Democracy: The Bottom Line


It is intriguing to think that what our legislators will be doing over the next few weeks is derived directly from an event that took place nearly 800 years ago on the banks of the River Thames in England.

The requirement that representatives of the people be consulted on proposals for taxation and public expenditure flows from Magna Carta, signed by King John near the village of Runnymede in 1215.

The Lords, who had joined forces to compel the King to sign this historic document, did not think of themselves as representing all the people of Britain of course. They were there for themselves, preventing (among other things) the monarch from introducing new taxes (such as "scutum", a proposed tax on shields) without consultation, and promising in return (again, among other things) to pay for the wedding of the King's eldest daughter "once". It was the inclusion of this last word in Magna Carta that obliged Britain's reigning Queen Elizabeth to pay from her own pocket for Princess Anne's wedding a few years ago when she married for the second time.

Proof that when signing contract documents you really do need to check every word.

Gradually over the centuries the UK system became increasingly democratic until it reached the stage where the Government is now led by the man or woman who can command a majority in the House of Commons which is elected by all adult citizens.

Support in the Lords is still also useful, but no longer essential.

The concept of democracy has slowly spread throughout the modern world until nearly all advanced countries enjoy some form or other of it. Though the exact shape may vary, all include the concept of the Government (modern day equivalent of the King, though many are now republics of course) being obliged to consult the elected assembly (equivalent to the Lords of eight centuries ago) on all taxing and spending measures.

This power of scrutiny has not been used wisely by all countries' parliaments.

In far too many, the pressure on governments to spend more on public services than can be covered by public revenue, has not been resisted. Instead the shortfall has been met by borrowing. There is a case for governments going into debt on occasion, for example issuing bonds to pay for a war, or to cover the capital cost of an asset that will last for many decades, or to keep the economy ticking over during times of economic slowdown.

The proviso is that as soon as circumstances permit, the governments concerned should get public finances into surplus and pay down the debt.

But they almost invariably fail to do so.

Thus the last Labour Government in the UK ran a deficit when the economy was slow, but carried on spending like drunken sailors when the economy was growing again and they should have been redeeming the bonds.

Similarly the Bush administration in the USA threw resources into the military after 911 to invade Iraq (despite it later being proven that that country had nothing whatsoever to do with the terrorist action) but at the same time reduced taxes instead of maintaining them or even increasing them as had been done in World War Two.

The Greeks carried on partying, refusing to carry out essential structural reforms to boost efficiency, lying about their economic statistics after joining the Euro zone, all to cover up the real situation.

Spain, Italy, Portugal – the list of the profligate goes on.

Sooner or later the music has to stop, and of course when it stops everywhere at more or less the same time the world economy comes to a juddering halt as we are all now experiencing.

It is easy to blame the politicians for all this. And so we should. After all, weren't they the ones who kept bring forward unaffordable spending proposals to please us and pretending that somehow the money would come from somewhere, or that there would always be an appetite for government debt.

But what about the electorates who kept returning these charlatans to office? Don't they deserve a share of the blame too as co-conspirators in this massive Ponzi scheme? Maybe we should be a little bit merciful bearing in mind that they are bearing most of the burden of the ensuing austerity.

Here in Hong Kong we are relatively lucky. Our governments have been prudent in the handling of public finances to the point where we are running surpluses that – incredible as it may seem – are actually too big. We could loosen the purse strings a little without causing mayhem.

Moreover the Basic Law behoves us to carry on being prudent. Looking at Europe now that seems like a pretty wise safeguard.

But we should also give credit to the ordinary men and women of Hong Kong. Yes, they grumble about the administration here as we all do, and they press for a bit more financial support here and there. But there is no discernible pressure for the government to cast off all restraint and spend every dollar today and to hell with tomorrow. Yet we are denied democracy.

The UK's eternal flame in memory of John Fitzgerald Kennedy, the youthful American President of the early 1960s who for many people around the world personified freedom, is situated on the banks of the River Thames near Runnymede on the spot where Magna Carta was signed to mark the place which gave birth to modern democracy. JFK is reputed to have had a lively sense of humour. How amusing he would have found it that the one community in the world which had showed the maturity to deserve democracy should be the one place to be denied it so long.

As our legislators begin their scrutiny of this year's Budget, let us hope that under the next Chief Executive we will finally secure the democracy we have earned.


 
Mike Rowse
email: mike@rowse.com.hk