Democracy is the rule of law, rather than men. When people got together to establish democracy the constituent assembly was not, and could not have been, democratic (for lack of established rules). This paradox highlights the self-referential character of social reality. One can, of course, postulate prior rules of law, ending with transcendent ones , but it is special pleading ending up in secular religion.

Once established, the state has permanent legitimacy. The option of secession has been replaced by elections, which allow for substantive change without putting the existence of the state at risk: stability and change are married. The state has the legitimate monopoly of rule setting and rule enforcement. The approach is "top down" tempered by law.

Groups of states may create rules among themselves. Characteristically, rule-making in a multilateral setting is based on consensus – the states reserve the right to accept the negotiated outcome on a case-by-case basis. They have not accepted multilateral rule of law and orderly secession is possible at any time – this is why all treaties have termination clauses.

Multi-stakerism is intrinsically spontaneous and “bottom up”. For whatever reasons individuals and groups voluntarily come together to propose rules. They are self-appointed, i.e. have no mandate, and thus have no legitimacy in a democratic sense. Correspondingly they base their activity not on legitimacy, but on a self-declaration: they hold a “stake” (however defined) in the matter or altruistically volunteer competence (however defined). It is their hope that the rule-making bodies take up the outcome of their deliberations and give them force of law. Multi-stakerism belongs to the world of decision-shaping. The fact that it is pro-active rather than reactive (government-directed consultation of interest groups) does not change its nature.

To give sustenance to their cause the may adopt democratic rules in their proceedings. It is a case of cargo cult – in reverse:

A cargo cult is a religious practice that has appeared in many traditional pre-industrial tribal societies in the wake of interaction with technologically advanced cultures. The cults focus on obtaining the material wealth (the "cargo") of the advanced culture through magic and religious rituals and practices.

Cargo cult activity in the Pacific region increased significantly during and immediately after WWII, when the residents of these regions observed the Japanese and American combatants bringing in large amounts of stores. When the war ended, the military bases closed and the flow of goods and materials ceased. In an attempt to attract further deliveries of goods, followers of the cults engaged in ritualistic practices such as building crude imitation landing strips, aircraft and radio equipment, and mimicking the behavior that they had observed of the military personnel operating them.
 

The ritualistic part is mimicking democratic rules in multi-stakerist procedures. This ritual is intended to bestow on the outcome - the “goods” in the cargo cult - a veneer of legitimacy, which may facilitate acceptance and promulgation of the proposals by democratic rule-makers.

As long as the “top down” democratically based approach is in place multi-stakerism can contribute to decision-shaping but not replace established democratic decision-making and -taking procedures (up is up and down is down – and never the twain shall meet).

By its very nature multi-stakerism may neither deny entry or direct exit. Karl POPPER famously said the “democracy is all about throwing out the rascals” – I’d agree. The inherent problem with multi-stakerism is that there is no way the “rascals” can be thrown out.

On the other hand multi-stakerism may be better than sheer lobbying, for hopefully it openly pits opposing interests against each other in a more transparent process of decision-shaping . It would become corporatist, however, should the state abdicate its independent rule-setting to such a body. Multi-stakerism emerged as traditional consultation mechanisms (which were heavily skewed toward producers rather than consumers) degenerated into caste.

What should the stance of state representatives be in a multi-staker process? State representatives may observe and counsel, but may not “participate” in the effort, in the sense of being themselves as agents bound by the outcome or bind the state. They have no mandate. The rule-maker as well as its agents must remain independent of any voluntary effort.

How representative are types of participants in multi-staker processes? How representative is an NGO as compared to a corporation? The question is quite tricky, and cannot be answered in principle.

NGOs base their claim on paternalistic “good intentions” - buttressed by voluntary (and often small) membership (which may be made up of groupies as when the organization is taken over by a charismatic personality). For all its bluster this is a weak reed to stand on.

Funnily enough corporations may sport better “legitimacy” than NGOs. After all, people vote with their actions and pocketbooks. The fact that Facebook serves one billion people is an indication that on balance users find their interests well served by the corporation. In a sense they “vote with their use” – which is possibly better than having self-appointed oligarchs that cannot be removed tell us what’s good for us all. Politicians’ goal of “doing good for the country” is collateral to the primary goal of being reelected. Firms’ goal of defending clients’ rights is collateral to the primary goal of making profit. The profit mode therefore does not immediately disallow a firm from participating in decision-shaping.

This in a simple, nay simplistic world. Complications arise.

The modern state is grounded in geography – the territory to which a specific rule-of-law applies. The border sets the unambiguous limits. The state has emerged as is an off-shoot of an agrarian society, which has always had difficulties in controlling nomads and migrants who disregard borders in trying to escape state constraint.

Situations are emerging which weaken the reach of territorial link and therefore the ability of the state to set and enforce rules. The most flagrant case is taxation, which was once based strictly on territoriality. Meanwhile capital has become nomadic and effectively escapes taxation. A first line of state defense is worldwide automatic exchange of information between banks and fiscal authorities in the place of residence of the economic beneficiary of deposits. Taxation on the basis of nationality (e.g. Alternative Minimum Tax of US citizens irrespective of residency) is emerging as complement to territorial taxation . In the background convergence of taxation levels as well as common urgency to combat criminal money flows favors political acceptability of this reciprocally intrusive process.

Internet may be another – and far trickier – case, because national governments may perceive that “vital interests” (usually conflated with those of the ruling regime) are involved. Strong divergences of views may emerge, delaying the emergence of a common regime. In such an unsettled situation multi-staker rule proposals may by default become interim rules. Usage over time may de facto harden into rule as path-dependencies emerge, possibly reflecting partisan and economic interests rather than objective criteria (so wnhat else is new?). Nothing endures more than the provisional. It may even transform itself into an unassailable tradition. From such humble beginning great rules are made.

Be of good cheer: after the internet becoming a highway for the purchase of goods, it is becoming highway for services like gambling and “crowd-funding” (innovators looking for venture capital from small investors on the net - a dignified form of gambling). As internet use becomes commoditized, controlling "top down" this enabler may become increasingly difficult.

BTW: in one my previous blogs I'd developed the idea of democratic multi-stakerism.
 

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