There is a weird brew of populism and District Representation (DR). You might think that countries with Proportional Representation (PR) would be most sensitive to populism, but it is rather the reverse. Countries with DR appear to be much more affected, like the France, UK and USA that use First Past The Post (FPTP).

Countries with DR run the risk that the seats in the House of Commons do not reflect the popular vote, and then they might try to repair this with a referendum, that is proportional. In countries with PR there would be no need for referenda.

The UK had the Brexit referendum of June 23 2016, that generated a relatively high turnout of 72.2%, with 51.9% Leave and 48.1% Remain. The Leave vote concerned only 72.2% * 51.9% = 37.5% of the electorate, and apparently the Leavers were quite motivated to turn out.

Many wonder how the UK general election of June 8 2017 squares with this referendum. In the previous weblog text, I already discussed caution. Some key aspects for digging deeper are:

  • The election was on many more issues than only Brexit, and had a turnout of 68.8%. A poll of YouGov showed that 17% who voted at the referendum didn’t vote in 2017.
  • Turnout is not proportional in the Remain / Leave segments.
  • Though the UK is set to Leave, it matters what you call “Leave”. The UK has a discussion about Hard and Soft Brexit, see these options. The political parties tend to be ambiguous about what they want, and voters thus have to guess.

PM. The events after the June 8 elections show the complexity of the situation. Labour leader Jeremy Corbyn apparently favours a hard Brexit like Conservative PM Theresa May. The evening of June 29 showed a House rejection by 227 abstaining, 322 against and 101 for a Queen Speech motion to target for remaining in the single market and customs union (regarded as a soft Brexit). Yes voters were Lab 49, LD 12, SNP 34, PC 4, Green 1, Hermon 1. It might still be that some prefer Remain but only vote for a soft Brexit to avoid a hard one. Labour MPs who abstained might have done so only tactically. The whip rule was not to vote for this particular amendment but to vote for the Labour amendment, to deliver a Brexit that prioritises jobs and delivers the “exact same benefits” of the European single market and customs union. The latter Labour motion is quite an incongruity. Yet Corbyn demoted some frontbenchers for not sticking to the party whip.

Limitations to current representation

For both PR and DR alike, there is the problem that the House doesn’t represent (i) who didn’t vote and (ii) whose votes got wasted. There is also the distinction between the registered electorate and the unregistered.

See the case of Holland 2017 with PR, here.

The wasted votes in the UK amount to 3.5% of the votes. A solution might be to leave 3.5% of the 650 seats empty. Alternatively, the standard majority of the House of 326 seats is replaced by a qualified majority of 337 seats.

The 14.5 million electors who didn’t turn out are more than the 13.6 million who voted for the Conservatives, who got  317 seats. An alternative might be to leave 202 seats empty or use a qualified majority of 489.

The present situation thus means that the Conservatives with their 317 seats seem to be overpresented with their view on Brexit. We don’t really know, since the Unregistered and Don’t Vote did not come to vote to show their opinion.

YouGov data on Remain or Leave

YouGov provides us with (at least) two polls for 2015 and 2017 that tell us how parties are divided on Remain or Leave. In this, the 18 seats for Northern Ireland tend to be excluded, so that the data concern Great Britain, with England, Wales and Scotland.

The first poll is from 2015, and let me quote their graph. Observe that the Undecideds are not in the graphs. Apparently 7% of the Ukippers did not want to Leave immediately.

The second poll is after the 2017 election, and asks how those voted in 2017 also voted in 2015 and the referendum. Let me again quote from their graph, and see their website for the data sheet. Observe that the Undecideds are now excluded, since the Undecideds obviously did not vote either Yes or No.

Transforming these data in party flows

The challenge is to transform these data into party flows. Considerations are:

  • The data on 2015 are rather rough while the data on 2017 benefit from the 2016 referendum.
  • The poll of 2015 however is still more useful since many voters in 2015 may not have participated in the referendum. Thus, using the 2015 poll, the Undecideds of 2015 can be allocated to Remain or Leave, based upon party flavour.
  • From the voters of the referendum in 2016, we can subtract the deceased, then allocate the transition flows as observed in the poll of 2017, with e.g. the key information that 15% of Remain and 26% of Leave in 2016, thus on average 20.7%, did not vote in 2017. Thus we should not be surprised if the 2017 outcome might be relatively more in favour of Remain.
  • For the transition flows, we assume that the dispositions to Remain or Leave do not change. Check this YouGov poll in March 2017. For example, when a Conservative Leaver switches to Labour, then this indicates a shift from Hard to Soft, and not a shift from Soft to Remain.
  • The above gives us the divisions in the 2016 electorate that also voted in 2017.
  • We allocate the new voters in same proportions: not only the attainers (coming of age, turnout of 57%) but also those who didn’t vote at the referendum, and the new registrations for the electorate (who we might assume that they only register to actually go and vote). These data are rough, namely measured over the full year, so that we must assume e.g. that the deaths in the last half of 2016 are about the same as those in the first half of 2017.

The voter dynamics are a bit remarkable. Of the vote of about 32 million there is a stable core of only 26 million. The 26% leavers who do not vote at the general election in 2017 amount to 4.4 million voters. The surviving non-voters at the referendum amount to 12.3 million, of which 5 million or 41.4%, decide to vote at the general election in 2017,  while the other 7.2 miljoen do not show up at both occasions.

Results of these considerations

Northern Ireland and other parties have been included again, so we leave GB and return to the UK.

  • For the minor parties we may assume (see also the BBC on MPs) that Remain are Plaid Cymru, Sinn Fein, Independent Unionist (Hermon), and Leave is DUP. The popular vote also has parties not represented. UKIP will be Leave, and the Speaker and the remaining wasted vote will be Blank.
  • Percentages of the popular vote will include the wasted vote of 3.5% (including UKIP) in the denominator.

Remain is horizontal, Leave is vertical. The diagonal or 45º line gives the split. Below the diagonal a party has more Remain votes, above the diagonal it has more Leave votes. 2015 has Squares and 2017 has Triangles.

The axes are in millions of voters. For example, UKIP (on the bottom left) in 2015 had almost 4 million votes, of which apparently 7% Remain. UKIP in 2017 lost almost all of its votes, mostly to the Leave part of the Conservatives. For example, LD (LibDem) is stationary.

The votes for the House of Commons are a sum and would not fit in the graph, and thus 11 million votes have been subtracted on both axes.

  • The division in the House in 2015 was {Remain, Leave} = {17.3, 12.8} but depicts {6.3, 1.8}.
  • In 2017 this became {16.5, 15.2} which depicts {5.5, 4.2}.

A major explanation for this huge shift in public opinion is that many Remainers apparently want to respect the Brexit referendum outcome. The vote on June 8 also was after invoking article 50. Voters regard Brexit as a given, and voted for parties to make the best of it. See this YouGov poll on the Re-Leavers.

The following is a chart for the division in 2017, again on votes and not seats. Remain still seems to have the larger share of 51.0% compared to Leave at 47.2%. Observe that the latter includes UKIP though it didn’t get a seat. The remaining 1.8% Blank are for the Speaker and the remainging wasted vote. These parties may well have an opinion, or their own subdivisions, but those do not show here because they don’t show in above polls.

Northern Ireland

Prime Minister May made a deal with DUP, including that DUP must respect the Brexit deal that May will achieve with the EU. The 317 Conservative seats and the 10 seats for DUP generate a majority of 327, just 1 above the standardly required 326.

Let us look closer at this. The following data have been retrieved from the BBC.

In 2015 DUP had 8 seats. DUP in 2017 managed to get 2 more seats at the cost of others, with a huge wasted vote of 32.6%. A seat in the UK House of Commons required only 30,410 votes while the UK average is 47,901. At that rate NI should have 41 seats if the total electorate should be represented. Then a majority of 50% would require 21 seats, more than there actually are.

The Lorenz curve for Northern Ireland looks quite like the unequal Lorenz curve of the UK in 2015, when UKIP got only 1 seat, see the graphs in an earlier weblog text. There is a PR Gini of 36.7%, while Holland has a PR Gini of 3.6. The excel sheet for Northern Ireland is: 2017-Northern-Ireland-Lorenz-Gini

PM 1. Sinn Fein apparently never visits the sessions of the UK Parliament. This doesn’t seem to be relevant for this discussion that concerns the popular vote.

PM 2. In the EU Parliament smaller countries like Holland have a disproportionate number of seats compared to Germany. The situation is similar for NI in the UK. This would tend not to be relevant for the present discussion, except that the low value in NI in 2017 derives from the huge wasted vote.

Splitting up parties ?

Why doesn’t the UK split up the parties along the Remain / Leave divide ? Thus we would get ConR, ConL (Hard), LabR, LabL (Soft), and so on. With proportional representation (PR), then we would not have to rely on polling, but would see the proper allocations directly in the House of Commons.

