Checks and Balances
For any Economic System to be functional, it needs to have both top down forms and controls. It needs Checks and Balances. And it also needs bottom up forms and controls (Ordinary Courts, Representation, Juries). Key to the success of such forms is a well educated and informed citizenry, and the kinds of checks and balances that prevent people from straying outside their lanes of excellence. Key to the success of an economic system is that it achieves the properties of a commonwealth. It has to serve the interests of all the people living within it, starting with majorities. To make any changes to our national and world economy sustainable they have to be institutionalized in a way that gives the right folks power while limiting the ability of folks to game, usurp or achieve too much power. Thus the issue is how we constitute our economy and how we execute that constitution.
This post is about some of the necessary Checks and Balances.
Managing the Economy is a "Necessary Social Function."
Using the principles articulated in part 3, because our Economic system is a "Proper Social Function" it must be run "By and for the whole people concerned" "through their proper government." This doesn't mean that we don't need bureaucrats or organizations like the Federal Reserve. However they must be run in collaboration and for the mutual benefit of the people at both "local, state and national government." Checks and balances are achieved by distributing power and reserving some powers to the people as a whole. Everything done nationally needs to be filtered through jury like deliberate bodies, the legislature, and through a free press. These structures exist to involve the people as bodies in their subdivisions and as a whole.
Each level of government has a legitimate role and legitimate need for access, control and regulation of the funds needed by itself and the people concerned by that subdivision of government. Distributing financial power nationally down to the local level, enforces a layer of checks and balances to the system that can keep it healthy. Distributing funds is like oiling a machine. It enables the parts of the economy to move. A federal reserve system must support local government as well as National and State Government. Otherwise, like an engine missing oil, the engine of the economy seizes up. A market has to be built, maintained, connected and governed. Roads have to be built and maintained. Communications run on people and connections. These need to be built and maintained. Government has to manage these functions, even as the execution is through entrepreneurial persons and officers. While private actors can govern, they need to be subject to legislative and judicial oversight. And local officers and rulers need the oversight of magistrates to whom the people can appeal when they overstep their boundaries. Those magistrates can be executive magistrates such as Governors or their officers. Legislative Magistrates who have the power to examine issues so they can change or improve law and regulation. Or they can be judges or jury type bodies. What they can't be is dictators or operate outside rule of law and accountability to the people concerned with their function.
The Federal Government should play a general role; controlling the purse, auditing function, vetting officers, advising and guiding local functions.
Counteracting Centripetal Forces
Our system currently is not healthy, precisely because power is concentrated and centripetal. Our centralized financial system is "hoovering" wealth to a hierarchy of financial powers. Giant banks that get ever more concentrated. State governments that usurp powers and functions that once were local. Giant Companies that threaten the sovereignty of entire nations. All these forms violate the principle that decision making should be made by those closest to the the issue being resolved (Subsidiarity). Power needs to be distributed so that checks and balances are built in, as the framers of the Constitution envisioned. To do that requires that one not only oversee officers of the Government, but oversee those overseers. For that reason certain traditional ideas need to be part of the design.
Citizen Controls on the Financial System
Good ideas are timeless. Ideas like Dokimasia (Greek: δοκιμασία) [“scrutiny”] and Euthune (εὐθύνη, εὔθυναι) [“the act of setting straight”] are as valuable today as they were to ancient Athens. The modern notion of public accounting for finances derives from both of these. In Athens this was done by Commission like or Jury type organizations. In modern times it is done by "professionals" who are sometimes not as disinterested and objective as advertised. It is worth reviewing how the ancients did this:
Dokimasia · (Greek: δοκιμασία) Vetting
- dokimasia, pl. dokimasiai · An investigation held either by the boule or in a court, to test whether a man was formally qualified either to hold the public office to which he had been appointed or else to exercise a privilege to which he was laying claim. Dokimasiai were of various types, and were for the most part held in advance: no public official, whether elected or appointed by lot, could hold office without having passed his dokimasia; and newly enrolled citizens, whether by birth or by naturalisation (uncommon), were among those similarly tested. In these cases a man who was rejected suffered disqualification but no further penalty; a public speaker however could be challenged to undergo a retroactive dokimasia before a court, and this had more of the nature of a regular trial, in that if convicted he would apparently be punished." Glossary/Dokimasia
Of course modern vetting investigations involve police type personnel to perform the investigation. But this control structure is long worth reviving in a modern form. A modern Dokimasia would probably best be conducted by an ordinary Jury, with members picked by lottery, overseen by an ordinary Judge -- and not all that different from the Athenian form. If we vetted folk wanting to run for public office this way. We could weed out some of the crazies and make the process more sane. We don't have to imitate the Athenians, just learn from them. Currently we require some officials to undergo background checks. However, the judges in those cases are usually nearly anonymous bureaucratic officials, whose attitude sometimes is guilty til "cleared" (proven innocent). Maybe Dokimasia would be better and more fair.
