (although a return to an eighteenth-century distrust of Executive power is not out of the question). There is no acceptable alternative to representative democracy with full adult franchise; even if one is tempted to agree with Dean Inge that "democracy is only an experiment in government, and it has the obvious disadvantage of merely counting votes instead of weighing them", there is the problem of devising a weighing machine which is itself democratic.
Richard Wood examines the principal theories of democracy of modern times, and the way they account for the way in which democratic governments so often allow the particular interests of sections of the community to prevail over the public interest generally, concluding that this is not "a result of some chance deviation from some ideal system of representation, whose diagnosis will lead at once to a cure", but rather is "systematically produced by interaction between three major components of the political system: parties, interest groups in the electorate, and "a constitution which imposes no ... limits on state spending". He does not offer a detailed agenda for reform, but examines some recent proposals in the light of their applicability to Australia and assesses "the prospects for parliamentary reform", suggesting as a beginning an extension and reinforcement of the "active reviewing function" of the Senate and other upper houses. The performance of Senate committees has been by far the most encouraging aspect of the parliamentary system in recent years, and shows that even in its present state a good deal of vitality remains.
John Nurick
CHAPTER 1
INTRODUCTION: DEMOCRACY AND THE PUBLIC INTEREST
In his classic study The English Constitution, Walter Bagehot identified the "expressive" and the "teaching" functions as among the most important duties of the House of Commons. "It is its office", he wrote, "to express the mind of the English people on all matters which come before it". He continued, "A great and open council of considerable men cannot be placed in the middle of a society without altering that society. It ought to alter it for the better. It ought to teach the nation what it does not know". (1) Bagehot was writing in the year 1867. In 1985, hardly anyone expects Parliament to do much more than carry out what Bagehot described as its "elective" function, that of creating, sustaining and legitimising a Ministry. Even the business of legislation, which is formally the responsibility of Parliament, has, over time, become almost entirely monopolised by Executive initiative, and thus virtually absorbed into the elective function itself.
The gulf between the formal role of Parliament and our actual expectations of it was revealed by the widespread public support for the National Economic Summit Conference of 1983. This assembly, consisting of over one hundred chosen representatives, almost all of them from government, trade unions, and business, committed itself to an "accord" on prices and incomes policies which was supposed to embody a "consensus" of the entire community. Neither the leadership of the Opposition (which formally represented half the voters) nor the newly elected Parliament itself (which represented everyone) played any part in the Summit. Nothing more perfectly symbolised the irrelevance of Parliament to the entire exercise than the fact that the Summit took place in the Chamber of the House of Representatives.
Why do we no longer regard Parliament as an effective forum for that exchange of information and opinions which must precede the articulation of, and commitment to, the public interest? In recent decades political commentators have advanced a number of explanations, such as, for instance, the domination of the political system by highly organised and disciplined political parties, leading to the degeneration of Parliament into a mere rubber stamp for decisions taken by the Executive. It is in response to this kind of criticism that some steps have been taken in recent years to revive the legislative function of Parliament; committee systems have been established in both houses, with some success in the Senate. This essay, however, canvasses a different (though not unrelated) explanation, which has been gaining ground rapidly in recent years. This is that the determination of public policy has become so subject to the influence of special interests that it no longer effectively promotes the public interest; and Parliament seems helpless to prevent this even should it wish to. Examples of the sacrifice of general to particular interests can be drawn from several areas of policy. The intellectual case for less state intervention in the economy has been won; yet powerful groups seem able to veto serious attempts to eliminate economic privileges (such as subsidies and protection from import competition), thus destroying opportunities for economic growth. There is growing disenchantment with the state education system, resulting in a steady increase in the proportion of children attending non-government schools; yet the Australian Council of Educational Research was prevented from releasing the data collected for its 1980 survey comparing the standards achieved by the various sectors of the education system, thus raising the suspicion that this was as a result of pressure from some teacher unions. There may be reasonable differences of opinion over whether land rights legislation for aborigines and "affirmative action" policies for women are necessary to protect the human rights of these groups; but many people are convinced that, in their proposed form, they amount to privileges which give those groups unfair advantages.
The belief that Parliament is no longer an effective institution for identifying and promoting the public interest raises important constitutional issues, since representative democracy has always been justified precisely by reference to its supposed ability to manage special interests and to advance the interests of the community as a whole. In the post-war era it was widely believed, not only among political activists and commentators but also among social and political scientists, that the common good could be pursued only by the promotion and balancing of group interests, whether through day-to-day political activity or through semi-formal gatherings such as the National Economic Summit. This "elitist-pluralist" theory of democracy was believed by its originators to represent a great improvement on the "classical" theory of the eighteenth and nineteenth centuries, according to which the public interest was conceptually distinct from group interests, and could be promoted successfully only within constitutional frameworks which neutralised the influence of groups. In this essay I argue that the classical theory was essentially correct in this respect, and that its claims have been vindicated by the conclusions of the "public choice" approach to political science which has become increasingly influential in recent years. This approach is often referred to as the "economics of politics" since it applies the analytical tools of microeconomics to political phenomena. The expression "public choice" is derived from the name of one of the most important academic institutions devoted to this method, the Centre for Study of Public Choice at George Mason University, Virginia, directed by James Buchanan. Put very briefly, the public choice theorists argue that special interests have acquired undue political influence as a result of certain constitutional or quasi-constitutional changes which have occurred since the second world war. These developments (which may be conveniently labelled the "Keynesian Revolution"), by removing certain crucial economic and ideological limits on political action, have greatly affected the nature of democratic representation. Electoral competition between political parties has become less a matter of trying accurately to reflect public opinion, and more a matter of satisfying electorally powerful minority interest groups. This process has itself encouraged both the fragmentation of the voting public into organised pressure groups lobbying for the favours of government, and a corresponding expansion of government as ruling parties seek the electoral support of such groups. Modern democratic legislatures are especially likely to fail to promote the public interest when electoral majorities can be constructed relatively easily out of coalitions of minorities.
Chapters 2, 3 and 4 of this essay provide brief expositions of the various theoretical approaches to democracy -- the classical, the elitist-pluralist, and the public choice -- with particular emphasis on their prescriptions for resolving the tensions between special interests and the public interest. Chapter 5 summarises some specific constitutional reforms proposed by members of the public choice school. Chapter 6 assesses the prospects for constitutional improvement in Australia along the lines advocated by the public choice theorists.
The concepts of public interest and special interest play a central role throughout the essay; but as the import of these terms (and their various synonyms) is not necessarily crystal clear, the remainder of the present chapter is devoted to clarifying the meanings attached to them and their place in democratic debate.
THE PUBLIC INTEREST AND SPECIAL INTERESTS
Although the term public interest is often invoked as a justifying principle in political argument, political scientists have not always found it an illuminating or useful concept. One problem is that, like the related terms common good and general welfare, it can be employed in a vague, empty and rhetorical manner to elicit a phony consensus for policy proposals. For example: peace, plenty, and justice could all be said, uncontroversially, to be "in the public interest"; but this would do little to resolve political conflict since disagreement would immediately arise as to how those eminently desirable goals should be realised. This point, significantly, establishes one of the limits of the concept of public interest as a decisive political consideration. Take the current debate in Australia concerning nuclear disarmament. Everyone wants peace; the issue is whether this can be better achieved through a neutralist-pacifist policy or through continued membership of an armed alliance with our ANZUS partners. If disagreement persists, it will have to be settled, not through consensus, but through the political victory of one viewpoint over the other.
The concept of public interest acquires much more politically relevant content where the public interest is in conflict with special interests. At this point we may refer to Brian Barry's successful attempt to restore the public interest as a tool of analysis and as an independent political principle. Drawing on the classical democratic theorists' treatment of the concept, Barry defines the public interest as "those interests which people have in common qua members of the public". (2) The important implication in this definition is that people have interests in capacities other than that of being "members of the public". In complex modern societies, most individuals have a wide variety of non-public interests; as well as being consumers, taxpayers and citizens, they are also, variously, home-owners, trade unionists, employers, motorists, opera-goers, migrants, students, and so on. These roles need not conflict with one another. But where a group interest is both in conflict with and greater than that group's share of the public interest, then it is a special interest. For example, employers and employees in protected industries gain much more from import tariffs and quotas than they lose as consumers. "They have a common [net] interest among themselves ... which is contrary to the interest of the rest". (3) (Note how close Barry's definition of a special interest comes to Madison's much older definition of a "faction" in The Federalist Papers, no. 10: "By a faction I understand a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community".) (4) In such cases, promoting the public interest is a clear policy option, involving winners and losers no less than does the alternative policy of promoting the special interest. But part of the unique moral appeal of the public interest is that it does, by definition, benefit us all as "members of the public".
THE PUBLIC INTEREST AND OTHER PRINCIPLES
The public interest does not cover the entire range of political issues which arise in modern democracies. Much legislation is concerned with promoting social justice and protecting individual rights. Policies justified by these other principles do not necessarily harm the public interest; advocates of free universal education, for instance, argue that this both assists the disadvantaged and brings universal long term benefits. But there can arise conflicts between the public interest and other principles; and it is easy to imagine cases of this sort where hardly anyone would want the public interest to prevail. For example, the incidence of serious crime could probably be quickly reduced by restricting the individual's procedural rights in law; but few people would want this benefit if it meant sacrificing their right to a free trial or greatly increased the chances of innocent people being convicted. Conflicts between the public interest and social justice, however, tend to be much more controversial, since very often social justice is invoked to justify preferring a special interest to the public interest. Trade unions, for example, would typically defend the wage arbitration system as guaranteeing "comparative wage justice"; opponents of the system meanwhile would criticise it for imposing unacceptable losses of employment opportunities on the community as a whole, i.e. for only protecting a special interest. In such cases, the public interest is perfectly clear in its requirements, but it may not provide a basis for consensus.
