Still in Politics 1.0 After 237 Years? (Part One)

“Live as if you were to die tomorrow.

Learn as if you may live forever.” 

——Gandhi

The US Debt Limit and Budget Debacle. 

Is the Most Powerful Nation on Earth a Role Model Country?

 

Most US citizens, as well as the world at large, repudiated the ignominious behavior of the US Congress in the recent drama that culminated –only for the time being– in a temporary truce between Democrats and Republicans.

There is a lot of anger and frustration generated by this fiasco, and rightly so.

Given the momentous nature of the debate, an adequate diagnosis on what happened, what is going on, and what to do about it is crucial.

Who is to blame for the debacle?

At a first glance, an appropriate answer to the previous question seems very difficult to come by. Fortunately, there is an unmistakable answer. Beyond the deplorable behavior of many Congressmen starring in that soap opera—from both sides of the aisle—, deep underneath lies an unequivocal truth: extremely poor governance in rules and practices. US Congressmen are only trying to maximize the primitive rules of the game as they know it. Quite frequently, the current rules of the game not only do not lend themselves for higher purposes; more often than not, they lend themselves beautifully for filibusters and all sorts of dirty tricks. Hence the recurrent poor results in Congress’ performance.

Evolution of politics

Not to serve as consolation, there are even worse cases elsewhere in the world, along similar lines of deplorable public governance practices: Silvio Berlusconi in Italy essentially abducted that beautiful country’s politics for almost three decades; fortunately, at last, his influence seems to be waning, a phenomena that probably has more to do with his old age —77— than anything else. More on this subject in our articles: Venezuela & Italy. A Tale of Two Horrors and Italy’s Perennially Troubled Political Status.

The great majority of the contemporary political systems are, in essence, a copy-paste version of the US’, after the superlative success of being the first major nation on Earth that implemented most of the best ideas of the Enlightenment, since its foundation. There is no doubt about the huge leap forward that the US’ political system represented at that time, 237 years ago, not only for itself but for the world at large, by so successfully replacing the worn-out monarchic systems of that age. More on this in Part Two of this series.

However momentous the founding of the US turned out to be, the ensuing political system has not experimented any major improvement ever since. And, no wonder then, the dire state of affairs of the contemporary political structure worldwide.

Virtually without exception, most political systems of the developed world, along with most emerging nations have degenerated into being abducted by their own legislatures which, in turn, have a much less effective power and margin of maneuver than typically is perceived.

Political parties seem to be the ones that, in the end, have most of the control. Alas, in analyzing more carefully the real power of political parties, it turns out that their effectiveness ends up significantly diminished by several factors, among others:

  • Internal divisions. More often than not, those divisions are of a seismic nature, like the great divide and antagonism between the Tea Party and the conservative wing of the Republican Party in the US.As a result, all political parties are excessively fragmented, miles away from behaving in a monolithic manner, with a high degree of unity and cohesiveness.

  • The fear of penalization by behaving significantly different than the rest substantially outweighs the genuine desire of a passionate and responsible minority that really would like to make profound changes for the better.

The result of all that is abundant bickering and dithering, and a deep aversion to the implementation of structural changes. It is no wonder then why the go-to “solution” for almost everything is an ad nauseum kicking-the-can.

Outdated and dysfunctional rules,

regulations, procedures and practices

=

Dysfunctional results

What can be done to revert this horrific state of affairs?

Actually, the genuine solution is simpler than it may seem, at least from the conceptual framework: let’s improve the rules of the game in such a way that the major interests of the legislatures is as closely aligned as possible with the major interests and needs of societies at large. Incentives have to be redefined, aiming for the closest possible alignment of interest between society, political parties, and politicians —at the personal level. That is crucial. You can find an in depth analysis on this subject in my book Globalization: Opportunities & Implications—now in its just released second edition.

