Monday, September 21, 2009

Options for Participatory Democracy and Sortition for Taxes

Possible Mechanisms for Participatory Democracy for Taxes

I proposed and our group at Western Illinois University are implementing techniques for peole to vote on the laws that constitute the tax code. The tax code could be represented as a decision tree which in the end leads to the amount of tax or a simple formula such as a linear function of income that gives one tax. A decision tree is a set of divisions, each of which will have other divisions. For example, we might vote to divide people on the basis of the number of children. Thus, we would look separately at those having zero children, one child, two children, three or four children, five to eight children, etc.

Then, we might look at the ratio of earned (wages) to unearned income (bank interest, dividends, bond coupons). Thus, the tree might have a division for those having no children and eighty to one hundred percent income. Another branch for those having no children and sixty to eighty percent income, etc.

Then for each of these divisions, we would have a formula or graph relating income to division.

At each stage in the process, individuals would vote on what divisions to make and eventually the ratio of income.

Another student is working on applying genetic algorithms to determing a tax code.

But do we need rules? Do we need a tax code?

We simply could say that each individual and each entity would go before a jury which would determine the tax they pay. How can we make it less arbitrary?
  1. Tax rates would not vary by more than ten percent year to year without a supermajority. To transition to that system, we would start with whatever tax the entity paid under our complicated tax code. Thus, if a firm paid four millions in taxes the previous year, their tax this year would be between 3.6 million and 4.4 million. However, sixty percent of the jury could vote to change it by twenty percent, in the example from 3.2 million to 4.8 million. Seventy percent could vote to change it by fourty percent, etc.
  2. Several entities could be grouped together for comparison. One possibility is to group them randomly. Thus, a jury would see a disparate group of entities, say
    1. a middle-class individual
    2. a working-class individual
    3. a financial institution
    4. a factory
    The jury would vote on a tax rate for each entity. It doesn't follow that the corporations would pay a higher rate than the individuals. The jury might find that the corporation truly is a public-spirited organization committed to sustainability. And it might find that the individual is a fuel hog in taking unnecessary trips, and not taking care of self. (See my blog entry on the badness tax.)
  3. The above scenario assumes no attempt to group elements. One certainly could group members. This can done by rules. That is, we could vote as discussed at the beginning for classifications. We could vote on dividing by corporation, partnership or individual. We could vote to divide by their net income, gross income or number of employees.. Thus, one would not be comparing small businesses with large businesses. But we wouldn't vote on a tax rate for each category, simply a total amount of revenue to be collected from each group.

    A sample of let's say twenty individuals or entities or juries would go before the tax jury. The tax jury would know that they have to collect a specific amount revenue from each individual. (The computer would divide the total to be collected in each category by the amount of revenue).

    Example, we vote that we want to group all those married individuals earning between sixty-thousand dollars and eighty-thousand dollars and having two children in one group. We would look at the total income earned and decide that gather all such people should pay twenty billion in revenue. Assume this group was two-million families. Thus, on average each family would pay ten-thousand in taxes. And thus, each group of twenty would pay $200,000 in taxes. The jury would tnen adjust the $10,000 that each should pay based upon all kinds of other factors: how much have they given in charity, which have high medical bills or suffered other disasters this year, etc. etc.

    Each family would be given a chance to explain their financial situation and any reason why they should be given special consideration.

  4. The alternative to rules for categorization is clustering. This would introduce a second type of jury. This jury would be given pairs of individuals. They would get financial information for the two individuals in the pair. These jurors would indicate how similar they are; not how much taxes they should pay.

    There are many algorithms available that cluster items into similar groups icnluding Self-organizing maps. In two or three spatial dimensions, this would be groups of points that are very close, forming a clump on a scattergraph. This could be extended to a tax situation in that the software would treat numbers such as number of children, incomes, as spatial dimension and place each taxpayer as a point in the "n-dimensional space." The clustering algorithm would find groups of tax payers that are similar in input characteristics.. The taxpayers would go before groups of the first juror types to explain those special tax considerations that would be lower than individuals that are similar.

  5. We have many algorithms to take sets of example data and create a function out of them. Thus, the jurors could rate several tax payers as to how much tax they should pay. This, of course, assumes that the characteristics that determine how much tax an individual or entity should pay are all quantitative or captured by the collected parameters (income, medical expenses, etc.) Are we better off allowing people to present these issues and construct the rules interactively and collaboratively, or merely say what the tax should be for various tax payers and construct the rules mechanically.
Computer scientists and statisticiians have developed many different ways that one could learn functions from example data. These relate from such standby's as multiple regression to the new methods such as neural networks, and machine learning techniques. Thus, assume that we have juror ratings of one thousand tax payers. We can apply these techniques to generate a function between the parameters and the tax assigned. Obviously, one could replace the jurors by the formula or alternatively, people could use such capabilities to estimate how much tax they would have to pay and when.

(This is similar to the various services that report jury verdicts in tort litigation to help trial lawywers decide when and for how much to settle their cases.)

