Contemporary Political Systems And Their Multiple Limitations

It seems to be taken for granted, all over the world –particularly in Western society, that all things equal, democracy is by and large the best political system ever conceived. Theoretically, it makes a lot of sense to look for governments essentially oriented to the population’s needs and aspirations. Alas, a highly effective and  functional way to materialize that idealistic concept is still very far from being a reality.

Throughout history, when very poor checks-and-balances systems have been in place, there have been too many excesses and devastating consequences. There are no exceptions to this.

Winston Churchill famously stated: “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” Thus, there doesn’t seem to be a better alternative outside of democracy. However, there are sufficient and conspicuous virtuous exceptions outside the democratic model that merit taking a look at them. By analyzing those virtuous exceptions, some important findings can be reached. Thus, revisiting this topic is a must. Let’s start first with a recent governmental exception.

Italy

As an unintended consequence of the ongoing European debt crisis, the Troika (the European Union, its Central Bank and the IMF) were left with practically no other option than to exert very heavy pressure upon the Italian government and appoint a previously agreed upon new prime minister. This compelling move from November 2011, was based on the evident incompetence both, of the Italian political system itself, as well as Berlusconi’s,  the former prime minister. Mr. Mario Monti, the newly appointed interim PM, will be in power for a period of 16 months –until the 2013 general elections. Monti also chose to personally take the Finance Minister position, given the extreme adverse circumstances in which he took power. Mario Monti was recalled from the presidency of prestigious Milan’s Bocconi University and sometimes consulted as a foremost expert on European matters. Mr. Monti has declared to have no political ambitions, and has been consistently declined to be a candidate to form a new government in 2013.

How can the Monti government be graded, until now. A resounding success, within the deplorable circumstances that he had been facing since day one. The major irony here is that Mario Monti, a technocrat, appointed as PM, outside of the typical population’s voting mechanism, has proved to be a roaring success. In sharp contrast, Silvio Berlusconi, one of the wealthiest businessmen in that country,  gained the PM seat through the formal party channels, with disastrous results. Berlusconi represents many of the worst vices and excesses possible, inept and highly corrupt.

In the Corporate World

The late Steve Jobs was not exactly a role model for corporate governance, as far as arriving at a decision by consensus. In short, he was an autocrat … but a very bright and effective autocrat!

By not behaving according to orthodoxy, given his exceptional capabilities, Steve Jobs was able to pull ahead of the rest of the industry in an astonishing way. It is now legendary that Jobs didn’t trust market surveys … instead relying almost exclusively on his personal instincts. Under normal circumstances, autocracy and being a lone wolf  is totally contrary to best practices; in Jobs case’s, however,  a great deal of his extreme effectiveness was based on unorthodoxy.

In Summary

There is plenty of room for lessons to be learned about governance, both at the public and corporate levels. The two exceptional instances briefly discussed, as well as many others, lend themselves very well as case studies.

There is ample room for improvement to adjust most models to be more responsive to meritocracy. The ancient Greek sages had a very clear objective about governance: ideally, the wisest and the fittest are the ones to govern.

A proper understanding of globalization and its positive effects is a most coveted asset for successfully navigating the global village waters. Governance is, undoubtedly –in all ways shapes and forms–, one of the paramount areas of progress for humanity. Under the “The ABCs to a Global Social Revolution” tab in this web page, there is a very specific, ambitious and provocative initiative in this regard.

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About Martin Marmolejo

Global Investment Manager | Founder & Managing Director at MMA Global Investment Management | Proud husband and father | Follow me @globalmarmolejo.

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