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Direct Democracy: a Solution to Despotism in the Irish Fiscal Crisis

Updated on February 12, 2013

Democracy, defined by the Oxford English Dictionary, is:

“…a system of government by the whole population or all the eligible members of a state, typically through elected representatives…”

The theory is that the citizens of a nation will elect, amongst themselves and with everyone having the right to put themselves forward, a representative. This representative will listen to the political concerns of their electorate and seek a resolution when the government meets. Thus everyone’s voice will be heard and considered as ‘the exercise of power’ is carried out. As a theory this is nothing short of idealistic naivete, and in practice it is riddled with problems.

A chain is only as strong as its weakest link and in the definition above there is no doubt that the ‘elected representatives’ are the weakest link in the process whereby the voice of the people is expressed in the exercise of governmental power. European democracies, in general, feature one Member of Parliament representing tens of thousands of citizens. (Spain, the most extreme example, features one MP for every 130,000 citizens). How can this setup be expected to give a fair representation of the people and their views?

The notion that the citizens of a democracy have any say in national decisions is illusory. There are few people living within democracies who feel that their voice resonates in the decisions made on a governmental level. On the contrary, many people feel powerless and at the mercy of the decisions made by their government.

The idea of something mentioned to an elected representative being discussed in government is ridiculous and laughable. This is especially the case when considering that all governmental party members are pressured not to give their own views but to follow the party policy on all topics. They face punishment and reprimanding if they do not comply. As a result, it is only the independent government members who can speak their minds freely. In most cases they represent a small percentage of the overall government; in The Republic of Ireland they constitute 8.4% of Dail Eireann.

Party policies, of course, appear to have the best interests of the population as their priority and a lot of governmental time is given to the discussion of the citizens and their problems on a larger scale. However, there have been numerous instances where this is not the case. Specifically, when the most significant decisions are made, the needs of the people play a secondary role. This has been particularly the case in Ireland with regard to both the European Union and the handling of the financial crisis of 2008.

The first major example of this occurred in 2001 with the Treaty of Nice, which proposed changes to the structure of the European Union. It had to be ratified by all members of the European Union in order to come into force. This required an amendment to the Irish constitution, which can only happen via referendum – a wholly positive and truly democratic process. The Irish people were circumspect about the Nice Treaty and harboured concerns that it may affect their nation’s traditional neutral stance. Ireland also ran the risk of becoming marginalised and effectively treated as a minority in the resulting political structure. Therefore the Irish rejected the treaty at the referendum, with a majority of 54% to 46%.

A second referendum was put to the people less than 18 months later. Voter turnout was higher and some additions were made, including a clause to meet the Irish neutrality concern. The result was a yes vote, with a 63% to 37% majority.

The second major example was with the Treaty of Lisbon, which sought to make further changes to European law and unify previous treaties. It also increased greatly the power of the European Parliament and therefore reduced democracy in the member states. It made European legislation easier to pass and more difficult to block. Within it were almost all of the elements of the European Constitution that had been rejected by both the French and the Dutch people in their respective referendums of 2005. Notably, it provided for the advancement of a common military defence policy for the European Union, in direct contradiction to the terms that the Irish people had agreed to the Treaty of Nice. An allowance was made that said it would ‘respect the neutrality of member states like Ireland’ – but in practice this would change nothing. As with the Treaty of Nice, it had to be ratified by all member states in order to be made into law. The Irish referendum was held in 2008 and the people voted against the treaty with a majority of 53% to 46%.

Similarly to the Treaty of Nice, it was merely 18 months until the Irish people were asked to go to the ballot boxes for a second time. There was an increase in voter turnout of 6%, which brought the total to 59% of the population. 67% voted for the Lisbon treaty - an increase of over 20%. This was an incredible turnaround and various factors have been credited as influencing the country’s vote, such as the dire economical situation and a clearer explanation of what the treaty was proposing to do.

However, the question has to be asked as to whether such an approach is truly in the spirit of democracy. In both cases, what would have happened if the second referendum had resulted in a no vote – would we have seen a third referendum? Would there have been continued referendums until the government got the answer for which they were looking? A governing body that operates in this way has lost the original goal of democracy – for a country to be representative of the will of its citizens. If the people give a no vote the first time around then that is how they feel collectively and it should be respected. It would be both unreasonable and unwise to expect any decisions made via referendum to be unalterable. National opinion is unstable by nature and thus the feelings and will of the people are liable to change over time. However, it should be pointed out that in other issues that were put to referendum in Ireland, such as abortion, it was ten years until a second referendum was put to the people. A minimum time such as five years between referendums of this kind should be made part of the constitution of Ireland. A measure such as this will ensure that the will of the people is respected and that votes are treated seriously.

