Thoughtful Thursday, Leadership part Three

Haiman, Frankly, Group Leadership and Democratic Action Boston, Houghton Mifflin 1951.

Empiricial Evidence presented

Nine groups of five students were put in separate rooms and asked to come up with a recommendation on a specific issue. No leader was appinted. They observed the groups and noted when someone does something "that could be construed as leadership."

They then tried another set of nine groups on a similar problem. A leader was appointed. In the class, they asked the members to rate who was an effective discussion leader. But Dean Barnlund did not choose the best leader, he chose six who got poor ratings and three who were in the middle. After the second set of groups discussed the problems:

Then Dean Barnlund prepared a leraning exercise on "democratic leadership." Six of the leaders got the training. Three did not. The groups were reconstituted--they did not know who got the training. The ones who got the training did show dramatic improvent. (I will need to track down Barnlund's dissertation and subsequent work for a future Thoughtful Thursday.)

Dr. Benne at the National Training Laboratory in Group Development have used a series of facilities not only to train the leader to train the group to become "more alert to its own leadership needs."

Benne, Kenneth, "The Future of Work-Survey Conferences" Adult Education Bulletin XII (February 1948) page 93 to 96.

On the job training can convert leaders from an authoritarian style to one more democratic. A controlled study had two groups of Sumemr camp leaders. Six had a training exercise which included observation and discussion of other leaders in action. They were also observed on the job by the experimenters. Then their actions were assessed and arbitrary and authoritarian actions went down. The morale of both the Summer Camp leaders and the children improved. Observations showed authoritarian methods went from 70% to 10%. There was no change or an authoritarian change for the other leaders.

Bavelas and Lewin, "Training in Democratic Leadership" Journal of Abnormal and Social psychologyXXVII (January 1942) 115 to 119.

So training can make authoritarian leaders into those who adapat a democratic style. Precisely what one would want for sortition groups--if they have a leader at all.

Role playing including on-the-job training with role-playing worked to a person training scoutmasters. A "metamorphosis' was achieved

French, John R. Jr, "Retraining an Autocratic leader" Journal of Abnormal and Social PsychologyMXXXIX (April 1944) 224 to 237.

The Unpresident

So what is the role of leadership in particpatory democracy. I thought of the idea of an Un-president who says, "The buck stops with you." (the people). Who unlike "Bush" is not the "Decider" (I hear the second President Bush saying "I am the decideer" on the Political Junkee on NPR each week.)

The "UnPresident" might say, we have a crisis in Korea, should we send the fleet in a show of strength for the South Koreans. And then invite several academic and government experts to present the reasons to/from to do this as well as a fair evaluation of the pros and cons. Then, the "polls open tommorrow for three days, please vote what America should do."

I have heard "that military action" was not taken off the table in regards to Iran nuclear ambitions. Should not this decision be taken by the American People. I discussed earlier, how we could have handled the health care crisis.

Broader Discussion

As I mentioned in an earlier Thoughtful Thursday in the Leadership series, it is a contention whether democratic-type leadership, and hence participartory democracy, makes for happier people. In a controlled study, Dr. Lewin found that children in a group led democratically were happier. But others studies have found that groups that expect a "strong leader" on "horseback." are unhappy when presented with a democratic one. (I need to track these down.)

And he raises the issue, does the process of having and presenting an opinion, even if voted down, help an individual? And, if so, would a participatory democracy be more helpful than a conventional democracy. Or as Henry Thoreu asked, "how can a man be satisfied to entertain an opinion merely, and enjoy it?"

And Dr. Haiman raised the issue of rules, lines and policies very cogently:

A society may agree that disabled war veterans should receive aid, perhaps to prevent homelessness. But is a G.I. who lost his little finger opening a keg of beer at Fort Sheridan, Illinois, on V-J day count as a disabled veteran? A small lodge might agree to buying some paper at twenty-five dollars, but will they select the brand of paper, possibly at the stationary stand. And they may establish a poicy of no excessive drunkenness, but will a committee of the whole deal with each individual who might be considered excessively inebriated. And how do we make decisions quickly, particularly in emergency situations?

And where is the line between oppressing an individual and consensus--could individuals be slaves to the people in general. And he wisely quotes Bertrand Russell.

Those who believe that the voice of the people is the voice of God may infer that any unusual opinion or peculiar taste is almost a form of impiety, and is to be viewed as a culpable rebellion against the legitimate authority of the herd. This will only be avoided if liberty is as much valued as democracy, and it is realized that a society in which each is the slave of all is only a little better than one in which each is the slave of a despot. There is equality where all are slaves, as well as wehre all are free. This shows that equality, by itself, is not enough to make a good society.

One can certaintly imagine a participatory democracy, where each person's every move is directed by a sortition jury with no privacy or free will or the opportunity to let out a little steam at a party. But each person will also have the right to vote on other's freedoms, and will the problem resolve itself in that everyone will understand that they don't want a TV camera overhead all the time for themselves , and thus not do it to others. Will they understand that they want to be able to spend a little of their money foolishly from time to time, and thus let others do the the same? (I talked about financial privacy and referenced David Brin's Transparent Society in my Daily Kos section.) Or will some, e. g. those who might have committed an offense, or the rich in a paroxysm of anger about Wall Street bailouts and bonusses, be subjected to invasive control while the vast majority will be given reasonable freedom. It is really an empirical question, what is most likely to respect human rights: a participatory democracy, a Constitutional democracy which has the equivalent of the United States bill of right, a representative democracy, or a dictatorship, hopefully benevelent.

citing Lewisn, Kurt, "Experiments in Social Space" Resolving Social Conflict New York, Harpers 1948 and Bertrans Russell, Authority and the Individual

And, of course, we must deal with the "great man" theory of leadership. Others say it is the social interplay and an individual can rise to the occassion. As an example of the first is Thomas Carlyle who wrote in 1840:

This.. is an age that, as it were, denies the existenc eof great men... Show our critics a great man, a Luther for example, they begin to what they call "account" for him.. and bring him out to be a little kind of man. He was the 'creature of the time,' they say; the Time called him forth, the Time did everything, he nothing...This seems to me but melancholy work. The Time called forth? Alas, we have known times call loudly enough for their Great Man; but not find them when they call! he was not there; Providence had not sent him; theTime, calling its loudest, had to go down to confusion and wreck because he would not come when called.

