I’ve been thinking about
‘s prompt to come up with an alternative to Democracy (asking readers to “brainstorm new forms of government”). I am probably being too literal but, the more I think about it, the more I think the question would be better phrased as, “come up with new ways to balance the democratic and non-democratic elements of government.”I’ll also include a
bat-signal here, both because he may have some perspective on the relevant political science categories, and because my comments below are strongly based on a US perspective, and I don’t know how much they generalize.I started out thinking about what should a government be capable of doing and, off the top of my head I would list the ability to: (1) raise and spend money, (2) support a military, (3) make, enforce, and document laws and regulations, (4) manage transitions of power, and (5) determine what is or isn’t within the jurisdiction of the government.
Several of those functions are likely to be carried out in organizations with strong non-democratic norms. For example, the fact that we talk about “civilian control of the military” is a reminder that the internal working of the military is very much non-Democratic. Similarly, there has been a strong push towards shielding central banks from political pressure. There is often a tension, in the bureaucracy of the executive branch, between career employees and political appointees.
Of particular note, in the US, particularly, the last 60 years have produced a significant expansion of the number of questions that are resolved by the courts. This creates various obvious inefficiencies but I wonder if it is necessary; if there is any simple alternative that could fill the role that courts have taken. If that is true, then it’s important that our theories of government are attentive to the relationship between legislative authority (however constructed) and the legal system.
[Edit] Below I will summarize a paper that talks about a theoretical description of how the legal system expands over time and why that’s particularly of interest for the growth of international governance. Then I mention to examples of cases which, I believe, the courts would have declined to hear 60 years ago and which post the question, “if not the courts who would resolve this?”
Years ago I heard a description of this 1998 paper, and it’s remained lodged in my imagination. It opens with a discussion of how the legal system can evolve:
The first factor is a simple contract-an exchange relationship-between two persons. Contracts, which are codified promises, fix the rules for a given exchange by establishing the rights and obligations of each contracting party with respect to the other. ... As exchange proceeds over the life of the contract, or as external circumstances change, the meanings attached to the same set of rules by the contractants may diverge. To the extent that such conflicts arise, contracting generates a social demand for third-party dispute resolution, for law and courts, the function of which is to sustain social exchange over time.
The second factor, then, is effective triadic dispute resolution. Without it, the costs of exchange may be prohibitive, since each prospective party may doubt that the other will abide by promises made over the life of the contract. A judicial system lowers these costs, providing a measure of certainty to each contractant and a means of reconsecrating the terms of the contract over time, given the certainty that differences in interpretation will arise as unforeseen circumstances arise. Transaction costs are particularly high in situations in which strangers-those who do not share a common normative framework (whether cultural or legal)-contemplate exchange and no effective triadic dispute resolution exists.
The triad-two disputants and a dispute resolver constitutes a basic, probably primal, institution of governance (Simmel 1950, 145-69). In every human community about which we know anything, we find such triads, arrayed along a spectrum that stretches roughly from consent-based mediation to arbitration to coercive-adjudication. Commonly, triadic dispute resolution performs profoundly political functions, including the construction, consolidation, and maintenance of political regimes (Shapiro 1980, chapter I), functions that inhere in the lawmaking dynamics of dispute resolution itself.
And applies that evolutionary theory to the European Union
The emergence of a transnational rule-of-law governmental system cannot be presumed. Our theory suggests that transnational exchange is a critical catalyst for such an event, generating a social demand for dispute resolution (transnational triadic dispute resolution), revealing important collective action problems that beg for normative solutions (transnational rules), and thereby pushing for modes of supranational governance. The theory further suggests that once the causal connections among exchange, triadic dispute resolution, and rules are forged, the legal system will operate according to a self-sustaining and expansionary dynamic. But the development of causal linkages among our three variables implies the existence of, respectively, some measure of individual property rights, some form of adjudication, and a lawgiver. For well-known reasons (e.g., Waltz 1979), these conditions have been notoriously difficult to achieve and sustain in the interstate system
And suggest that explains a possibly surprising fact about the European Court of Justice
The ECJ, the "constitutional court" of the EC (Shapiro and Stone 1994, Weiler 1994), is the supreme interpreter of this constitution. The court's function is to enforce compliance with EC law. Although the outcome was not anticipated, the greater bulk of the court's case load is generated by preliminary references from national judges responding to claims made by private actors. The preliminary reference procedure is governed by Article 177 of the Rome Treaty. According to that article, when EC law is material to the resolution of a dispute being heard in a national court, the presiding judge may-and in some cases must-ask the ECJ for a correct interpretation of that law. This interpretation, called a preliminary ruling, shall then be applied by the national judge when settling the case. Article 177 was designed to promote the consistent application of EC law throughout EC territory. The member states did not mean to provide a mechanism by which individual litigants could sue their own government, or to confer on national judges the power of judicial review of national legislation. Both of these outcomes, however, inhere in the ECJ's vision of the community as a constitutional polity.