The biggest reason for the turnaround in the second referendum on the treaty of Lisbon is often cited as being the availability of information regarding what the Treaty itself was about. During the first referendum many people felt that they did not understand the Treaty and, as a result, did not want to vote in something that they did not comprehend. It needs to be pointed out that the onus is absolutely on the government to make such information available in simple terms that everyone in the country can understand. One of the major problems with the Lisbon Treaty was the document itself, which was hugely complicated and so full of legal jargon that even the experts had difficulties in understanding its implications. The government acted in an insulting an unprofessional manner through not making this document understandable to its nation until it became apparent that it was in their best interests to do so. Combined with their insistence on a second referendum so soon after the first this constitutes absolute contempt for their people.

During the fiscal crisis there have been two major instances of ‘emergency legislation’ being rushed through government. The first happened in September 2008 with the Credit Institutions Bill. This guaranteed that all the loans in Ireland’s major banks would be paid. Ultimately this has meant that the people are liable for billions of euro in debt and will also have to suffer both taxes and cuts to cover the subsequent bailout. It was passed through government in three days, which was certainly not enough time for close scrutiny, and the people of Ireland were not consulted in any way. It has since been seen as a colossal and irreversible mistake.

The second instance was in February 2013, when the government passed a major bill in a single evening. This allowed them to liquidate the assets of the Irish Bank Resolution Corporation, formerly known as Anglo Irish Bank, and had close ties to their deal with the European Central Bank. As presented by the media, the Irish government had no choice but to do this, as news had been leaked that AIB was to be liquidated. This put an immediate risk on the assets of the bank and their value and thus resulted in the emergency legislation, allowing the government to liquidate it immediately and transfer its debt to NAMA. Government sources have indicated that the leak itself came from Frankfurt, which would indicate that it had its origins within the European Central Bank. This is a key point, as the ECB were the biggest gainers in the government bill. Specifically, the deal exchanged the infamous ‘promissory notes’ for government bonds. These promissory notes were predominantly held between IBRC and the Irish Government. They were devised in 2010 so that the government could use them as collateral to borrow from the European Central Bank, which was permitted once they had issued IBRC with a promissory note for €31 billion. One of the main reasons for doing this was to avoid turning Irish bank debt into sovereign debt. The promissory note arrangement meant that the Irish and their government had some negotiating room, which the ECB wanted to avoid. This was because there was still the possibility that the government could decide not to pay out the money guaranteed on the promissory notes, which in turn would result in the Irish Central Bank breaking the rules set out by the ECB on monetary funding. This option becomes impossible if Government Bonds are used instead, which means that the debts of the banking sector now belong to the Irish people, and paying them off will take the best part of half a century. This has a direct effect on the quality of people’s lives and thus it should have been decided via referendum. Breaking ties with Europe by defaulting on the loans would have been a bold step, but it was a legitimate possibility.

Iceland took this option in 2008, with leading politicians saying they were unwilling to let their people pay for the faults of heedless bankers. A referendum showed that 98% of the country wanted to default and so, true to their people, they allowed their banks to default. Throughout the worldwide crisis they experienced about half of both the economic decline and unemployment than that seen in Ireland, and their economy is now much farther down the path to recovery, with a growth rate of over 2% for 2012.

The Irish people, on the other hand, are suffering and outraged that they are being forced to pay for the reckless risk-taking of thier banking sector. Although defaulting may lessen Ireland’s chances for investment and international trading, it is the justified and moral option. Iceland proved that it is a viable route. When such a decision arises it is the democratic duty of any government to ask the people what they want.