THE SCOPE OF THE PUBLIC INTEREST
While the public interest comes into its own as a distinct idea when contrasted with special interests and other principles, political theorists who use the term do not all agree on the scope of its application as a justifying principle. Some restrict it for this purpose to those few areas of government activity permitted by traditional liberal political economy (the provision of a legal system, internal and external security, and a few essential amenities which for technical reasons cannot be supplied in adequate amounts on the market). Others adopt a wider definition and include services and amenities which the state can make generally available free of charge or at subsidised rates (such as health care, education, and recreational facilities), but which could in principle be supplied entirely by the market. The wider the conception, however, the more controversial the principle becomes, since, like social justice, it can be used to cover the promotion of special interests. For instance, a government may defend subsidies to the arts as being "in the public interest"; but the size and distribution of the subsidy may in fact be determined by pressure from arts lobbies. For this reason, like most public choice critics of modern democratic systems, I prefer narrower to wider conceptions of the public interest. The main purpose of this essay, however, is to bring into view a range of costs generated by public policy which tend to be overlooked in societies, such as Australia, whose politics are dominated by powerful pressure groups, and to canvass constitutional-institutional reforms which might restore the public interest to the centre of democratic politics. In the absence of such changes, appeals for "consensus" around the "common good" can easily amount in practice to attempts to discourage or prevent public debate of high-level deals between major special interests, deals which may actually impose substantial public harm.
CHAPTER 2:
THE CLASSICAL THEORY OF DEMORACY:
ROUSSEAU, BENTHAM AND MILL
Our ideas about how democracy does or should work, and why it is a desirable form of government, are largely derived from the writings of the classical theorists of democracy, and in particular those of Jean-Jacques Rousseau, Jeremy Bentham, and John Stuart Mill. Although they differed in important ways, these thinkers agreed that each individual had a range of interests, some peculiar to himself, others shared with small numbers of other individuals, and yet others shared with all other members of the community. The public interest consisted of this last class of universally shared interests, and it was the special role of democratic politics to discover what these interests were and to promote them. But this would be possible only if the political mechanisms could remain free from the corrupting influence of particular and group interests.
JEAN-JACQUES ROUSSEAU (1712-78)
Rousseau's work The Social Contract, first published in 1762, is the most brilliant and compelling text in the history of democratic theory, Rousseau's central argument was that, of the available forms of government, democracy alone was consistent with individual freedom. It was in fact a form of self-government, since under it the individual consented directly and specifically to all the laws to which he was subject. This consent, to be genuine, had to be immediate: it could not be represented. And for the laws to be genuinely consistent with freedom, they had to promote the public interest as opposed to the private interests of any group or individual.
In order to give this highly idealistic conception of democracy some plausibility, Rousseau naturally had to ground it in a precise institutional framework. First, the political community needed to be small. This was necessary both to enable each citizen to exercise his right to participate directly in legislation, and to make possible the degree of public spirit needed to motivate him to prefer the common good to any private interest he might be able to advance. Secondly, a rough economic equality should prevail so as to discourage the fragmentation of the citizens into mutually hostile factions; if they were so divided, the democratic process would give effect not to the "general will", but to the "will of all", that is, the "sum of particular wills". (5) Despite his paradoxical terminology, it is reasonably clear what Rousseau meant by this distinction. A community may need, say, to shoulder the collective burden of defending itself from external aggression. The "general will" requires legislation to this effect. But where factions predominate, each faction will aim to secure an advantage for itself over the others, and so try to avoid its share of the cost of defence. If they succeed, the result is that everyone is actually worse off, since their collective security needs remain unmet. The voters will succeed in promoting the public interest only to the extent that they can make this their conscious aim and remain free from sectional prejudices; and this is most likely to be the case when each individual's share of the public interest exceeds his private interests:
The better the constitution of a State is, the more do public affairs encroach on private in the minds of the citizens. Private affairs are even of much less importance, because the aggregate of the common happiness furnishes a greater proportion of that of each individual, so that there is less for him to seek in particular cares. (6)
The constitutional rules which Rousseau believed were necessary to make democracy work are, of course, impracticable in the modern world of populous nation-states and organised political parties (though Rousseau did concede that the harm done by political factions may be tolerable so long as the factions were numerous and roughly equal in power). But Rousseau remains of great significance in the history of democratic theory, in two main respects. First, his conception of democracy as a form of self-government inspired the belief in the individual's moral right to political equality: no government could claim legitimacy unless it was based on universal or near-universal suffrage. Second, Rousseau's concept of the "general will" remains in some respects an elusive but inspiring ideal goal of democratic politics. Although many would resist the hign degree of political involvement he advocated, few would publicly deny the claim that democracy should bring the community together in the pursuit of its common interests, rather than simply provide an arena for legalised warfare between political factions. The trouble is that the major political factions may be unable to agree on what constitutes the common good. So although circumstances prevent Rousseau's solutions being applied, they completely vindicate his diagnosis of the problem.
JEREMY BENTHAM (1748-1832)
Bentham is perhaps best known not as a democratic theorist but as the formulator of the extremely influential moral philosophy of utilitarianism, which evaluates actions and institutions by reference to their tendency to promote the public interest, understood in terms of the "greatest happiness" of the community. But in the early nineteenth century Bentham became the intellectual leader of a movement for radical parliamentary reform, many of whose proposals came to be embodied in the great Reform Acts in nineteenth century Britain. Originally a constitutional conservative, Bentham became converted to democracy when he realised that governments would not promote the public interest out of the goodness of their hearts, but only when they had a special incentive to do so. Democratic reform would, he believed, provide that incentive.
Bentham's democratic theory is more immediately relevant than Rousseau's because it was meant to be applicable to large nation-states where the voters could participate in legislation only indirectly and through representative assemblies. But Bentham was no less aware than Rousseau had been that in very large communities it was only rarely that anyone would be spontaneously motivated to promote the public interest. He defined the public interest as "these common interests [which] correspond to the immediately subordinate right and proper ends of government, maximisation of subsistence, abundance, security and equality". (7) But each individual also had a particular interest which was not only in conflict with, but also normally greater than, his share in the public interest. (8) Bentham's point was that each individual would maximise his well-being if he could receive the benefits of the public interest while avoiding paying his share of the cost. For example, everyone must rationally support taxation which finances the public benefits supplied by the state; but everyone also has an incentive to seek tax relief. Of course, if everyone is granted tax relief, the public benefits cannot be supplied, and everyone is worse off as a result (this is the situation which Rousseau described as the "will of all" as distinct from the "general will"). But if tax exemptions are constitutionally possible, every special interest ("sinister interest" was Bentham's preferred term) must rationally seek special treatment for itself while hoping that the rest of the community can be made to carry the entire tax burden. This was an early appreciation of the "free rider" problem which Mancur Olson has brought to the forefront of political analysis in modern times. (9)
The specific defect of the unreformed British constitution was that it allowed the public interest to be systematically undermined by the particular interests of a few organised minorities, most notably the landed aristocracy. This particular "sinister interest" explained the existence of the corn laws, which protected British agriculture at the consumer's expense by imposing tariffs on cheap food imports. While it remained unreformed, the British parliament could not be made to register the requirements of the public interest. In Bentham's words, "The individuals who compose the particular interest are ... a compact, harmonizing body; a chain of iron: the individuals making the universal interest are on every such occasion an unorganized, uncombined body; a rope of sand". (10)
Bentham's four main radical reform proposals -- universal manhood suffrage, equal electorates, the secret ballot, and annual, unicameral parliaments -- were intended to make it impossible for either the voters or their representatives to promote their particular interests, and thus to guide them towards a consensus around the public interest. (Bentham privately favoured votes for women, but found it prudent not to include this on the radical reform program). The secret ballot would automatically end the system of electoral bribery; in the solitude of the voting booth, the voter would have no incentive to vote for any candidate other than the one he judged most competent to advance the public interest. An assembly elected in this fashion would then, so long as its members were required to attend all sessions, have no hesitation about promoting the public interest, since any member who failed to live up to the voters' expectations risked losing his seat at the next election. (11) Although Bentham relied principally on this pattern of institutional incentives to ensure that it was in everyone's private interest to promote the public interest, he did add a Rousseau-like "Legislator's Inaugural Declaration" in which each representative would undertake to promote constantly the greatest happiness of the community and to guard against sinister pressures that might deflect him from this duty. (12) To Bentham it was inconceivable that the collective interest could result from an assembly of representatives identified with the various special interests within the community.
JOHN STUART MILL (1806-73)
Like Bentham, J.S. Mill is better known as a moral philosopher than as a political theorist. In both fields he was influenced by Bentham's doctrines; indeed his father, James Mill (1773-1836), was a collaborator of Bentham's and an influential democratic theorist in his own right. In J.S. Mill's hands, however, the utilitarian theory of representative democracy underwent important modifications. His Considerations on Representative Government, first published in 1861, contains one of the most heroic intellectual efforts ever made to protect the representative assembly from the influence of sinister interests.
Mill took seriously the argument, which began to surface in Bentham's own time, that a democratic constitution based on equal and universal suffrage, and operating under the simple majority rule, could itself come under the influence of powerful special interests, and thus lead to the "tyranny of the majority". This was most obviously true in countries divided on ethnic lines; democracy in Ireland, for example, would most probably lead to the Protestant minority being repressed by the Catholic majority. But a similar danger existed in countries divided on class lines between rich and poor. In such cases, even where the advantages of private property were generally understood, democratic reforms could lead to the rich being soaked by taxation, and even to skilled workers being prevented by trade unions from earning wages in excess of the rate tor unskilled labour. Just how apposite Mill's reservations about democratic reform were can be judged from the following passage:
Legislative attempts to raise wages, limitation of competition in the labour market, taxes or restrictions on machinery, and on improvements of all kinds tending to dispense with any of the existing labour -- even, perhaps, protection of the home producer against foreign industry -- are very natural (I do not venture to say whether probable) results of a feeling of class interest in a governing majority of manual labourers. (13)
One hundred and twenty years later, all that needs to be added is the observation that such things are probably even more likely to result from the pressures of well-organised middle class special interests than from old-fashioned class conflict between "rich" and "poor".