There might be other (attractive or unattractive) features. When Mrs. May would have been part of the ConR party in 2015, then this would have made it more difficult for her to start leading the ConL party after the Brexit referendum outcome. Or when Corbyn would have been part of the LabL party in 2015 then he could not have easily gotten a hold on the LabR as happens now.

There was an entertaining poll on this very idea itself by YouGov in 2015, here. That poll isn’t quite convincing given the wrong forecast for the Brexit referendum outcome, which suggests some misrepresentation.

However, the system of DR tends to make such break-ups unattractive for the parties involved. Smaller parties are destined to lose in the FPTP system. Thus another argument for PR would be that it provides voters with more clarity on party positions. The final result may well be a compromise, but this can be bargained by the professionals in Parliament, and better is not tried by the voters in the isolation of the ballot box.

Also, I have argued before that the Brexit referendum question was flawed in design. We don’t know what the voters really want. We might need to further split up the parties, e.g. in “Labour Leave, as UK” and “Labour Leave, but Scotland Independent so that Scotland can Remain” and so on. In countries with PR like Holland, one tends to think that parties divide up along issues that people tend to think of as fundamental, in which ideology tends to be of key importance.

The issue of Brexit might not be as fundamental as many people in the UK seem to think. The issue of immigration got translated into the question on Brexit, and this might have to do with the DR structure, see also France. This might be a topic to look closer into.


Conclusions are:

  • Above calculations obviously are fairly rough, and based upon perhaps arbitrary assumptions (but that is what arbitrage is). They basically set the stage for a better opinion poll that replaces these uncertainties by normal poll variety.
  • Above estimate suggests that the popular vote would be still very close to a majority on Remain.
  • The above doesn’t look at the views of the 1.8% of the vote that hasn’t been in the YouGov polls that were used here or that could not easily been determined by the other reports.
  • The share for Leave is a mixed bag, with Hard and Soft.
  • The Conservatives have a disproportionate share of the seats, which causes that their view on Brexit finds disproportion too (and their view might be the view of their leadership).
  • Northern Ireland has a huge disproportion in 2017, similar to the UK House in 2015. The Conservative + DUP majority in 2017 thus is of dubious value.
  • When the UK electorate better understands that the Brexit referendum question was flawed in design (see here), then many voters will lose the tendency to vote for Leave only out of respect for the Brexit referendum result, and then vote for their own opinion.

The main point is: We see the weird brew of populism and DR.

  • In 2015, UKIP with 12.5% of the vote got only 1 seat, and the unrest in the Conservative party caused David Cameron to call the referendum: which is populism, since a democratic response would have been to call for PR.
  • Now in 2017 a disproportionality in Northern Ireland seems to facilitate the Hard Brexit that Theresa May now seems to want.

Annette Bongardt and Francisco Torres (ABFT) argued about the UK Parliament: “Parliament has a strong and clear mandate for Brexit, Remainers and EU politicians shouldn’t question it“. Their reasoning can be rejected on key steps.

(1) Parliament already has a mandate

Parliament has a mandate, potentially provided by the Magna Carta of 800 years ago, though historians and legal experts will discuss aspects.

  • There is no reason to argue that this mandate would vary with a particular issue.
  • When someone questions Brexit then this doesn’t put Parliament’s mandate into doubt.
(2) Don’t confuse a general vote and a single issue

It might be possible for political scientists to look at a particular issue and argue that the mood in Parliament concurs with the public mood. This would require a poll targeted on that issue, both for Parliament and the public, so that we can do a statistical test on the difference of the averages. ABFT provide no such a poll. They refer to the general election, but the election concerned more issues. It is too simple to argue that the positions of the parties and candidates were clear on Brexit and that the popular votes concurred with such views.

(3) The Brexit referendum result doesn’t provide evidence

ABFT refer to the Brexit referendum of 2016 as one way how the electorate has expressed its view. However, scientists should clarify that the Brexit referendum question was flawed in its design. I explained this in an earlier LSE Brexit blog text of May 17, see here. My text relies upon a sound theoretical foundation. Representative democracy should not be confused with populist referenda, since voters in the ballot box cannot bargain.

There is no need to repeat my text here. The discussion on the weblog however was helpful in highlighting the distinction between the legal situation and the moral issue. Whether one legally invokes article 50 is a binary Yes / No issue. The Brexit referendum question was not about this legality but about policy preferences.

The referendum question wasn’t:

  • “Britain has to invoke article 50 in 2017 whatever happens”
  • versus “It is not so that Britain must invoke article 50 in 2017 whatever happens”.

For policy, there are various options, and electors have (conditional) expectations. With this ambiguity, the referendum question generated a situation of “Garbage in, garbage out“. We really don’t know what the electorate wants.

For example, some Scots who voted for both independence and Remain might now decide to stay in the UK with Brexit, which means both dependence and Leave and thus is quite opposite to their original views. Apparently they fear many years in the wilderness when out of both EU and UK. Clearly these voters have had conditional expectations and they have not been invoking legal rules. The Brexit referendum question clearly doesn’t provide the clarity that many attach to it.

(4) The role of scientists

Article 50 has been invoked and Brexit will happen, potentially abruptly on March 29 2019 when there is no agreement. One might argue that it is silly to continue to mention the problem of the Brexit referendum question.

However, my impression is that the 27 EU members may well be sensitive to the scientific observation that the Brexit referendum question was flawed in design. An international agreement on this observation, potentially also at the ECJ, might create an option for the UK to propose to annul the invoking of article 50.

If the UK should wish to annul Brexit before March 29 2019 then this can only be done with agreement of the 27 EU members. These members will not be swayed easily when the UK would use economic and financial arguments to explain its regret. But the issue of the referendum question is clear and impartial. The diagnosis may well be that the UK has fallen victim to a populist mood, and up to now lacks insufficient checks and balances to correct this. It fits the role of scientists to clarify this, which in itself is a check and balance.

ABFT propose that scientists defend the Brexit referendum question as sound, or at least want them to be silent, given that article 50 has been invoked and Parliament apparently has no intention of trying to annul it. I would hope that they are open to the idea that scientific criticism still would be possible.

They present events as a rational story from referendum to Parliamentarian mandate, while the events might well be diagnosed as an accidental course of history, in which the UK happened to take a one-way street because a street sign was flawed.

A YouGov poll also showed that people show loyalty to a seeming majority:

“There is a third group who change the dynamics of EU-related arguments – the “Re-Leavers.” These are people who voted to Remain in the EU and many still think that leaving was the wrong decision, but crucially now believe the government has a duty to carry out the will of the British people.”

“When taking this into account, we can split the country into three groups instead of two: The Hard Leavers who want out of the EU (45%); the Hard Remainers who still want to try to stop Brexit (22%); and the Re-Leavers (23%). The other 9% don’t know.” (YouGov May 12 2017)

Also the UK audience would be served with a better understanding that the Brexit referendum question was flawed.

(5) Democracy versus populism

My comments w.r.t. Brexit are scientifically warranted, yet ABFT in their final paragraph suggest that this criticism is “subverting the popular mandate”, “undermining the position of the EU chief negotiator” and “a subversion of the democratic process that led to the country’s decision to exit the EU”. Referring to the Brexit referendum result they ask: “Were there no lessons learnt from the rise of populism?”

ABFT are confused on the distinction between representative democracy (Parliament) and populism (referenda, neverendum). David Cameron’s decision to have a referendum was populism itself, while a democrat would have adopted proportional representation (PR), see below. See this interview by Protesilaos Stavrou on the distinction. Potentially one might use a referendum to ratify a constitutional change, but then one would tend to require that at least 1 / 2 of the population would decide, say a 3 / 4 majority of a turnout of 2 / 3. In Holland, a constitutional change, adopted (in proposal) by one parliament, requires ratification by another parliament after new elections. The Brexit referendum did not meet such standards (a turnout of 72% and a majority of 52%), apart from the design flaw on the question. It is a bit too simple to hold that there are now two UK Parliaments who are on a course towards Brexit, since article 50 was invoked by only one Parliament (referring to that flawed referendum).

ABFT are also confused on subversion. When there are serious points on content then those have to be dealt with, and it doesn’t help to neglect or denounce valid criticism.

(6) Proportional Representation (PR) versus District Representation (DR)

At first it seems as if proportional representation (PR), differing from current district representation (DR), doesn’t matter, and would be another topic than Brexit. It is a dead topic too, as John Cleese already showed in 1987, here. The ABFT article however clarifies that they entertain some assumptions that better be discussed too.

  1. The use of DR rather than PR is part of the lack of checks and balances that explain the populist drift in the UK. While DR strengthens existing powers, PR allows easy entry of challengers, which is the competition that economists like to see. Brexit would quite likely never have happened if the UK had had PR. In 2015 UKIP got 12.5% of the votes and only 1 seat. With a similar share of seats, UKIP would have become just one of the parties instead of the nightmare of the mainstream parties. In Holland Geert Wilders with a similar percentage has a marginal existence. If needed, mainstream politicians can agree on a Grand Coalition, like in Germany.
  2. ABFT suggest that support for Conservatives or Labour might mean support for either Hard or Soft Brexit but then they neglect the logic of DR, that voters must vote strategically.
  3. It is better to discuss annulment of Brexit within an environment with PR than one with DR. Britain might have a year to redesign its electoral system and have proper elections.