Carlyle, hypothesizes a given time to be a collection of dry wood, but without the spark, it never would burn. But we know that a dry forest will eventually have its forest fire or wild fire, even from "spontaneous combusion." And similarly, an idea, a bill can bubble up, and get voted on, even without Speaker's of the House or Presidents.

deflation, bring it on

Fix the money supply--this causes at least a mild deflation, as technology improves and population increases. It causes a rally in your currency, To be both specific and chauvinistic I will speak in terms of dollars. Mr. Kessler talked in terms of reducing leverage to one in five instead of one in ten giving oil back down to fifty dollars a barrell. My proposal might see oil dropping back to the single digits.

By fixing the money supply, that means each dollar is numbered and tracked in the global electronic fund transfer scomputer system. Thus, it cannot be created by people or individuals or the computer system itself, as done in Heinlein's Moon is a Harsh Mistress. I talked about a global XML EContracting and fund tracking system in my DailyKos blog.

What does this have to do with this blog:

1. Deflation is bad for those who owe debts denominated in a fixed amount of money per month or year and which have to be paid back. Thus, don't do that! When one "borrows" morrow, one gives back a share of income, whether one is an individual or a corporation. If all prices go down, the amount given back to the lender goes down but it would have the same purchasing power. Of course, Dr. Weitzman proposed that workers be paid as a share of the companies gross reenues. Thus, we don't have to worry about the problem that it is hard to cut nominal wages.
2. There are many people who wish to save, particularly for a short term goal. They don't want to be an investor, determining which individuals and business enterprises would succeed. Now we have a financial services industry to put these two together, so people can put their money in a bank, earn a modest short term return, e.g. money market account, and then spend the money. I propose they would simply hold the money as cash. (Not as dollar bills under the mattress, but a computer record that they owned dollars serial-numbered 123463412, 1345632345, 13423455, and 7824563124.)

If there is a real problem with people holding on to cash, simply give sortition juries the right to require individuals or businesses with cash balances to either spend the money or invest the money. (since all money is in one system, one can't hide one's dollars in one bank account or another or in one's mattress--if the dollar is not on the system, it simply does not exist.) They could consider if one's goals or reasons for holding on to the cash for a short term goal are legitimate. If the person refuses, the sortition jury would have the right to simply do it for them--perhaps considering social impact of the investment more than the person would.

Would it not be great if fifty years from now, when senior citizens are talking -- "when I was a youth, a subway ride was two dollars, now I pay twenty cents."

Thoughtful Thursday, Corporations and Corporate Democracy

1. Dodge Versus Ford Motor Company 1780 N.W. 668
2. Joel Bakan, The Corporation:The pathological Pursuit of Profit and Power

History

In the early 1700's in Britain, many confidence men created fraudulent corporations, the most notorious of them being the South Sea Company Bubble. Thus, in 1720, Parliament outlawed the corporation.
1. In 1776, Adam Smith warned in Wealth of Nations, corporations inevitably would be victims of insider fraud. Managers could not be trusted to "steward 'other people's' Money."
2. England repealed what was known as the Bubble Act in 1825, bringing back the corporate form.
3. In 1853, Edinburgh Journal called for workmen to have a share of the ownership of the firm so they understand the concerns that now only a manager/owner understands.
4. Gilbert and Sullivan satirized the corporation in Utopia Limited Though a Rothchild you may be, in your own capacity, As a Company you've come to utter sorrow, But the liquidators say "Never mind--you needn't pay" So you start another company tommorrow

5. England limited Corporate liability in 1856
6. In the 1890's states competed to have corporations incorporate in their state and made their corporate laws most friendly. As we know, Delaware was very successful in this regard, which effort to this day brings in money to the state.

Corporation Purpose

I am sure everyone here has heard that corporations goal is to make profit, improve the bottom line and increase shareholder wealth, generally by increasing the stock price. John and Horace Dodge invested $10,500 in Ford at 1906. Ford, famously, paid his workers more than the going rate. He also halved the price for his Model T. Bakan quoted him as saying 'I do not believe that we should make such awful profits on our cars. A reasonable profit is right but not too much.' And in this case, the Dodges sued Ford and this established the legal principle that managers and directors have a legal duty to increase profit. Robert F. Kennedy Junior recently gave a talk at our University to a packed Western Hall, our largest venue. He said that a corporation must maximize its value. He used the example of Walmart donating supplies after Katrina. It could do to that to make people feel good about the company. But it could not donate because there were people who really needed help. That would be spoliation of assets and it should be illegal. Thus, we must regulate corporations. Bakan cited Hutton versus West Cork Railway Company allowed this saying 'a company which always treated its employees with Draconian severity' would have bad employee relations but that 'charity has no business to sit at boards of directors qua charity.'

But according to Wikipedia that is not the case. The real problems was that the Dodges wanted a big dividend to start a competing car manufacturing company! Ford did not want this. And the court awarded a special dividend to the Dodges with which they started the famous Dodge company. And the case was much concerned with minority rights in a corporation as henry Ford owned fifty-eight percent of the shares. And it was about the argument of gaining market share versus profit. 'My amibition' declared Mr. Ford, 'is to employ still more men; to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this, we are putting the greatest share of our profits back into the business." And in fact the complaint said asked that Ford restrained from taking money that would be given out as dividend and from building "fixed capital assets" including possibly an iron smelting plant versus distributing a cash surplus of sixty million dollars. At the time the shareholders were receiving a return from their original investment of sixty per cent per year!

In the share economy, we have similar problems with an individual, A loaning to another individual, B. B as a sovereign indivdual would have the right to vary his income, e. g., stopping work, going to medical school, etc. or vice versa. B might work for share of future income, from building a house where they would both receive money as it was rented out. Or B might work for a startup biotech firm--in exchange for the revenue if their drug succeeds. A is at the mercy of B's decisions, except where they represented waste. Thus A might take action if B decided to sit on the meadow and watch the grass grow, particularly, if A was living in B's house and agreed to pay a 20% of their income in exchange. In a share economy, people would not rent an apartment for a fixed amount of money; they exchange a share of their income for the right to live there. If there was no corporate form, we boil down to that in Ford vs. Dodge, because Ford still retained majority ownership even though Dodges contributed to Ford's business.