It was not merely the opportunities available to sectional majorities which threatened to subvert representative democracy. Under universal and equal suffrage, it was quite possible for minorities to carry the day. An assembly might consist of representatives each elected by a bare majority of his electorate; a bare majority of those representatives, though constituting a legislative majority, would most likely represent only a minority of the voting public. In such cases, not even the pretence of democracy could be maintained. (14)
Mill proposed a number of measures to protect the representative assembly from such outcomes and to enhance its ability to promote the public interest. By far the most important of these was the system of "personal representation" (i.e. proportional representation) elaborated by Thomas Hare (1806-91). This system, though complicated, can be adequately summarised in three points. First, voters numbered the candidates for election in order of preference. Second, those candidates receiving at least a quota of the votes were declared elected (a quota consisted of the number of votes cast divided by the number of seats to be filled); surplus votes were distributed according to second choices and, if necessary, lower choices until all seats were filled. Third (and most important for Mill), the voter was not restricted in his choice of candidates to those standing in his electorate, but could express a preference for any candidate standing anywhere in the country. The point of the system was to prevent majorities from "beating" minorities at elections, and to enable every voter to identify with a parliamentary representative. In particular, the option of voting across electoral boundaries ensured that any widespread minority interest or viewpoint could escape being overwhelmed at the electoral level by local majorities, so long as it could field a candidate capable of attracting a quota of votes from various parts of the country. (As an M.P., Mill tried but failed to persuade the House of Commons to incorporate Hare's system in the 1867 Reform Act.) (15)
By allowing, and even encouraging, the representation of minorities, Mill seemed to have come a long way from Rousseau, who preferred to see factions banned, and Bentham, who wanted to make it impossible for them to be represented in Parliament. But Mill was no less intent than his predecessors on preventing the public interest being undermined by special interests. Britain was divided into two major interests: the employers of labour (along with rentiers and the professional classes), and the labourers (including small employers and tradesmen). The election of representatives of minority viewpoints would help prevent Parliament becoming a battleground between these great parties, in two ways. First, the representatives of dispersed minorities would very likely be of a higher intellectual calibre than the representatives of local electorates; they would have a clearer conception of the public interest and would insert this into parliamentary debate. Secondly, they would ideally hold the balance between the main parties and thus prevent a tyranny of one over the other. Mill summarised the workings of an ideal representative system thus:
It ought not to allow any of the various sectional interests to be so powerful as to be capable of prevailing against truth and justice and the other sectional interests combined. There ought always to be such a balance preserved among personal interests, as may render any one of them dependent for its successes, on carrying with it at least a large proportion of those who act on higher motives, and more comprehensive and distant views. (16)
This final version of the classical theory thus depended for its success on two rather fragile conditions: an electoral system which could, to some extent, escape domination by political parties, and a supply of at least a few parliamentary candidates both inteiiigent enough to see the public interest and high-minded enough to devote their lives to realising it.
CHAPTER 3
THE ELITIST-PLURALIST THEORY OF DEMOCRACY
The era of the classical theory of democracy may be said to have ended when the House of Commons refused to implement Thomas Hare's electoral system, Ever since, democratic theory has increasingly reflected and accommodated the growing influence of political parties. Yet it is only in recent decades that political theorists have attempted a systematic justification of democracy that takes account of this reality. Indeed, during the last decades of the nineteenth century and the early decades of the twentieth, when democracy was coming to be accepted as the only legitimate form of government, many commentators (most notably the school of political sociologists known as the "elite theorists") concluded that democracy was in fact a sham: not only did universal suffrage and regular elections provide a mere facade behind which self-appointed elites struggled for power, but it was impossible by institutional changes to transform politics into anything different. From this point of view, even if "the public interest" could be given a meaning, there was no hone that it could ever be realised at the expense of dominant group interests.
The recovery of democratic theory in modern times began with the recognition of the social division between politically active elites and the inactive masses. But it then went on to assert that this division was acceptable, and not wholly inconsistent with traditional democratic ideals, so long as these elites competed for political influence within a democratic constitutional framework. This so-called "empirical" type of democratic theory comes in several versions, but the most influential have been Joseph Schumpeter's elitist theory, which stresses the role of political parties, and Robert Dahl's pluralist theory, which highlights the role of pressure groups. The combination of these two theories gives us the essential elements of the "elitist-pluralist" theory of democracy which has been so influential in modern times.
ELITISM AND DEMOCRACY: JOSEPH SCHUMPETER
Schumpeter's treatment of democracy in his famous work Capitalism, Socialism and Democracy, first published in 1942, begins by attempting to refute the classical theory of democracy, by way of three main arguments. First, Schumpeter denied the existence of a "common good" which could become the object of a political consensus. This was not because people did not desire the common good but because the common good inevitably meant different things to different individuals and groups. Second, even if the common good could be formulated to everyone's satisfaction, it would not necessarily permit a consensus on policy. Everyone might agree, for example, on Bentham's definition of the common good as the "greatest happiness" of the community, yet they could still remain divided on whether socialism or capitalism best realised that end. (17) Third, Schumpeter stressed that the individual voter, so far from being the concerned, thoughtful and rational citizen which the classical theorists required him to be, was incapable of grasping the complexities of political issues and approached politics with a level of rationality well below that which he applied to his private affairs. The mass of the people were easily moved by irrational prejudices. and so were susceptible to the propaganda of political activists. If there were such a thing as a popular will in politics, it could only be an artificial product of the political process itself. (18)
Schumpeter approached his own conception of democracy by recognising, first, that the only useful role of the voting public could be to produce a government rather than a coherent set of policies, and second, that this government would consist of a pre-existing elite of political leaders. Democracy survived in the element of choice available to the voters: "the democratic method is that institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for the people's vote". (19) Party competition, then, so far from tending to deflect democracy from its ideal goal, was, on the contrary, all that we could realistically expect democracy to consist of.
Yet although this theory of democracy was, in an obvious descriptive sense, more "realistic" than the classical theory, Schumpeter insisted that democracy would succeed only if certain stringent conditions were fulfilled -- conditions which, forty years on, seem nearly as impracticable as anything Rousseau recommended. Stable democracy required not only politicians and public servants endowed with high intellectual and moral qualities, but also a voting public capable of toleration and self-restraint, and willing to observe practical limits on the range of political decisions. These limits even protected certain areas of state authority (Schumpeter's examples were the judiciary and the Bank of England as it was before 1914) whose autonomy should be respected by the democratic process. (20) In other words, democracy required party competition to be restricted to those areas of policy where it could do little harm. If competition extended to areas beyond the competence of politicians and where consistency of policy was required (Schumpeter had in mind primarily economic policy, which should ideally be left in the hands of the public service), then democracy ran the serious risk of collapsing into some form of authoritarian rule. Thus, Schumpeter's theory effectively rules out the kind of unlimited competition between parties that characterises modern democratic politics.
PLURALISM AND DEMOCRACY: ROBERT DAHL
One of the weaknesses in the elitist theory of democracy was that it exaggerated the distinction between active elites and the inactive masses. In reality, the energies of very many citizens are engaged in the various groups and associations which stand between the individual and the state. According to the pluralists, many of these groups are politically relevant and help determine the outcomes of the democratic process. Pressure groups may exert influence on political parties or directly on the government. In any case they must be included in any complete account of democratic reality.
In A Preface to Democratic Theory, first published in 1956, Dahl argued that the existence of active pressure groups rendered irrelevant traditional anxieties about the tendency of democratic systems to be undermined by majoritarian tyranny. What these systems actually produced was "polyarchy", or "government by minorities". (21) Dahl countered the obvious objection to this idea -- that polyarchy could turn out to be the domination of the majority by coalitions of minorities -- by arguing that new pressure groups emerged and joined in the political process in accordance with the intensity of the wishes of their members: "All other things being equal, the outcome of a policy decision will be determined by the relative intensity of preference among the members of a group". (22) The openness of the system to fresh minority demands thus guaranteed a political equality among citizens which compensated for the undoubted social and economic inequalities that divided them.
Like Schumpeter, Dahl dispensed with any conception of "the public interest" or "the common good" and saw politics as the interplay of group interests only. But again like Schumpeter, he believed that political competition between groups could be stable only if political actors showed mutual toleration and self-restraint. For Dahl, this required a "consensus" among the politically active around the norms of the system itself. Pluralist democracy depended crucially for its survival on the socialisation of its citizens into the acceptance of its values. (23)
It should be said that some members of the pluralist school have paid more attention than did Dahl to the question of the public interest. Charles Lindblom, for example, in The Intelligence of Democracy (1965), tackled head-on the objection, now commonplace among public choice theorists, that group bargaining is systematically biased against public interests. Lindblom argued that the political process ("partisan mutual adjustment") need not promote "narrow and particular values" at the expense of "widely shared and collective values". Like Dahl, Lindblom believed that intensity of preference was a major factor determining the weight accorded to interests. But he identified an additional factor: "Other things being equal, the more widely shared a value, interest, or preference, the heavier its weight in partisan mutual adjustment". (24) Party competition, so Lindblom believed, would mobilise widely shared but less intense preferences, thus ensuring that they were accorded no less attention than narrow but more intense preferences. But Lindblom remained a pluralist in his conviction that interests traditionally subsumed under "the public interest" posed no special constitutional problem. So long as the political system facilitated "partisan mutual adjustment" there was no need to fear that some kinds of interest would come to dominate others. The political process itself could be safely assumed to bring into play and to reconcile all significant interests, collective as well as particular, weakly felt as well as intensely felt.
