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What the Brexit Vote Teaches Us about Direct Democracy (and the Future of Democracy)

Yesterday’s Brexit vote was widely seen as a referendum on referenda. The populist right across Europe now routinely is demanding to take issues directly to the people in order to bypass the parliamentary process which has not produced desired outcome–a process The Economist recently dubbed Referendumania. The United Kingdom Independence Party (UKIP) has demanded for years that important issues like EU membership should be voted on by the electorate. Prime Minister David Cameron gave in to the demands in order to win the last election, feeling confident that he would win the vote and thus quiet the right-wing opposition. The gamble backfired: Cameron lost both the vote and his job.

The price Britain will pay for playing with the populist fire is potentially steep. Scotland voted overwhelmingly in favor of staying in the EU and now wants a second vote on independence. In Northern Ireland, the vote opened up old confessional lines of cleavage: Protestant Unionists voted for the Brexit, Catholics against. And the City of London may lose its position as premier financial market in Europe. Most importantly, the British economy will face an uncertain future. The EU is unlikely to sign off on free trade arrangements of the sort Norway and Switzerland enjoy because such a deal would encourage other member nations to leave as well. Furthermore, it took Switzerland a couple of decades to arrive at its current, admittedly cushy relationship with the EU.

Governments in other European countries no doubt will try to avoid this populist trap. This will enrage the masses even more, and demands for more democracy will become ever louder. In the wake of the British vote, the German right-wing party Alternative for Germany (AfD) has demanded more direct democracy for Germany. Marine Le Pen, the leader of the Front National, promised a referendum on the Frexit if she is elected president of France next year. And the Dutch right-wing leader Geert Wilders announced a push for the Nexit.

One real concern is that this type of referendum is susceptible to lies and deception. The Brexit campaign was run entirely as a post-truth campaign. Its most visible element was the Vote Exit campaign bus run by Boris Johnson, the former mayor of London and possible successor as prime minister. The inscription on the side of the bus made a bold claim: “We send the EU £350m a week.”

False claim on Boris Johnson’s Vote Exit campaign bus: “We send the EU £350m a week.” (Reuters)

As it turns out, the figure is wrong. It disregards the massive rebate Britain has received since 1985, and it does not include the EU payments that flow back to British institutions. But facts just did not matter in this campaign that was ruled by anger and fear and dominated by issues like immigration and sovereignty. Michael Gove, co-chair of the Leave campaign and current minister of justice, was asked to name a single independent economic authority who thought Brexit was a good idea. His response: “I think people in this country have had enough of experts.”

The counter-example to this narrative is Switzerland. Swiss voters go to the ballot box four times a year to decide three or four issues each time. Direct democracy in Switzerland has grown organically into the fabric of Swiss politics since the late 19th century. Both the government and the media generally do a good job to inform the public on the facts and on the pros and cons of the issues to be voted on. As a result, Switzerland has developed a polity that is structured from the bottom up and that allows voters to participate in decision-making processes on all levels of government. This system has produced an educated and knowledgeable electorate that is much less likely to be fooled by deceptive populist rhetoric.

Political systems create political cultures as much as political cultures shape political systems. Countries like Britain and Germany have a strong tradition of parliamentary democracy. Voters elect leaders who represent them in parliament that in turns forms a government which it controls. This mechanism does not really allow for an alternate decision-making process, for instance in the form of a referendum, as the political culture does not have the tools to deal with it. A system that works exceedingly well in Switzerland therefore could turn toxic for Britain, with the potential of doing the same in other European countries.

There are two reasons why the current populist anger is directed at the European Union and why referenda could accelerate the unraveling of the EU. The European Union has been an elite project. It has done a poor job explaining to Europeans how it has brought peace and prosperity to a continent that had been ravaged by two world wars, how it helped Spain, Portugal and Greece transition away from fascist dictatorships, and how it supported countries formerly in the Soviet bloc both politically and economically. But it also created institutions that are not transparent and that delegate too many decisions to bureaucrats in Brussels. And it has thoroughly mismanaged the Greek debt crisis. Thus it has become an easy target for malcontents.

The second reason is that Globalization has contributed to the de-industrialization of Western Europe (as well as North America). This has created massive wage stagnation and chronic unemployment among the working classes, and it has spawned unprecedented levels of global migration. European populists successfully managed to blame the European Union for both. In reality, 1.5 billion workers, mostly in China and India, have joined the global labor market over the past quarter century which has created extraordinary pressures. On top of that, the digital revolution has begun to make human labor redundant–a trend that may lead to massive unemployment in developed societies in the future. The EU is responsible for none of this: British voters will soon discover that leaving the EU will not lessen the competitive pressures on British industry, nor will it ease migration pressures.

Western democracies have become vulnerable to populist deception. Boris Johnson will be rewarded for his deceptive politics by inheriting the job of Prime Minister. He also wrote the playbook for Donald Trump on how to win a fact-free campaign that is not restrained by the limitations of truth. Maurine Le Pen is favored to win the French presidency next year. And Angela Merkel, the lone beacon of reason in European politics, may well stumble over the populist furor raised by the refugee crisis. Direct democracy which has given Switzerland unparalleled political stability and economic success may also become the political idea that will give the populist right the tools to undo the European Union.

 

Swiss Direct Democracy: a Model for Europe?

Small states by definition are too small to be good at everything. So they tend to bundle their resources to excel at one or two things. Like chocolate, or watches. But small states are also laboratories for ideas–like the plan to make Sweden an oil-free society by 2020. The Swiss contribution to the global melting pot of ideas is direct democracy. In Switzerland, a sufficient number of signatures can force a popular referendum on any federal law or can require a vote on a constitutional amendment on any issue imaginable.