PR is the key design criterion for democracy, and districts are mainly a historical hangup. Consider n voters and s = 650 seats, so that the quota is q = n / s. This allows s / 2 = 325 districs of size 2q, since s / 2 * 2q = n again. With 45 million voters there might be an average distict size of about 140,000, correcting for turnout. Let a district candidate be elected when he or she has more than the quota q. Normally this amounts to q / (2q) = 50% of the district. One might allow a lower turnout in districts, and let a candidate be elected with at least 50% of the local vote. The unfilled seats can be filled by the nationwide PR criterion. Thus, a fundamental choice for PR still allows a feature of districts if so desired.

In France, the UK, USA and India DR is the key design feature whatever happens to PR. They haven’t overcome the historical hangup yet.

The distance of DR to PR can be expressed in the PR Gini coefficient, see the excel sheet and graphs. David Cameron in 2015 had a coefficient of 29.7%. In 2017 Theresa May has a PR Gini coefficient of 15.6% while Holland has 3.6%. The UK thus is strikingly disproportional.

The major non-PR impact in Holland is from the 2% wasted votes for small parties that get zero seats. In 2017 the UK had 3.5% wasted votes for parties that got no seats. One might argue that the wasted votes should be omitted from the Gini, yet, they rather stand out as a sore spot in current representation. A proportional representation of the wasted vote w in total n is possible by leaving seats empty or by filling the seats and taking a qualified majority f = 1/2 / (1 – w / n). In 2017 f = 50% / 96.5% = 51.8%. A representative majority in a full House of 650 seats then requires 337 seats, and not 326. See here.

There is a curious miscomprehension in the UK about what democracy actually is.

(a) This miscomprehension also exists in the Electoral Reform Society (ERS). There is a ranked system called “Single Transferable Vote” (STV) that has some PR properties when applied to the whole country. ERS however applies it to districts, and DR destroys nationwide PR again. Incongruously, the ERS keeps saying that their STV would be PR while it isn’t. See my criticism and counterexample here. The continued support of ERS for districts is part of the confusion that blocks the change to PR. (And with 4 candidates per district, their districts might need to have some 500,000 voters, curiously undermining the reason of “closeness” to have a district.)

(b) The 2011 referendum on PR was actually a referendum on the method of “Alternative Vote” (AV), which is a suboptimal suggestion too.

(c) It is apparently a misconception and dogma amongst UK voting theorists too that the (more complex) methods of ranked voting like STV or AV must be used at the level of voters. There is no need for this. It would suffice if the UK would adopt the Dutch system of Open Party Lists. The (more complex) methods of ranked voting can be applied by the professionals in Parliament, if needed, and those methods would still be proportional if the party weights were proportional.

(d) There is now an initiative “Make Votes Matter” (MVM) that strictly targets PR but that suffers from such conceptual problems too.

  • ERS signed their declaration though ERS, as said, also proposes a system of STV with districts that is not PR.
  • MVM might generate a discussion on ranked systems while such complexity might block PR again. It is better to clearly state a preference for “PR in Open Party Lists”, for otherwise we might end up with another situation that it is unclear what people signed up or voted for.
(6) Conclusion

Parliament’s mandate comes rather from Magna Carta, not Brexit, and scientists have every reason to question both Brexit and the lack of proportional representation (PR).


I now notice the contribution by Jonathan Portes on the LSE Brexit blog about the influence of the Condorcet paradox (June 15 2016, that appeared on the NIESR blog on June 6 2016). I referred to voting theory too, though after the referendum of June 23, in this comment of June 29 2016, that was later summarized on the LSE Brexit blog in May 2017.

  • Portes suggests that there is a Condorcet paradox, while my argument only mentions that there might be one, and that we basically don’t know, even after the Brexit referendum “outcome”. The argument by Portes is less strong since he provides a speculation, and others might argue that it is only a speculation.
  • My main reason to refer to the Condorcet paradox was to explain that many voting theorists themselves do not properly understand voting theory. See the argument about the distinction between voting and deciding. Indeed, Portes repeats the confusion: “We may not be inconsistent individually but we can be so collectively.” Potentially a collective might be inconsistent, of course, as an individual might be. Yet, the point concerns the distinction between intransitive vote counts and the transitive decisions (e.g. indifference) based upon such vote counts.

For the Brexit referendum question, the problem might likely be a bit different. With R for Remain, S for Soft (EEA) and H for Hard (WTO), there are 6 possible strict preferences, from R > S > H (Theresa May before the referendum) to H > S > R (Theresa May after the referendum). If S and H are collected in L then there arises the claimed binary choice between R and L. Voters who are in the categories S > R > H or H > R > would face a hard question, and might decide not to turn out, or develop assumptions about what the actually might mean given what what they think about future developments. Similarly for the versions of R. 

Overall, the argument suffices that Proportional Representation is the proper method for modern democracy, and that referenda are an instrument of populism, notably within systems with District Representation. See the next weblog entry.

The former two weblog texts discussed British and Scottish incomprehension of democracy. Our discussion used numbers though. A picture says more than one thousand words. Lorenz curves are a nice way to display inequality. The data, calculations and following charts are in this excel sheet: 2015-2017-UK-Holland-NIreland-Lorenz-Gini

The UK General Elections in 2015 and 2017

The following two charts show the results in the UK General Elections of 2015 and 2017.

The horizontal axis gives the cumulative percentage of the popular vote. The vertical axis gives the cumulative percentage of the seats. If there is proportional allocation of seats, then the blue line of the seats would cover the pink diagonal.

The parties in the line-up have been ordered by mismatch. Conforming to the Sainte Laguë / Webster criterion (see this discussion by Alan Renwick), the mismatch is determined by ((the ratio of % seats to the % of votes) minus 1). For example in 2015, UKIP with 12.5% of the votes got only 0.2% of the seats, namely 1 seat for Nigel Farage himself. Their mismatch is 0.2 / 12.5 – 1 = 0.012 – 1. LibDem got 7.8% of the votes but only 1.2% of the seats, a mismatch of 0.158 – 1 (with rounding). Another mismatch are the parties that got no seats: the “Others” still got 2.1% of the votes, which means a mismatch of 0 / 2.1 – 1 = -1.

One might argue that the wasted votes should be omitted from the graph and Gini, yet, they rather stand out as a sore spot in current representation. A proportional representation of the wasted vote w in total n is possible by leaving seats empty or by filling the seats and taking a qualified majority f = 1/2 / (1 – w / n). In 2017 the wasted vote was 3.5% and then f = 50% / 96.5% = 51.8%. A representative majority in a full House of 650 seats then requires 337 seats, and not 325. See here.

The situation in 2017 has improved mainly because UKIP no longer really participated. The LibDem still got 7.3% of the vote and 1.8% of the seats, which is a marginal improvement.

The Gini coefficients are 29.7% in 2015 and 15.6% in 2017.

The graphs and coefficients are inaccurate because of strategic or tactical voting. A voter who favours a Conservative candidate but sees a loss against a Labour candidate might vote for the LibDem, reflecting a {Conservative, LibDem, Labour} preference ordering. There will be some averaging out, but the official votes will likely not reflect the true proportions of the first choices.

The nice thing of these graphs also is that one can recognise some of the parties. In both graphs the Conservatives are on the right hand side, with 36.4% of the votes and 50.8% of the seats in 2015, and 42.2% of the votes and 48.8% of the seats in 2017.

(These percentage take the wasted votes including the invalid votes as part of the denominator. Other sources may report that e.g. the Conservatives got 43.8 of the vote, looking only at the parties that got seats.)

The Dutch General Elections of 2017

The PR Gini for the UK shows that it is strikingly disproportional. Holland provides a useful point of reference. Holland had general elections in 2017 too, and its PR Gini is 3.6%. The major impact in Holland are the 2% of voters for small parties who got no seats. The Dutch qualified majority is f = 50% / 98% = 51%. In a PR system there will be strategic voting too, for example w.r.t. the coalition government. This however is no good reason to adjust the PR Gini coefficient, since such considerations are not quite those of proportionality, see also the discussion in the Appendix.


Conclusions are:

  1. The UK is at an alarming distance from proportional representation. This is detrimental for: (a) The ability to work together, compromise, form coalitions, and respect the opposition, (b) The possibility for smaller parties to partake in government and responsibility. (c) The entry and exit of new parties. (d) The notion among the electorate that they are represented.
  2. The Lorenz graph is a useful tool to show proportionality. The graph and Gini coefficient are not difficult to make. The ordering via the Sainte Laguë / Webster criterion gives (slightly) higher Gini coefficients (less proportionality) than ordering by the difference between % seats and % votes.