THE IDEOLOGY OF ELITIST-PLURALIST DEMOCRACY
The combination of the elitist and the pluralist democratic theories supplied a remarkably successful justification for the post-war Western democratic systems. Policy decisions were determined in a partisan manner, but the system seemed to guarantee all sizable parties a turn in office, thus providing a political balance between the main interests in society. Private citizens were not condemned to complete passivity, but could use their civil freedoms to promote causes and minority interests with a chance of influencing policy. The process was conducted within a liberal-democratic consensus which enabled nearly everyone to accept its outcomes as legitimate.
In the ideological contest between the free world and the communist bloc, elitist-pluralist democracy seemed to be the easy winner. It was deemed superior not only because it presided over full employment and high and rising living standards for its working populations, but also because it avoided a doctrinaire approach to politics. It was not only manifestly more desirable than communist totalitarianism; it also seemed an improvement on the "rigid" laissez-faire capitalism which preceded the Keynesian revolution. Western democracy embodied a moderate, pragmatic, middle-of-the-road approach to politics in which, so it appeared, all men of good will could successfully co-operate. The main achievement of elitist-pluralist democracy was the welfare state and the so-called "mixed" economy, in which private enterprise is accompanied by vigorous state intervention. The precise proportions of the public-private "mix" could not be justified by any particular economic or social doctrine, but they could be defended as the "fair" outcome of the purely political process of party competition and group bargaining.
CHAPTER 4
THE PUBLIC CHOICE THEORY OF DEMOCRACY
The ideological dominance of the elitist-pluralist theory began to wane in the early 1970s, when the world economic climate rapidly deteriorated. The end of automatic economic growth, the threat of hyperinflation and the re-emergence of high and intractable levels of unemployment have, over the last decade, served to highlight the weaknesses of elitist-pluralist democracy. Pressure-group bargaining and party competition have continued despite the growing inability of the economy to finance the policy outcomes to which they lead. As a result, democratic processes have become more intensely and bitterly competitive, and the value consensus which contains them weaker and less predictable.
It is in this context that the public choice theory of democracy has acquired an increasingly obvious relevance. The theory is in many ways a throwback to the classical theory. It assumes the existence of a public interest quite distinct from group interests; and it revives Bentham's assumption that governments are not necessarily more devoted to the public interest than anyone else, but are liable to promote their own interests in whatever ways they can, even when this conflicts with the public interest. But public choice theory brings to the analysis of democracy an intellectual sophistication that reflects its origins in the discipline of economics rather than political science. The central claims of the theory are that, in modern conditions, unrestrained competition between political parties generates constitutional majorities consisting of coalitions of minority interests that override the public interest, and that democracy will promote the public interest only if it operates within constitutional limits designed to control the influence of group interests.
THE PUBLIC CHOICE CRITIQUE OF PLURALISM
A major text in the literature of public choice is Mancur Olson's The Logic of Collective Action, first published in 1965. In his analysis of pressure-group formation and activity Olson undermines the elitist-pluralist theory of democracy in two ways. First, he argues that even if pressure groups emerge in the way the pluralists describe, the results of group bargaining are likely to leave them worse off than before. Second, he claims that in the real world only certain kinds of groups are able to organise, and these groups can secure benefits for themselves mainly by exploiting the general public.
Olson's doubts about the results of group bargaining are summarised concisely in the following passage:
It does not follow that the results of pressure-group activity would be harmless, much less desirable, even if the balance of power equilibrium resulting from the multiplicity of pressure groups kept any one pressure group from getting out of line. Even if such a pressure-group system worked with perfect fairness to every group, it would still tend to work inefficiently. If every industry enjoys, to a fair or equal degree, favourable government policies obtained through lobbying, the economy as a whole will tend to function less efficiently, and every group will be worse off than if none, or only some, of the special-interest demands had been granted. Coherent, rational policies cannot be expected from a series of separate ad hoc concessions to diverse interest groups. (25)
Pluralism, under this analysis, tends to be self-defeating because agreements between groups so often sanction restrictive practices (such as protection from import competition) and special favours (subsidies, tax breaks, and the like) which impose costs on the general public of taxpayers and consumers. The average individual will of course gain from deals which favour any pressure groups to which he belongs. But as a member of the public he has to carry his share of the burden imposed by other groups, and that share is all too likely to exceed his share of his own groups' benefits. (In Rousseau's terminology, pluralism leads to outcomes dictated by the "will of all", which are inferior for everyone to outcomes dictated by the "general will".)
Olson's second argument against pluralism is that the ability of a social group to organise itself for the realisation of collective benefits does not depend primarily on the intensity of the preferences of its members but rather on certain other features of the group, and in particular its size. What counts is not the balance of benefits over costs for the group as a whole, but the balance for the individual member. Small groups can organise easily, since the resulting benefits for the members who take the initiative will exceed their shares of the costs of organisation. Large groups, however, are less fortunate, since the members who take the initiative often find that their shares of the potential benefits are not only relatively small, but are also exceeded by their shares of the organisation costs. If such large groups do eventually manage to organise, this is usually because they can apply selective incentives and sanctions to their members to persuade them to carry their shares of the organisation costs. Without such incentives, the benefits of membership would accrue to the members whether they paid their dues or not, and the group organisation would never be able to finance itself. Trade unions, for example, typically look for closed shop agreements with employers, or offer fringe benefits to members, as ways of dealing with free riders.
Olson's theory has serious implications for Dahl's version of pluralism. If Olson is correct, then the political process of group bargaining will advance the interests only of what Olson calls "privileged" groups: those groups which, like Bentham's "sinister interests", have the means as well as the desire to organise. Either these groups will be small or else they will be able to apply selective incentives to their members. Groups incapable of organising (Olson calls these "latent" groups) will be systematically excluded from the bargaining process, and their interests, however intensely felt by their members, will go unrepresented (the most important of the "latent" groups is, of course, the general public of consumers and taxpayers). Dahl's "minorities rule" does after all turn out to be a form of minority tyranny. Olson has recently extended his theory of pressure groups, boldly and with great effect, to explain the tendency of dynamic countries to gradually stagnate and decline. In The Rise and Decline of Nations (26) he argues that nations which have enjoyed prolonged internal and external stability slowly become dominated by special interest organisations (his examples of such countries include Australia, New Zealand, the UK, and the north-eastern region of the USA). Olson calls these organisations "distributional coalitions" because they almost always find it easier to maximise their interests by redistributing more of the national product to their members rather than by increasing the total size of the national product. This leads to overall stagnation as market forces are increasingly hampered by price-fixing, special subsidies, and other anti-competitive arrangements. As long as political influence is confined to "privileged" groups, the gains to the group members far exceed their shares of the public loss. Thus, the middle-aged skilled worker in a protected industry, and the average public servant enjoying security of tenure, are much better off than they would be if subjected to the competitive conditions which the public interest demands.
Significantly, Olson does not explain the power of special interest organisations exclusively by reference to their political influence. Cartels may benefit from state protection but can often survive without it. (27) Any state-imposed solution to the problem, assuming such a thing were possible, would therefore require not only the repeal of legislation favouring special interests, but also intervention to break up coercive monopolies. (28) To this extent Olson modifies the traditional laissez-faire belief that small government alone can guarantee free markets.
Olson does not in the end accept the depressing conclusion which seems to follow from his analysis, namely, that the power of special interest organisations renders futile any appeal for reform in the name of the public interest. Instead he retains some faith in the power of ideas to dislodge vested interests:
May we not then reasonably expect, if special interests are (as I have claimed) harmful to economic growth, full employment, coherent government, equal opportunity, and social mobility, that students of the matter will become increasingly aware of this as time goes on? And that the awareness eventually will spread to larger and larger proportions of the population? And that this wider awareness will greatly limit the losses from the special interests? That is what I expect, at least when I am searching for a happy ending. (29)
THE PUBLIC CHOICE CRITIQUE OF PARTY COMPETITION
An obvious solution to the apparent failure of group bargaining to promote the public interest might seem to lie in competition between political parties for the popular vote. Do not parties have a strong incentive to represent the interests of those latent social groups which cannot overcome the barriers to organisation? This was roughly the conclusion reached by one of the pioneers of public choice theory, Anthony Downs. In An Economic Theory of Democracy, first published in 1957, Downs adopts a model of democracy which, like Schumpeter's, consists of only political parties and voters. His argument is that, if parties and voters are rational and motivated by self-interest, they can conduct quasi-market exchanges which will satisfy them both and result in political equilibrium and harmony. Downs assumes that voters are distributed across the left-right spectrum of opinion on the permanent and fundamental issue of the extent of state intervention in the economy. Each voter will rationally vote for the party which represents the position nearest to his own; the parties meanwhile will take up positions on the spectrum which are likely to maximise their votes. The result is that, in a two-party system, both parties will gravitate to the position occupied by the "median voter" (the voter who has an equal number of voters on either side of him on the spectrum). Whether or not this ensures that the parties govern in the public interest depends on the views of the median voter. But Downs believes that in most democracies the great majority of voters take up positions in the middle of the spectrum, which is why political parties are so keen to formulate policies which represent the "middle ground" of politics. (30)
Downs's conclusions are relatively optimistic, but they depend on the assumption that the voters do in fact vote on the one issue of the extent of state intervention in the economy. The trouble is, of course, that the voters in modern democracies have various minority interests which it is rational for them to promote even when these conflict with the public interest. This means that there may be no unique "median voter" who determines the outcome of elections. Political parties, therefore, as well as trying to occupy the "middle ground" by vaguely appealing to the community as a whole, will also compete for the support of minority groups and try in this way to put together electoral majorities which bring them to power. Organised pressure groups are in a good position to trade their electoral influence for special consideration; but it is also worthwhile for politicians to seek the support of unorganised minorities. If minority coalitions win elections, political parties have every incentive to encourage the division of the voters into groups with whom they can come to understandings. Party competition may thus fail to ensure that genuinely public interests are represented in pluralistic societies.
