The Great Debate UK

Inflation or deflation: a stress test for democracy

-Laurence Copeland is professor of finance at Cardiff University Business School. The opinions expressed are his own-

The policy debate is hotting up. On one side, we have the expansionists, arguing that it’s the Nineteen Thirties all over again, that Keynes is right now as he was then – we need more, not less government spending, we are digging our own graves by cutting back, especially as the fiscal retrenchment is continent-wide, covering thrifty North Europe as well as profligate ClubMed. According to this view, fiscal contraction will exacerbate the situation by magnifying the fall in the level of economic activity, leading to a downward spiral and, incidentally, making it harder than ever to repay our debts.

On the other side, the contractionists argue that comparison with the Nineteen Thirties is grossly misleading. Debt levels were far far lower for all the major economies in those days. Most important of all, in the Nineteen Thirties the threat (which duly materialised) was deflation, not inflation, so government spending financed by printing money was riskless.

The central question then is this: is inflation actually a risk today? Or is deflation the bigger risk?

On the one hand, falling prices could be catastrophic for two reasons.

First, ever since Keynes, economists have believed that deflation causes unemployment because wage levels rarely fall pro rata, so employers, squeezed between lower prices for the goods and services they sell and unchanged labour costs, are forced to lay off workers so as to protect their businesses.

Secondly, a falling price level implies a rising debt burden, or an increase in the real cost of repaying the country’s outstanding debts. If you think this is purely a matter of economic theory, just compare it with the situation facing a householder with a mortgage – inflation raises his wages and the price of everything he buys, making the burden of his mortgage lighter every year, while deflation does the opposite, meaning he has to struggle to repay a debt which remains unchanged while the value of everything else (including his house) is shrinking.

from Africa News blog:

Niger following Mauritania’s blueprint for an African coup

“We didn’t launch a coup,” said Colonel Djibril Hamidou Hima, spokesman for the military group which had days earlier overthrown the president of Niger, “We just re-imposed legitimacy.”

The statement was almost a carbon copy of the one I heard in Mauritania in 2008, where the soldier who had hustled an elected head of state out of the presidential palace spent the first few days denying his actions amounted to a coup d’etat.

Far from it, General Abdel Aziz said. He had in fact restored democracy.

Niger is the second military takeover in West Africa since the Mauritania coup – Guinea followed less than six months later -- and the strongest indication yet that Abdel Aziz’ putsch is becoming the blueprint for aspiring presidents who don’t want to waste time standing in an election.

The Aziz model: For a start, you don’t shoot the man whose power you’re taking. That looks bad. Get him out of the palace and under house arrest, but keep bloodshed to an absolute minimum. The first pictures you want broadcast are of crowds cheering the coming of the liberator of the people, not of soldiers in shades firing machine guns.

Mauritania got away without a shot being fired and Guinea there was nobody to shoot anyway as the president had died. In Niger, at least three soldiers were killed, but ousted president Mamadou Tandja was captured without taking a bullet.

From here, the Mauritanian model shows how to make it stick. Once you’re in power, don’t do anything silly. If there are opposition parties, let them be. If people march against you, let them march. Keep the country running, talk about elections, allow the international community to have its say and to get involved.

There’s more to deliberative democracy than deliberative polling

- John Parkinson is Senior Lecturer in Politics at the University of York, specialising in democratic theory and comparative democratic institutions. In a previous life he was a facilitator, internal communications and public relations consultant. The opinions expressed are his own. -

Last weekend 200 randomly-selected citizens got together in London for a “deliberative poll” to sort through ideas for transforming British democracy. Judging by the organizers’ blog – at www.power2010.org.uk – the participants were blown away by the experience, as ordinary people always are when they take part in serious discussion on big political questions. It’s brilliant stuff to be part of, and there should be more like it, I think.

However, there is more – much more – to “deliberative democracy” than deliberative polling.

What is deliberative democracy? There are several versions, but what all the versions share is the idea that democracy should be based not just on votes but public debate as well; not the power of big business, big interest groups and political parties, but the power of the “better argument”. Good arguments come from being inclusive: you need all sorts of people involved otherwise you only take account of a small range of perspectives, interests and experiences. And being inclusive like this makes for better citizens: the more we practice self-government, the better we get at it, and the less persuasive are patronising claims about the ignorance of ordinary people.

As a political theory, deliberative democracy has been around for a while now. It’s 30 years since a young American academic called Joseph Bessette coined the term, but he was talking about the deliberation that went on among elected representatives in the U.S. Congress.

Most democracy theorists latched onto the term 20 years ago, with some, most notably Jürgen Habermas, using it as a theory that better explained how democratic societies work: how large-scale public debate is generated, and how arguments move from the kitchen table to parliament and back again.

from Pakistan: Now or Never?:

Pakistan’s political pandemonium

A Supreme Court ruling striking down an amnesty given to politicians and officials by former president Pervez Musharraf has created havoc in Pakistani politics.  Among those affected on a list of 8,000 politicians and bureaucrats who were protected by the amnesty are the interior and defence ministers, who are now no longer allowed to leave the country until they clear their names in court.

"Pakistan's interior minister today found himself in the unusual position of being asked to bar himself from leaving the country," wrote Britain's Guardian newspaper.

The defence minister abruptly cancelled plans to fly to China on an official visit after his name was included on the so-called Exit Control List,  according to Pakistan's Dawn newspaper.

Indeed such was the drama of a defence minister being refused permission to leave his own country that Twitter was briefly abuzz with talk of a coup, followed later by one comment which pretty much summed up the prevailing uncertainty:  "a bad sign when CNN is reporting 'no coup' in Pakistan".