Technical appendix

The calculation of the Gini is straightforward. Each step, from one party to the next one, generates a small trapezium, with the area h (a + b) / 2. The height h is in this case the horizontal distance, given by the vote share of the next party. The sides a and b are the differences (on the left and right) between the diagonal and the cumulated seat curve. Summation of all these areas gives a total A. The Gini is equal to 2A, since the whole area of the square is 1. (The formulas for the Gini in wikipedia are more complex than needed for this piecewise linear application.)

Once I had decided to use the Lorenz graph, a google generated some predecessors.

Orit Kedar, Liran Harsgor and Raz A. Sheinerman (2013) refer on page 5 to Taagepera and Shugart (1989) Seats and Votes. Let me reproduce the quote from the first authors quoting the second authors:

“They note that ‘an alternative [to the measure of deviation from PR which they use] is the Gini index of inequality, which has theoretical advantages but is more complex to calculate’ (p. 204). They add that ‘the Gini index is the most widespread index of inequality, and it does satisfy Dalton’s principle [of transfers]. The Gini index is useful for many purposes other than electoral studies (where it has been little used)’ (p.263).”

The calculation above has been straightforward. It must be mentioned that Kedar et al. have a more complex analysis with districts though.

Anish Tailor and Nicolas Veron (2014) look at inequality in the European Parliament. Their problem is that Germany has 700,000 votes per seat while Malta has 70,000 votes per seat. They find a Gini of the UK of 6.3%, but this thus concerns another research question. If one would look at representation by parties then the EU Parliament might be less disproportional.

Kestelman (2005) also considers measures of apportionment and proportionality, and also refers to Taagepera and Shugart for the Gini (p14). He states that the Gini would be complicated to explain and calculate, while it is rather simple, see above Excel sheet. Thus, curiously:

“Fortunately highly correlated with LHI [Loosmore-Hanby Index], the Gini Disproportionality Index (GnI) is rather complicated to explain and calculate (virtually necessitating computerisation).” (p16)

Kestelman also suggests that STV would be a proportional method, but then he might neglect that an application to districts causes disproportionality over the whole nation (see this example).

Alexander Karpov (2008) gives a more analytical overview of the various measures.  He sums over the ratio of shares (%seats / %votes) but I do not see the rationale for this yet. The calculation above uses the ratio only for ordering, and uses levels with their intuitive interpretation.

Karpov’s article got a comment from Michela Chessa (2012) who points to indices that look at power. Indeed, if a party has 49.9% of the vote and the mere technique of apportionment would generate a majority of 50.1% in the seats, then one might wonder whether this is merely technique, and not a major decision on content.

Update June 23 2017: (1) Originally I sorted the parties on the difference between the % seats and the % votes, but the ratio is better, and indeed gives slightly higher Gini coefficients. One can easily check this by sorting differently in the excel sheet. (2) Alan Renwick repeats the useful distinction between the measure of proportionality and the measure on impact (like power). (3) If seats are allocated using one particular criterion (like the Sainte Laguë criterion), then it doesn’t seem so much useful to see what it means in terms of another criterion, for, if the other criterion really is better, then use this to assign the seats. Thus the issue is intellectually rather dead in continental Europe, that already applies proportionality. The issue only comes up here because of the situation in the UK.

Update June 30 2017: (1) Northern Ireland included, see this discussion. (2) The excel sheet for a country/year now contains an unsorted section and a section that sorts automatically. (3) Uniform chart sizes. (4) With a small correction, the Dutch PR Gini is 3.6 instead of 3.5.

Apparently I cannot find a picture of Max Lorenz (1876-1959) but there are some of Corrado Gini (1884-1965).

Corrado Gini (1884-1965) (Source: SIS, Instituto Centrale di Statistica)

If you don’t have proportional representation (PR) then some voters get representatives they did not vote for. Thus it isn’t very democratic not to have PR.

The last weblog criticised the UK Electoral Reform Society (ERS) for erroneously claiming that Single Transferable Vote (STV) was PR.

ERS namely adopts districts, which causes STV to lose the limited PR properties that it has.

A persons affiliated with ERS answered to this criticism:

“We are well aware of the tension between the desire for (overall) proportionality and the desire for guaranteed local representation.  This tension is apparent among British electors when opinion polls have asked relevant questions about the outcomes of voting systems.  British electors want both overall proportionality (of parties) AND the local representation provided by exclusively single-member districts.  That is just not possible, so we aim for a compromise between local representation and overall proportionality through appropriately-sized multi-member districts. (…).” (Personal communication)

This is an unsatisfactory answer since there simply is no such “compromise”. When one must choose between a square and a circle then the answer is not some other graphic with some measure of deviation. If there is no PR then there is no PR, and then ERS should not claim that they have PR. To express their “compromise”, ERS speaks about “STV-PR” but this is like speaking about square-circles, and comes with the grating sound from nails across a blackboard.

If n is the number of voters, s the number of seats, then q = n / s is the threshold or quota, of voters per member. A candidate can be elected when he or she meets the quota. When the district size is 2q, then the district representative must get 50%+1 of the vote to attain the quota. At best s / 2 seats can be filled in this manner, since s / 2 * 2q = n again. All unfilled seats can be allocated using overall PR. This shows that districts are not a key design feature, while PR is. (These formulas can be adjusted for turnout, when district size is defined in terms of the electorate and not actual voters. See here.)

By focusing on districts, ERS loses track of the key design feature, and it lets its logic be occluded by a less relevant issue.

Wikipedia follows ERS

Apparently the editors at wikipedia follow ERS rather uncritically. The wikipedia statement in red is what ERS claims falsely and what is adopted by wikipedia too. The statement in green is true. Since the statement in green is true, the statement in red can only be true by chance.

Proportional representation (PR) characterizes electoral systems by which divisions in an electorate are reflected proportionately in the elected body. If n% of the electorate support a particular political party, then roughly n% of seats will be won by that party. The essence of such systems is that all votes contribute to the result: not just a plurality, or a bare majority, of them. Proportional representation requires the use of multiple-member voting districts (also called super-districts); it is not possible using single-member districts alone.[1][2][3] In fact, the most proportional representation is achieved when just one super-district is used.

The two most widely used families of PR electoral systems are party list PR and single transferable vote (STV).[4][5] Mixed member proportional representation (MMP), also known as the Additional Member System, is a hybrid Mixed Electoral System that uses party list PR as its proportional component. MMP has the potential to be proportional or semi-proportional depending on a number of factors such as the ratio of first past the post (FPTP) seats to PR seats, the existence or nonexistence of compensatory seats to make up for overhang seats, and election thresholds.[6][7][8][9]   (Source: Wikipedia on PR)

ERS thus is confusing the world including wikipedia. My advice for the editors of wikipedia (and the ERS) is:

  • Maintain conceptual integrity.
  • Restrict PR to the notion that p% of the votes translates into p% of the seats.
  • For PR the first preferences are relevant and not what is done with the subsequent preferences. Thus do not label STV as a PR-system but as “potentially PR”, or as STV-PPR.
  • For PR it suffices when the electorate selects parties. A single candidate is a party with a single candidate.
  • The professionals in parliament can use more complex systems like STV. The use of STV (there) must be compared to other systems, like Borda Fixed Point.
  • Get rid of the hangup on district representation.

Unfortunately, the person affiliated with ERS writes to me, with an unrelenting hangup about districts, and neglecting that PR should hold nation-wide:

“Neither the ERS nor I would be prepared to label STV-PT as “potentially PR” or anything similar.  I have seen some academics describe STV-PR as “a semi-proportional” system.  That is just nonsense.  For the same district magnitude, STV-PR and party-list PR both deliver the same degree of proportionality.  The fact that some electorates are prepared to accept electoral districts that cover the whole country for party-PR but don’t like the idea of “large” electoral districts for STV-PR is completely irrelevant.  It is the district magnitude that is the determining factor, not the voting system.”  (Personal communication)

Scotland is an example

Scotland has four electoral systems, and I copy from Wikipedia:

Does this mean that Scotland comprehends democracy or that they don’t ?

The Party List System as used for the EU Parliament generates proportional representation (PR), and this would be the criterion for representative democracy.

(Obviously, for the election of a local council, the norm for PR are the local votes, and not nationwide PR. Once the issue here is reduced to apportionment, then STV is one of the options and a choice depends upon one’s criteria.)

Let us look at the Scottish implementation Additional Member System (AMS) a.k.a. Supplementary Member System a.k.a. Mixed Member System (MMS). I would prefer the latter term, since there is nothing “additional” about an elected MP. Sometimes the term “Mixed Member Proportional” (MMP) is used but this is only warranted when there really is overall PR.