The interaction between party competition and minority interests (known in the USA as "logrolling") has been most effectively analysed by the leading public choice theorists Gordon Tullock and James Buchanan. In The Vote Motive, Tullock shows that logrolling in the USA is "explicit": Congressmen win legislative support for schemes benefitting their own states by openly agreeing to support similar schemes in other states. In parliamentary systems logrolling tends to be "implicit": the parties centralise in their own hands the negotiations between groups and undertake to produce entire packages of deals designed to win elections. But the political effects of implicit logrolling are identical to those of the explicit variety. (31)
Tullock is not entirely hostile to logrolling; deals between minority interests may resemble market exchanges from which all participants benefit. But political deals between groups differ crucially from economic transactions between individuals in the sense that in politics everyone can be made, via legislation, to carry some of the cost of the deals while the benefits are concentrated only on the participating groups. Consequently political actors have little incentive to conclude deals that are efficient from a social standpoint. This can have the result analysed by Olson (and intuited by Rousseau) where group bargaining leaves everyone worse off than before. According to Buchanan, this is in fact liable to occur under the typical democratic constitution which includes the simple majority rule. In The Limits of Liberty Buchanan shows that a sequence of legislative measures may all pass under majority rule, but leave everyone worse off than if none had got through. This will occur if the costs to each voter of those (few) proposals which he opposes exceed the net benefits of those (many) proposals which he supports. (32) Alternatively, as Tullock shows, some groups may derive exceptionally high benefits from specific policies, so that logrolling leaves them with a net gam even though this is far exceeded by the social cost (these groups are equivalent to Olson's "privileged" groups and Bentham's "sinister interests"). (33) The net result of logrolling is that total government intervention in democracies tends to be higher than anyone wants. Buchanan and Tullock conclude that the only way out of this dilemma is by constitutional reform: specifically, they recommend replacing the simple majority rule with a "reinforced" (roughly two-thirds) majority requirements of which more below.
THE INTERNAL CONTRADICTIONS OF DEMOCRACY
Several years ago, Samuel Brittan, one of the most effective communicators of public choice theory, conjectured that liberal democracy was "likely to pass away within the lifetime of people now adult". He argued that the system was threatened both by "the generation of excessive expectations" (of more spending) and by "the disruptive effects of the pursuit of self-interest in the market place" (i.e. by interest groups). (34) Brittan was writing mainly with reference to the UK, whose politics at the time were dominated by high inflation and trade union power. But the problems he identified persist more or less in all democracies. Neither group bargaining nor party competition automatically promotes the public interest. These mechanisms on the one hand encourage the articulation of minority interests, but on the other hand they cannot guarantee to benefit those interests in the long run. Modern democracy both generates political demands and ensures that many of them will be frustrated.
According to Brittan, excessive expectations are generated by party competition, which in reality is far less constrained than either Schumpeter or Downs assume it to be. The pressure on parties to win elections leads them to outbid one another and to end up promising more than they can deliver: more precisely, their promises are not constrained by any clear conception of what can be afforded. Minority groups with no established political allegiance are especially likely to receive competitive offers of special treatment. A particularly instructive example of this process in Australia is multiculturalism. Raymond Sestito has shown that multicultural policies were neither demanded by ethnic minorities nor particularly in line with public opinion generally. Rather, they were promised and implemented as political parties realised that there existed many thousands of first and second generation migrants not fully assimilated into the political culture; they were "floating voters" and so could be easily influenced by promises. But as soon as one party made a move in this direction, the others were bound to follow suit. As a result, multiculturalism is now firmly entrenched by party competition, regardless of its effects on the public interest, and regardless even of whether it really promotes social justice or protects anyone's rights. (35)
Corresponding to the tendency of parties to make excessive promises is "the lack of a budget constraint among voters". (36) This notion fills out Schumpeter's perception that voters are less rational about political matters than about their private affairs. In fact, this political irrationality is itself, so to speak, quite rational; as Downs shows, the effect of one vote, for good or ill, is normally so very small that it is just not worth the voter's while to give much thought to it. (37) The result is that voters will be aware only of potential political benefits and ignore the costs of their demands. But in the context of interest-group politics even this need not be irrational, since the costs of special treatment are, as we have seen, carried mainly by the rest of the community.
The extent to which expectations are "excessive" depends of course on the ability of the state to finance them. Before the Keynesian revolution of the 1940s, governments observed certain objective and quasi-constitutional rules, such as the gold standard and the balanced budget requirement, which limited their spending. The abandonment of those rules did not lead to any immediate problems, largely because the post-war economic boom automatically financed the steady increase in expenditure by governments committed to full employment and the welfare state. But although economic growth has since slowed, political demands have continued to expand; and politicians have found it extremely difficult to control spending when they have no obligation to observe any constitutional limits. Through the 1970s they used budget deficits and inflation to give the appearance of meeting demands in excess of what could be supplied. When high inflation turned out to be electorally disastrous, some attempts were made to control it by monetarist means; several Western governments have yet to tackle their budget deficits. The attraction of deficits lies solely in the fact that the final reckoning can be considerably delayed, and to some extent bequeathed to future generations of taxpayers. But deficit financing cannot (given stable prices) be sustained indefinitely, both because of its effects on interest rates and because of the escalating cost of debt servicing. Brittan usefully characterises the internal tensions of democracy as the non-fulfilment of some of the conditions regarded by Schumpeter as necessary for democratic stability. Specifically, party competition pushes the range of political decisions beyond the limits which the system can sustain; while electoral demands on the system are no longer restrained by the exercise of democratic self-control. (38) Unlike Buchanan and Tullock, Brittan does not go on to recommend constitutional reforms; instead, he speculates sombrely that "a continuation of present trends might lead to a situation where nothing remained of liberal democracy but its label". But he ends, like Olson, with qualified faith in the power of ideas:
My conjecture about democracy could be forestalled by events or by preventive action. This is, after all, the point of making it. To point to weaknesses, tensions and dangers does not mean that we must succumb to them. (39)
CHAPTER 5
THE SCOPE FOR PARLIAMENTARY REFORM
The analysis so far suggests that the failure of Parliament to ensure that public policy is sufficiently attuned to the public interest is not a result of a chance deviation from some ideal system of representation, whose diagnosis will lead at once to a cure. Rather it is systematically produced by interaction between three major components of the political system: political parties that compete democratically for votes; a voting community which is to a considerable extent fragmented by organised minority interests; and a constitution which imposes no legal or conventional limits on state spending. But while understanding this may enable us to formulate appropriate reforms, it also reveals to us the formidable obstacles to reform presented by entrenched group and partisan interests. The question of the limits to parliamentary reform is, however, postponed to the next chapter. This chapter assumes provisionally that ideas do have some influence on events, and that open speculation on far-reaching reform proposals must in some way assist the reform process itself.
WIDENING THE DEBATE
Discussion of parliamentary reform in Australia is usually confined to relatively piecemeal reforms designed to avoid constitutional crises such as that of 1975 or to increase the accountability of the Executive to Parliament. The problem with such proposals is that they do not directly confront the central issue, which is that the Constitution, for all the "checks and balances" written into it, has failed to protect the political system from the undue influence of special interests. This is not to deny that some such proposals have merit. Longer parliamentary terms, for instance, would lead to less electioneering, and might encourage MPs to display more independence of thought; in particular, they could promote the evolution of the Senate into a genuine house of review. The proposal for fixed parliamentary terms, on the other hand, would largely neutralise one of the most effective checks on the Executive -- the Senate's power to force an early election by withholding supply -- since, under fixed terms, both houses of Parliament would be required to complete their terms even where the Senate had blocked supply. (40)
As for increasing the Executive's accountability to Parliament, a good deal of attention has been paid to the parliamentary committee system, with which both houses have experimented in recent years. Debate within committees is much less partisan than debate in the full house, and can thus contribute better to Parliament's educational function. (41) However, the effectiveness of committees, especially those of the lower house, is severely limited by the fact that their powers, privileges and ultimate influence on legislation are in practice at the discretion of the Executive, and will remain so while the partisan adversary system persists in its present form. (42) Again, the effectiveness of parliamentary committees is limited by the growth of party committees in Parliament, which, in the words of one commentator, facilitate "closed politics at the expense of open polities" and "secret deals in government at the expense of open public debate". (43)
The remainder of this chapter summarises three reform proposals advocated by public choice theorists (or by commentators influenced by public choice theory) and evaluates them in terms of their applicability to Australia's twin constitutional traditions of responsible government and independent upper houses. The first proposal, advanced by Friedrich Hayek, redefines and strengthens the role of upper houses vis-a-vis lower houses and the Executive. The second proposal involves the qualified (or "reinforced") majority decision rule; this, as noted earlier, has been proposed by Buchanan and Tullock as a restraint on logrolling. Finally, Milton and Rose Friedman have demonstrated that constitutional limitations on government spending and taxation would go far towards offsetting the political imbalance between special interests and the public interest. These proposals are not really as radical as they might at first seem; ail three draw on and articulate aspects of modern constitutional experience, including Australia's. Nor do I mean to imply that they are the only reform proposals worth considering. The extension of proportional representation to lower houses, and the widening of the referendum procedure to cover ordinary legislation as well as constitutional amendments, could both help check special interests. But the three proposals examined here are especially relevant in that they arise directly from analyses which identify the undue influence of special interests as the central weakness of modern democratic systems.
