Keith Rankin: Parliament: Polypoly or Duopoly?

Thursday, 16 August 2001, 8:34 am
Column: Keith Rankin

Economics extols the marketplace. Markets work best when there is competition. The best name for competition is polypoly ("many sellers"). This contrasts with monopoly, duopoly, oligopoly: one, two, few sellers.

MMP, like other forms of proportional representation, is political polypoly. Many parties put their wares in front of the voting public. MPs are elected in proportion to the support each party receives. The only barrier to entry is the 5% threshold.

There are large parties that are the political equivalent of chain-stores, and smaller "boutique" parties. The result of this competitive contestable political process is that almost everyone's interests are represented in Parliament. And that minority interests are not over-represented.

It is beyond comprehension that an orthodox economist could be opposed to polypoly, be it economic polypoly or political polypoly. How could a market economist refute the virtues of maximal competition?

Yet an economist called Stuart Marshall is reported to be trying to undermine proportional representation. He is petitioning for a referendum that will ask the question "Should a binding referendum be held to decide the future voting system, based on a Parliament of 99 MPs?"

To many, this will appear to be just a repeat of the unfortunate Robertson referendum that sought to misuse the democratic process to reduce the level of democracy in New Zealand. However the Marshall question is actually about changing the voting system, while seeking to use the 99 MP issue as a Trojan Horse. Further, given Marshall's close connection - through the "Citizens' Majority Trust" - with NBR editor Graeme Hunt, it is clear that Marshall's real agenda is to "get rid of" proportional representation. Anti- MMP fanatics like Hunt (who has written a book on the subject that is riddled with factual errors), the real agenda is to remove effective competition from the political process in New Zealand. Hunt and Marshall both know that MMP cannot function with 32 list MPs and 67 electorate MPs.

At least the "bring back Buck" campaign was honest. The "bring back first- past-the-post" campaign is totally dishonest, riding on the back of endemic political cynicism, weasel words, and perceptions unintentionally created by the media that proportional representation has (in some undefined sense) failed.

Of course proportional representation has failed in the sense that it hasn't created an earthly paradise in Aotearoa. But that's hardly a reason to bring back an electoral system that was so unpopular by 1992 that fewer than 200,000 people voted to retain it. Proportional representation was successful in bringing young New Zealanders to the polling booths (to vote Green having seen Nandor on TV). Contrast our turnout with the pathetic turnout in Britain this year.

Stuart Marshall and Graeme Hunt should come clean. What political change are they really trying to engineer? What are they for? Are they for some alternative electoral system that would be lucky to get 5% support in an opinion poll? Or are they for the restoration of the duopoly (ie 2-party) system that was comprehensively rejected by a referendum that followed an extensive public debate? And, as an Act Party member, does Marshall wish to destroy his own party along with a desire to destroy the Greens, the Alliance, NZ First and United?

A political duopoly is not a proper democracy. A duopoly is a form of market failure. Just ask any real economist.

It is National who will benefit most if the boutique parties are destroyed; if the Parliament is reduced by 21 "minor party" MPs. (Ironically, the small party MPs who are most at risk of losing their jobs if there is another change to the electoral system tend to be the best behaved.)

On a more general level, what should happen when people use the democratic process to dismantle or diminish their democracy? Call it catch-23. My answer is that it is legitimate to reject a democratic decision that has negative repercussions for democracy. People who vote for less democracy obviously don't care much about democracy, so therefore they should not care if their vote to reduce democracy is ignored.

Once achieved, political polypoly - the competitive political marketplace - needs to be protected from the interests that prefer political monopoly or duopoly.

If Adolf Hitler had run referendums on the holocaust or the burning of Parliament, and a majority of the German people had supported those referendums, would that in itself have justified those two atrocities?

There are still some people who think that the earth is flat. Let's put that issue to a binding referendum? That's democracy. Isn't it?

© Scoop Media

Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.

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