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If, as the media and certain politicians seem to want us to believe, we have a "broken society " (whatever on earth that might actually mean), surely it is just reflecting how "broken" its leadership, government, has become. And I don't mean just the current Labour government. I mean government as an institution, even our democracy itself, if you will.

The state and its agents and those who act with its protection have routinely perpetrated force, violence and coercion, against their own citizens, against other countries, for aeons. The whole model is based on us surrendering some of our personal sovereignty. Some would no doubt rather say "pool" than "surrender" but look around you; "pooling" implies much more of a consensual relationship than reality attests to.

From cradle to grave, as they once promised, the state imposes itself on our lives and choices by more or less coercion. From compulsion in education, via criminalizing consensual or victimless behaviour (even thoughts and opinions) and right through to prosecuting wars "in our name", commanding our young men and women to kill or be killed. And most of all perhaps through taxation - it never hurts as hard as on the pocket!

In turns the state seems to infantilise and nanny us, to absolve us of personal responsibilities, and then, moralizing, blame us for all our own ills. Those who would rule us cynically play on our fears and talk up our aspirations according to their need to gain and retain power. And a tiny minority of us in our broken system can make or break that power for them, so have disproportionate influence over our fellow citizens.

That this has always gone on need hardly be stated. The biggest mystery, as Milton Friedman said, is why human-kind seems collectively to submit to authority - especially remarkable really when you consider that every step of human advance has actually arisen from someone stepping beyond the current conventions, bending the rules, exceeding the norm.

Supposedly benign regimes create instruments to comfort us, to fool us into thinking they are prepared to limit their own authority, whether we call them Geneva Conventions, Human Rights Acts or Data Protection, and then seem to break their own principles when it suits them, call it Guantanamo, pre-charge detention and control orders or ID cards and state databases.

It is often said that ("successful") politicians display many characteristics of psychopathy. How much more "broken" can we get than to submit ourselves to being ruled and represented by smooth talking, self centered, pathological liars? How much more scary than that such people have their hands on both our wallets and on the nuclear triggers? Is it any wonder that life on some of our streets can be vicious?

A few weeks ago this ten year old article by Fred E Folvary was brought to my attention. I thought I had blogged about it before, but in the light of what I said in 'Revolutionary Liberalism: 5 - The "Sovereign Individual"' the other day and the welter of stories of party funding corruption this week it's worth reprinting today I think:

Democracy Needs Reforming

by Fred E. Foldvary, Senior Editor, The Progress Report

Ever since the 1996 elections, we have had wave after wave of revelations about improper or suspicious political campaign finances. Campaign contributions from Asia, soliciting contributions from government offices, overnight stays at the White House, diversion of "soft" money to political parties -- all this money sloshing and influence peddling points to the corruption of government, whether it was strictly legal or not.

The finance reform bill now being considered may be blocked by Democratic opposition to the "paycheck protection act" that would bar unions from using dues for political contributions without the members' approval. Even if it passes, the problem will remain. We've had campaign finance reforms every few years, and 114 votes on the issue by the Senate during the last ten years, but nothing really changes.

The basic problem is the way we elect our representatives. Our system is mass democracy: a large mass of voters elect a Congressman or Senator, or the President. The voters' don't know the candidate personally, so the candidate relies on advertising in the media to project a favorable image. This costs money, and the special interests are happy to contribute the funds.

No matter what laws are passed, the special interests will find ways around them, because of the tremendous gains they can get. Government financing of campaigns only gives more power to the two major parties, reducing even further the opportunity for smaller political parties to challenge the system and come up with new ideas. The problem is the corrupt incentives built into the system. To solve the problem, the whole voting system has to be changed.

Since the key problem is mass democracy, the only remedy is to change it to small-group democracy. Have every election take place in a small group. That would eliminate the need for mass media, and therefore the need for mass campaign funds, and thus the opportunity for special interests to buy out the election. Also, wealthy candidates would no longer have such an advantage.

But if a Congressional district has several hundred thousand people, how can we elect the representatives with small groups? The solution is multi-level voting. Divide cities and counties into small neighborhood districts. Each district elects a council. Then the council members elect one of their members to a higher- level council made up of a dozen neighborhood districts. These then elect members to the next higher level, and this continues on up to the representatives to the city council, state legislatures and Congress. One of the rules is that a lower-level council may recall a representative at any time if they are not satisfied.

Now you the voter are electing someone from your neighborhood for the neighborhood council, somebody you might know or easily have access to. Instead of mass mailings and TV commercials, the candidates would hold neighborhood meetings. All the higher-level elections would also be personal, since only a dozen or so councils would elect representatives to the next higher level council. The President himself would be elected by Congress, and the House of Representatives would only have, say, some 60 members instead of 435. And let's cut the Senate to 50 members, while we're at it. We want smaller groups, right?

Somebody might object that he or she wants to be able to elect the President directly. But one vote out of tens of millions does not amount to much. One vote in a neighborhood election of about 200 voters does count for something, plus your voice will be heard, and those who want to be representatives don't need to raise money.

This bottom-up multi-level voting system would also profoundly change the incentives for taxation. Power would shift dramatically to the neighborhood councils. Decentralized voting would lead to decentralized government and decentralized taxation. With local funding that gets sent to higher-levels of government, income and sales taxes would not longer be practical. Taxation would shift to real estate, especially to land, which does not flee when taxed.

Small-group democracy would be a radical change, but if we want to eliminate special-interest influence and the corruption of government, campaign-finance laws alone won't do it, because of the incentives built into the system. Either we change the voting system, or we will continue to let the special interests have their way.

News that the German and British governments have been paying for information almost certainly illegally obtained in order to chase people who try to stash their money overseas should worry us all. Obviously in this case the amounts of money potentially liable for tax are quite large numerically, although small in proportion to the total tax take - though the fact that it is merely around one fifth of one per cent of the total UK tax take we're talking about should alter our opinion about people who try to beat the system when everyone else has to pay. But it is the means employed that are of concern - paying what amounts to a criminal who has liberated customer personal information from the Liechtenstein bank at which he or she worked.

In a world in which it is ever easier for us to trade with overseas companies and individuals, to live in one place and earn in another and to invest in overseas assets, all of which are a good thing, I have warned previously that governments could try to get more authoritarian about chasing money allegedly stashed away or earned elsewhere:

This means ever more intrusive government, clinging desperately to current understandings of money, income and taxing that income as the only progressive way. We are already seeing huge bites taken out of our civil liberties because of immigration fears, terrorism and taxes.

And of course there is an alternative; that we switch to taxing only things that are impossible to hide - like land, which happens to have the added advantage of being value that the occupier does not create, rather than capital wealth or income which the worker or investor has created.

You might think this is just a bunch of rich people getting what they deserve from HMRC, but their willingness to engage is what amounts to industrial espionage to do so is disturbing and is a message to us all, whether we just trade with Americans on Ebay who then send us "gifts" tax-free or decide to retire to Spain, or further afield, whilst keeping a retirement job working online for a UK employer.