In reading the decision, I find, "The difference between incidental humanitarian expenditure of corporate funds for the benefit of the empoyees, like the building of a hospital for their use and the employment of agencies for the betterment of their condition, and a general purpose and plan to benefit mankind at the expense of others, is obvious...A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself..."

Fiduciary Duty

Many of the problems with corporate decisions are a director or manager self-dealing. Voting to approve the big purchase to the company they or their relative own. The manager reveals his conflict of interest. A group of disinterested directors or a majority of the shareholders approves the decision. I see no reason that a sortition jury could not do this. Thus a firm can hire the managers' wife when she really is qualified.

Governance

By contrast to my proposal, the shareholders have no power. In 1913, A Congressional Committee found that that not only had the shareholders never overthrown the existing management in any large corporation, they had not even started an investigation. The management is "virtually self-perpetuating."

I contrast a sistuation where randomly selected groups of shareholders, and shareholders would include the employees who receive a share in lieu of salary, make the decisions. As I outlined in that proposal, a certain percentage of each group could escalate a decision to a larger group or even force a vote of all members.

In the 1930's, AT&T advertised a picture of an older women looping at her AT&T Share Certificates with her children in the background and pronounced in another advertisement 'a new democracy of public service ownership' that is 'owned directly by the people--conrolled nto by one, but controled by all.' Now, we would have that same mother, sitting at her computer participating in the decisions, big and little, teaching her children, looking over her shoulder, about the company that they would one day inherit--I don't believe in stocks being sold.

Limited Liability

Now the corporate form by limited liability did allow middle class to contribute capital to large enterprises. And the idea was this middle class investor who may have invested a few thousand dollars should not lose their house and all their other savings should the aiport or railway go bankrupt with more liabilities than assets. Let's look at Ms. Jones from my earlier post. Should she lose all her assets if the doctor she financed commits malpractice during a delivery and a child is born with severe cerebral palsy. What if the plumber that the apartment complex hired causes a gas explosion killing dozens?

I distinguish contract and tort liability. In our current system, an enterprise can promise more than 100% of its incomes. This usually does not happen deliberately--I hope. It promises fixed payments totalling a million dollars a month at a time that its revenue may be several million a month. However, if the economy sours.... This is what happened to General Motors whose revenue halved and Pittsburgh whose population halved (reference, IssuesPA.net, 7811 which disappeared from the net in a few days), but which still has large pension and debt service obligations. But in a share economy, no enterprise can promise more than 100 percent of its revenues. Thus, unless it commits a tort offense, there is no problem with the business going bankrupt. As I mentioned in that post, the owners might liquidate if the revenue cannot cover the current variable costs.

But what about a BP spilling oil, Massey Coal having a mine accident, or an Arthur Anderson not auditing Enron properly resulting in many investors losing money. Or a small businesses delivery driver crashing into someone.

I propose the sortition juries in dealing with a tort case would have to decide how to allocate the costs. one seventh of Britain's total dividend income came from BP. These individuals certainly had no control over the decisions that led to the blowout and spill! Is it fair they lose their retirement?

In a sortition system, ordinary stockholders would have the authority to contribute to the day to day decisions of the enterprise. In the rig control room, the partners and employers could call in a sortition jury to make an important decision. What if there is another big spill like Macondo? The share holders would be individually judged as to what share if any they should bear. Computers keep good records. The sortition jury in the tort case could look at each juror: What did you know and when did you know it? What did you say? Did you try to bring the problem to other shareowner's attention. What did you vote? The Corporate Bylaws would have a mechanism where any shareholder or employee or even an outsider could bring the matter to the attention to a randomly chosen set of the shareowners. They could vote, don't worry about it--it's just a gadfly. Or they could say this is a real concern and escalate it further.

And, sortition jury would look at the general climate in a corporation. Bakan described (page 81) how BP was negligent in handling its Prudhoe Bay facilties. Massey's Upper Big Branch coal mine had five times violations than the national origin. In 2005, BP's big rig Thunder Horse had many problems, bad underwater welding and a valve installed backwards. JoulesBurn documented many other near misses in the Gulf of Mexico. The Texas City refinery disaster in 2005 was similar with 300 safety violations 21 million in fines. Workers were working twelve hours per day--reminds me of the concern about medical residents working twenty-four hour shifts. Occupational Safety and Health Administration revisited them in 2009 and found 700 safety violations and $87.4 million in fines--most because BP did not live up to its agreement after the 2005 disaster.

In the United States and Australia uses a mind and will test in corporate criminal liability. If it is run by a series of decisons sortition jury, it could look at the decisions as a whole. Do they give a wink and nod at safety violations? Or do we see 987 of the 1032 situations where sortition juries had the opportunity to act on safety situations being decided on the safety/conservative side.

Revocation of Corporate Charters

State governments can revoke corporate charters. And Elliot Spitzer and Robert Benson proposed that corporations that repeatedly release toxic waste or otherwise endanger the public can have their charter revoked. But, there are many small investors in any of these large corporation, and should they suffer for offenses they did not do, had no knowledge of, and had no way of stopping. I propose that a corporation would lose its governance to a sortition jury, forever if it is convicted of murder, a capital offense. It would be under the control of a sortition jury. The sortition jury would run the corporation as the board of directors, considering whatever stakeholders it wished to including investors. The sortition juror would command every move of the corporation just as a jailor controls the minute-by-minute activities of a prisoner.

Similarly, a corporation convicted of a lesser charge, that would be punishable by a few years in jail if done by a natural person, would find their affairs controlled by a sortition jury for the same length of time. They would have to avoid not wasting assets in the same manner that a conventional jail could not work a person to death, even thought the thirteenth ammendment specifically allows involuntary servitude as due punishment for a crime.

The Corporate Purpose

A corporation, by law's, sole duty is to increase shareholder wealth. in the opinion of Milton Friedman of Peter Drucker, that is as it should be. This creates a psychopath. It has no empathy for anyone else and have superficial relationships crafted by Public Relations types.

A true shareholder democracy, would allow the Walmart share holders to genuinely feel for the Katrina victims and put the full power of Walmart's distribution to get them things they need. One may argue that the role of a corporation is simply to make money for the share holders. The share holders could then give to whatever charitable enterprise they wish. If they all donated to the Red Cross, the Red Cross should simply contract with Walmart to buy at the market value whatever Katrina victims needed. To some extent, that is the Coase's work on the nature of the firm--is it more efficient to have several entities interacting or do everything within one organization. It depends upon the relative transaction costs. There are empirical sociological issues of group identity as well, would people get a better feeling, be more likely to contribute, as part of the identity: Walmart shareholder.