A NEW ROLE FOR UPPER HOUSES
Hayek has given a full account of his constitutional reform proposals in The Political Order of a Free People, (44) but he included a briefer and simpler version of them in a lecture ("Whither Democracy?") he gave in Sydney in 1976. (45) Hayek proposes to revive the classical notion of the "separation of powers" and to accord to government, legislation and adjudication a distinct institutional forum, while retaining the main features of responsible government. In this way Hayek hopes not to exclude special interests from democratic representation, but to discipline them by making them subject to law (understood by Hayek to consist of general, abstract rules rather than specific orders addressed to the public service).
Government would be carried on as it is now, by an executive body supported by a partisan majority in the lower house (the "governmental assembly"). This assembly would be subject to periodic election and so would reflect the shifting pattern of interests within the society; its administrative acts would be determined by temporary majorities among such interests. It would, however, be constitutionally required to observe the rules of law laid down by the upper house, the "legislative assembly". These rules would not themselves require any action on the part of governments, but would keep governmental acts within certain fixed guidelines. The guidelines would ideally reflect public opinion and would consist mainly of common law principles such as equality before the law. Their effect would thus be to prevent governments from favouring some special interests at the expense of others. For example, the governmental assembly would be responsible for providing state services and determining the total tax burden those services entailed; but the legislative assembly would determine the principles for distributing that burden among the community. In Hayek's words, "It is difficult to conceive of a more salutary control of expenditure than such a system, in which every member of the governmental assembly would know that to every expenditure he supported he and his constituents would have to contribute at a rate he could not alter!" (46) Finally, a constitutional court would adjudicate in any disputes between the two assemblies, and would invalidate acts of the legislative assembly which violated the principles of the rule of law,
Hayek naturally devotes considerable attention to ensuring that the members of the legislative assembly would be competent to discharge the functions of the assembly. His aim is to ensure the election of individuals similar to the non-partisan types that Mill hoped would be brought into the House of Commons by Hare's system of proportional representation. Members would serve single, fifteen-year terms and thus be rendered independent of parties. They would be forty-five years old on election, and thus have acquired some experience and respect. (These provisions might seem designed to create a gerontocracy, but Hayek points out that the average age of a member would, at less than 53 years, be lower than in many actual legislative assemblies.) Each year, the one-fifteenth of the assembly that had reached the age of sixty would retire: a similar number of forty-five-year-olds would replace them, elected by voters of the same age. Each citizen would thus vote only once in his life, at a suitably experienced age, for one of his contemporaries to take a seat in the assembly. Retiring members of both governmental and legislative assemblies would have the opportunity to become judges on the Constitutional Court or elsewhere in the legal system.
The final noteworthy aspect of Hayek's proposals is that they would lead to a rejuvenated federalism:
Once it is generally recognised that government under the law, and unlimited powers of the representatives of the majority, are irreconcilable -- and all government is equally placed under the law -- little more than external relations need be entrusted to central government -- as distinct from legislation. Then regional and local governments, limited by the same uniform laws with regard to the manner in which they could make their individual inhabitants contribute to their revenue, would develop into business-like corporations. They would compete with each other for citizens, who could "vote with their feet" for that corporation which offered them the highest benefits compared with the price charged. (47)
Hayek's proposals, however unusual some of their details, are not in fact very far removed from one actual constitutional development in Australia: the slow increase in the influence of at least some upper houses. The adoption of proportional representation for elections to the Australian Senate and to the Legislative Councils of New South Wales and South Australia has weakened executive dominance in those bodies. (48) This is especially important in the case of the Senate, where the frequent inability of the governing party to command a majority has resulted in a more vigorous committee system than is possible in the lower house. It is also with respect to the Senate that the most serious specific reform proposal in recent times has been made. Senator David Hamer has proposed making the Senate a genuine house of review by, first, requiring that all Ministers be drawn from the lower house, thus ensuring that Government legislation could not originate in the Senate, and, second, automatically referring all bills received from the lower house to one of the Senate Standing Committees for scrutiny. Committee hearings would be in public, thus helping to expose the influence of special interests on legislation:
Public hearings would ... push lobby groups into the open. Lobbying is a legitimate part of the democratic process. As a major influence in the framing of legislation and government decision making it too should be subject to public scrutiny. At the moment pressure groups chiefly operate on public servants in secret. They should be forced into the open, which committee hearings would do. (49)
One major outcome of such a reform would be to reduce the number of bills that became law -- an outcome which Senator Hamer would welcome as "an unmitigated blessing". (50)
A Senate which, like Hayek's "legislative assembly", ensured that legislation met the formal requirements of the rule of law could do much to prevent routine government favours to special interests, such as above average import protection for certain industries, uncompetitive conditions of employment in the public sector, and the exemption of trade unions from common law liability for damages. It could also do much to eliminate the harm done by cartels and other coercive monopoly practices arising spontaneously; it could, for instance, follow Hayek's suggestion and declare unenforceable in law all agreements in restraint of trade. (51) The Senate committee system could be strengthened so as to eliminate the need for administrative "quangoes", such as the Australian Broadcasting Tribunal and the Human Rights Commission, which provide additional avenues for the influence of special interests. By gradually building up its own interpretation of the rule of law, the Senate would also do away with the need for a Bill of Rights, the interpretation of which will in all likelihood provide yet another arena for competition between special interests.
The Senate is, of course, still a long way from Hayek's model upper house. Yet its rejection in 1984 of government proposals to apply tax legislation retrospectively -- proposals which clearly violated the rule of law -- shows its potential for evolution in that direction. Longer parliamentary terms could encourage that evolution if Senators continued to be elected for twice the term served by members of the lower house, since this would further reduce their dependence on the party machines and would probably result in more of them serving single terms. Again, the slowly increasing size of the Senate will weaken the dominance of the main parties by improving the electoral chances of independent members.
"REINFORCED" MAJORITY DECISIONS
As noted in Chapter 2, one of J.S. Mill's reservations about the radical reforms advocated by Bentham was that they could lead to minority rule. A bare majority of representatives, themselves elected by a bare majority of the voters, would be sufficient to pass a legislative measure, even if, as a "majority of a majority", they in fact represented only a minority of the people. Nor was this mere hypothetical speculation. More often than not, winning political parties receive fewer than half the votes cast. In Britain's second general election of 1974, the Labour Party won a majority of parliamentary seats with only 39% of the votes (representing 29% of eligible voters). Yet it went on to implement much of its manifesto claiming that it had a "mandate" to do so.
The most popular remedy for this unintended outcome of the simple majority rule is proportional representation, which is designed to relate the parliamentary strength of political parties more closely to their actual electoral support (as already noted, proportional representation has been adopted for elections to some upper houses in Australia and to the Tasmanian lower house). Buchanan and Tullock have arrived at the rather different remedy of the "reinforced" majority as a result of their analysis of logrolling. They argue that legislative measures that require a two-thirds majority to pass are much less likely to lead to the socially inefficient outcomes which, as observed in Chapter 4, may result from logrolling under the simple majority rule. The ideal rule is unanimity, since in this way everyone can veto a bill which is harmful to him. Where only a majority benefits from a bill, that majority would begin logrolling and buy off the minority, thus securing unanimous support for the bill. The trouble is that logrolling is itself a costly business; and where the decision rule is unanimity, negotiation costs are likely to be so high as to prevent logrolling from taking place, thus depriving the community of many potentially beneficial measures. The two-thirds rule emerges as a sort of compromise between the simple majority, which cannot prevent groups conspiring to exploit the public, and unanimity, which would prevent even harmless deals between groups. (52)
The "reinforced" majority is especially suitable for the "explicit" logrolling system in the United States, where party discipline is relatively weak and the Executive is constitutionally separate from the legislature. It is already used there for certain purposes. For example, Congress may override a Presidential veto on a bill by supporting the bill with a two-thirds majority; and as Tullock points out, the President could ensure that all legislative acts did receive that level of support simply by vetoing all bills passed by a lesser majority. (53) But the reinforced majority is correspondingly less appropriate to Australia's parliamentary system, where the Executive does depend upon the continuous support of at least the lower house, and where a qualified majority rule for ordinary legislation, in particular supply and taxation measures, could result in regular crises of confidence. Nevertheless, such decision rules are not entirely foreign to the Australian system. The equal representation in the Senate of states with unequal populations, and the requirement that constitutional amendments receive the support of a majority of voters in a majority of states, are both devices for preventing the larger states from "logrolling" at the expense of the smaller ones. Gareth Evans has argued that an Australian Bill of Rights should be entrenched by a two-thirds parliamentary majority, thus ensuring that both the document itself and any future amendments received bipartisan support. (54) It is at this higher constitutional level that the qualified majority rule seems most suitable for Australia. It may perhaps be most fruitfully considered along with other, more fundamental, reform proposals. For instance, progress towards a truly independent Senate may be possible only if that body loses some of its powers over supply; it might perhaps retain the power to reject supply only if two-thirds of its members so voted. Again, a role for a qualified majority has been included in the Friedmans' proposal for a balanced budget amendment -- which is the last of the reform proposals to be discussed in this essay.
CONSTITUTIONAL CONTROL OF EXPENDITURE AND TAXATION
Before the Keynesian revolution, Western countries usually balanced their budgets or ran budget surpluses in order to reduce national debts accumulated during past wars. Keynes himself did not essentially depart from the balanced budget convention, but argued that governments could promote economic stability by adopting the "countercyclical" policy of running surpluses during booms and equivalent deficits during recessions. (55) In practice, as we saw in Chapter 4, democratic states have acquired the habit of running permanent deficits as a means of satisfying electoral pressures for high levels of spending. But pre-Keynesian experience does establish the fact that democracies can live within their fiscal means.