In simulations, one can compare the results to a Lindahl Equilibrium, which I will present later in a Thoughtful Thursday and discussed earlier in the discussion of Genetic Algorithms.

Sunday, September 20, 2009

Frank Luntz, What Americans Really Want

Frank Luntz presented his survey of 6200 Americans and his book on CSPAN today. Americans trust people more than business or the government. In discussing health care, he said Americans hate both insurance companies and government involvement--which echoes a statement by President Obama. Why don't we just do it--particpatory democracy, including health care.

Do outrageous jury awards negative the power of sortition?

Article that juries often award a ridiculous amount of damages to a patent holder when a big company infringes their patent. and asks the questions of whether a jury is appropriate in determining such amounts. I believe sortition jury verdicts would become more reasonable if they have to award a large chunks of them, but this is an empirical question.

Thursday, September 17, 2009

Thoughtful Thursday Book Review or Literature Review Weekly Series

I will have a weekly series, Thoughtful Thursdays, which will be a review of a book or older literature.

The first episodes were:

  1. This Thursday, Genetic Algorithms, particularly David Goldberg's book
  2. People's Bicentennial's Commission book on Voices of the American Revolution
  3. Paul's Woodruff book on Athenian democracy, First Democracy
  4. July 23rd, Sortion, the Random Selection of Juries to make the decisions that are now made by legislatures, bureaucrats, judges and laws
  5. July 16th Ann Pettifor's book, The Coming First World Debt Crisis as a theme in this blog is alternatives to the Financial Missystem
  6. June Eleventh, Wisdom of Crowds by James Surowiecki

Genetic Algorithms (Thoughtful Thursday Post)

In genetic algorithms, one represent information as a Chromosome, a series of values. E. G., assume we are optimizing a gas pipeline, that has five pumping stations each with a pressure differential and we have five pipe diameters between them. Thus we would have for two possibilities. I will refer to them as Configuration A and Configuration B.
P(1) P(2) P(3) P(4) P(5) D(1) D(2) D(3) D(4) D(5)

300  200  150  75    80   1.2  1.5  1.3  2.2  3.3

P(1) P(2) P(3) P(4) P(5) D(1) D(2) D(3) D(4) D(5)

275  300  125  140   140  1.8  1.2  1.4  2.1  3.1
This might represent the following real world configuration where the p(1)..p(5) in boxes are the pressure of the pumping stations and the d(1) to d(50 are the diameter of the pipes:
_____      ______    _____   _____     _____
|    |d(1) |    |d(2)|    |  |    |d(4)|    |d(5)                               
|P(1)|==== |p(2)|=== |p(3)|==|p(4)|=== |p(5)|===
|    |     |    |    |    |  |    |    |    |                             
_____      ______    _____   _____     _____
The most important operation is crossover, where two possible pipleine configurations "mate" and produce two offspring. The system randomly chooses a point in the chromose, and the two mates get switched at that point. Assume the random number generate says cross over after D(2). The two children in the next set would be:
P(1) P(2) P(3) P(4) P(5) D(1) D(2) D(3) D(4) D(5)

300  200  150  75    80   1.2  1.5  1.4  2.1  3.1

P(1) P(2) P(3) P(4) P(5) D(1) D(2) D(3) D(4) D(5)

275  300  125  140   140  1.8  1.2  1.3  2.2  3.3
The second important operation is fitness evaluation and preferring high fitnesses. In the pipeline scenario, this fitness would probably the inverse cost. Thus, assume the two original configurations had costs of $100.00 and $75.00. Assume that there were two other configurations, call them Configuration C and Configuration D, with costs of $300.00 and $150.00.

The genetic algorithm uses random number generators to determine the chance of each configuration mating and thus contributing to the next set of chromosomes, the population in the terms of the Illigal algorithms. Then configuration B would have four times the chance of mating as C and D would have half the chance of mating as configuration C.

Application to taxation and budgeting

In our project, the chromosome will include the various tax rates. These are the marginal tax rates for each quintile of income (with a few special ones for the richest.

R(1) - tax rate for those in the bottom twenty percent of income
R(2) - tax  rate for those in the twenty to fourty percent of income
R(3) - tax rate for those in the fourty to sixty percent of income
R(4) - tax rate for those in the sixty to eighty percent of income
R(5) - tax rate for those making between eighty to ninety-five percent
       of income
R(6) - tax rate for those making between ninety-five percent and
       ninety percent of the income
R(7) - tax rate for those in the top one percent of income
And then, we have the budget amounts, how much to be spent on:
R(8) - social security
R(9) - defense
R(10) - education
R(11) - medicare
R(12) - transportation
R(13) - agriculture
R(14) - aid to low income families
R(15) - training labor and unemployment
R(16) - international affairs


David Goldberg's book very nicely explains schemata (Genetic algorithms in search, optimization, and machine learning / by David E. Goldberg. Published: Reading, Mass. : Addison-Wesley Pub. Co., 1989, which is where I got the information in this article ). Schemata represent that we have chosen several fields. The other's have not been chosen yet. In our first example, the schemata
P(1)=300 * * * * * D(1)=1.2 * * * * *
represents a specific value for the pressure in pumping station one and a specific value for the pipe to its right. The schemata,
P(1)=300 P(2) = 200 * * *  * * * * *
represents all the possible configurations with pumping station one having pressure of 300 and pumping station two having pressure of 200.