The current Scottish system

Scotland has 73 constituencies, in which the candidate is selected by FPTP. There are 8 regions with 7 seats per region, to a total of 56 regional seats. These “additional seats” are used to make the outcome more proportional. Brief explanations of the current Scottish system are by the Parliament itself and The Scotsman. The Scottish Parliament elections of May 5 2016 have these full data. The turnout was 55.6%.

Scotland like the UK has a hangup on the distinction between the local candidate and the party. It is claimed: “In the second vote the voter votes for a party rather than a candidate.” Indeed, when the first vote has a FPTP selection, then voters may be forced to vote strategically for a candidate of reduced preference, in trying to prevent that a worst candidate is selected. Thus the explanation about local representation may be a misrepresentation about what might really motivate voters.

When we compare the votes for the constituencies (districts) and the regions, then we don’t see much of a difference, except for the Greens and Others. (This are totals though, and there might be differences over districts.)



























We take the summed region vote as determining what the proportions for the parties should be. The additional 56 seats and their restriction to regions are not enough for correction of the error in the local vote. The SNP got 7% more seats than warranted under PR.


























































An alternative for Scotland

Let us consider a rough alternative for Scotland:

  • A local winner must get at least 50% of the vote of a district (constituency).
  • All 129 seats are allocated in proportion to the summed region vote.

The data file allows us to determine which candidates are elected now. This generates a quite different result. In the local vote, only 29 candidates manage to get at least 50% of their district (constituency). 95 candidates are selected via the Party List, which puts the ERS argument for locality into perspective. In this rough alternative, there are 5 seats that cannot be allocated due to rounding errors. But having 4% empty seats is not unfair given that 4.5% of the votes are wasted on the small parties.













































Others  0  0  0










A general observation

The quota is q = 2,285,752 / 129 = 17720. Above criterion of 50% of the local vote might be too lax. With 73 districts, the number or electors per district might be too small. If the number of districts is 129 / 2 ≈ 65, then the average district has size 2q, and the criterion of at least 50% of the votes would fit the overall condition of winning a seat via satisfying q.

A google showed this page by Andrew Ducker who also wondered about PR in Scotland. He mentions: (1) The region votes must be summed for nationwide PR indeed. (2) A 50%:50% distinction between local and national seats would be helpful indeed. In reply to this: why still allow FPTP when it may cause that a minority winner would become the “representative” ? It is better to require at least q and/or at least 50% of the district.

The UK Electoral Reform Society (ERS)

The UK ERS falsely claims that STV applied to districts would be PR while it is not. The ERS also criticises the Scottish system, but perhaps for the wrong reasons.

In 2011, the current Scottish system was already in place, and the ERS advised a change. See the Guardian or the BCC:

One of the authors of the report, Prof John Curtice of Strathclyde University, said: “The widespread expectation that the Scottish Parliament would be a multi-party parliament, in which no party would ever have an overall majority, has been dashed. “In truth, although the electoral system bequeathed to the Scottish Parliament by Labour was far more proportional than first-past-the-post, it was never one that was best fitted to the realisation of that original expectation. “It still favours larger parties over smaller ones, who, indeed, are actually being discouraged from standing in the constituency contests.” (BBC 2011-11-15)

A similar critique is given w.r.t. the 2016 outcome. Some changes like an “open party” list (i.e. the ability to vote for individual party candidates on the list) and the allocation of Sainte-Laguë may indeed be mentioned.

But this is small beer compared to the major critique on the Scottish system, that it still allows for the hangup on district representation.

While the ERS should warn voters and legislators about this hangup, the ERS suffers from this hangup itself too, and propounds STV for districts, which destroys PR.

The person affiliated with ERS writes to me:

I am not in favour of electing MPs (or other representatives) in two different ways. In Scotland we have experience of the Scottish Parliament where MSPs are elected by the Additional Member System (AMS = a regionalised version of MMP). Some of the worst problems of electing MSPs in two different ways (Constituency and Region) have abated over the years, but the tension remains and surfaces from time to time. It would have been much better if all the MSPs had been elected by STV-PR, but AMS was a political compromise as one the major parties (Labour) would just not accept STV-PR at any price. (Personal communication)

Again, this person at ERS suggests that STV would be PR, even calling it STV-PR, while the very application of STV to districts destroys the PR.

Missing Scottish voters

ERS Scotland director Willie Sullivan wrote a book about the structurally low turnout for Scottish elections: “The Missing Scotland: Why over a million Scots choose not to vote and what it means for our democracy” (publisher).

In an article, Sullivan summarises:

“If the working people wanted democracy, why do so many now not vote? Surely these are the people that should be most eager to flex their democratic muscle? In research for my book, Missing Scotland, I tried to find out why more than a million Scots choose not to vote. What I found is worrying. Most important of all, people don’t think voting will make anything better. They have tried voting, and they have tried not voting, and there is no difference. They think politicians are all the same, don’t understand their lives and they make promises they never keep. This is not a question of not caring. The people I spoke to care a lot about their families and communities. They are worried about losing their homes or their jobs. They even like the idea of democracy, they just don’t think we have it. Not voting is often a deliberate act.”

I haven’t read this book, but only find it relevant enough to mention its existence. My guess is that Sullivan hasn’t mentioned two elements:

  1. When the Scottish electoral system was changed, they didn’t adopt the PR system like in Holland, but kept their hangup on districts, and ERS itself was an agent in this. Potentially Sullivan might feel ashamed that he doesn’t quite comprehend what democracy is.
  2. Scotland isn’t aware of the failure of the Trias Politica model and the need for an Economic Supreme Court.


My finding is that major political distortions in the UK, France, USA and India arise because of lack of PR.  A lobby for STV for districts doesn’t resolve this, and it is falsely claimed to be PR. Thus I would tend to advice electoral reform in this order of priority:

  • first PR, like the system in Holland or the EU Parliament (Open Party List)
  • if this is up and running, secondly allow for an element of locality for half of the seats (s / 2, district size 2q, and the district representative is elected with at least 50% of the district vote, potentially corrected for turnout)
  • if this is up and running, improve the system by allowing voters freedom on how they vote
  • compare STV and Borda Fixed Point and other methods for the selection of the local representative.

The UK Electoral Reform Society hinders clarity on electoral reform since they show a hangup on districts. They better focus on establishing Proportional Representation (PR), while regarding the issue of districts as of secondary importance.

Given overall PR, one might even let voters determine on the ballot how to deal with the district representation, for the s / 2 seats available for district representation.

  1. Some voters might vote for a party, and be done with that. Seats are allocated to the party in proportion to the total number of votes. (Closed Party List) Some voters might wish to select a party but also a particular person in that party, so that the party order takes over if the person would not be elected. (Open Party List) These approaches can be combined (as in Holland) when the Closed List voters vote for the party leader.
  2. Some voters might indicate where their vote would go, if their party of choice isn’t elected. (Remember that a single candidate is a party with a single candidate.)
  3. Other voters might wish to vote for particular candidates across parties, and then might want to indicate how votes would have to be transferred if the candidate doesn’t get elected. (Otherwise it is apportioned automatically.) There is still the comparison between STV and e.g. (repeated) application of the Borda Fixed Point method. STV runs the risk of eliminating a compromis candidate, who receives few votes in the initial stage, but who can collect support because of secondary preferences. This might not be relevant for the party proportion but be quite relevant for voters and the candidates themselves. This would not be an issue of PR but of Quality Representation (QR).

PS. Dan Hodges (Telegraph June 1 2015) has a very entertaining article “No, Britain does not want proportional representation“. The weak spot in his argument is that the 2011 referendum on AV was misrepresented as a referendum on PR while it actually was a referendum on AV. The strong point is that ERS cannot be convincing if its arguments are confused. There still is a case for sound arguments and good education.

PPS. The subtle relation between proportional representation (PR) and district representation (DR) shows also in the existence of a Senate or House of Lords, in which districts / States might be represented by 2 senators per State like in the USA. For a Senate the DR might be acceptable since the Senate has the role of guardian for the nation itself. The House would be sensitive to the preferences of the electorate, and in that case PR would be logical.

There is a bizarre incomprehension of democracy.

I was inclined to say in the English speaking world – UK, USA, India – but there is also France, with the upcoming elections for the French National Assembly 2017. Also France has a system of District Representation (DR) rather than Proportional Representation (PR). Examples of PR are Holland, Germany and to some extent the European Parliament.

Democratic theory favours PR above DR. It is a historical mistake that countries have DR.

The UK Electoral Reform Society (wikipedia) protests about the UK general elections 2017.

Electoral Reform Society, website June 2017

Indeed, there is this difference (wikipedia) between the UK system of DR with the better system of PR. While the popular vote gives a majority to Lab + SNP + LibDem, the majority in seats goes to Con + DUP.

Seats Votes



































There is also the political dynamics of proportionality. Once a proportional system is in place then new parties will have a larger chance to get elected, and then they also have more scope to grow and to challenge the existing parties. We may observe that the UK 2017 outcome may be more proportional than in the past, but this still neglects the dynamics and the build-up of frustration amongst minorities that aren’t represented well.