The movement for a balanced budget has recently received the support of Milton and Rose Friedman in Tyranny of the Status Quo (1984). (56) The Friedrnans seek to explain why public expenditure in the USA continues to rise even when public opinion, and President Reagan, believe it to be already too high. Their answer is based on an analysis of democratic decision-making which reaches similar conclusions to those elaborated by the public choice theorists. They argue that spending decisions are taken by an "iron triangle" of groups who can support one another's special interests even when this is damaging to the public interest. The beneficiaries of a spending decision form one corner of the triangle; since their gains from the decision far exceed their shares of the cost which is carried by the public as a whole, they have every incentive to press for the greatest possible amount to be spent. The politicians occupy another corner; their special interest is to win votes, which of course they do by directing resources towards groups of beneficiaries. In the third corner are the bureaucrats. Their interests lie in expanding their administrative empires, which themselves depend on the continuous growth of government; they will therefore do everything to facilitate communication between voters and politicians, and, correspondingly, resist all efforts to close down existing spending programs. (57) The Friedmans do not deny that the public interest does to some extent determine political decisions. Incoming Presidents enjoy a honeymoon period of about six months, during which time they can get away with initiatives which reduce government intervention. But eventually the "iron triangle" reasserts itself, and the trend towards ever bigger government resumes its path.
Underlying and facilitating this trend is the absence of any constitutional limitation on government expenditure, taxation and borrowing. The Friedmans propose to eliminate borrowing as a normal source of finance by making it unconstitutional for governments to spend more than they receive from taxes, unless a reinforced (three-fifths) majority of the whole membership of both the Senate and the House of Representatives votes otherwise. They also propose that tax revenues should not rise faster than the growth in the national income, unless a simple majority of the whole membership of both houses decides otherwise; and neither provision would apply in wartime. Government borrowing greatly reduces the short-term political cost of increased expenditure, since it transfers the direct cost to future taxpayers, even though borrowing is likely to cause higher interest rates, high debt service costs, and inflation, long before repayment of the principal becomes a problem. But if all spending has to be covered by taxation, politicians will find the existing electoral bias towards increased spending to some extent offset by counterpressures from the taxpaying public. A proposed new spending program could eventually lose the government as many votes as it gains. The indexing of the annual increase in tax receipts to the rate of economic growth would slow down "bracket creep", the unlegislated and largely hidden tax increases which occur as inflation and economic growth push more and more taxpayers into higher tax brackets. It would also (though the Friedmans do not mention this) give governments an incentive to promote economic growth in order to maximise their tax revenues.
Constitutional limitations of this sort should not only reduce the opportunities for pressure groups to secure benefits at the expense of the general public. They would also go far towards correcting the widespread illusion that governments have access to some secret hoard of wealth with which, if they were sufficiently "generous", they could satisfy all the demands placed on them. Pressure groups would have to work much harder to get their way. They would have to show that their proposals really did promote the public interest; they would also be pushed into mutual competition, and quite possibly a convention would emerge whereby only self-financing spending proposals (i.e. proposals which recommended spending cuts elsewhere) would be entertained. Extravagant and irresponsible electoral promises by political parties would be greatly curtailed by the need to spell out their cost. And Parliament would begin to recover some of its teaching function as it acquired some conception of the level of state spending that the community was prepared to carry.
Considerable progress has already been made in the USA towards a balanced budget amendment; the legislatures of thirty-two states have called for a constitutional convention to propose the amendment, and in 1982 both houses of Congress supported the amendment, the Senate by the requisite two-thirds majority. In Australia there is no equivalent mechanism enabling states or private citizens to bypass the Executive in initiating referendums on constitutional amendments. Nevertheless, two kinds of limits on taxation have been discussed in Australia in recent years. One is the flat-rate tax; the other is indexation of tax rates to inflation. (58) Both these limitations can be defended as requirements of the rule of law. Hayek argues that progressive tax rates, which could be justified to offset any regressive effects of indirect taxes, have come to used for illegitimate political and redistributive purposes: i.e. to benefit some groups at the expense of others (he does not mean by this that the rich are soaked by the poor, but rather that both rich and poor are exploited by the better organised middle-income groups.) His own solution would be to make the political majority that determined the tax scale pay tax at the maximum rate; and he suggests that that rate should approximate the percentage of the national product taken by the government in taxation. (59) Inflation-indexing of tax rates, meanwhile, which was applied briefly in the late 1970s, would slow down "bracket creep" (as described above). Governments that wanted to increase the share of the national product taken in taxation beyond the increase generated by economic growth, or to amend the steps in the tax scale itself, would have to try openly to secure this by legislation.
Hayek's more recent recommendation that the legislative assembly should determine the rules for distributing the tax burden (60) points once again to a strengthened Senate as an appropriate weapon against governmental abuse of the tax power (we have already noted the Senate's recent rejection of retrospective tax bills). A Senate Standing Committee could devote itself entirely to exposing and eliminating tax inequities. Such a committee could contribute greatly to Parliament's teaching function by gradually formulating a conception of tax equity which commanded widespread support throughout the community. Whether it arrived at a flat-rate tax or admitted some progression would matter less than the fact that Parliament was actually examining the problem, rather than merely legalising the government's manipulation of the tax system for short term electoral gain.
CHAPTER 6
CONCLUSION: THE PROSPECTS FOR PARLIAMENTARY REFORM
How optimistic can we afford to be about the chances of Parliament becoming less susceptible to the influence of special interests, so that it can begin to exercise the full range of the functions assigned to it by Bagehot? The reform proposals examined in the previous chapter were specifically designed to remedy defects in the workings of democracy diagnosed by public choice theorists. But those theorists have analysed the workings of democracy almost entirely in terms of interests: democratic constitutions fail to promote the general welfare as well as they might because both voters and parties have every incentive to promote their special interests rather than co-operate to realise their common interests. To be sure, as we noted in Chapter 4, both Olson and Brittan implied that ideas could have some influence on events, and might to some degree negate the power of vested interests; but neither of them went on to explore the precise ways in which interests and ideas interact, and their analyses tend towards the pessimistic conclusion that interests are decisive. And as the Friedmans observed, public opinion in a democracy may be powerless against the organised interests of the "iron triangle" of beneficiaries, politicians and bureaucrats. The recent failure of some Western governments (notably those of Fraser, Reagan and Thatcher) to fulfil their doubtless sincere promises to cut government spending fully bears out this point.
Yet supporters of reforms designed to restore Parliament's educative function will hardly conclude from this that the battle of ideas is futile, since the longer the historical perspective one takes, the more evident it becomes that intellectual change is a major force for social change: more precisely, that ideas which are adopted by the intellectuals -- communicators of ideas -- tend in time to become conventional wisdom: widely shared, taken for granted and thought of as self-evidently correct. But this only serves to demonstrate how much remains to be done. In many Western countries, Australia included, not only do many citizens assume that special interests have a "right" to state protection, but a very great proportion of the intellectuals, probably a majority, believe in the superiority of political control of the production and distribution of the national income. From this ideological standpoint, parliamentary reform should naturally be designed to remove all remaining constitutional constraints (most obviously federalism and independent upper houses) on the power of central government. In the present intellectual climate, supporters of more constitutional limitation can scarcely avoid having to cope with the charge that they are opposed to democracy itself. Only in the USA, where, as we have seen, the movement for a balanced budget has achieved some success, does there seem to be occurring a decisive shift in public opinion away from state protection for special interests.
On the other hand, the steady expansion of state intervention is already bringing into play, however slowly, certain self-correcting mechanisms, such as tax avoidance, evasion of much economic regulation, and a steady growth of private alternatives to state-supplied education and health care. Politicians are finding it correspondingly harder to buy off the special interests on which they depend. They know that the private sector cannot produce an unending stream of wealth for the public sector to consume, and that there has to be a limit on taxation and regulation if the incentives which alone guarantee economic growth are to do their job. For several years their rhetoric has been designed to reduce citizens' expectations from government. Prime Minister Hawke's 1984 pre-election promise not to increase spending, borrowing and taxation as percentages of the national product was a significant attempt to subject his government to a set of constraints which the Constitution in its present form does not impose.
These developments suggest that the public choice critique of modern democratic constitutions may have been pushed too far. As we saw in Chapter 4, Anthony Downs argued that party competition produced a benign equilibrium between voters and politicians, usually resulting in all parties occupying the "middle ground" of politics, since it could plausibly be assumed that individual votes expressed views on the desirable level of government intervention in the economy. Downs was criticised by later public choice theorists on the ground that deals between parties and special interests negated his central assumption about the meaning of the vote, and so led to majority viewpoints being defeated by coalitions of minorities. Yet in the first part of his book Downs had concluded that opposition parties could, under certain conditions, always defeat incumbent parties with a coalition of minorities so long as more than half the voters were in a minority on some issues, and felt more strongly about those issues than about those in which they were a majority. But he went on to argue that, in practice, this strategy was too risky to follow because of the uncertainty which pervades political life; opposition parties simply knew too little about voter preferences to decide whether the strategy could work, and voters were equally uncertain about the effects of parties' actions. Parties therefore tried to take stands which would attract majority support. (61)
The increasing prominence of public interest issues such as total government spending and taxation suggests that politicians may now have reached the limits of the electoral gains to be had from promoting special interests. After all, no special interest organisation can literally commit its members' votes to a particular party. Politicians may try to reduce electoral uncertainty by entering into understandings with such organisations, but they cannot eliminate that uncertainty altogether. In the British general election of 1983, a great proportion of trade unionists voted Conservative, even though the unions to which they belonged were organisationally committed to the Labour Party. Against this, however, it can be argued that the tendency is still for state spending to rise, especially in the areas of transfer payments and national debt servicing; and that politicians seek the best of both worlds by both promising to keep spending under control and making piecemeal concessions to special interests which ensure that total spending rises. Moreover, if Olson (62) is correct in arguing that political stability tends to increase the number and the influence of special interest organisations, then it would be vain to expect public interests to become more politically salient than special interests, especially while the already unusually prolonged international stability induced by the nuclear stalemate continues. It seems doubtful, therefore, whether the excessive influence of special interests can in the end be removed without the implementation of some constitutional or quasi-constitutional reforms designed specifically for that purpose.