In crossover, which schemata is most likely to be disrupted by the crossover which occurs each cycle, it is the first with about a fifty percent chance of getting disrupted. The second schemata has only a ten percent chance of getting disrupted as of the ten possible divisions only one will disrupt the schemata.

(These are approximations as most genetic algorithms use scaling to get better performance to prevent random variations that happenn to fit from dominating in the early stages and to magnify differences for fine tuning at the end of the optimization, but that doesn't concern the main idea of what we are doing in social choice.)

In taxes, schemata might represent

R(1) = 0.1 R(2) = 0.2 * * * *  * * * * *  * 
The tax rates forthe two lowest income quintiles thus constitute a schema, and since they are next to each other on the chromosome, they would be most likely preserved. On the other hand, a relationship between the tax rate on the lowest quintile and the money for welfare (aid to low-income persons) would not likely to be preserved. , e.g.
R(1) = 0.1 * * * *   * * * * *  * * * R(14) = 10.0E6 *  *
That is because the first is on R(1) and the second is on R(14). Practically every cross-over will ruin this connection.

There are two other operators, mutation, which is randomly changing one value in the chromosome and inversion which is changing the order of operations. In this space, we could allow individuals to make proposals of new chromosomes or changes. Mutations thus introduce new possible budgets into the mix.

An interesting twist would be to proceed the genetic algorithm by a process where individuals give their degree of associativeness between two characteristics. This would be a pseudo-inversion.

MR. Lessard, a graduate student in our department, has started two programs in that direction: He implemented a web system for the above genetic algorithm.

  1. After logging in and do "informed consent" stuff, the participants enters their ideal budget. Thus, the initial population consists of everyone's ideal budgets.
  2. When the system has everyone's ideal budget (or at least from enough people), it will cross them over. Each of these will be presented for rating.
  3. The users will rate five budgets each.
  4. The system will do cross over on the results. These will be based on the fitness ratings in step three.
  5. Return to Step Two
Simulation of the strategic behavior will start from the software provided The second step will be a simulation starting from the University of Illinois Library. I have marked the modifications so that we can test strategic behavior. What happens if one or two sets of raters don't give their honest rating, but attempt to give (strategic behavior in the game theory and algorithmic mechanism design literature) a rating that is more likely to have them end up with a budget more to their liking.

Of course, a more basic question is whether the genetic algorithm will converge to a Lindahl Equilibrium. Thus, the first experiment will be to run the genetic algorithm with no strategy. The fitness chromosome will simply the taxation for each group. Each group will have a linear fitness function to give the d U / dTax = M * Tax + b where U is the utility. Each group will be assumed to rate the tax level proportional to the total benefit it receives from the total tax revenue. Thus, the benefit is the integral of the above function up to the total tax on all groups. Then, we will try strategic voting and a genetic algorithm where the chromosome represents a tax which is a piecewise linear function of the Income.

(I really appreciated the lecture of Dr. Warren Jones of this University on Lindahl Equilibrium when I took his Summer Public Finance course. It is on my to do list to write a more detailed Thoughtful Thursday piece on Lidnahl Equilibrium. The next best is the presentation in David N. Hyman, Public Finance, Fifth Edition page 136 to 144,)

Tuesday, September 15, 2009

Uncertainty in Environmental Decisions

Paul Woodruff talked very eloquently over uncertainty among experts should be decided by democracy and not representatives. His example was the decision by Athens to attempt the invasion of Sicily and Syracuse in his book about Athenian demoracy.

The Oil Drum is talking about uncertainty in environmental decisions and the Precautionary principle.

Michael Pollen "Big Food versus Big Insurance"

Many people have advocated that something be done about American diet and the costs of health. Mr. Pollen says that the insurance industry will go after food consumption and diet. Of course, in my very first posting, I proposed a badness-based consumption tax, with food being taxed on the basis of its healthiness for both the consumer and the environment.

Monday, September 14, 2009

Jury News

Another reference on juries not doing their own research ont he internet regarding the case. Should sortition jurors be encouraged to do their own work, possibly sharing it with the other jurors.

Embodied Energy in Imports for Carbon Tax

One of the problems with most carbon tax or cap and trade systems, is that they allow imports that have a high carbon foot print or embodied energy. The carbon tax must be applied to imports, otherwise that favors imports from those countries that do not regulate their greenhouse gasses. This is just part of the pollution haven factor which I cited in my first blog post.

Some people recognize this, including the Mine worker's Union President, Cecil Roberts complained about China and India which are producing a coal-fired power plant every week.