And it is a broader issue of Rule-Based utilitarianism vs. Original utilitarianism, which is of course beyond the scope of this blog. But we hear stories of top executives, top lawyers or partners in big accounting firms, deciding to leave those organizations and help a non-profit or become teachers in inner school districts. Utilitarianism would tell a public spirited individual with the talent and luck to be a partner in an accounting firm: stay in that job that brings to you hundreds of thousands of dollars. Spend only what you need to be socially acceptable there--I know that a partner at Big Four accounting firm must dress a certain way, and probably could not get away with living in a slum. Give the remainder to that cause. Would an individual who was fortunate to be a big tobacco lawyer do more for the anti-smoking cause by staying in that job--after all someone would take it anyway who probably would be at least almost as an effective litigator for the tobacco company for you. Secretly contribute money to the anti-smoking cause!

For Future Thoughtful Thursdays

Corporate Criminal Liability -- a good bibliography is in the Wikipedia article on this subject.

Rights of Minority ShareHolders and the fiduciary duty of one share holder to another.

Share Economy--how it might work.

The third posting here, I proposed share economy. A firm or enterprise or government does not have debts. When it does not have enough cash or fungible product to purchase something it needs, it grants a share of its income. (In this article, I limit myself to discussing shares that last forever.)

It is now 2060. Nurse Joan Smith owns a one percent share in an apartment building. She is free, so she marked on her mobile device that she is available for her investments. She's a night owl--she is up. There is a leak in one of the line B apartments in that building. It is starting to create a flood. The tenant calls the super who is in the apartment now and he video's the situation and clicks the button to contact all share owners for approval. He wants to call the plumber, $200.00 for an emergency house call. Joan along with five other investors gets the call. Their mobile's calculate the cost of this expense based on their share. In Joan's case, it is two dollars. She certainly feels comfortable. Since, it was marked an emergency and not everyone would have an opportunity to weigh in, 80% consent is required under the bylaws. However, Janet, a plumber living 500 miles aways, asks about shutting off the water to the entire line. They discuss that this means that the six tenants in the line won't have water in the morning. However, they decide to do that since Janet won't consent to her share of the expense on an emergency basis. The alternative would be for fourty percent of the group to vote to bother everyone and wake them up, as well as have approval of one employee, in this case the super. (This is all programmed into the bylaws of the corporation and those procedures are automatically enabled.) They all the hold the line while the super makes sure that he really can shut the water off. He does so, and the group do vote to give the plumber fourty dollars for going quickly, shutting the water and helping the tenant mop it up. They also set up the procedure for everyone to be contacted for an eight AM meeting to decide the permanent fix for the leak.

A few days later, unrelatedly, Apartment 2C became vacant. A young medical student presents wanting to rent the apartment. He had no current income but he did offer a one percernt life time share of his medical income in exchange for his rent. He presented his grades from Undergraduate School and recommendations, as well as video record of his study time during his undergraduate days for their perusal. He estimated his medical income from the Bureau of Labor Statistics data, and it certainly would have been attractive. But they won't get any money until he starts practicing, seven or eight years away--depending upon what residency he picks. This was not an emergency, so a random sample of share owners was convened. They each got votes proportional to their share; some on the call to discuss this thus have a higher percentage and some had a lower percentage. Based on the estimate, the bylaw computer estimated for Ms. Jones would get thirteen dollars every year he practiced. However, the others wanted more current income and she was outvoted.

However, Ms. Jones found his prospects attractive, and maybe him as well, so he send him a message that she would talk to some of her friends at the hospital. Several of the other nurses reviewed the records, they all had a surplus of income over expenses that needed to be invested. So they sponsored him, authorizing a share of their current income in exchange for his share of his medical income. With that, he went to an apartment complex down the street and the owners there took a share of the nurses income while he was in medical school and he signed over at the e-notary, one percent of his medical income. (A comment on any subsequent romantic involvement between Ms. Jones and the future doctor is beyond the scope of this posting!)

After the second "Great Recession" in 2025, the United States shifted to a share economy. Ms. Jones' grandfather, a construction worker, joined the team to build the apartment complex above and he got a six percent share but no money since the apartment complex was built on spec. He had rented a house to live in on 1/3 share of his income. So two percent of the apartment complex income went to the original owner of that house. When he passed on, each of his four grand children got one quarter of his assets, he had accumulated several other shares over the years. And so that is how Ms. Jones ended up with one share of the apartment complex.

And as our young doctor went off and practiced, he remembered the help that he got that day and many others. And sometimes a young college student would need medical care, and they would exchange a 0.1 share of their income for his professional practice. And each of our six nurses then ended up with a 0.002% percent share in each of their life incomes.

I talk about corporations and how larger corporations would run in the share economy in August Fifth's Thoughtful Thursday.

Government Secrets

United States vs. Reynolds established the state secret privelege. A routine negligence claim in a B-29 on a secret mission. Three civilian were on board when it crashed in 1948 due to an engine crashed. The United States government said that revealing the accident report would reveal the state secrets. The lower courts wanted an in camera inspection of the accident report. The Supreme Court said to just believe the government when they utter the words "national security at risk." In 1990 when it was finally released, the daughter found that there was no secret information in the report or information.

The lawyers at the time lied when they said there was secret information. (The Supreme Court declined to look into the matter fifty years later.) And the report acknowledged that there was a major record of negligence on the B-29 and a history of trouble. And United States vs. Reynolds has been used many times to throw out negligence cases.

Now, I think most people believe that the government does have information that had better be kept secret. We could rely on in camera inspections by judges. But who says that judges are the best people to do this. Are they most likely to weigh well the publics right to know vs. legitimate secrets. Are judges the most likely to not leak important information. Dr. Bailey talked about the problems from the Gulf of Tonkin and dishonesty by the government. The State Secrets Protection Act in Congress was introduced twice with no result to require in camera inspections by the judge. The judge coudl require that the plaintiff would have an attorney with appropriate security clearance appointed.