The UK already has experience with the system of PR, namely for the European elections. While UKIP didn’t do so well within the UK system, Nigel Farage gained the limelight via the elections for the European Parliament.

The UK Electoral Reform Society fails too

Part of the bizarre situation is that the UK Electoral Reform Society (ERS) fails too. They favour the system of “Single Transferable Vote” (STV) and they call this a system of PR while it isn’t PR. It is rather bizarre that they do not comprehend this. The UK had a so-called “referendum on PR” in 2011, but this was actually on the system of “Instant Run-Off” (a.k.a. “Alternative Vote”).

Apparently, the UK has a hangup on DR. They think that districts allow voters to connect directly with the local politicians, and that this reduces the influence of the party bosses. This is a dubious argument. If a representative and party member is out of line with the party then the party might still sack him or her nevertheless. In PR it is easier to start a new political party and be elected (when the issue likely isn’t just local).

Thus the statements by the ERS about district representation derive from historical bias and not from clear theory and practical experience with PR.

Let me give an example how STV favoured by ERS is not PR at all, even though they claim that it would be PR.

Example that STV is not PR

Consider two districts with 30000 voters each. Each district has 2 seats, so that the Droop Quota is 30000 / (2 + 1) + 1 = 10001. Parties contending for these seats are Con, Lab, en LDP. In District 1, the Con are popular, and they present there a list with two candidates. In District 2 the Lab are popular, and they present there a list with two candidates. We consider a rather symmetrical situation as in the following table, also with the STV results.

In STV, voters vote only once, but they can assign a rank order of the candidates.

In District 1, 7503 Con1 voters give Con1 as their first choice and Con2 as their second choice. Also 7501 Con2 voters give Con2 as their first choice and Con1 as their second choice.

  1. In the first round, no candidate meets the quota. LDP1 has the minimal number of votes, 7494, and is eliminated.
  2. In the second round, Con2 has the minimal number of votes, 7501, and is eliminated.
  3. In the third round, the Con2 votes are allocated to Con1, and Con1 meets the quota and is elected.
  4. In the fourth round, Lab3 is the remaining candidate and thus is elected, though the 7502 votes are below the quota.

The situation in District 2 is analogous.

District 1 Votes District 2  Votes


Elected Con3










Elected Lab2








Let us now join the two districts, and look how STV works for the national vote.

There are 60000 voters and 4 seats, so the Droop Quota is 60000 / (4 + 1) + 1 = 12001.

The Con voters put the Con candidates of their district in the first places, and then the Con candidates of the other district. For example, the 7501 Con2 voters have the rank order {Con2, Con1, Con3}.

Because of the symmetrical structure of this example, there are some ties. Rather than using a coin, we use the alphabetical order.

  1. In the first round, no candidate meets the quota, and LDP1 is eliminated.
  2. In the second round, the LDP1 votes go to LDP2, and it is elected.
  3. In the third round, alphabetically Con2 has the minimal number of votes, and is eliminated.
  4. In the fourth round, Con2’s votes go to Con1, and it is elected.
  5. In the fifth round, alphabetically Lab2 has the minimal number of votes, and is eliminated.
  6. In the sixth round, Lab2 votes go to Lab1, and it is elected.
  7. In the seventh round, alphabetically Con3 has the minimal number of votes, 10506, and is eliminated.
  8. In the eighth round, Lab3 remains, and is elected, though with only 10506 votes.

Thus now LDP2, Con1, Lab1 and Lab3 are elected.


  • As the UK Electoral Reform Society (ERS) states that STV would generate proportional results, both {Con1, Con3, Lab1, Lab3} and {Con1, Lab1, Lab3, LDP2} would be proportional results, which however are quite different results, which destroys the meaning of proportionality.
  • With a hangup on DR, there will be little scope for fair representation of the minority LDP.
  • PR would require party representation with {37.5%, 37.5%, 25%} of the seats. Admittedly, this is difficult to achieve with 4 seats, but if the situation persists then one might change the number of seats. This uses the PR criterion rather than the STV criterion.

In these considerations, the notion of PR dominates DR.

Confusing information from Holland

Holland is a small country with some 10 million voters. One might think that its proportional system might not easily scale up to a large unit like the EU. If the EU Parliament would be fully proportional, then Germany might have too large a weight. However, there are also divisions along party lines, and proportionality still would be a fair choice.

Holland had general elections on March 15 2017, and political parties are still negotiating about a coalition government. This is bad advertisement for the system.

There is a confusion in Holland about desiring the minimal majority coalition, that bargains for an agreement that would apply for the next 4 years. It would be more rational to look for a larger majority, and rather set for a flexible agenda, so that issues can be dealt with in varying manner. See this paper of mine. It may also be better to have elections every year, so that Parliament becomes more sensitive to the popular vote. (If you would replace only 25% of the seats, then the electoral quota becomes 4 times larger, and this might be too high again.)

Most bizarre is that the Dutch party D66 wants to change the Dutch PR system into more use of districts … see here. Thus the good news about democracy in Holland is killed again by the campaigners on the D66 hobby horse.


We observe that the UK ERS protests against the failure of the UK electoral system, but we can also conclude that ERS doesn’t comprehend democracy.

We find similar confusions all over the world. The best advice is to change your national electoral system to the PR system like in Holland (or to some extent the EU parliament), yet many campaigners ride their hobby horses of wildly confusing varieties, and calling it “democracy” while it actually isn’t.

PM. A paper of mine on comparing PR and DR is here.

There is a useful interview with Bill Mitchell of December 2014 on Modern Monetary Theory (MMT) and unemployment. My only comment on this interview is that one should be aware that Mitchell gets wrong information from Holland, see this discussion.

Thinking about money I wondered about Bernard Lietaer. He has an impressive CV, so I watched most of this interview with him too. It appears that I can make the following comments. The main one is that Lietaer gets wrong information from Holland too. Apparently no one told him yet about the censorship of science at the Dutch Central Planning Bureau since 1990 and the relevance for his analysis on money.

Interest causes the need for growth ?

Question 3 “Why is money scarce?” gives Lietaer’s answer in minute 3-4 that interest mathematically would cause the need for growth. Consider an economy where all loans are $ 100 bn, and where all borrowers must pay an interest of 3%. Then the loans can only be repaid with interest to the sum of $ 103 bn, if, it is claimed, there is some growth of at least 3%. If there is less growth, then some borrowers would be forced into higher debt. In the past I have wondered about this phenomenon too. When you imagine that all loans are exactly from January 1 to December 31 then the argument seems to be compelling.

However, when I looked at this closer, I found the argument wanting. For, the 3% would be earnings by the banking system too, and thus be spent and injected into the economic cycle. Not all loans are exactly from January 1 to December 31. For this weblog article, I planned to make a diagram with the proper argument, but checked on google first whether someone had already debunked Lietaer’s argument. Indeed, Johan Rönnblom already gives a fine discussion with a diagram. He actually has some other good articles too (like on the Jesus myth).

Silvio Gesell’s decay / demurrage / negative interest

Lietaer repeats Silvio Gesell’s argument on money with decay or demurrage or negative interest. For example, a Decay-Euro might lose 2% of its value next month, so that you would have an incentive to spend it. He gives the example that this worked well in Egypt for 2000 years.

However,  we already have decay with inflation. Also, when part of your money earns interest in a bank, then the other part with no return has a relative penalty. These incentives are lost when there is deflation and a zero rate of interest, as has been the case nowadays. But there are other ways to bring money into circulation. (My conclusion is the need for national investment banks.)

Thus, there is no need for Silvio Gesell’s argument in this particular form. J.M. Keynes already though Gesell an interesting author because he pointed to the incentives to spend or hoard money, but there it stops.

Ecosystem of monies

Lietaer argues that a monoculture runs a large risk so that it is better to have an ecosystem of more monies.

This is somewhat problematic. W.r.t. Question 21 on the Euro, Lietaer appears to be in favour of it. But in subsequent discussion he states that his original wish was that all Eurozone nations had also kept their own currencies. This however is dubious. When we look at the case of Cuba with its CUC and CUP and informal use of the dollar (which the CUC is linked to), then this advice by Joseph Perry et al. is that the dollar should not be legal tender. Supposedly bad money drives out good money, but this applies to the hoarding of the good money, so that only the bad money is in circulation. The situation is different when the good money is amply available and doesn’t need to be hoarded. If the dollar would be legal tender then apparently it would annihilate the use of CUC and CUP. The mentioned advice refers to Panama and its use of the dollar. Thus, Lietaer’s preference for dual monies in the Eurozone cannot be maintained. If in Greece both Euro and Drachme would be legal tender, and be used to calculate and pay taxes, and when the Drachme would obviously tend to drop in value, then people would flee towards the use of the Euro. The use of a dual money would not only be against the spirit of the Eurozone but also be counterproductive, causing a resentment against the Euro that causes a devaluation of the Drachme.