Sunday, September 13, 2009

Ann Petifor blog

I reviewed Ann Pettifor's latest book, a prescient book on the First World Debt Crisis. She also has a good blog on finance at Huffington Post. I particularly like her article about the problems withthe financial missystem that are, if anything, only getting worse. But she is unwilling to replace the whole system.

Cap and Trade Alternative

An alternative to Cap and trade for reducing climate change gasses is a Participatory Democracy Consumption Tax. One advantage is that it allows for one to determine the amount to cap by letting businesses compete to see how low they can reduce carbon emissions.

It is important to protect vulnerable consumers, e. g., those who already have a large house in a city served by a coal-burning power plant. Or those who might have good reason to do extensive driving, e. g. a married couple who cannot find jobs in the same city or an those who have relatives in a tertiary care facility. Individuals can apply to participatory juries for the ability to purchase electricity, gasoline, etc. free of a carbon tax.

Towards Share Participatory Democracy Economy

Yesterday, I heard a telecast of the Jerry from Ben and Jerry who spoke at Western Illinois University, my University. He pointed out that they raised their capital by an /IPO directly to Vermont residents. This was under an "obscure" Vermont law that allows this. One out of one hundred Vermonters bought some shares.

And I just heard on NPR, Debora Spar who talked about risk in the Economic Meltdown and argued that had women been involved at crucial junctures, there may have been less risk and a better outcome. She noted that there was a correlation between risk taking and testosterone levels.

The implications for a participatory share economy is obvious.

Saturday, September 12, 2009

Psychology of Belief Systems

This is a great article on some of the issues of what people believe and do. It is a concern in electoral systems of any kind, whether participatory or not.

Global Tobin Tax

The German Social Democrat Party including the German finance minister called for a Global Tobin Tax.

Friday, September 11, 2009

Thursday, September 10, 2009

People's Bicentennial Commission Book Review

I ran into Voices of the American Revolution by the People's Bicentennial Commission. Our public library puts some books in a roller in the Amtrak Station and encourages people just to take one to read on the train. (We are fortunate to now have a train twice a day to/from Chicago which is a distance of two hundred and fifty miles from where I live and work, Macomb, the home of Western Illinois University).

I thought it was a book by an official entity, but I realized later that is not. However, some of its quotes from the Founding Fathers and others of the Revolutionary period are ringing of some of the themes of this blog. In fact the two "official" bicentennial commissions were the Revolutionary Bicentennial Commission (ARBC), established in 1966, and after a scandal involving a relationship with Richard M. Nixon, was replaced with the American Revolution Bicentennial Administration (ARBA) in 1973. The People's Bicentennial was a "New-left" inspired organization.

Tom Paine wrote:

"It is at all times necessary, and more particularly so during the progess of a revolution that until right idey as confirm themselves by habit, that we frequently refresh our patriotism by reference to first principles. It is by tracing things to their origin that we learnto understand them..."

And to some extent I am taking democracy to its first principles, and I by applying computer technology to participatory democracy, I hope to understand what democracy really is and can be. I remember something told to me by my boss on a computer science grant,

The phrase, to really understand something, teach it to someone else, is well known. But to really understand something, program it. And that is what I have students doing as their master's project and other indepedent work. And what is the first principles to determine the budget for our "public goods."

And the first chapters looked reasonable, like the things that a government-sponsored commission might very well write. But later on, the book seems to advocate, or claim the founding fathers did, communistic ideas.

Benjamin Franklin said "All the property that is necessary to a man for the conservation of the individual, and the propagation of the species, is his natural right which none can justly deprive him of; but all property superfluous to such purposes is the property of the public who, by their laws have created it, and who may, therefore, by other laws dispose of it, whenever the welfare of the public shall dispose of it, whenever of the public shall desire such disposition." (I took the liberty of checking this quote to see if it is real and I found it in many places via Google including a book by the United States Department of State from 1889.

The book also claims that Jefferson submitted a bill which passed, that released "half the area of Virginia" "from the large landholders."

The book claims the revolution was determined to diffuse power as much as possible. "In North Carolina, as the new State constitution was debated, one delegate to the convention was asked what power the governmor would have in this new deomcratic system "The power to sign a receipt for his salary" and one delegation to the convention was instruction to seek "a simple democracy, or as near it as possible. Oppose everything that leans to aristocracy of power in the hands of the rich and chief men exercised to the oppression of the poor." I confirmed with the full document

And since I have talked about the problems with the financial system and the alternative of a share economy, I quote from Thomas Jefferson:

  1. The dominion of the banks must be broken, or it will break us.
  2. Everything predicted by the enemies of banks in the beginnign, is now coming to pass
  3. I sincerely believe, with you, that banking establishments are more dangerous than standing armies.
There are apparently bogus Jefferson quotes out there and the University of Virginia has a list of presumably good ones on financial systems, banks, inflation and the gold standard.