There are two sides to that story. The first is that the expansion of a European constitutional court serve a legitimate and important need; of providing dispute resolution across national boundaries and also between individual and their government. The other side is that this lead to an (arguably) unintended and rapidly evolving loss of national sovereignty.
Whether this seems like a good thing, depends in part on whether we believe the court or the national government is likely to be a better steward of people’s interests.
Even without the EU, I find myself thinking about two stories (one silly, the other serious) about US courts playing a role that you might not expect.
First, I was fascinated by the New Yorker profile of a lawyer who works full time bringing suits for violations or product labeling laws.
But Sheehan has been typecast, with his tacit approval. He’s a food-label zealot, and is especially relentless with vanilla cases. (Tabloids have called him “the vanilla vigilante.”) “Real” fruit and artificial smoke flavoring are in his crosshairs, too. Since 2018, Sheehan’s firm has filed more than five hundred consumer-protection class-action suits, making New York one of the top states for such cases. At annual food-law conferences, presenters displaying litigation trends provide two sets of statistics: one including Sheehan’s cases, one without. Some of his lawsuits, including one involving an “aged vanilla” claim made by A&W Root Beer, have resulted in multimillion-dollar settlements; some make headlines; many are dismissed. Defendants and judges “might roll their eyes at a case,” Sheehan said, “because, yes, it can be somewhat amusing. But I can proudly and honestly say I’ve never been sanctioned by a court for filing anything frivolous.”
...
I asked Gersen, of Harvard, about how to regulate ambiguous labelling. “It’s actually a much harder problem than I originally thought,” he said. “Like, there’s a really strong incentive to over-claim and deceive. Even if you say a reasonable consumer wouldn’t be tricked, it’s almost certainly the case that somebody would. That’s why the company is doing it. And across a lot of food products, across a lot of brands, across a lot of the population, that’s actually not a trivial number of people.” In Sheehan’s Country Crock complaint, he observes that consumer-research organizations—namely Mintel, one of the largest in the world—advise companies on how to respond to shifting demands, including by lending margarines and spreads a healthier, more “natural” profile. When I talked to some Mintel employees, they seemed to agree with Sheehan’s characterization, without taking credit for it. “The one thing I find funny is this revolutionary new product that’s been talked about the last couple of years: plant butter!” Lynn Dornblaser, a product-trend analyst since 1986, said. She laughed. “I think that’s margarine. But that has revitalized some brands—becoming ‘plant butter,’ or talking about being ‘plant-based,’ because plant-based is the hot, cool thing.”
Defendants usually try to have Sheehan’s cases dismissed, “which I always find to be somewhat offensive,” Sheehan said. “It often feels like they’re trying to gaslight you.” He read Horvath’s response to the Country Crock complaint. “What chutzpah! He says, ‘Has no basis to allege’? I mean, no basis? That’s a little crazy.” Sheehan was bullish on the case’s prospects, citing a precedent involving “whole-grain” Cheez-Its; and, indeed, the Country Crock judge had scoffed at the defendant’s claim that “Made with Olive Oil” was merely meant to convey “a flavor note.” “It’s fallen to lawyers like this to offer any kind of accountability,” Pollan told me. “I don’t think it’s the ideal way to do it. But it’s the way the government has left us to do it.”