The other possibility is that people be selected whose integrity is impeccable. Individuals like just retiring general McChrystal, Norman Schwartkopf, Congressional Medal of Honor winners. They would review documents and decide which ones should be released or perhaps be the sortition jury to decide to such cases. What a wonderful way of using these individual's talents, integrity and credibility!

feinberg gulf coast claims

Last night, CSPAN had an interview with Ken Feinberg who administered the 9/11 reimbursement fund, the Virginia Shooting fund, the pay for the top twenty-five people for seven institutions that received extensive bail outs under TARP. He is now beginning administering his payment of the escrow funds for the BP oil disaster. Earlier, he acted as Special Master for Agent Orange and asbestos litigation.

He began his speech by saying that every so often, government has a problem that calls for out-of-the-box thinking--where we have to try something new and conventional thinking won't get the job done. He has awarded the funding. He is designing a plan for the BP oil disaster. He is setting rules and procedures for common classes of victims: shrimpers, crabbers, motel owners, restaurant owners on the Gulf. He has exclusive authority to design the plan. Thus, he does not have to individually decide each claim.

(I was intrigued that people can receive an emergency payment representing six months without giving up their right to sue. Some time in the next thirty months, they can file for an extensive payment. They can decide whether to accept the amount after it has been calculated or can then decided to leave that amount and sue. If they do accept the funds, it WILL close off their right to sue, and they can weight until they know what the damages will be. Mr. Feinberg said that with the oil gusher finally stopped, people can assess what it cost them. And Mr. Feinberg said that BP promised that they would pay additional funds if the claims added up to more than twenty billion dollars. That is just what is in escrow.

Could the same thing happen in a participatory democracy? Is this the new thing that would work. The claimants would still come. Since jurors are cheap, it would not be necessary to have a lump sum payment. People can come each month with their business losses for that month. As long as the money is there, or BP keeps paying, they can charge. The same problem was with the 9/11 respiratory claims. Some people did know how severely their lungs were injured and how much it would cost for their medical treatment. Courts are geared to closing cases, making a final settlement even if it is a structured settlement. Thus people are caught between the Scylla of not getting enough for their reasonable expenses or the Charybdis of getting money for possible health problems that may simply never occur. Particpatory democracies would take the companie's income each month or year and allocate it to tort victims as they have medical bills, etc. The challenge is drawing lines of what will fund. What about a restaurant owner in boston that features Gulf Coast Shrimp? What about a golf course fifty miles from the gulf that can document a decline in their users compared to last year? Can the participatory democracy juror do a better job than Mr. Feinberg? And what about the person who had a cash business but was not reporting same to the Internal Revenue Service? I wrote on handling immigration decisions with participatory democracy. I wrote on handling taxes with participatory democracy. In both cases, the demos has an option. Assign a variety of cases to each jury, or specialize jury panels. In the Gulf Coast claims, one could have one jury panel for shrimpers, one for crabbers, one for restaurants. Or one juror could be dealing with a mix.

One of the problems that Mr. Feinberg had with the 9/11 was the speed that Congress passed the legislation and he got started. "Mr. Feinberg, you are coming here to offer me two million dollars and my husband has not even been recovered from the 9/11 disaster."

Citibank and Citibank Financial borrowed money to repay the taxpayer "to get out from under my thumb" (Mr. Feinberg on pay.) Mr. Feinberg said that other parts of administration are concerned with executive pay across the board.

Charity overhead

A charity that pays most of its intake to its chief executive is claiming that eleven percent of its receipts go to overhead and fundraising expenses. They say that the chief executive is working on program services rather than overhead.

We need closer monitoring of charities as well as donations, which I discussed briefly in the context of charitable deductions being deductable.

Sortition juries should approve investments as having social purpose. We would replace the complex of retirement mechanisms (IRA, Roth IRA's, Simplified Employee Pension plans, 401, 457) with a simple statement, money going into approved investments is not considered income. Money taken out of such is considered income. Note that the The Brookings Institution called for us to streamline not only retirement savings, but education savings, and other tax preferences such as for energy conservation and efficiency. And this simple rule would do the same as well. Certainly, many tuition and college expenditures are good--sending one's child to nursing school, for eamples. But there certainly are parents who are using college as a "finishing school" and many college students who are pursuing degrees with no job prospects such as an increse in music majors and enrollment in conservatories. Note a sortition jury can distinguish between the next Validimir Horowitz or Pablo Casals going to Juliard and an over-indulgent parent allowing their kid to pursue an unrealistic dream.

But now one can purchase gold bullion for one's IRA in spite of the environmental damage done by gold mining. And carbon credits are being given out for dubious investments. And money in an IRA can support suburban sprawl and McMansions. (In 2003, there are 3.2 million homes with over four thousand square feet and they can cost five thousand dollars a year to heat and cool.)

On money being loaned to an individual, the sortition jury can better determine whether it is needed or not and to prevent againsts usurious use. Thus, if A wanted to buy the house from someone needing to go to a nursing home, this would likely to get approved investments, for the social benefit to this person. And many other personal loans would get approved, but those for frivolous purposes could be denied.

Investing in United States treasuries would automatically be considered an approved investment; this should hopefully reduce the percentage of this debt that is owned by foreigners and make us less reliant on foreign governments to buy our bonds. (Currently half of United States debt is owned by the United States Government itself! Of the remaining half, half are owned by citizens of this country and the other half are owned by foreign entities.

In a later post, I will discuss using this to deal with out of control executive compensation and retroactive estate taxes.

Participatory Democracy for Taxes, Possible Approaches

Possible Mechanisms for Participatory Democracy for Taxes

I proposed and our group at Western Illinois University are implementing techniques for people 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. This has been referred to in the literature (Reference One) as Recursive Partitioning.

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 wage income. Another branch for those having no children and sixty to eighty percent wage 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?

One could envision a taxing system that simply said: each individual and each entity would go before a jury. They 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 the category, simply a number of sets to be collected from each group.

   A sample of let's say twenty individuals or entities or corporations would go before the tax jury. The tax jury would know that they have to collect a specific amount revenue from each set. (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 including 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. There are many algorithms to take sets of example data and create a function out of them. (See the discussion below and references one and two for a good summary.) 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 statisticians 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. Alternatively, people could use such capabilities to estimate how much tax they would have to pay. This would be how "tax planning" would be done.

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.

Classification Procedures and Tax

James E. Parker and Kenneth F. Abromowicz tried both statistical methods and recursive participation to see if they could discover tax law from examples. They tried it on decision rules of a straightforward tax law provisions for whetehr somebody should be considered a dependent. They also compared the ID3 results with those of a common statistical techniques such as regression. The ID3 based approach did slightly better than other techniques.