Euthune (εὐθύνη, εὔθυναι) Accounting
- "euthune, normally pl. euthunai · Lit. “the action of setting straight.” Every public official at Athens had to undergo at the end of his term an examination of his conduct in office. If he had handled public money, he had to present his accounts (logoi, pl.); in all cases he had to seek approval of the way he had used his powers (euthunai properly so called, but the term euthunai came also to be applied to the whole process of audit, logoi included). The examination was conducted by boards of logistai (pl.) and euthunoi (pl.), as appropriate; but any private citizen could bring a charge at any stage during the proceedings.Glossary/Euthune
The military has learned that "after action" reports are useful in fighting enemies and developing best practices. A public accounting for officers is another ancient function that is long overdue for revival. Currently we have auditors, and legislators, commissions and occasionally the press, trying to fulfill this function and doing it poorly. On the contrary, anyone involved with public money should face a formal accounting at the end of his/her term of office. And these kinds of review can also be useful for medicine and other places where best practices need to be developed. Panels can be made up of the professional's "peers" but have to explain to ordinary citizens the merits of what they did. The modern Public hearing is based on Euthune. The idea here is to hold a hearing after events as well as before initiating them.
Ordinary Juries and Commissions
The key to creating "citizens controls" is to involve as many citizens as one can. In some cases it's appropriate to draw from pools of experts for review boards, establishing best practices, and vetting other professionals. But for oversight and review of policy and law, ordinary decently educated citizens, drawn by lottery, has a better chance of protecting the integrity of the process than any kind of selection process that allows interested persons to interfere. Our current Jury process often produces weird outcomes because both sides of a prosecution are allowed to strike Jurors they don't like. Grand Juries fail because the prosecutor is judge, jury and selects the Jury. This is something we can learn from history. The Athenians would have been aghast at the way we select our juries and commissions. They selected randomly from those who were able to be selected from.
Adding Subsidiarity to the Regulatory "Toolkit"
We've made many changes to our governing "toolkit" over the years. But we've also subtracted functionality due to the power of centralizing forces, over-privileged officers and less than just judges.
An "ordinary court" is a local court with judges, a bar of barrister/attorneys who are collegiate equals, and juries randomly taken from a Jury pool. We'd be better off if our Supreme Court and Appeals courts rotated judges rather than letting them be appointed by local Senators for life. The problem is not the "for life" appointment, it is the special status of the courts and the judges who sit on them. There needs to be a bar of appellate judges a bar of ordinary judges and folks admitted to the Bar who can work as either defense or prosecuting attorneys. Specialized attorneys are useful as expert witnesses, but our system's specialism encourages tyranny, impunity, favoritism, cronyism and even nepotism. Courts concerned with economic matters are important, but the experts need to be accountable to the generalists and vice versa as a principle of checks and balances.
One way to restore this is to recognize that most disputes should be subject to "ordinary judges" and "ordinary juries" rather than interested specialists. While there is no getting around the wording of the 7th amendment, the principle behind it's enactment was the principle that, even in Civil Proceedings people should have a right to a trial by jury of their "peers" by which they mean citizens who are not experts, don't have a "private, separate interest" [Lock's definition of tyranny] in the outcome. When the Declaration of Independence decries: "mock trials", denial of "Trial by Jury" and the "transport[ation]" of US citizens "beyond Seas to be tried for pretended offences", it was calling for the abolishment of Admiralty, Administrative, Star Chamber and similar courts. When the Founders threw in "at common law" into the 7th amendment they were subverting that cry while paying lip service to it. Since the Declaration of Independence was a cry for the replacement of tyrannical administrative and Admiralty law with "ordinary courts." At least that is my opinion though I'm not a lawyer. To reaffirm the principle, we need to let local government assist in applying Federal law, but only through ordinary courts and with an absolute right of appeal for those so tried.
A right to Local Government
Anywhere there is government there should be courts. The people who staff those courts can "ride circuit" between places, but courts are necessary to adjudicate disputes and ad-hoc courts should be a low cost first option when there is a dispute. It is possible if the Legal Services includes a reserve component (militia). Local courts should handle local matters, and that goes even when the Federal Government is concerned. The courts within our Immigration system, for example, ought to be actual courts. This sounds deeply conservative I know. And it is.
A basic right to Self Determination
And Anywhere people have a settlement they should have a right and a duty to self govern over matters concerning themselves. That means local executive (mayor or similar), legislature (Assemblies of citizens can do that in small communities), and ordinary courts. At the local level the only permanent official need be a magistrate who acts as a judge, another who acts as constable and an assembly of the people living there. They can be, even all of them, volunteers. This is a basic right that all local folks should have. Higher levels of government exist to guide, assist or represent them to even higher levels.
One reason why we need "ordinary courts" and "ordinary juries" to be more involved in economic and social matters is that otherwise those matters are adjudicated by bureaucrats in some hierarchy, or worse by powerful officials executing judge, jury and execution functions in the same person. This sabotages justice. Just as putting economic bars to entering the bar or running for office sabotages the principles of equality. Anytime there is a dispute, a court should be available. And it should have the ability to hear the information it needs to make a just decision. Ordinary Judges can put a check on legislative and executive tyranny, and a balanced system emphasizes rule of law.
And these functions are needed to be available to reign in our banking and finance system.
To reign in the function of our executive, legislative and judicial functions:
- Officers must be vetted publicly by jury like structures before they run for office or are appointed.
- A Performance Review must occur for all public officers at the end of each of their terms.
- Disputes should be handled by ordinary courts and not administrative forms.
- Managing the economy is a "necessary social function" and should be distributed among the Federal Government, the States and their subdivisions, overseen by the people.
- People have a fundamental right to all three Republican Local Governance Structures. And to local democracy.
Next Section: Sustainable Economic Policy VI
References and Further Reading
- Sustainable Economic Policy To Date:
- Sustainable Economic Policy I
- Sustainable Economic Policy II
- Sustainable Economic Policy III
- Sustainable Economic Policy IV
- Sustainable Economic Policy V
- Sustainable Economic Policy VI