To be sure, direct democracy is a beautiful thing–even when people make stupid decisions. Switzerland, the haven of direct democracy, showcases both the brilliance and the absurdity of direct democracy as a system of governance. While the Swiss elect a parliament, as do citizens in other democracies, the Swiss also can use referendums to undo the work of the very same parliament they just elected. So direct democracy essentially creates a parallel system that can control and even bypass the parliamentary process.

The advantage of this system is that politicians are forced to come up with laws that most likely would withstand the test of a popular referendum. So compromise is essential for the system to work. The drawback is that ordinary people like you and I could come up with something really stupid at the kitchen table and get enough signatures to force a popular vote on it—like the successful initiative to ban minarets in Switzerland. This creates opportunities for populist groups to bypass the parliamentary system altogether. This can be a good thing as long as an educated electorate can be trusted to act in the interest of the republic. This assumption will be seriously tested in the votes coming up in Switzerland this coming Sunday, November 30.

Swiss direct democracy is the envy of democratically-minded people all over the world. But the tool of the constitutional initiative has been mostly used by populist groups on the left and on the right who do not have broad parliamentary support. While leftist initiatives, like the constitutional amendment to abolish the Swiss Army, have failed consistently, the initiatives and referendums launched by the right frequently have been successful, like the vote against Swiss membership in the European Economic Area in 1992 or the vote to curb “Mass Immigration” earlier in 2014.

It has become fashionable among the populist right in Europe to promote direct democracy, most prominently the United Kingdom Independence Party (UKIP) in Britain and the Alternative für Deutschland (Alternative for Germany; AfD) in Germany. There are reasons to doubt that these movements are more democratically inclined than mainstream parties—in fact, there is evidence to the contrary. Rather, they promote direct democracy because of its populist potential: they see it as a tool to implement their anti-immigration and anti-EU agendas. One of the outspoken supporters of Swiss-style direct democracy is the euroskeptic Daniel Hannan, a journalist and Conservative British Member of the European Parliament. When Swiss voters banned minarets in 2009, Hannan wrote a column with the title “Switzerland bans minarets: long live referendums, even when they go the wrong way.”

So Europe will be watching as Swiss voters will cast their ballots on November 30. There are two contentious issues to be voted on, both with consequences that will reach far beyond Switzerland’s borders. One of them is the popular initiative with the official title Rettet unser Schweizer Gold (Save Our Swiss Gold). Its declared intent is to secure the Swiss National Bank’s gold reserves with the specific stipulations that the National Bank needs to hold at least twenty percent of its assets in gold, that it does not have the right to sell gold reserves, and that the gold must be physically stored in Switzerland. Its populist appeal is evident in the language: the phrases “our Swiss gold” makes it sound like the Swiss have a birth right to the gold that has been chiseled out of Swiss Alpine granite–rather than mined by sweat labor in Botswana.

GoldVI_F12_de21

“Protecting the wealth of the people”: deceptive imagery to support the Gold Initiative.

Experts agree that the initiative does not make sense economically as the gold standard to support currencies has long been abandoned around the globe. But the impact would be felt globally as gold prices would rise substantially because the Swiss National Bank would be required to buy large quantities of gold. Furthermore, the Swiss Franc would rise in value to unprecedented heights which would do serious damage to the Swiss export industry. Already before the vote, the Euro briefly dropped to below the magic barrier of 1.2 Swiss Francs.

The second ballot issue is the so-called Ecopop initiative. It is a hard-core anti-immigration measure sugar-coated in language that feigns concern for the environment. It creates a horror scenario in which twelve Million people would live in Switzerland by 2050—the current resident population is eight million–which would cause the Swiss landscape to be paved over by concrete and destroy biodiversity. It seeks to limit net migration into Switzerland at .2 percent of the resident population or at currently about 16,000 individuals per year in order to keep the resident population stable and  to limit the environmental degradation associated with overpopulation. The increase in 2013 was about 100,000 so the impact on migration indeed would be serious.

Ecopop

Ecopop horror scenario: deceptive images showing Lucerne littered by highrises by 2050.

The consequences would be dire: it would stop immigration almost completely (which is the true intent of the initiative), deprive the Swiss economy of a much-needed labor force, irreversibly harm Swiss universities and research institutes, and force the cancellation of the extensive system of bilateral treaties with the EU which are critical for Switzerland–which is another undeclared objective of the initiative. As a result, Switzerland would lose direct access to EU markets and all the benefits the country enjoys from its current status of de-facto integration without the burdens of full membership. It also would embolden Euroskeptics in EU member states to demand similar measures in their countries.

Both ballot initiatives show the difficulties of addressing complex issues in a globalized and networked world by means of direct democracy. It is easy to convince ordinary voters to tell the National Bank to keep their gold in their piggy bank and to keep the Swiss landscapes from getting sullied by concrete. All that is needed are simplistic slogans using emotion-laden language that caters to  base fears in the population. But it is much harder to make a reasoned argument that demonstrates the extreme dangers these ballet issues will pose if passed. While the ramifications for Switzerland and Europe would be extremely serious, it is unclear if Swiss voters have the capacity to understand them. Of course, this could be decried as an elitist viewpoint–an argument often used by populists to defend their brand of direct democracy.

Direct democracy is a good indicator for popular sentiment and allows for a more nuanced expression of popular will than parliamentary elections and therefore is a very important political institution. But it also is prone to falling prey to populist seduction and deception. Many in Europe believe that some form of direct democracy could help address the perceived democratic deficit within the European Union. But recent Swiss votes raise doubt whether direct democracy really offers a viable alternative. The vote this coming Sunday will go a long way to answer that question. In a sense, the two ballot issues also will be referendum on the viability of Swiss direct democracy.