Wednesday, September 9, 2009

United States of East Africa and a Constitution Construction Kit

In my white paper, Three Systems, I talk about a Constitution Construction Kit for those nations or groups of nations that anticipate developing a new Constitution. Well it looks like there is one more application, a United States of East Africa as reported very ably by the Economist.

Tuesday, September 8, 2009

Education and Democracy and Games

Many have tried to have games provide learning and education. There is even a term, edutainment. The Economist reports on the extreme of having students from twelve to eighteen do nothing but participate in edutainment ventures. But their games include things such as role-playing Ancient Spartans or pyramid builders. I won't comment on the quality of such experiences, either for holding interest or providing education. But they are not here-and-now.

I believe participatory democracy provides a perfect educational medium. People making a decision on a health care issue (in lieu of a health insurance bureaucrat), learn about medicine. Individuals working on a budget learn the departments in the government. I read somewhere, but cannot quickly find it, that most people cannot name three Federal Departments.

High-school age students participating in sortition juries in a non-voting capacity as part of their education could earn voting rights early by showing they are thoughtful.

I will blog more on the relationship between education and participatory democracy.

juries and medical malpractice

I blogged before on medical malpractice reform. Here is information that shows that juries can and do deal effectively with medical malpractice.

Jury News

I have advocated the use of sortition juries countless times here. Of course a question is what to do when one of them misbehaves. Should the misconduct, whatever that is defined to be, of one be enough to redo the entire sortion jury process? That is not the case in South Carolina.

Should the jury be allowed to do their own experiments and research? In criminal situations, the answer is of course no.

On the subject of juries, in trials, there is always the question of what should be decided by juries and what should be decided by the judge? There is a move that a jury should not decide whether a patent was "obvious."

I thank the Juries Blog for this information.

Sarah Palin Health Care Editorial

Today, September Eigth in the Wall Street Journal, Sarah Palin had an editorial on health care, which really doesn't say anything different than their last editorial on health care, about which I blogged earlier.

But, from a participatory democracy point of view, Obama has asked Congress to create an independent meeicare advisory counsel and that this will work "outside of 'normal political channels' So here the choice is between those driven by the election process and lobbyists on one hand and unfeeling bureaucrats that are not answerable to anyone.

This reminds me of Obama's speech in which he says that neither insurance company bureaucrats nor insurance companys should "meddle" in heath care.

Of course, the answer is sortition juries and the general public in plebiscite.

Monday, September 7, 2009

Death Panel, God Squad

The Jurisdynamic web site compares the phrase "death panel" as a rhetorical feature of the health care debate with the "God Squad" which is the panel which can allow an agency to take an action against an endangered species. Should such a decision require approval from a sortition jury.

This is also an example in the statutory law where a supermajority is required for a decision (five out of seven). I am not aware of any other. Examples of supermajorities of are Constitutional, to approve a treaty by the Senante, to amend the Constitution and in the Senate to invoke cloture to stop a filibuster, and to overturn a veto. I am also aware of supermajorities being needed in some State decisions on budgetting. The United Nations Charter has an instance of a Supermajority being needed.

I believe people should vote on such percentages, and a constrained movement be allowed each year. In high school, we study the Constitution. As each high school student reaches the age to vote, they would have an opportunity to enter for such numbers, what they believe it should be, 70% to overturn a veto or merely 50%. However, the numbers would only be allowed to move a few percent a year. That is we would have political hysteresis. (That limit itself could be voted on the same way.) As individuals died, their vote would be removed and, of course, there would be a procedure to change your preference.

Wall Street Journal Health Care Article Response

The Wall Street Journal just had an opinion piece on health care. It has some good facts:
  1. 400,000 people engaged in medical tourism here
  2. Our five-year survival rate for all cancers beat those for Canada, Europe and England
  3. The HR 3200 is long and has too many new taxes and penalties and mandates.
But some other facts are just plain wrong:
  1. "Anyone can walk into an emergency room and receive care regardless of their ability to pay.
    That is not true. They can be treated for the emergency, but if they have cancer, a gall bladder that needs to come out, it probably is not an emergency.
    As I have argued here, we need to replace this with a plan that says that those who do not have insurance must go before a sortition jury (Unless it is truly something current like a heart attack or a car wreck) and they will decide whether the person could reasonably be expected to have health insurance or be putting money away into a health savings plan. The person making $20,000 with a family probably will be excused for not having helath insurance. Ditto for the person who was layed off. Ditto for the person who went to the health insurance companies but was turned down. The yuppie making $70,000 who went bare would not. And we would like at the amount in the health care savings care plan as compared to one's income. The proverbial washer-women who saved a few thousand dollars over her life in her health care plan would be given much more credit than the young urban professional.
    We would all serve on these committes. I know I would probably push people to go to the premier medical facilities such as John Hopkins, Hospital for Special Surgery and Memorial Sloan Kettering, just as I do for my students and family. They would all use Pubmed the wonderful free resource provided by the United States Government that indexes the medical journal literature, to research diseases, treatments and outcomes.
  2. They blame "runaway lawsuits," "malpractice"premiums for the problem. Malpractice costs are only two cents of every health care dollar. They blame defensive medicine. But the CBO found many studies that show this is not a problem.
Doctors and hospitals that do provide charity care should be rewarded at tax time by sortition juries. The Wall Street Journal advocates vouchers! But I would argue that those who receive public funds for their health care should have to answer to the public for what is done with it. As mentioned above, this would be done on a one-on-one basic through sortion juries. Of course, I am not including here programs that represent earned dollars like Medicare.