They then looked at one hundred decisoins regarding "tax home." Taxpayers can deduct traveling expenses when away from home. But where is one's home? If I claim my home near Western Illinois University where I am an Associate Professor, I cannot deduct the cost to go to and from. But if I am temporarily in Pennsylvania during my sabbatical, can I take my carfare off my taxes? It depends on what is considered my home. The Researchers looked at such factors as where the person filed state tax, have income producing property and where one's children resided. The ID3 algorithm correctly correctly classified twenty-seven out of thirty tax cases while the statistical techniques did only 26 to 30.

The tax law considers a scholarship or fellowship not income. If a profit-making corporation pays one's tuition in exchange for working for them latger, that is income. But what about the assistantships that Ph.D. students often get. There are some duties, but it is more awarded to support promising students Garrison and Michelsen looked at one hundred cases and then presented a holdout sample. The ID3 correctly classified all twelve cases as compared to one two or three from statistical approaches.

The Internal Revenue Service has been looking into using machine learning techniques to identify tax returns that are potentially fraudelent. See94ARD 030-1, Statement of Margaret Milner Richardson on February 10, 1994. NCR Terradata division and States has been using such techniques to help catch those who don't file their State Income Tax or don't pay it problperly. And in 2006, the National Taxpayer Advocate reported on using machine learning to identify abusive tax returns.)

Proposed Work

We can simulate the ID3 algorithm and use Lindahl Equilibrium as a figure of merit. That is, I will hypothesize individuals with various incomes and characteristics. I will also hypothesize a distribution for their preference for public goods (defense, public libraries, public education, national and state parks). We will assume some percentage of them behave strategically and some percentage simply vote their true preferences. Dr. Wally Smith did some excellent simulations for multiple-candidate elections, which will be another Thoughtful Thursday.

As an empirical work, we will solicit stories from taxpayers where they will provide their tax return, other information that the jurors would consider relevant to how much tax they should pay and possibly have them give a video clip explaining how much tax they feel they should pay and why.

We will try two different sets of jurors. One set will simply vote on the taxes to be paid by each taxpayer. They will have a training set of half the sample tax data. Other groups will develop a classification scheme by ID3 or Genetic Algorithms.

Then, we will generate a tax code using the examples from the first set of jurors, and classify the holdout set, the other half. We will ask the first set of jurors how they liked the results for the second half. The second group will have the holdout set classified by the rules on which they just voted. We will see how they like the result.

We may have to make up some hypotheticals for the very rich as we probably could not get them to give us their data. Although some politicians are wealthy and do make their taxes public.

References

1. Parker, James E. "Predictive Abilities of Three Modeling Procedures" The Journal of the American Taxation Association, 37 to 53, Volume 11 Number One Fall 1989.
2. Garrison, Larry R. and Robert H. Michaelsen, "Symbolic Concept Acquisition: A New Approach to Determining Underlying Tax Constructs" Journal of the American Taxation Association, 77 to 91, Volume 11 Number One Fall 1989.

Solve the Campaign Finance Problem by Getting Rid of the Campaign

Probably all the readers have heard that the American Supreme Court has ruled that corporations can campaign for or against candidates for election, but they still cannot contribute directly. Both Daniel Shor, senior columnist of NPR and the President of the United States, Barak Obama, have said this undoes a century of campaign reform.

I propose several reforms of the campaign, not the financing of itself. Many of these, although dramatic in effect, can be done without a Constitutional Amendment. (Although I see no reason not to attempt an amendment of the Constitution.)

1. Allow a random selection of individuals to do the voting for office holders. This would be large enough to avoid brib4ery and to provide a random sample. But it would be small enough that a candidate for congress, senate, governor, etc. could contact all of them at reasonable cost. Possibly they could even visit with all of them at reasonable cost. (If we assume a group of one thousand voters making the decision, at 200 hours per month, a congress person candidate could visit with each of them for one month in a five month campaign.) Article One, Section Four of the United States Constitution provides that "Congress may at any time by law make or alter Regulation determine the Time, place or manner of holding the elections for senantors and representatives." So this can be done by Congress, or even in a specific state.
2. Of course an alternative is to simply randomly select the House of Representatives
3. Or, perhaps we could have three houses, the first two being our house and senate and the third being chosen by sortition
4. But perhaps, the most radical idea is to have two elections, the first in each state would decide how to decide. The second would be the actual election for whatever percentage the voters in that state decide should be elected and not chosen by sortition.

Individuals would vote what percentage of their state delegation would

1. be elected in the conventional manner, from geographically-based districts
2. elected at large
3. chosen by sortition as described by one above. That is modest-size randomly-selected groups would elect the representatives as described above.
4. selected randomly

Particularly, for small states, Conress would have to increase the number of representatives. Our Constitution allows Congress to have one representative per thirty thousand population. Wyoming, our smallest state by population, has 544,270 population and would choose eighteen people. This would be a reasonable number, allowing a few to be selected by each of the above such mechanisms, based upon the votes of the population.

But California would send a whopping 1192 representatives instead of the 53 they now do. (Many people would consider this unwieldy.) The solution would be to allow a single CongressPerson to represent many districts if they can achieve the popularity. Thus, the larger state delegations would consist of a few popular mega-congress persons that would have have tens or hundreds of votes out of a total delegation of a thousand individuals. The popular congress persons would be pretty much guaranteed being returned to Congress. They would campaign to get more votes. There would also be those representing what most would be considered fringe ideas or groups and a few new people starting out, getting 30,000 or 90,000 votes in their first campaign and hoping that leads to being a mega-congressperson one day.

This would also encourage more competition for safe seats. Each mega-representative could increase their number of votes by getting a few more votes than they did last time. Safe seats are a problem in many countries and voters don't have an opportunity to have a meaningful voice. For our readers who are United States voters, imagine being one of the twenty percent republicans in certain urban congressional districts that have voted democratic for many years. Major Owens in New York's Eleventh congressional District, my mother's old district, won relection with over eighty five percent in every election from 1998 to 2006. But the problem is not confined to the United States. Canada has safe seats with 75% for the incumbent and Australia has a safe seat with the incumbent getting 67.7% voter and the rival getting 12.5% of the vote.)