Despotism, as defined by the Oxford English Dictionary, is:

“…the exercise of absolute power, especially in a cruel and oppressive way…”

There is no doubt that the operations of the Irish Government are closer to despotism than they are to democracy. It is true that the people are allowed to elect representatives, but this is of little consequence when those people are being forced to make decisions against the best interests of the country and its people. This is exactly what has happened as a result of Ireland’s joining the European Union, who made it very clear to the Irish Government that they were not to allow the banks to fail. The implications of this are that high-ranking people either in the EU or closely associated with it are pulling the strings. The power lies with the banks and it appears to stretch beyond Europe, as indicated by Professor of Economics at UCD, Morgan Kelly, who published an article in 2011 relating to the Irish bailout. Recounting how the IMF had devised a plan to ‘haircut’ €30 billion of unguaranteed bonds by two thirds, he made known that the proposal had been ‘torpedoed’ by Timothy Geithner, the US treasury secretary, and subsequently abandoned. Geithner has close ties to the infamous Goldman-Sachs Bank and he is a member of the Bilderberg Group, which is seen by many as the pinnacle of Western elitism and the beginnings of a one-world government often referred to as the New World Order. Mario Draghi, the current president of the European Central Bank, also attends their annual meetings, and he was managing director of Goldman-Sachs International from 2002-2005. His predecessor, Jean-Claude Trichet, is closely linked to the Rothschild family, who many believe were behind the creation of the European Central Bank in the first place. The Rothschilds are a hugely wealthy and powerful organisation and have been for over two hundred years. It is people such as them who have the true power and control in Europe and worldwide.

These are the organisations in control of the governments who joined the European Union. Democracy, as we know it now, is a tool that they use for control and exercising power. People of the modern world will no longer accept a governmental system that is overtly oppressive. Democracy carries within it the illusion of fairness, as the people feel they have elected the government that rules their country. Yet this means nothing when the major decisions that the government make are being decided elsewhere and by people with very different agendas to those of the citizens of Ireland and other European countries. It is a form of political terrorism exactly akin to that of terrorist organisations that cannot be quashed because they do not belong to a specific country. In both instances culpability cannot be ascertained.

The current system has become unacceptable. A few specific changes to the existing format would see a massive shift in power back to the people, with governmental decisions truthfully reflecting the will of the population. It is only then that people can take full responsibility for their countries and hold themselves accountable for the state of their nation. This ideal is known as direct democracy. Through its practise the values that modern democracies allege to be striving towards are realised and the actions of their countries become an expression of the people’s desire. If such a system had been in place in the West, even for the last 30 years, then the world would be a completely different place, with the wars in both Iraq and Afghanistan not having occurred.

Direct democracy allows the people to vote on policies directly, as opposed to their elected representatives retaining all of the voting power. It also allows the citizens to propose new laws for consideration and remove obsolete legislature from their constitutions. They also reserve the right to remove elected officials from power before their terms are completed, and veto any governmental decision as long as there is a nationwide majority. Aside from these important differences, the standard model of democracy is left in tact, with the government running affairs as normal. It also reduces massively the potential for corruption within the political system. External forces such as the EU or other elitist groups immediately lose any power they have over the government.

Switzerland is the most often cited model of direct democracy in the modern world. The Swiss have a standard government consisting of elected members operating in the usual way. However, the citizens can challenge any decision made by the government and propose amendments to the federal constitution. This is done through ‘initiatives’ where the people gather signatures for their causes. It takes only 50,000 signatures within 100 days to challenge a law, and 100,000 in 18 months to make a federal amendment. This is equal to 0.625% and 1.25% of the population respectively. If the initiative is successful then a referendum takes place. This system has led to both integrity and transparency for their politicians. A testament to its strength is that 96% of governmental decisions have remained unchallenged.

If Ireland had been a direct democracy then the fiscal crisis would have been handled entirely differently. It is very likely that the people would hold the banks accountable for their actions, as is only fair and reasonable. Moreover, the inequalities affecting the largest demographics of Irish society would be challenged. Issues such as the infamous household tax and the pending water charges would have been undoubtedly rejected, as well the cuts made to the welfare system that saw carers of the infirm badly hit. Low paid public sector workers saw a reduction in pay whilst politician’s pensions remained untouched. These austerities effected the working class most significantly, which is something that is very unlikely in a system of direct democracy.

There are various additional benefits to such a system. The people would be highly informed on political matters, leading to a healthy culture of debate and discussion. Significantly, they would take personal responsibility for the progression of their country, and see their own values and personalities invested in their nation. Ideally voting would be a legal requirement so that the national decisions absolutely reflect the will of the people.

Through its nature, direct democracy overcomes inequality. The people’s choice is the nation’s choice. Our countries become what we desire.


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