I also have advocated that businesses that do provide health insurance for their workers be rewarded at tax time. This is better than mandates.

Sunday, September 6, 2009

Meltdown Rescue, Participatory Democracy Style

As we hit the one year anniversary of the bailout:

A participatory democracy approach to stopping the meltdown. The businesses that needed credit that could not get it, would apply to the government for the funds they needed for day to day operations. Remember that the problem was that the commercial paper market threatened collapse! The businesses would be watched by sortition juries. There were plenty of unemployed who would be available to do this. This would include crews that would film inside the business and posting a feed and for, the publicly traded businesses, the executive suite and top management would be put on round-the-clock monitoring, with veto power by the sortition juries over any action.

Then, the banks and other large institutions would be allowed to fail.

Those facing foreclosure would have their bank accounts monitored and strict laws would be passed saying that their pay or any other payments sent to that account. The individuals would stay in their home and be allowed to make essential purchases, as allowed by their sortition jury, orthodontia for their kids, continuing their kids education. But non-essentials such as eating out, vacations, a new flat panel TV, etc. would be stopped. All expenditures out of the account would have to be approved by their sortition jury. In other words, individuals would be allowed to keep their status quo so they would not suffer losing their job, not eating, etc., but they would be forced to hunker down.

In other words, we would keep the status quo going, but those who might have been profligate would be stopped.

A Tale of Two Research Areas (economics and computer science)

compares the goals of economics and computer science and how it affects the research papers. An economist espects to model a situation that already exists, while a computer scientist is look at the possibility of what can be. some of this is the effect of Moore's law where computer power doubles each year. Thus a 33% efficiency improvement would be dramatic for the whole economy but for an algorithm it is less important as it is swamped by the speedup of technology.

He calls for papers that combine the best of both world's, things that look at all possibilities as well as grounding this in empirical data. As a computer scientist I think that is a good approach to take for the whole profession. There is a tension in our field between the practical papers and the theoretical, and it is important to have both.

And I close with remarks from Joseph Weizenbaum: "One programs not because one understands, but in order to come to understand. Programming is an act of design. To write a program is to legislate the laws for a world one first has to create in imagination”(Weizenbaum, 1976 p 108). and The computer programmer ... is a creator of universes for which he alone is the lawgiver ... universes of virtually unlimited complexity can be created in the form of computer programs.

Tragedy of the Commons

I am sure everyone here knows of the "tragedy of the Commons," the famous essay in Science which says that environmental problems are caused by the fact that everyone has an incentive to exploit a resources (overfish, dump pollutants into the river) and we need a good political system to stop this.

The Oil Drum blog (The campfire series) just had a presentation/revisit on this The companion article on the difficulty of creating a good political system is relevant to this blog.

Anti Poverty Nudge

There is a New York City anti-poverty program to pay the poor for doing good things like attending parent-teacher conferences. It has been successful at small things. Can this be administered better by sortition juries and in a participatory democracy manner.

Medical Malpractice

I watched the CSPAN coverage of the Senate debate on medical malpractice law reform. There were three issues, all of which have a sortition-based solution

  1. Defensive medicine, a doctor ordering tests or procedures to help protect against malpractice. But as Sheldon Whitehouse said, one can't draw the distinction between good defensive medicine, protecting a patient from possible risk and bad defensive medicine that solely protects the doctor. Also, they said we can't distinguish those who might order tests and refer them to the facility owned by their friends.
  2. The Jury Verdict. Sheldon Whitehouse said that even though a jury system makes people uncomfortable, it is supposed to. It is the refuge of those who might be victimized by the powerful, by corrupt legislatures or governors.
  3. And this was discussing reducing medical malpractice liability for those who sever the rural and underserved communities.
  4. And they cited a CBO Study that showed that tort reform would reduce medical costs only marginally.

    Quoting from the Congress Budget Office itself, Evidence from the states indicates that premiums for malpractice insurance are lower when tort liability is restricted than they would be otherwise. But even large savings in premiums can have only a small direct impact on health care spending--private or governmental--because malpractice costs account for less than 2 percent of that spending.(3) Advocates or opponents cite other possible effects of limiting tort liability, such as reducing the extent to which physicians practice "defensive medicine" by conducting excessive procedures; preventing widespread problems of access to health care; or conversely, increasing medical injuries. However, evidence for those other effects is weak or inconclusive." They cited Tillinghast-Towers Perrin and the Office of the Actuary at the Centers for Medicare and Medicaid Services for the two percent number.