I have the impression that the problem is rather nonexistent. What is important is the design of the system of money and banking with a single currency.

Obviously, when you don’t have a good design, then it might be a solution to have various monies with various designs in parallel, and hope that one of them works. But we already know plenty about money and there is no need for experimenting. Best is the observation that the Euro has a bad design, and that politicians did not pay sufficient attention to scientific advice. Each nation needs an Economic Supreme Court (ESC), to warrant the quality of information for policy making.

Complementary monies

The same holds for complementary monies like the Swiss WIR. There is no real need for them. It would not really differ from starting a community bank that has more creative criteria for credit. One might avoid taxes perhaps. I can imagine that complementary monies can work in times of crisis and a government that is fixed on some gold standard or so. For economists, however, the proper analysis should rather be criticism on the government for wrong policies and the absence of an Economic Supreme Court. For economists, the objective remains that people would use legal tender, and thus also be in the position to prosper in doing so.

World money

The world would be helped with a world currency. The current system with IMF and Worldbank would better be replaced with a more developed one (Keynes: “The fund is a bank, and the bank is a fund !”). The current system is remarkably resilient, perhaps also because of Lietaer’s involvement with floating exchange rates and the ECU. Yet there may be tough times ahead, and we should be able to make arrangements with the experience that we have. The notion of an optimal currency area goes against world money, but see my amendment in Money as gold versus money as water. Curiously, Lietaer also suggests to think about world money, but his proposal of an ecosystem would seem to go against it.

Supposedly a taboo ?

On Question 10 about the lack of discussion on these issues, Lietaer suggests that money is a taboo. I wonder. There are ample economists who study money. When some of Lietaer’s arguments aren’t convincing then this doesn’t necessarily mean that there isn’t enough discussion.

More reading

For a discussion about money, this article by Goodhart & Jensen is quite useful. (I thank H. Visser (VU) for alerting me to this.)

Let me refer also to my earlier discussion of the gold bugs and the paper Money as gold versus money as water.

Club of Rome: Money and sustainability: The missing link

There is also Lietaer’s book for the Club of Rome – and Finance Watch (with executive summary):

“Just as The Limits to Growth exposed the catastrophic flaws in our economic system, this new Report from the Club of Rome exposes the systemic flaws in our money system and the wrong thinking that underpins it. It describes the ongoing currency and banking crises we must expect if we continue with the current monopoly system – and the vicious impact of these crises on our communities, our society as a whole and our environment.”

Comments are:

  1. I haven’t read this book. Here are reviews.
  2. I am sympathetic to the subject area, see my draft book on the analysis by Tinbergen & Hueting on the economics of ecological survival. See Hueting’s site.
  3. I am afraid that the presumed mathematical necessity from interest to growth forms part of the argument, which has been debunked above.
  4. A bad system of money and banking will obviously hamper the economy, and thus also environmental sustainability. But the issues are logically independent. The summary by Dennis Meadows in the Preface (excecutive summary) doesn’t indicate to me that we can expect a proof of logical dependence.
  5. A good system of money and banking is here: Money as gold versus money as water and the suggestion by Kotlikoff.

Dennis Meadows still isn’t an economist

The mentioned preface by Meadows has some relevance here. Meadows is an engineer (systems dynamics) (like Lietaer started out too) but his report “limits to growth” was criticised by economists for not having prices, income effects and substitutions. Apparently, Meadows never took up the challenge to study economics, and now he is taken in by Lietaer’s incomplete economic analysis on money as if this would be the true story.

“I did not think about the money system at all. I took it for granted as a neutral and inevitable aspect of human society.” (Meadows, Executive Summary, p6)

Well, any macro economist has money as a subject in his or her training, and all would know that the idea of “money is a veil” is only a particular assumption (which students might later forget, that is true).

“a devastating critique of traditional economic thinking” (Meadows, p7)

He cannot say so, since he didn’t study economics and thus cannot judge about what Lietaer claims. I am very much a traditional thinking economist, but do not accuse me of errors that fellow economists are making.

The analysis in “limits to growth” was relevant because it pointed to the limits to natural resources and the ecology, but there it stops. For national decision making, democracies require Economic Supreme Courts that check the quality of information. Part of their task is to make sure that the information from the various sciences is integrated, so that parliaments can trust that decisions are based upon the best information available.

Potentially a link to the Dutch Sustainable Finance Lab

Potentially there is a link in the latter issue with the Dutch Sustainable Finance Lab. See their malconduct here and here.

Potentially disinformation at the Club of Rome too

There may also be disinformation at the Club of Rome. Wouter van Dieren (b 1941) is presented as a scientist, but he is mainly an activist, after first starting as a journalist. His prominence at the Club of Rome can only be explained by his prominence at the Club of Rome. Van Dieren supported drilling for gas and oil in the Wadden Sea and use the proceeds to buy out clam fishermen, apparently neglecting issues of sustainability and earthquakes.


Looking back at these points, my impression is that Lietaer is a relevant author who mentions relevant aspects to consider, yet, that the discussion of his work requires a much more critical evaluation than it has received. Somehow Lietaer’s work has become popular in “alternative” circles who lack the required critical attitude, and that is a pity also for Lietaer’s work itself.

Lietaer’s argument that interest either requires growth or causes more debt is wanting. The proper argument seems to be that people borrow too much or that banks are less successful in judging creditworthiness, but this is a different issue with different remedies.

I did not spot a compelling summary that inspires me to read more. I expect that a rewrite would help, but it would not be for me myself to try to do so.

This continues from former weblog text.

In the past, Dutch society had the pillars, or segregation – though not in the extreme form of Apartheid – notably between Protestants and Catholics, but also for the socialist labour movement. People could live in their own community without the need to deal with other concepts or to develop a personal sense of tolerance and open-mindedness. Only the leaders of the pillars had to bargain with one-another, and this could be restricted to more practical issues.This pillarisation started to break down in the 1960s and 1970s with the increased welfare and freedom and the advent of television and “globalisation”. Yet, there are still relevant structures, e.g. in political party memberships and newsmedia subscriptions and such.

“In their search for the conditions of stable and democratic political rule most of these political scientists came to believe that political fragmentation of a society poses enormous obstacles to the realization of stability and democracy. In their view the cleavages or fragmentation, created by differing social, ethnic, religious, and cultural groups, had somehow to be overcome before there could be any prospect of a stable, democratic regime. About fifteen years ago this dominant belief among political scientists was challenged by the young Dutch Arend Lijphart. In 1968 he published his The Politics of Accommodation: Pluralism and Democracy in The Netherlands. Both within the country and elsewhere (thanks to the English edition) the work was highly acclaimed. Its success was due, in large part, to his description of Dutch politics as a paradoxical case of strong social segmentation or pillarization which was also marked by stability and democracy. That is, contrary to expectations, Holland is both stable and democratic despite its extensive social cleavages.” (M. van Schendelen around 1985).

While the pillars have mainly disappeared, Dutch culture hasn’t developed yet the personal sense of tolerance and open-mindedness that is required for this new situation. Dutch people are no orphans without self-confidence, but the metaphor might be helpful. If I am correct, in the USA, there is now strong antagonism between strands of Democrats and (Tea Party) Republicans, but there is also an underlying idea of mutual respect, and the attitude that opponents have the right to speak their minds, which also involves the obligation to listen to them. Perhaps this is the pioneering spirit that relies on individual strength. Though, in Hollywood comedies, it are the eternal misunderstandings that cause most laughs. Whatever that be, my suggestion is that in Holland, discussions break down far too soon. One is treated at best with a smile but no longer listened to, with the hint that you should go and look for your own pillar to talk to.

Thus, Dutch people might seem open minded but actually there is fundamentalism, fueled by uncertainty and the need to cling on to something.

A course “Economics from a pluralistic perspective” (newspeak)

The example in this weblog entry concerns what professors Irene van Staveren and Rob van Tulder call “pluralism“. This appears to be Orwellian newspeak for something that excludes key information that proper pluralism would include. It is “Free of charge to follow the course, € 50 to get a certificate”, though apparently you still must register with Coursera.

“Wondering why economists have not predicted serious financial crises? Shocked by economic assumptions of human behavior as self-centered and focusing only on what can be measured? Asking yourself if there are no sensible economic alternatives to free markets? Then you are at the right place to learn economics! Economic pluralism means that a plurality of theoretical and methodological viewpoints is regarded as valuable in itself and is simply the best way in which economics can make progress in understanding the world. This MOOC will illustrate economic pluralism not only in substance but also in form.” (EUR website)

This case concerns science and education, and involves Van Staveren’s and Van Tulder’s suppression of scientific ideas that they apparently don’t want to hear and don’t want to tell their students about. A scientist might specialise, and no longer be able to see beyond the blinders of this specialisation. In that case the scientist is no different than any other lay person, except for a general training in methodology and integrity of science. In this case, we are dealing with pluralism and generalisation, which are the opposite of specialisation. Hence the omission of key information is a much more serious issue.