Meanwhile, the struggle between special interests for the available favours from government is likely to become increasingly intense as governments find it more and more difficult to finance their commitments. But this should itself begin to make clear the futility of the whole process. We cannot all be better off in the end by promoting our special interests; the public interest, by definition, must ultimately be in the best interest of at least a majority of us. This is likely to become all the more obvious as Australia's economic performance, already seriously hampered by the influence of certain special interests, lags further and further behind that of our trading partners and in particular our Asian neighbours. But, as Samuel Brittan has observed, popular perception of the failure of a system provides opportunities for political leadership successfully to break with past practices. "As the output gap widens between a slowly growing country held back by restrictive interest groups and other countries employing best-practice techniques, the incentive to catch up also becomes larger ... [T]he returns to political entrepreneurship from trying to change the institutional or political rules in favour of better economic performance may become so great that the changes are made". (63) In the same paragraph Brittan observes that if innovation can be introduced into an atrophied economy, "[t]he gains can become so great that it may be possible to make agreements to share them with the restrictive interest groups." This observation underlines the need for parliamentary reform to facilitate the shift in political emphasis from special to public interests. No-one is willingly going to surrender his privileges if he suspects that those privileges will simply be transferred to his neighbour: in other words, if the political system is still dominated by special interests. The reforms discussed in Chapter 5 would all greatly reduce that possibility by constraining governments to observe the rule of law, which, by definition, insists on equitable treatment for all. Some of those reforms would not require formal constitutional amendments but could be accommodated within our existing constitutional traditions, and in particular that tradition which accords an active reviewing function to the upper house. As a first step in this direction, a political party committed to promoting the public interest could adopt Senator Hamer's recommendation that the Executive should be drawn entirely from the lower house. It could then release its members in the Senate from day-to-day party discipline, and invite the Senate as a whole to establish its own procedures for reviewing proposed legislation. In this way it could assure the public that the (initially) painful process of reducing state intervention would not become yet another way of dispensing favours to influential groups.
In the course of discussing the teaching function of the House of Commons, Bagehot wrote:
I think ... that a correct observer would decide that in general, and on principle, the House of Commons does not teach the public as much as it might teach it, or as the public would wish to learn. I do not wish very abstract, very philosophical, very hard matters to be stated in Parliament. The teaching there given must be popular, and to be popular it must be concrete, embodied, short. The problem is to know the highest truth which the people will bear, and to inculcate and preach that. (64)
The arguments for redefining the public interest and enforcing its claims against the special interests that oppose it are by no means "abstract" or "philosophical". On the contrary, they can be expressed in terms of the concrete experience of very many people. Many trade unionists whose wages are fixed by the arbitration system have sons and daughters who are priced out of the labour market, and forced into humiliating dependence on the welfare state, by that same system. For every parent who transfers her child from a state school to an independent school, there must be several who would do the same if they could afford to. Many businessmen (and their employees) know that they cannot export their products because the costs of import protection make them uncompetitive in international markets. If Parliament proves itself incapable of confronting and acting upon issues as straightforward and comprehensible as these, it will become an increasingly irrelevant and despised institution, reduced to sanctioning in a merely ceremonial fashion deals between special interests concluded elsewhere.
NOTES
1. W. Bagehot, The English constitution, Glasgow, Fontana/Collins, 1963, p 152.
2. B. Barry, Political argument, London, Routledge & Kegan Paul, 1965, p 190.
3. Ibid, pp 222-23.
4. A. Hamilton, J. Madison & J. Jay, The federalist papers, New York, Mentor, 1961, p 78.
5. J.J. Rousseau, The social contract and discourses (ed. G.D.H. Cole), London, Dent, 1913, p 23.
6. Ibid. pp 77-78.
7. J. Bentharn, The works of Jeremy Bentham (ed. J. Bowring), 11 vols, Edinburgh, 1838, Vol ix p 63.
8. Ibid. p 127.
9. See M. Olson, The logic of collective action, Cambridge, Harvard UP, 1971.
10. Bentham, op. cit., Vol iii p 98.
11. M. James, "Public interest and majority rule in Bentham's democratic theory", Political Theory, Vol 9 No 1 (1981), pp 49-64.
12. Bentham, op. cit., Vol ix pp 198-204.
13. J.S. Mill, Essays on politics and society (ed. J.M. Robson; Vol 19 of Collected works of John Stuart Mill), Toronto, University of Toronto Press, 1977, p 442.
14. Ibid. pp 449-50.
15. Several modified versions of the system are however in operation today. The Australian Senate and the upper houses in New South Wales and South Australia are elected under proportional representation; and the "Hare-Clark" system is used in elections to the Tasmanian Legislative Assembly. A recent study tests the performance of Hare-Clark against the aspirations of its early advocates: S. Redenbach, "The theory and practice of Tasmania's Hare-Clark electoral system," unpublished Honours thesis, La Trobe University, 1984.
16. Mill, op. cit. p 447.
17. J.A. Schumpeter, Capitalism, socialism and democracy, London, Allen and Unwin, 1954, pp 250-52.
18. Ibid. p 263.
19. Ibid. p 269.
20. Ibid. p 292.
21. R.A. Dahl, A preface to democratic theory, Chicago, UCP, 1963, p 133.
22. Ibid. p 135.
23. Ibid. p 76.
24. C.E. Lindblom, The intelligence of democracy, New York, The Free Press, 1965, p 242.
25. Olson, op. cit. (note 9 above) p 124.
26. M. Olson, The rise and decline of nations, New Haven, Yale UP, 1982.
27. Ibid. pp 177-78.
28. Ibid. pp 236-37.
29. Ibid.
30. A. Downs, An economic theory of democracy, New York, Harper & Row, 1957.
31. G. Tullock, The vote motive, London, Institute of Economic Affairs, 1976, pp 41-47.
32. J.M. Buchanan, The limits of liberty, Chicago, UCP, 1975, pp 154-56.
33. Tullock, op. cit. p 51.
34. S. Brittan, The economic consequences of democracy, London, Temple Smith, 1977, p 247.
35. R. Sestito, The politics of multiculturalism, Sydney, Centre for Independent Studies, 1982.
36. Brittan, op. cit. p 255.
37. Downs, op. cit. pp 260-76.
38. Brittan, op. cit. pp 262-63.
39. Ibid. pp 272-73.
40. G. Lindell, "Fixed term parliaments: the proposed demise of the early federal election", Australian Quarterly, Vol 53 No 1 (1981), pp 15-38.
41. A. Rutherford & J. Hyde, "Choosing the lesser evil", in M. James (ed.), The constitutional challenge, Sydney, Centre for Independent Studies, 1982, pp 83-86.
42. M. Indyk, "Making government responsible: the role of parliamentary committees", in P. Weller & D. Jaensch (eds), Responsible government in Australia, Melbourne, Drummond, 1980; B. Simon, "An insiders' view: the backbench", in G. Brandis, T. Harley & D. Maxwell (eds). Liberals face the future, Melbourne, OUP, 1984.
43. G.S. Reid, "Party committees: the background and issues", in R. Herr (ed.), Party committees: the implications for Parliament, Proceedings of the third special workshop of the Australasian Study of Parliament Group, 1983, p 27,
44. F.A. Hayek, The political order of a free people, (Vol 3 of Law, legislation and liberty), London, Routledge & Kegan Paul, 1979, pp 105-27.
45. F.A. Hayek, Social justice, socialism and democracy, Sydney, Centre for Independent Studies, 1979, pp 33-45.
46. Ibid. pp 41-42.
47. Ibid. p 45.
48. C. Sharman, "Diversity, constitutionalism and proportional representation", in M. James (ed.) op. cit. (note 41 above).
49. D.J. Hamer, "Towards a valuable Senate", in ibid., p 68.
50. Loc. cit.
51. The political order of a free people, p 86.
52. Tullock, op, cit. (note 31 above), pp 51-55.
53. Ibid. p 55.
54. G. Evans, "An Australian Bill of Rights", Australian Quarterly, Vol 45 No 1 (1973), pp 4-34.
55. J.M. Buchanan, J. Burton & R.E. Wagner, The Consequences of Mr Keynes (Hobart Paper 78), London, Institute of Economic Affairs, 1978.
56. M. & R. Friedman, Tyranny of the status quo, London, Secker & Warburg. 1984.
57. The Friedmans cite as an example of bureaucratic tenacity the continued existence of the Board of Tea-Tasters, established in 1897. President Nixon's attempt to abolish the Board, whose functions had long been superseded by other methods and whose annual cost was $US125,000, was supported by many commentators and columnists. The President was finally frustrated by the combined pressures of the Food and Drug Administration and the House Ways and Means Committee, which had been lobbied by large tea importing concerns. The argument was that the Board provided a few jobs, and in any case didn't cost much (op. cit. pp 50-51).
58. These and some other proposed reforms are summarised in P.L. Swan. "Reforming the system: and economist's view", in D.J. Collins (ed.) Tax avoidance and the economy, Melbourne, Australian Tax Research Foundation, 1983.
59. F.A. Hayek, The constitution of liberty, London, Routledge & Kegan Paul, 1960, pp 306-23.
60. Social justice, socialism and democracy (note 41 above), p 41.
61. Downs, op. cit. (note 30 above), pp 55-60, 77-81.
62. In The rise and decline of nations.
63. S. Brittan, The role and limits of government: essays in political economy, London, Temple Smith, 1983, p 238.
64. Bagehot, op. cit. (note 1 above), p 178.