Doctors should save money in lieu of taxes in an account. As many years go by and whether they committed malpractice, they would go before a sortition jury. Those who were permanently injured would also go before the sortition jury. If overall the doctor provided beneficial health care (less malpractice, more handling the uninsured and giving charity care and possibly practicing in underserved areas), they get to spend the money from the retirement account tax free. The sortition jury would like at the entire record of the physician, not just the one where, using the words of the Senators, one of the "best doctors" removed the wrong leg. Those who have a bad record, the money would go to the victimes and back to those who provide medical care. Ideally, we would also look at the total spending for which the doctors were responsible. So those that cared for many patients, had good outcomes, few mistakes, and spent little money would get a nice reward. Those that had the opposite would have a poor retirement. I talked about individuals having to put money away and then is distributed upon retirement after reflection on their lifetime record with twenty-twenty hind sign.

Of course, we would also have other funds which would pay the immediate medical bills of those injured. Remember that there are many that have bad outcomes after the medical care and who are left paralyzed or otherwise disabled. They don't get money from the medical malpractice system because there was no negligence. But they still need to be taken care of by somebody, whether the government, charity, or their regular insurance. I note that as Senator Orrin Hatch said, they were only capping non-economic damages.

Another concern is that only a minority of the money put into the medical malpractice system as premiums is actually received by the injured patient in care. And the CBO study said that "claims that did not lead to payments incurred average defense costs of $22,000 in 2002, compared with $39,000 for claims that did result in payments." But would sortition juries which could operate without lawyers, but not without medical experts, reduce the total expense of finding "the truth" and awarding money where it was due.

Thursday, September 3, 2009

Japan Democratic Party Victory: The Change Mandate

Today, I heard Michael Green discuss the Democratic Party victory in Japan on CSPAN. They won on the strength of "sticking it to the bureaucrats." Unfortunately, the legislature does not have the expertise in policy that is true here in America, nor do they have "Think Tanks" like in the United States. Thus, he believe their campaign on the them of "Change" will fail to deliver on its promises as they are too dependent upon the bureaucrats to actually run things.

The particpatory democratic answer is to use citizen juries to review the decisions and salaries of the bureaucrats.

Paul Woodruff, First Democracy, A Book Review

Paul Woodruff, First Democracy, The Challenge of an Ancient Idea, Oxford University Press, 2005

The Athenians are known for democracy and in particular, participatory democracy. (Paul Woodruff recognized that slaves and women did not vote. But Thrasybulus led the force that defeated the thirty tyrants put in by the Spartans. Thrasybulus argued that the slaves on the side of democracy should have been given their freedom. This had happened before as said in Xenophon's Hellenica and aristophanes Frogs and the debate about when slaves should be freed after serving in combat was debated often.

The wealthy, who owned slaves, under ARchinus defeated this belief. And as Paul Woodruff pointed out, and we saw in the bank bail out, the wealthy interests defeat common sense. Paul Woodruff lamented, often the interests of the rich and powerful prevail and pure democracy does not prevent this.

Paul Woodruff points out that a democracy must make decisions when the outcomes are uncertain and advocates that this is precisely the time when decisions must be made by sortition. And he contrasted this with Plato's dream of rule by expert, the techne, the philosopher kings. A democracy must deal with experts who have interests. And a democracy must deal with the times that experts have legitimate disagreements, perhaps disagreements based upon ideology.

Paul Woodruff uses Athens' war in Sicily both to give the power of a sortition-based assembly and its problems. The Athenians considered whether they should attempt an invasion of Sicily and capturing Syracuse. On page 148 to Page 149, Mr. Woodruff beautifully recounts the pros and cons for the attempted invasion as it would be viewed by Athenians. And he talks about the second vote, where the Assembly was to plan the invasion and what would be needed for it. Nicias talks about the cons once again. (He is an experienced general.) Alcibiades is pro-war and another "brilliant commander." He talks about the situation of experts, as both these generals were, disagreeing, the difficulty of knowing the future and why in these situations, true democracy should triumph.

Three generals were appointed, Nicias, Alcibiades and Lamachus. Woodruff does a wonderful job of explaining the interaction between democracy, expert politics, and the end of the Peloponnesian war and the rivalry between Sparta and Athens. (However, I read the Wikipedia articles on Nicias and Alcibidias. The former also give a somewhat different perspective on the history.) The wikipedia pages put these in the context of the conflict between the overcautious and the overoptimistic. Is participatory democracy the way to deal with this conflict which certainly occurss again and again including modern times?

And Paul Woodruff gives us the parable of the ship sailing in heavy seas, and decisions must be made quickly, and there is no time to debate, sort out differences among experts, and vote. "That is why ships have captains, and no ship, can be democratic." These pages are truly beautiful and I believe everyone should read them!