My analysis in 1990 was that the Trias Politica fails, and that democracy requires an Economic Supreme Court. The economic crisis 2007+ confirms this analysis. Now, fellow economists may have other analyses, but it would be unscientific not to mention my analysis. Certainly when you target for pluralism, then also the proper analysis better be mentioned.

The former weblog entry already mentioned some important elements. We continue with the list.

Sustainable Finance Lab

Irene van Staveren is member of the so-called “Sustainable Finance Lab” (SFL) at Utrecht University. There is no good reason to combine finance and sustainability, but it might be good marketing for some bankers, and fashionable for the news media and students looking for something to study. Former RABO banker Herman Wijffels can call himself a professor now, and redirect criticism on his former banking activities to his new image on sustainability. In Dutch there is this 2013 warning by me.

I alerted Van Staveren about the malconduct by Klaas van Egmond at SFL. Van Egmond is an engineer in food technology, who has insufficient background in economics, but who doesn’t care about this, since engineers know better. He switched to the issue of the environment, and became head of the Dutch research institute on the environment. There he maltreated Roefie Hueting’s analysis on environmental sustainability. With the 2007+ economic crisis, he presented Dutch parliament with a model exercise that flies in the face of economics. These two issues are discussed here. Van Staveren didn’t respond to my criticism though she could at least have asked her SFL partners to reply to the criticism.

Holland also has environmental researchers like Rob van Dorland who do serious work on the environment. I am afraid that they get so-called “information” about economics from confused Klaas van Egmond. When I alerted Van Dorland about this issue, he rejected my warning as “spam”. Well, this is curious. The email exchange is here. This was part of the exchange above, that Van Staveren neglects to look into. It would have been better when she had corrected Van Egmond and informed Van Dorland that my information and warning had been correct.

At SFL there is also Dirk Bezemer, who disinforms the world about economists who warned about the 2007+ crisis.

At SFL there is also Mark Sanders, who advises the scientific department of the political party D66. I have asked Sanders to look in the D66 claims on improved democracy with district voting, referenda, and direct elections of prime minister and mayors. He refused to do so, and didn’t transfer my request to other people at that D66 department so that my new analysis would be looked into. Dutch readers can look here. A recent discussion on voting theory on this weblog is here.

Poor families paying for environmental costs

With global warming and deteriorating environment, the costs of the environment rise, and thus also costs for families, either directly or via taxes. For some persons this might be an argument not to include environmental costs into prices, since it would increase poverty.

“In the near future, an average three-person household will spend about €90 a month for electricity. That’s about twice as much as in 2000.
Two-thirds of the price increase is due to new government fees, surcharges and taxes. But despite those price hikes, government pensions and social welfare payments have not been adjusted. As a result, every new fee becomes a threat to low-income consumers.” (Der Spiegel 2013)

“Americans can’t afford higher electricity prices.” (Forbes 2013)

However, this situation is not fundamentally different from the past, when families already faced the question of survival and subsistence. Let me thus refer to my analysis on unemployment and poverty in DRGTPE. A short text is “Don’t tax sweat“. Dutch readers might look at this.

However, for some students of environmental economics this still might seem to be a new issue. I don’t know whether this is the case with Van Staveren and Van Tulder. They neglect to respond, and thus I really don’t know. Given that they neglect me, I presume that they also neglect my work, so that they might have above confusion.

Unemployment and poverty in general

In 1996 Ruigrok & Van Tulder “The logic of international restructuring” presented the important insight that globalisation actually was regionalisation. Fears about global competition were exaggerated. For Dutch readers: see this. This analysis fitted an earlier study by Andre Middelhoek at CPB in an evaluation of the Treaty of Rome, that there was mainly intra-industry specialisation.

In 1998 I gave Van Tulder a copy of the Dutch book “Werkloosheid en armoede, de oplossing die werkt (W&A) (pdf online). Van Tulder would look into it and get back to me. He hasn’t.

Date: Wed, 15 Apr 1998
To: Thomas Cool
From: Rob_van_Tulder
Subject: Re: Boekje over werkloosheid en armoede, i.v.m. uw analyse;  reactie?

Geachte mijnheer Cool,
ik heb uw boekje in goede orde ontvangen. Ik heb het slechts kunnen
doorbladeren. Momenteel is me weinig tijd gegeven voor enig substantieel
leeswerk. Dat zal in de komende weken z’n beslag kunnen nemen. Ik zal dan
graag contact met u nemen.
met vriendelijke groeten,
rob van tulder

Google Translate:

I have received your book in good order. I’ve been able to browse only. At present, I have little time for any substantial reading. That will be possible in the next few weeks. I will be happy to contact you.

Now I see that Van Tulder made a 2008 study about poverty for UNRISD, the United Nations Research Institute for Social Development. There is no reference to this book or my work.

“This paper addresses the way in which the largest firms in the world are coping with their involvement in the issue of poverty at home and abroad. It will be analysed in particular whether different ‘varieties of capitalism’ (VOC) or ‘business systems’ (Cf. e.g. Whitley, 1999; Jackson and Deeg, 2008) and different industries lead to different approaches towards poverty. The paper focuses on the one hundred largest firms in the world – as measured by 2006 turnover (see Annex). The sample contains sufficient representative firms from five industries and three different varieties of capitalism, to facilitate international comparison: (1) Anglo-Saxon (containing in particular US firms), (2) Continental European (in particular French and German firms) and (3) East Asian (in particular Chinese and Japanese firms). This paper is largely descriptive. It aims at identifying and documenting various strategies that can be and are employed by corporations to reduce poverty, it tries to come to a first assessment on the profoundness of these strategies, while also considering which variety of capitalism (and business leadership) seems to develop the most pro-active strategies towards poverty reduction.” (Van Tulder 2008, UNRISD)

The study targets businesses, but a key point for such a study would be:

  • Business leaders should plea with the government for a general policy to alleviate poverty, since it is the government that can resolve main issues, including the prisoners’ dilemma for the individual companies.
  • Resolution of poverty in OECD countries would be an important step, since it would set an example for countries with less democracy and resources.

Indeed Van Tulder in his chapter 2 presents a more general discussion how businesses are getting involved in the poverty issue, and W&A fits in this general framework, but isn’t referred to.

Why oh why did Van Tulder not get back to me about this book that I gave him ? It might be that he simply forgot ?

Wage moderation policy

Van Tulder (2000) (in Dutch) p178 & 180 refers to the Dutch wage moderation policy, but without the criticism given by Kleinknecht, see this earlier weblog entry.

The policy of wage moderation is also discussed in W&A as a key angle to understand unemployment and poverty in Holland and the OECD. See DRGTPE on exposed and sheltered sectors of the economy.

Reading DRGTPE

In 2010, I alerted Van Staveren about DRGTPE and the Dutch booklet DOK for a general public. Van Staveren indicated that she would look at it, so I sent her the relevant links. I haven’t received a reaction since. A 2014 discussion about the failure of the Trias Politica and need for Economic Supreme Courts is here.

From: “Staveren, I. van (Irene)”
To: ‘Thomas Cool / Thomas Colignatus’
Date: Tue, 16 Feb 2010
Subject: RE: Mijn analyse over werkloosheid en armoede

Geachte Thomas Cool,

Hartelijk dank voor uw mailtje en interesse in mijn werk. Als u me (een link naar) uw werk over de Trias Politica en uitbreiding met een Economische Hof zou willen toesturen, zal ik dat met belangstelling lezen.

Ik neem aan dat u bekend bent met mijn boek waarin ik betoog dat er drie economische waardendomeinen zijn en dat een economie pas goed functioneert als die drie (vrijheid/ruil; rechtvaardigheid/herverdeling; zorgzaamheid/de gift) in evenwicht zijn? (Voor de zekerheid: Irene van Staveren, The Values of Economics – an Aristotelian Perspective. Routledge, 2001.)

Hartelijke groeten, Irene van Staveren.

Google Translate:

Thank you for your email and interest in my work. If you would like to send me a link to your work on the Trias Politica and expansion with an Economic Court, I will read that with interest.

I assume you are familiar with my book that I argue that there are three economic value domains, and that an economy only works well if those three (freedom / exchange, justice / redistribution, care / gift) are balanced? (For sure: Irene van Staveren, The Values ​​of Economics – An Aristotelian Perspective. Routledge, 2001.)

PM. I am aware of the work by Arjo Klamer and Deirdre McCloskey on (virtue) ethics. Van Staveren wrote her thesis with Klamer and McCloskey was in the thesis commission. It had been my intention to look at Van Staveren’s thesis, but this hasn’t been urgent for me to do so yet.

Closing off

This discussion already takes two weblog entries. Let me close this off now, with a salute to George Orwell, apparently born in the same year as Jan Tinbergen (1903-1994).

Eric Blair / George Orwell (1903-1950)