Inside Story

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1424 words

The real crisis of democracy

26 May 2009

Fortunately the Institute of Public Affairs has had less influence than it has sought over the past sixty-six years, writes Norman Abjorensen




IN 1975, in the midst of the energy crisis, a powerful organisation called the Trilateral Commission, set up by American banking interests and made up of representatives of big business and government in the United States, Western Europe and Japan, published a report commissioned from three eminent political scientists called The Crisis of Democracy: Report on the Governability of Democracies to the Trilateral Commission. Its key theme was that democracies had become ungovernable, that governments were suffering from an overload of both decision-making and expectations. In short, there was too much democracy, too much regulation, too much welfare.

Helped along by radical economists such as Friedrich Hayek and Milton Friedman, this was the thinking seized on by Ronald Reagan and Margaret Thatcher and used to dismantle much of the post-war Keynesian safety net. (John Howard in Australia was a later, though no less ardent, disciple.) The object of the exercise was to create a global market – an American global market, which we now call globalisation – under which much of the world slipped back into laissez-faire economics thinly disguised as deregulation.

Three decades later, unfettered capitalism has been discredited once again. But it could have been far worse if those associated with one of Australia’s most stridently pro-business think tanks, the ironically named Institute of Public Affairs, had had its way more often. Behind its very establishment address at 410 Collins Street, in Melbourne’s commercial heartland, lies political extremism in a smart suit and tie: the ideological headquarters of cowboy capitalism.

Under the banner of “free people, free society” the IPA has exerted significant influence on Australian political and social life for more than six decades. It was the driving organisational and ideological force behind the formation of the Liberal Party and the architect of a massive stream of propaganda that sought, successfully, to discredit Australia’s very moderate Labor Party as a socialist tiger waiting to pounce once the war had ended.

The IPA is, of course, concerned with private rather than public affairs, its extreme neo-liberalism and deification of the so-called free market displaying a thoroughgoing contempt for anything public: public ownership, public service, public transport and, indeed, the public itself. It is the ideological mouthpiece of very private enterprise that likes to glorify in the name of “free” enterprise.

Leaving aside the vexed question of whether liberty really does reside in a system that confers economic rights on a tiny, unaccountable, property-owning few over the powerless many, the IPA might have been expected in the current crisis to tone down its rhetoric. Not so. It is as ebullient as ever, and its executive director, John Roskam, is busily building branch support for a crack at a safe Liberal seat in Melbourne.

The latest issue of IPA Review carries a full-page house promotion, featuring a graphic of the mythical monster, and the accompanying headline: LEVIATHAN IS BACK. But who is Leviathan? Many of us, and possibly most, might well regard the uncontrollable rampant beast of that name as the representation of the globalised private sector rather than the elected governments who should (but seldom do) regulate in a way that benefits the many, not the few. (In 2004 the respected Australian Election Study showed almost one-third of those surveyed feared the power of big business, far ahead of any fear of government or unions.)

In its exhortation to “reject the State-Monster” and support the IPA (“the most concrete way you can support limited government and individual freedom in Australia”), it is evident that the spirit of cowboy capitalism is far from spent. The organisation warns of an emissions trading scheme “set to raise the price of everything.” Well, yes, the free use of the people’s environment for private exploitation and profit is simply unsustainable. The jibe of “environmentalists pushing bad science at the highest levels of government” is scarcely disguised climate change denial.

The IPA also opposes “wasteful government programs like GroceryChoice being proposed at every opportunity.” It has been a consistent critic of consumer protection measures, seeing in them an illegitimate trespass by the state on private matters. Only a strong state can protect the public interest; the IPA’s constant harping about reducing the size of the state is really aimed at reducing the capacity to protect.

Industrial relations changes are seen as “handing power back to militant unions,” quite ignoring the fact that unions never had real power, that they are representative of far more people than the IPA and its employer cronies, and that union militancy is dormant, if not extinct. And the IPA also opposes “taxpayer’s (sic) money being used to bail out failed firms.” This is, of course, the economic Darwinism of neoliberalism talking: failed firms have social consequences for displaced employees, whom failed employers happily abandon. Perhaps it is time to rethink this policy of bailouts and give displaced workers the option of taking over and running the failed firms.

Unsurprisingly, the IPA is also opposed to governments bringing in budget deficits. There is an enormous hypocrisy at work here that is also reflected in the Liberal Party’s blustering and posturing: the much-vaunted reduction in public debt during the Howard years, much of it financed from selling off the people’s assets, was not so much a case of good economic housekeeping as a transfer of public debt to private debt.

But the most problematic – and dangerous – aspect of the IPA is its utter contempt for even the most basic democratic rights. It has waged a relentless war against non-government organisations, themselves a response to the shrunken public sphere under neoliberal assault. In this it reflects the Trilateral Commission’s view of democratic processes. Crisis of Democracy spelled out quite clearly the need for the public to be discouraged from political activism: “The effective operation of a democratic political system usually requires some measure of apathy and non-involvement on the part of some individuals and groups.”

According to the report, a crisis of democracy can occur when the populace becomes too well-informed about the true goals and motivations of its rulers and begins to demand that those in power shift their focus from self-aggrandisement to providing for the people’s common needs. After all, “order depends on somehow compelling newly mobilised strata to return to a measure of passivity and defeatism... At least temporarily the maintenance of order requires a lowering of newly acquired aspirations and levels of political activity.”

This accords with the IPA’s feeble and passive definition of democracy, courtesy of former Keating government minister, Gary Johns. Dr Johns, who has led the ideological attack on NGOs, wrote: “Our attitude is shaped by our conception of democracy, which is at odds with the current fashion for participatory democracy… Participation merely crowds the field with agents (for example, non-government organisations) who may or may not provide solutions to those issues that require government action… The IPA argues that the strength and role of NGOs may give the appearance of an active democracy, but it is in reality a sign of an active citizenship.”

The IPA joined with the American Enterprise Institute in 2003 to “debate NGO influence and accountability” at a conference in Washington, an event publicised with the breathtaking claim that “the extraordinary growth of advocacy NGOs in liberal democracies has the potential to undermine the sovereignty of constitutional democracies…” In fact, corporations, whose donations keep the IPA and AEI afloat, have done more to undermine national sovereignty than any humble NGO could ever dream of.

The neoliberal experiment has cut a swathe through society over the past three decades, setting back popular sovereignty, further removing people from decision-making and engendering a critical disenchantment in, and detachment from, the political process. It has led us to the point of global crisis, greater hardship and considerable uncertainty. The doctrines that have inspired it – those preached by the IPA – have effectively seized the public space and stifled real debate and deliberation; as such they represent the gravest threat to popular democracy.

This, more than anything, is the toxin in the body politic. The only antidote is greater awareness of the essentially anti-public nature of this doctrine and more, not less, citizen involvement in the political process. The alternative to be consume, be silent and die. •

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Electoral advances by the national Sweden Democrats at last Sunday’s election pose a challenge to cosmopolitan Sweden and the incoming Social Democrat–led government, writes Andrew Vandenberg


Swastikas long gone: supporters of Sweden Democrats during a rally in July this year. Johan Wessman/News Øresund (CC BY 3.0)

Swastikas long gone: supporters of Sweden Democrats during a rally in July this year. Johan Wessman/News Øresund (CC BY 3.0)