Hayek Understood the Perils of Referendums

by Christopher Rowe

If only David Cameron had studied his Hayek more assiduously when reading PPE at Oxford. Not because he failed to understand the argument in favour of free markets expounded so forcefully by the Nobel Prize winning economist, but because Friedrich Hayek’s understanding of the functioning of parliamentary democracy contains insight of relevance today and for all time.

Whatever Hayek’s views would have been on Brexit, he would undoubtedly have been averse to the use of a referendum to decide the issue. In The Road to Serfdom (1944), a persuasive case is presented against placing legislators in the unenviable situation of executing a plan which “requires more agreement than in fact exists”. Few expressions would better encapsulate the position in which Theresa May’s government finds itself with Brexit.

Hayek understood the UK’s parliamentary democracy. He appreciated that agreement amongst the people for an undefined, amorphous cause such as Brexit risked deleterious constitutional consequences. Expressly preoccupied with the vogue for central planning across the continent and in Britain in the middle of the last century, Hayek surmised that “the question of the precise goal towards which all activity is to be directed will arise as soon as the executive power has to translate the demand for a single plan into a particular plan.” Sound familiar?

The metaphor of backseat driving was notably invoked by Amber Rudd in criticism of her counterpart, Boris Johnson, for his over-zealous prescriptions for Brexit. Hayek resorted to similar allegory in his discussion of planned economies, envisaging a group of people committed to taking a journey together “without agreeing where they want to go: with the result that they may all have to make a journey which most of them do not want at all.” Worse still, if the car slows to a standstill, there will be “stronger and stronger demands that the government or some single individual be given power to act on their own responsibility”, culminating in totalitarian rule.

The folly of referendums as a means of settling insufficiently defined agendas in a parliamentary democracy founded on a first-past-the-post franchise is becoming increasingly evident as every day passes. If our MPs are representatives of their constituents, surely it is right that they represent them and not the nation more broadly? The corollary of this is a hypothetical Brexit vote on a first-past-the-post basis pitted against the actual 2016 referendum, which encouraged more people to vote for a single cause than ever before in the history of the UK. This tension creates a crisis of legitimacy for parliament, democracy, and the rule of law, and the immediate consequence is a constitutional logjam.

Edmund Burke’s Speech to the Electors of Bristol (1774) is one of the most cogent expositions of the argument that the MP is merely a representative, unfettered by the wishes of his constituents save as to exercising his (as it was back then) independent judgment in their best interests: “Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.” A true adherent to his own principles, his electorate showed him the door subsequently over his support for free trade for Ireland (seen to threaten Bristol’s manufacturers) and his sympathies for Catholics.

Burke was not writing in a vacuum. The general will, expounded so elegantly in Rousseau’s Social Contract and indicative of his upbringing in Geneva, mapped out a very different vision of society where individual wills aligned themselves so that one general will would reign supreme – man would be everywhere free, and no longer in chains. Mill, Locke, and others made similarly salient contributions to this debate.

But returning to Hayek. In his criticism of the trend towards a centrally planned economy, did he not spot the Achilles’ heel in the plan for a referendum on our continuing EU membership. To place a vague, ill-defined vision on the ballot paper, the realisation of which would require myriad legislative choices by the executive subsequently, and to use a voting system predicated on a simple majority in a parliamentary democracy which elects its representatives via a first-past-the-post system, was reckless.

It was to risk the very totalitarianism which Hayek feared so greatly and which, in executing a meaningful Brexit without further undermining trust in politicians, Theresa May’s government (if it is allowed) will necessarily have to assume.

Christopher Rowe is a historian of free trade, with particular expertise in nineteenth-century British and European history.

Source: CapX


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