Karel Janeček, co-founder of RSJ Invest | Vladimir Weiss/Bloomberg via Getty Images Letter from Prague Recalculating democracy Czech ‘master of the universe’ uses his money and math skills to revamp how voting works.

PRAGUE — Karel Janeček made a fortune in financial derivatives, but now the Czech businessman is less interested in money and is instead planning nothing less than a “complete renovation of democracy.”

Janeček, 42, used his knack for numbers — he has a PhD in mathematical finance from Pittsburgh’s Carnegie Mellon University and publishes scholarly articles in applied stochastic calculus — to build RSJ Algorithimic Trading, a firm that specializes in automated futures trading on exchanges in Chicago, London and Frankfurt.

Those same skills are being turned to his attempt at revamping the nuts and bolts of how democracy functions, a system he calls ‘Democracy 2.1.’ Although no country has yet taken up the idea on a national scale, it is already in use at the local level.

The formulas can look a little abstruse:

K ≥ 1

N > K

M ≤ N/2

But Janeček claims the outcome is a voting system that better reflects public will and reduces corruption.

In much of the West, democracy is ailing: mass political parties are shedding supporters, governing elites are often perceived as being under the control of special interests, voters can feel forced to choose the lesser of two evils at the ballot box, and electoral turnout is falling.

In Janeček’s native Czech Republic, corruption remains a primary grievance; the country now ranks two spots lower on Transparency International’s Corruption Perceptions Index than when it joined the European Union in 2004.

As Janeček puts it, the political system has been “completely taken over by real bastards.”

Revamp voting

Although the exact model can be altered to fit local conditions, Democracy 2.1 (D21 for short) calls for doing away with one-person, one-vote systems and replacing them with elections where voters have more than one vote, and in some cases negative anti-votes. The formulas set the numerical balance between positive votes and negative ones, with each voter casting multiple votes on a single ballot and the sum of pluses and minuses determining the outcome.

The political system has been “completely taken over by real bastards” — Karel Janeček

The additional votes boost consensus-driven politicians and weaken the power of party insiders while the negative vote provides a check on corruption, Janeček says. A politician widely perceived as corrupt is weakened by negative votes, even if they are able to mobilize significant numbers of supporters.

“Multiple votes allow voters to say an entire sentence, not just a single name,” Janeček says from his office in a Prague hillside villa. “Extremist parties on the right and left rarely have any competition, while democratic minded parties take votes from one another.”

It is early afternoon, but Janeček is already yawning. He went to bed at 5 a.m., but has already had a session with a personal trainer and a conference call with Carnegie Mellon. He wears orange shorts, a teal golf shirt and sandals. He knocks back a shot of espresso and sips what appears to be freshly squeezed orange-carrot juice.

“When something pisses me off, I need to do something about it,” he says of the motivation behind D21.

In 1994, Janeček was among the founders of RSJ Algorithmic Trading — he still owns 42 percent — a firm that specializes in automated futures trading on exchanges in Chicago, London and Frankfurt. By 2004, the company was the largest single trader on the London derivatives market.

Fixing the Czech Republic

That made Janeček very rich, and he has donated his money to a variety of Czech causes — an endowment for science research, building a new contemporary art museum in Prague and another endowment that targets corruption by, among other things, paying cash rewards to public officials who blow the whistle on wrongdoing.

Janeček’s Anti-Corruption Endowment had its first big success in leading a campaign to ban bearer shares, an archaic financial instrument where physical possession of a stock certificate is the only proof of ownership. Until 2013, the Czech Republic was one of just a few countries in the world where anonymous bearer shares were still unregulated.

As Janeček lobbied for outlawing bearer shares, he found himself in meetings with many top Czech politicians.

“When I met with these people, I could see there was just no way to clean things up, these people must be changed,” he says. “The corruption was the result of the people, not the inverse. Once you see that, it is obvious what to do. It is a corrupt voting system.”

As with most other EU countries, the Czech Republic uses a form of proportional representation. Although voters can express preferences for individual candidates on the list of the party they vote for, who actually makes it into parliament remains heavily reliant on intra-party backroom deals. Janeček proposed two-seat voting districts, with each voter possessing two positive votes and one negative vote.

“It can be shown from mathematical modeling that the negative vote has a cleansing effect on corruption,” he says.

The Czech political establishment rejected the proposal as eccentric and complicated, and Janeček started looking for chances to implement the system internationally. He tweaked the formula and hoped that a small success in one place could be replicated.

As Janeček hunted for places to test D21, he saw that others were also trying to tweak dysfunctional voting systems. Parts of his theory were already being put into practice.

“A year ago in May and June I traveled to New York and Washington, it was clear there were many more applications than just politics, this blew me away,” he says.

“Rocket boost”

Nobody is using D21 to decide general elections as yet, but participatory budgeting gives citizens a greater say in how public funds are being spent and in many places operates using the exact same multi-vote logic.

For example, voters may choose multiple projects from a list of 10, and also cast a negative vote. While interest groups are likely to mobilize considerable votes for their projects, when all voters have more than one vote, the project that has the widest base of support has a chance to win voters back it with their second vote — even if voters still use their first vote to choose projects coinciding with their narrow interests. As well, city leaders may note that some projects attract a lot of negative votes, forcing a rethink of the plans.

“Not only do people get more involved, there is this feedback loop,” Janeček says. “City councils can see more from the results of the voting, they can improve options. You have a huge pool of information.”

In Cascais, an affluent Portuguese city not far from Lisbon, the city consults voters on yearly public works programs and has been experimenting with participatory budgeting for the past five years. In 2014, in the city of 200,000 people more than 42,000 voted on the budget. That‘s more than took part in local elections, which still take place under a traditional voting system. Deputy Mayor Miguel Pinto Luz says the shift has provided a “rocket boost” to the democratic system and calls it a “game changer.”

“Some say a system like this is too complicated, I say the traditional one is too simple,” he says. “Voters don’t really get to express their opinion.”

This year, citizens of Cascais will decide on a list of proposed city projects with one negative and two positive votes. The system weakens the influence of interest groups and their ability to mobilize voters and tilts the balance back toward the objective quality of the projects, backers argue.

D21 is also working with organizers in Tunisia, the native country of Janeček’s second wife — whom he married earlier this year in a helicopter hovering a kilometer in the air. Janeček hopes the country’s nascent democracy could be the first place where the D21 system is implemented during regional elections, possibly in two years. Much like in Cascais, the Tunisians were working on participatory budgeting on their own, but have since teamed up with D21.

The corruption was the result of the people, not the inverse. It is a corrupt voting system — Karel Janeček

“This is the highest level where citizens can participate in the decision-making itself,” says Ahmed Ben Nejma from Action Associative, an NGO which partnered with four Tunisian municipalities to implement participative budgeting last year and is working with three more this year. “If we are successful, it can be successful in the whole country and it will prove that democratic tools can work in Tunisia, and work now,” he says. “The difference can be instant.”

The exact multiple-vote model varies by locale. Negative votes, for example, are not a good idea in a place with marginalized minority groups to avoid the majority voting against them.

D21 is now at the center of a network of pilot projects that include cities in China, France and the U.K., as well as several neighborhoods in New York City. Dozens of Czech towns use multiple voting schemes.

“We have hubs of new governance in various countries,” Janeček says. “This becomes a network of political change. In five years we will have a network of smart cities, smart companies, and real political implementation in a few countries.”

Benjamin Cunningham is a Prague-based writer and journalist. He is a frequent contributor to The Economist, The Christian Science Monitor, Aspen Review and others. Follow him on Twitter at @Cunning_Tweets.