In the same participatory democracy spirit, we can allow the states to determine the minimum size for a representative. There would be a trade-off. On one hand a state would allow minority viewpoints to be heard and new candidates to make a start by getting 30,000 votes and a seat in the House of Representatives. On the other hand, such a state would probably have a few embarassments. If Texas, New York and California all allowed representatives who would be seated with merely 30,000 votes, I am sure one of them would seat a Congressperson from the Nazi party.

I will discuss Proportional Representation in another post.

Corruption

Corruption, of course, is a well-known widespread problem. And it is getting worse. It certainly affects Afghanistan! where one expert said that part of the problem is focusing on particular individuals and not on the process.

Could participatory democracy be the answer? The ancient Greeks used randomly chosen large juries; five hundred people randomly chosen by lot the day of or day before are difficult to bribe. Decisions made by sortition jury, when chosen truly randomly, when the numbers int he jury higher are much less likely to be corrupt than those made by a single minister, judge or other government official.

In an age of portable cameras, it is possible to capture images and sound from officials. MyLifeBits, a project of Microsoft, puts a camera on individual and allows them to record what they doing. It is intended to augment one's memory. (Who did I speak to in Front of the Empire State Building a while back?) However, countries concerned with corruption can put these on government officials, and perhaps company officials as well to help prevent an Enron, and these can be reviewed by citizen juries, perhaps chosen from the unemployed. Afghanistan, for example, has fourty percent unemployment which many have blamed for the problem with violence and instability.

Health Care Poll

The Associated Press polled Americans on health care. Eighty-two percent are in favor of a ban on insurance companies discriminating against those in poor health. However, when told that this ban would cause most to pay more for health insurance, 31 per cent of Americans are now against it and only 43 percent support it.

The questions should have been Would you support a ban on insurance companies not insuring those with pre-existing conditions who had an opportunity to buy health insurance, could afford same, but chose not to do so?

Would you support an insurance company not insuring someone with a pre-existing condition who lost their insurance through no fault of their own (e. g. got laid off)?

A bureaucracy might not be able to distinguish between the two but a sortition jury could have. It is also the premise of my alternative to a public insurance plan, a sortition plan. That is, there is no public "insurance" but there is a public "pool" of money to which both the person covered and the public (as part of general taxes) would pay for. When an individual got sick, they would petition for approval to have the public pool pay for this. A sortition jury would look at both the illness and treatment involved. It would also look at how much the person contributed to the public pool and their income in comparison to the contributions made. Thus, the eighty dollars that the proverbial washer-women contributed might have more weight than the eight hundred dollars that the YUPPIE contributed.

Sixty-seven percent agreed that everyone should have "at least some health insurance" with only 27 percent opposition. However, sixty-four percent are opposed to a tax penalty for not having insurance. And even half of Democrats oppose fines to enforce the requirement to get insurance.

I proposed a broader requirement of financial responsibility and this, obviously ambiguous one, be interpreted by sortition juries.

Prosecutors framing innocent men for murder; Wait to reward them.

I spoke before about rewarding important government officials and those running companies or investment banks many years after they work, e. g., when they retire. Here is a reason why. Prosecutors and framed a man for murder. Twenty-five years, they finally discover the records of this frame-up. The Iowa Supreme Court released him and exonerated him. Iowa does not permit people to sue prosecutors. So they sued under Federal Civil Rights provisions and this is a Supreme Court Case.

A sortition jury should review the pension amount for major public officials. Those who were wrongfully convicted would present their information. Those who were victimized by criminals could also present the case--that the persons were brought up on charges before hand. But the prosecutors might have declined to prosecute--or flubbed the trial.

They would look at groups of prosecutors and compare the good and the bad of each and distribute the income from the pension pool accordingly.

Citizen Juries, Financial Responsibility and Health Insurance

Obviously, there are those who choose not to have health insurance. They may prefer to save money. Perhaps, they just want a catastrophic health insurance plan. Certainly, as Ms. Robinson points out, she would like the health insurance plan to give her a discount because she is like the care. And she prefers to deal directly with the doctor for payment and uses alternative care such as chiropractors and naturopaths.

And, of course, there are other ways to be financially responsible, saving, and other insurances one should have. One of my students dropped out of their Ph.D. program because he did not get the insurance on a rental vehicle which got stolen--and he was stuck with the cost of the car.

Rather than a mandate, citizen juries could look at each individual and determine whether they are being financially responsible. That includes the combination of savings and insurance as well as investing in one's own business and one's education. I think one would have more sympathy for the person who uses the money they would have paid for premiums to pay for a college degree in a field with good job prospects than those who use it to party hardy.

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.

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.

Wait until we really know what you deserve?

Many workers' success are best determined with twenty-twenty hindsight. For example, is a surge in profit due to the CEO's acumen, or just an accounting gimmick? Did the doctor really do the back surgery so it would keep a person pain-free for the rest of their life? And did the teacher do a really good job or just "teach to the test" Did the politician pander for votes, or truly achieve the status of a statesman? Does the miracle drug have undisclosed long-term side effects?

I thought one idea would be to put their money away into an account and then twenty years later or as they retire, distribute it after a retrospective of their entire lives. Well someone else came up with this idea--in a specific field. He proposed that sports figures put ten percent of their salary into an account --which will be forfeited if they are ever caught with performance-enhancing drugs steroids in their system.

But lets extend this to the general case and to the particpatory democracy case: The participatory jury would evaluate the persons performance when they try to take the money out, and perhaps evaluate their need for the money urgently. If the particpatory jury feels the use for the money and the person's performance justifies, they get the money tax free. Otherwise, the money continues in a useful investment.

This would be in lieu of taxes on that money. It is a way of resolving the problem with investment banker's bonuses.

I would express this more clearly: if a person earns or has ever earned over one million dollars in a single year, they have two options:

1. limit their spending to the median income (about $43,000 per year in the United States)
2. submit to a participatory democracy sortition jury. They would determine how much they can spend based upon what we know of their entire life and its accomplishments, the risk that they may have caused harm that is not clear, and lastly their needs. (Thus a person facing an illness, a terminal condition, or simply advanced chronology might be given more leeway to spend than those who would still have many more years in which to enjoy a fling).