In no way do I pretend to minimize the daunting task this authentic solution implies. Most fortunately, however, the benefits of doing it well far outweigh any associated costs. How can I be so sure of this? Very simple: the most visible costs of the highly dysfunctional contemporary political systems are tepid economic growth, way below its true potential. Another side of the same coin is the stubbornly and painfully high unemployment levels. In short, the opportunity cost of the miserable current state of affairs is humongous, several hundreds of billions of dollars a year in lost output in the US alone. Severe mismanagement of public affairs is that expensive!

Even in the deplorable current state of affairs there already are some built-in mechanisms that exert both external and internal pressure in the right direction. For instance, the Chinese government was very vocal and clear about its discontent concerning the debt limit and budget US fiasco, and for good reason, the Chinese government is the largest US Treasuries holder on Earth. Unfortunately, albeit in the right direction, that pressure is rather imperfect and insufficiently effective for the chief purposes sought after. It is only an external pressure.

Fortunately, there are other forces in movement exerting considerable internal pressure on the US’ political system, and that is society. A recent example of this is Howard Schultz’s petition. The Starbucks Chairman and CEO mobilized his customer base across the US and gathered 1.7 million signatures on a petition sent to Washington, pushing the government to solve its budget woes. This is a beautiful example of how two basic components of society are working together: companies and individuals alike. We applaud this kind of action which is urgently needed around the world.

 

CONCLUSIONS

The best practice of continuous improvement has been conspicuously absent in the US’ (and the world’s) political system, creating a sclerotic and dysfunctional reality.

  • It is an undebatable truth that contemporary political systems are highly dysfunctional. The great contributions that the current system provided to the world, probably for over a century, are worn-out, and are in urgent need of a profound overhaul. A genuinely upgraded version, a true re-engineering of the political system is imperative.

  • The abduction of societies by their respective congresses and parliaments has to end.

  • There is a terrifying disconnect between societies and their respective congresses and parliaments. The representation system, as we know it, has repeatedly proven to have very profound flaws and limitations. It is time to change it, to substantially upgrade it.

  • Both, Management Science and Game Theory disciplines are up to the challenge. Political Science has not sufficiently benefited from the many tools, procedures and methods of the former.

  • The greatest obstacle resides in the fact that the main responsible bodies for correcting the multiple flaws and deficiencies are also the ones that will experience the greater burden of change. In other words, legislatures have to substantially self-regulate themselves, overcoming a myriad of internal conflicts of interest. What is required is a consistent and relentless pressure from society, and a truly virtuous attitude from legislators themselves.

The truly virtuous attitude from legislators is only mentioned as a hypothetical reference. History has unmistakably shown that, most of the time, great virtuous social changes are only possible through extremely well-structured systematic efforts and pressures, from civil society at large.

The timing and need to substantially improve public governance in Western society could not be riper. Despite many recent setbacks, the US is still, by and large, the most powerful and influential country in the world.

The US should lead by example; there is no better pragmatic alternative. There are only two governments with sufficient critical mass, and credibility to lead in this most far-reaching project: the US and the EU; the EU, however, is far from being a suitable candidate given that it is still an immature confederacy, years away from being a cohesive enough society to successfully handle global challenges of this caliber.

The US debt limit and budget debacle would be a terrible crisis and circumstance to waste. There is so much the US, and the world can learn from it!

Humankind has to be quicker and more flexible to learn from real life. Challenges and obstacles have to be overcome. Both, an appropriate diagnostic and decisive corrective answer is the only sensible way for progress. We have to learn as we live. Complacency and laissez faire will never be a reasonable alternative in circumstances such as these. If insufficiently attended, the dynamics of this sort of sociopolitical challenges push it towards the worst, until a swift remedy is implemented.

We have to be able to continuously learn from reality. Otherwise, we are doomed to fail, as has been the case up to now as far as contemporary political systems go. Everyday challenges are obstacles to learn from and to be overcome.

Civil society has to forcefully step in: major think-tanks, leading universities, big corporations, professional associations, large financial contributors to the political parties, and so on. More on this in Wanted: Global Society Strategists.

There is a lot at stake. Politics are too important to be left in the hands of politicians alone.

 

 

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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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