It does seem like there should be a better way to handle that process, but it’s also not clear what that would be. But the process isn’t cheap
That document, which Sheehan attached as a thirteen-page spreadsheet in his response, “provides extraordinary insight into the track record of most prolific consumer class action attorney in the United States,” the lawyer Chris Cole wrote on his firm’s blog. Cole has defended clients against Sheehan’s suits, including in the Vizzy Hard Seltzer case. “By my rough count, between January 1, 2020 and April 7, 2023, Mr. Sheehan filed 553 complaints,” he wrote. “Of those, 120 (21.6%) were dismissed outright and 35 (6.3%) survived a motion to dismiss at least in part. The remaining 398 (roughly 72%) were either settled or are still pending.” Cole estimated, conservatively, that since 2020 defense costs for Sheehan’s cases could have amounted to forty-two million dollars.
On a more serious note, I remain somewhat shocked by the case involving a 2010 restructuring of Argentinian bond debt. The full wikipedia description is several thousand words (and fascinating) but the short summary is:
Upon default, Argentina's bondholders sued to be repaid 100% of their bonds' face value. Among the bondholders were vulture funds, who had speculatively acquired US$1.3 billion of the bonds' total value on the secondary market for cents on the dollar after the 2001 default. Vulture funds also owned a large quantity of credit default swaps (CDS) against Argentine bonds. This created a further incentive to not only trigger a default against Argentina; but also to undermine the value of the bonds themselves, as the CDS would pay out at a higher rate if the defaulted bonds decline to extremely low values.
The vulture funds held out for payment in full via litigation [in New York courts] (hence their common description as "holdout" bondholders, or "holdouts"). Their legal tactics included seeking injunctions to attach future payments to other bondholders by way of forcing Argentina to settle. A similar strategy had been successfully pursued previously by vulture funds against Peru and a number of African nations,...
In August 2013, the Government of Argentina lost a U.S. appeals court case and was told it had to repay the full face value amount to these holdouts. …
As a result, Argentina has still not been able to raise finance on the international debt markets for fear that any money raised would be impounded by holdout lawsuits; their country risk borrowing cost premiums remain over 10%, much higher than comparable countries. Consequently, Argentina has been paying debt from central bank reserves, has banned most retail purchases of dollars, limited imports, and ordered companies to repatriate money held abroad. Nevertheless, between 2003 and 2012 Argentina met debt service payments totaling $173.7 billion, of which 81.5 billion was collected by bondholders, 51.2 billion by multilateral lenders such as the IMF and World Bank, and 41 billion by Argentine government agencies. Public external debt denominated in foreign currencies (mainly in dollars and euros) accordingly fell from 150% of GDP in 2002 to 8.3% in 2013.
In that case the rulings from US courts ended up having enormous impact on the ability of Argentina to participate in the global financial system.
See also Felix Salmon on why the case was so important
Anna Gelpern puts it well: “for the small but committed contingent of pari passu pointy heads, this is WorldCupOlympicMarchMadnessSuperBowl.” I’m one of the contingent, and I’ve been actively enjoying myself reading various appeals and amici briefs in the case of Elliott Associates vs Argentina. (Technically, it’s not Elliott Associates but rather NML, an Elliott sub-fund, but make no mistake: this is very much a fight between Argentina and the most famous vulture fund in the world.)
I’m not sure who should have heard that dispute, but I believe this is important context for anyone trying to “brainstorm new forms of government” and would be curious if there are any ideas about what the process should be for people suing governments to ask them to enforce their stated rules.
From the first article, here is a graph showing the way in which trade and court rulings increased in tandem.
Nick, this was an interesting sum up of several author's thoughts, I'm curious to know your thoughts? Do you have a specific idea for how you would fix democracy using these ideas?
I'm actually trying to finish a book that's in the space that Elle is thinking about in her columns; the main difference is that I treat my central concept as a thought experiment and conclude that as a utopian thought experiment, it demonstrates the folly of the entire idea while underscoring the need for more plausible changes. Whereas I think she is consistently arguing that the visions she advocates are possible and desirable without really assessing the political landscape involved--there are no opponents or enemies in her advocacy, and no struggle on the road to utopia other than finding the will to do it.