The July 20th 2009 shows that the mortgage system is still dysfunctional. One of the mortgage brokers who "specialized in the exotic mortgages that have proved most prone to sliding into foreclosure" is now selling dubious services for those struggling. Mortgages must be sold on a share economy basis, they must be based on a function of earnings, and bailouts and mortgage modfications must be approved by a sortition jury. Peter S. Goodman, "Cashing In, Again, on Risky Mortgages" The New York Times, July 20th 2009, Vol CLVIII, No 54, 742, Page One and A12

Sortition, Stealth Democracy and Particapatory Democracy

Dr. Hibbing and E. Theiss-Morse wrote a book about American's views of the mechanism of Democracy. Do we accept Republicanism and representative democracy as a feasible substitute for an ideal of truly democratic and participatory democracy(1)? They show a figure showing that Americans prefer a system midway between pure representative democracy (which is what we have on a federal level) and the fully democratic system that I advocate. The bell curve of beliefs is pretty similar to that of the bell curve between right-wing and left-wing beliefs. The majority of Americans are in the middle on the left-right scale and most Americans are not extreme in ideological spectrum.

Would Americans prefer that government be run by impartial empathetic experts and not have to be bothered by participating in democracy? These authors would say yes. Unfortunately, artificial intelligence has not advanced to that level yet, one might argue that this is the wrong question. Thus, the question might better phrased, if we could reform campaign contributinos and the like, and given the innate limitations of all humans, would you prefer a participatory democracy or a republican democracy?

Drs. Saebo and Nilsen in Norway had discussion boards on democracy models and compared four main themes:

1. Passivity
2. A combination of representative and technocrats running things--which is what Americans and the rest of the " first world" have
3. Expanding citizen involvement using cybermedia which he terms "neo-republicanism." With some of the web ideas such as recovery.gov of the Obama administration, Electronic town halls seems to be what is what American democracy is moving towards.
4. And lastly, Cyber-democracy.

Drs. Saebo and Nilsen report the discussion group did not support that, but they expressed cautious optimism that support might increase when citizens are given the opportunity to try cyberdemocracy. (Which is what I aim to do in my new research project.)

Muhlenberger did a study of on-line deliberation and found that after participating, Americans were more likely to suport cyber-optimistic ideas.

Sortition refers to the random selection of individuals to make decisions in government. Currently, in the united States, only juries and grand juries exemplifies this. Brian Martin is one person who advocates replacing representative democracies by series of juries that would deal with various issues which he terms demarchy. He points out the problems with referendums, the voters can simply give a yes or no.

Brian Martin points out in a community that there would be sortition juries chosen to handle art, transportation, etc. Athenians used this for many purpose, but not exclusvively. Later when I talk about parametric constitutions, we can discuss John Zube's Panarchy where several systems can be used. And he has several links to attempts to try this out. Paul Woodruff talks about democracy in ancient democracy, the importance of randomly selected legislatures to avoid the power of wealth in elections, and things that we take for granted in democracy but Dr Woodruff refers to as "doubles" for democracy.

Ernest Callenbach and Michael Phillips advocate the House of Representatives being chosen by lot. But one could have a parametric method. For example, there could be three houses, one chosen by sortition, one chosen as represenatives by district as we do now, and the Senate chosen by election from the states. In addition to voting for the second two houses, we could vote for the percentage of each house that is needed to pass legislation. Thus, at a particular time, 40% of the Senante, 60% of the Sortition House, and 37% of our House of Representatives. (There has to be a hysteresis, so that voting on this is not used to influence specific legislation. Thus, the vote might not take effect for fifteen years. Or there could be a rule that the percentages do not change more than five percent year regardless of the votes.) Obviously, the Senate and House are designed to reflect the paradigm between a strict system proportional to the number of voters and giving power on a state-by-state basis. One could average the votes for the percentages when accumulated on a per-state basis and on a vote. (I also will talk later about the min-max principle in voting to deal with this kind of divide.)

Wally Smith talks about Direct Democracies, and argues for having proxies. Everyone gets to either participate or nominate someone who they consider better qualified themselves, allowing the chain to go up by four levels. He also observes a back-of-the-envelope system that all the legislation which is less than one hundred thousand pages, could be voted on in ten page chunks with ten thousand people voting on each chunk. I proposed some mechanisms and (students here at Western Illinois are starting to implement in computer code for the Web )on how to combine decisions better than this.

But such a discussion would not be complete without mentioning Deliberative Polling and the work of Peter Fishkin. In deliberative democracy, individuals are chosen randomly. They are given "briefing material" which is "balanced" and an opportunity to question experts.

Here he implemented several nationally televised polls in Australia, Britain and the United States. And people's opinions did change. Most of the results he cited are on the order of fifteen percent, but there were dramatic changes in some cases, particularly a deliberative polling exercise done on sources of energy for several Texas utility companies where there were thirty percent changes. These changes are comparable to the changes in people's opinion after a debate on whether "Global warming is a crisis" that I heard on National Public Radio. They are also comparable to logical discrepancies in polling results. Wally Smith has several examples of these. 61% of Americans say that abortion should not be permitted after fetal brainwaves are detected. 58% say that abortion should not be permitted after fetal heartbeat detected. These occur at the sixth week of pregnancy and 18 to 21 days. On the other hand, 64% of Americans are in favor of letting Roe vs. Wade stand which permits abortion after three months, which was stated the indirect. And similarly sixty percent say abortion should be "left up to the women and her doctor." These results differ by twenty percent, about the same rate of change we saw in many of the deliberative polling exercises.

Opinion Leader Research and the Institute for Public Policy Reserch and others in Britain have tried out citizen juries to get input on a wide of usually specialized topics such as handling the rehabilitation of a specific site, or the types of medical care that should be provided for back pain. They were surprised on the level of suport for osteopaths and chiropractic. And this is a good source of links and definititons for what are termed citizen deliberative councils.

References

1. J. R. Hibbing and E. Theiss-Morse, Stealth Democracy: American's Beliefs About How Government Should Work Cambridge University Press, Cambridge U. K. New York, 2002.
2. Woodruff, Paul, First Democracy: The Challenge of an Ancient Idea, Oxford University Press, 2005.
3. Oystein Saebo and Hallgeir Nilsen, "The Support for Different Democracy Models by the Use of a Web-Based Discussion Board" Electronic Governemnt, Third International Conference, EGOV 2004, Zaragoza Spain, August 30 - September 2004, Springer Verlag, Lecture Notes in Computer Science, Volume 3183.