President Asif Ali Zardari had also been covered by the amnesty, or National Reconciliation Ordinance (NRO), pushed through by Musharraf in an American-backed plan to allow Zardari's late wife, former prime minister Benazir Bhutto, to return to Pakistan in what had been supposed to be a power-sharing agreement to provide both stability and democracy. While he is expected to come under pressure to step down, he remains protected by presidential immunity.

The Pakistan blog Deadpan Thoughts captured the immediate reaction to Wednesday's Supreme Court ruling, talking of  people in Karachi closing down their shops, racing home, and swapping notes on the phone as "vicious rumors circulated of a coup". 

"The legislative branch of our government has right now with this judgment directed the executive branch to prosecute itself," it said.  "After all is said and done and we have torn apart this government, gone to mid term elections and arrived at the same crossroads in say another year or two at most, we must ask ourselves is democracy the best system for Pakistan? If it is then why does it never work for us?"

Jack Straw cites trust as top issue for UK democracy

In a wide-ranging lecture in London on Monday hosted by Brunel University‘s Magna Carta Institute, Justice Secretary Jack Straw outlined his thoughts on the state of democracy in Britain and beyond.

After the talk, Straw told Reuters that the most pressing issue in UK democracy is the need for politicians to restore public trust following an expenses scandal that forced the main political parties to work together to resolve the crisis.

“People feel a bit detached from the political system,” Straw said, adding that it is important to work out ways to “get people back into connection.”

Disclosures earlier this year that MPs claimed on their expenses for everything from manure to porn films triggered public outrage. The controversy led MPs to oust parliament’s speaker for the first time in 300 years.

Stop tip-toeing around and save Suu Kyi

- Zoya Phan is international coordinator at The Burma Campaign UK. Her autobiography, Little Daughter, was published by Simon and Schuster in April. The opinions expressed are her own. -

If statements of concern were enough to influence the brutal dictatorship ruling my country, then opposition leader Aung San Suu Kyi and the people of Burma would have been freed many years ago. It is impossible to count the number of statements from world leaders condemning the dictatorship, whether it be for imprisoning Aung San Suu Kyi, crushing democracy uprisings, or blocking aid after Cyclone Nargis last year.

But while these statements are welcome, they are clearly not enough. Burma is not run by politicians or diplomats. The generals ruling my country are brutal killers. They spent years in the jungles of Burma engaged in a campaign of ethnic cleansing against ethnic people. They use rape as a weapon of war, torture and shoot on sight. Babies are snatched from the arms of their mothers and thrown into the burning homes of innocent villagers. Landmines are laid in church doorways, deliberately aimed at those going to pray. Why do the United Nations and so many other countries think that statements and soft diplomacy is the way to influence people who are involved in such horrors?

Now, once again, Aung San Suu Kyi has been taken to the notorious Insein Jail. Once again there is an international outcry. So far, once again, the generals are ignoring it. How many times will we have to go over the same old ground before the international community wakes up to the nature of the generals they are dealing with? These generals are not immune to pressure. They depend on international trade and investment for their survival. It funds their luxury lifestyles and pays for the guns they use to keep their grip on power. They crave international acceptance and legitimacy, which is why they are pushing ahead with sham elections next year. They are vulnerable to real pressure, but it has never been properly applied.

It is time to hold Burma’s generals to account. The United Nations Special Rapporteur on Human Rights in Burma has said that the dictatorship is breaking the Geneva Conventions by deliberately targeting civilians in Eastern Burma. That makes them war criminals. Why aren’t they in an international court? The International Labour Organisation has said the dictatorship is committing a crime against humanity for its use of forced labour. Why aren’t they facing a case at the International Court of Justice? The United Nations has also said that Aung San Suu Kyi’s detention is illegal under international law. Why has no action been taken?

It is time to stop tip-toeing around the generals, and treat them like the criminals they are.

In most countries if someone commits a serious crime they are hunted down, tried and imprisoned. Imagine if someone committed a murder in London, and the response of the police was just to issue a statement saying they are deeply concerned by the murder, and asks the murderer not to do it again, or they’ll issue another statement.

Telegraph tactics on MP expenses enhance democracy

- John Kampfner is chief executive of Index on Censorship and former editor of the New Statesman. His new book, “Freedom for Sale”, will be published by Simon and Schuster in September. The opinions expressed are his own. -

Squalid is the adjective that best describes the approach of our not-so-honourable members of parliament to their own expenses. But what about the journalism that has helped to all but destroy what remaining trust the public had in its elected representatives?

Some legitimate questions have been raised about the tactics deployed by the Daily Telegraph in buying in the information, apparently a CD from a mole inside parliament which had been touted around newspapers for months.

Cheque-book journalism is a time-honoured tactic of British newspapers, often revealing tawdry stories about celebrities that have little to do with free expression and more to do with prying into people’s private lives.

But in this instance, the Telegraph has surely acted in the public interest. Indeed, all the facts surrounding the case suggest that the newspaper has – far from undermining our democracy – helped to enhance it.

MPs, it should be remembered, fought tooth and nail to try to exempt themselves and the details of their 88-pence bath plugs and black glittered toilet seats from the public gaze. When they forced to publish the information, they sought to time the release to coincide with the summer holidays. Then, instead of dealing with the issues in hand, the stock response of some parliamentary authorities was to call in the police to investigate wrongdoing and to attempt to change the rules by ensuring the expenses will not be published in future.

My critique of the British press is somewhat different to former Prime Minister Tony Blair’s who, in one of his valedictory speeches as prime minister, described the British media as “feral”. Certainly there are many valid concerns around standards, around accountability (journalists’ expenses chits would also make for amusing reading), and around attention spans in the 24-hour news culture. But by far the worst trait of the modern-day profession is a lack of fearless investigation.