I know this is an old thread. But the wonder of forums like this is that the conversation is documented so it can be picked up again.
Before the turn off into a discussion of EarthFirst! politics, there was a question about Buddhist politics and what it would look like. I think in posing the question of what Middle Way politics would look like, we jumped ahead of the game and confused the bigger issue that I think we are asking. I will return to Middle Way politics later.
I think the first question we would need to ask ourselves is, what is the purpose of engaging in the political process?
Assuming we have a government organized on democratic principles, as a general principle, people participate in the political process to try and direct the community's resources and to implement policies that they want. These policies are implemented in any number of ways - in a general sense, through budgeting for programs and services, and through establishing normative rules (and penalties for not observing those rules).
If we have some other form of government, monarchy, or even despotism, whatever it is, our aim would be at influencing the decision making process. In past times, Buddhists have sought to implement policy through advice to or even conversion of the sovereign. We might, as a means of getting to a point where we as Buddhists can influence decision making, might work for opening such channels - like advocating for the implementation of democratic principles if there are none. (The Vajjis were brought up tangentially in the thread, but IIRC, the Buddha looked approvingly on the political organization of Vajjian society, which seems to have been a Republic. I think a Buddhist democracy advocate could find support for their activities in the Buddha's admiration of the Vajjis.)
So then as a Mahayana Buddhist, how would I like to see resources directed?
As a Mahayana Buddhist, as a bodhisattva, my wish is for awakening, and the awakening of all beings. I would therefore like to see the community's resources directed to this goal. In the past, this was done most directly by the support of the Sangha, by housing and feeding sravakas. We here on the board have different views on the ideal Buddhist society and the relationship between the 4 classes of Buddhists, but generally, I think we can generally agree that we'd support policies that enabled the pursuit of enlightenment, from providing the basic material needs to more advanced institutions for the preservation and dissemination of Buddha Dharma. In a pluralistic society, these government policies would need to be for the benefit of the whole society, not just Buddhists, so building monasteries is probably out of the question. Schools and hospitals, though...
I did not read the entire thread, but did skim it. It seems there is a lot of idealism here. Sure, it would be great to have a Buddha as ruler, but that's not happening any time soon. Even a Buddhist spiritual meritocracy is a pipe dream under present conditions - I think too many of us might be focused on some sort of Buddhist totalitarian state ideal ruled and administered by perfected beings. I don't think such a state has ever existed, and we are a looooong way from realizing anything like that.
Instead, we have the pluralistic societies organized on democratic principles, and as Buddhists, as a group among the plurality, we can contribute towards the implementation of policies we believe in through coalitions and cooperation with others who share in general principles. Some things we can work with others on could include peace and order, social welfare, universal healthcare and of course, good education. On more refined levels, we could certainly work with others who are trying to influence culture towards making compassion normative. I think if we are able to set up society so that real material want (and by this I mean, nobody is hungry, nobody is stressed out of their minds worrying about having a place to live, nobody is worried that medical bills are going to wipe them out) is eliminated and we make compassion the default norm in our interpersonal relations, we are a long way to establishing a society in which the pursuit of enlightenment is easier for everyone. From there, it would be up to Buddhists and our institutions to propagate Buddhadharma.
In achieving these policy goals, we would of course be constrained by systemic rules as well as our own ethical standards. This is where Middle Way politics might be applicable. I don't think anyone takes Middle Way to mean the compromise position, but rather that we ourselves, in our conduct, avoid extremes. We might not, for instance, set up Super PACS to accept dirty money with all its strings, but we could engage in fund raising to publicize our positions and support candidates who share our goals and values. Etc.