If you ever get a chance to read Popular Economic commentary by the best-selling author Steven Levitt, keep in mind a very apt example of how intuitive conclusions can be wrong, or even counter-factual. Among many other subjects, Levitt explores the popular myth that Real Estate agents will generally fetch the highest selling price for their home. It makes sense: an agent is paid by percentage commission. The higher the price, the more money the agent makes right? Well, actually no. Matter of fact, when studied at samples of 1000, it turns out that most Real Estate Agents tend to sell properties at 85 to 90 percent the highest sale price for comparable properties in comparable areas. Why? Well it turns out that a Real Estate agent’s incentive is not to sell just your property, but as many properties as fast as possible. After all, if holding out for a better offer keeps inventory on the shelf for an extra month, why would an agent do this when he has 10 other properties he can sell in that same time period? It turns out that the revenue optimization point for a real estate agent is driven primarily by volume, not by sale price. As such, sell as high as you can as quickly as you can, and this turns out to be (depending on the specific market) 80 to 90 percent the highest price you could possible get.
How does this relate to Proportional Representation? The only thing I have heard people say in favour of Proportional Representation is that is will be “more democratic.” In other words, if you vote for a party that cannot possibly form a government, or win a riding, it is not a wasted vote because by some unspecified formula, your preferences will be accounted elsewhere and taken into the balance of power once the election is over. But why is this better than platitudes of “better democracy?”
I will assert it is actually inferior. It is inferior in theory, and in practice. First Past the Post incentivizes centrism. It incentivizes moderation. Up for play are the coveted middle voters, those with no party affiliation whose votes shift from election to election. Whomever gets as close to 50 percent support as possible, takes the seat, or position. So yes, somebody who gets 35 percent of the vote will represent 65 percent of a population that did not support them. But that is the point. What does First Past the Post incentivize? It Incentivizes the individual who shows the greatest ability to build the broadest consensus, and earn the greatest level of trust to represent. Of course 50 percent plus one will always be the preferred gold standard. But unless you have run-off elections, this is rarely possible.
Now what does Proportional Representation incentivize? Bring in the Real Estate comparison. If you are a politician in a Proportional Representation system, what is the surest way to keep your job? Build a broad consensus? Earn as many people’s trust as possible? OR, appeal to your hard core supporters knowing that enough ideological votes will best ensure you keep your seat? That is not to say that 50 percent plus 1 is not desirable (any real estate agent would gladly sell for the highest price on the table), it is to say it is a costly goal that carries high risk.
And so if you look around the world, from Brazil to Sweden, Italy to Germany as well as France, you see the rise of fringe parties. Some of these fringe parties are literally Neo-Nazis. And these parties now get state funding and will not be pushed out of legislative bodies unless Proportional Representation is abandoned.
We need less platitudes about “better democracy” and more serious conversation about systems, and why systems incentivize. We have four levels of government in Canada. You do not need to even own property to vote in municipal elections anymore. You can call Canada a lot of things, but you cannot call in undemocratic. And frankly, centrism and broad consensus building are fading arts we should not let go of lightly.
Joseph Nusse Valemount, BC