And certainly, there are many situations where participatory democracy is inappropriate, a platoon leader in battle, a surgeon in the operating room and the pilot in an airplane come to mind. But overall strategy in war including political strategy is not decided instantly, the decision to operate or not is, usually, made after deliberation, and possibly the decision to ground an aircraft due to weather could be made after deliberation and hearing several opinions. Similarly a decision in a firm about whether to merge with a rival or acquire a possibly synergistic company is not made immediately.

Mob Rule

Of course, one of the objections to participatory democracy, is the danger of mob rule. Paul Woodruff points out a famous example of the "trial" of 406. Athenia won a naval battle against the Spartans at Arginusae. After the victory, the generals tried to rescue some of the crewmen of sinking vessels. But failed. The generals of the navy were brought back for trial. They were supposed to be given a trial one by one and each individual should have an opportunity to defend themselves. The Assembly denied this and executed the generals; the Athenians then recognized their mistake. Paul Woodruff said that this anomaly led the founders of the United States to fear mob rule.

Other innovations

  1. Jury duty and a day in the assembly had a modest payment, about half a days wages for a laborer. But it was enough so that all classes participated and at times, the Athenians had to rope off the Assembly when six thousand people showed up.
  2. Every public officer had to be officially cleared of financial misdealings before leaving position.
  3. Also, some officials were chosen by lot and others needing special expertise were elected, particularly generals and those dealing with financial situation. Many officers that were selected by lot had a formal review.
  4. They used a juror system as well. In court cases, juror panels were large. They were chosen by lot the day of the trial. Thus, it was hard to bribe jurors. Individuals defended themselves. There were arguemnts about wehther the rich should be allowed to hire speech writers.
  5. Anyone could bring up anyone on charges including leaders of government, but those who did not get 20% of the vote on the jury paid a heavy fie. But there were sycophants who threatened to bring the wealthy upon charges in order to extort payments.
  6. A council fo five hundred and legislative panel did the work of screening and marking up legislation done by committees in federal and state legislatures. These were chosen by lot.
  7. There was at first the Aeroagus, an aristocratic court, and after Solon, popular courts in which any citizen could bring charges against others.
The combination of systems, perhaps as some might denigrate by using the expression "ad hoc," or as others might refer to it, "wisely using the right mechanism for each purpose or situation." is what John Zube referred to as "panarchy."

Wednesday, September 2, 2009

Tobin Tax

The Tobin tax is a tax on Financial transactions, particularly foreign currency transactions. This article is a good discussion of its pros and cons, and the political implications.

But should we eliminate the financial system? I proposed two ways. We can simply say that firms should sell their securities directly to the public. But there is no secondary market. ONe gets ones return from the interest for a bond or similar transaction or eventual dividends in the case of a stock.

Or one can go for a share economy which eliminates the distinction between stocks, bonds and salaries. All receive a share of income. That could be a share of a company's revenue (serving the role of a security), or a share of an individual income. The latter replaces mortgages, personal loans and educational loans. Instead of people graduating with twenty thousand in debt from college, they agree to give back eight percent of their income to the University that hired them.

Categorizing Food Products as Junk Food

Amy Gadja, NPR Legal Issues in the News, talked about "junk food" and the problems if we put a special tax on "junk food." What happens if courts have to adjudicate is this product or the other, such as a chocolate candy bar that contains healthful ingredients such as nuts, "junk food?"

There was a law suit by a soft drink company saying they were singled out when other food manufacturers with equally vacuous food products were not taxed. (The court did say that the legislature did have sufficient reason to be specifically concerned about soft drink manufacturers. Courts generally defer to the legislature making that kind of classification, and even in making a statute constitutional or unconstitutional.

But from a participatory democracy point of view, we simply need to have sortition juries compare the products and allocate taxes based upon their perception of badness. No categories are needed, we don't have judges making these value judgments that this item is "junk food" and this item isn't. We just present the information on the products to the sortition jury. Hopefully, the jury can reach a consensus on the tax rate for each product. If not, each juror votes on what tax each product should pay. The average or median of the votes is the is the tax rate.

Tuesday, September 1, 2009

Certifications and Participatory democracy

One of the issues in both conventional democracy and participatory democracy is the role of certifications. Do certifications really mean what we would like and expect them to mean?

One of these is the LEED certification for buildings (Leadership in Energy and enverinmental design). Yet many are not energy efficient in fact--noone checks. That is changing--with audits of bills after the building opens for operation. Half of the buildings do not quality for an energy star level and fifteen percent are in the bottom thirty percent of buildings in the United States for energy efficency per square unit.

Should sortition juries evaluating a business for a badness-based tax look beyond a certification and how do we encourage them to do so?

Note that energy efficiency per square unit is not the best measure. Does a well insulated/etc. McMansion apply that only has two people in it? Should businesses be obligated not only to efficiencly cool and heat the square feet they have but to use the square feet wisely. This includes not having excessive conference rooms, atriums, etc. and moving that which is not immediately needed to unheated storage locations.