Australia’s traitors: Champions of neo-fedualism

How analysts, commentators, and politicians are distorting Australia’s political landscape. A personal assessment of the battle for Australia as an independent nation rather than as a minor feudal colony of imperial powers.

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The persistently silly public opinion about the Queensland State election, and prospects for an embattled Coalition government, lead me to consider just what it is about these developments that commentators and bar-room sages don’t understand.

Unfortunately I think the answer is ‘everything’. That is to say, applying traditional filters of political partisanship, reliance on established statistical models, and even betting on moneyed power, no longer offer the certainty they might once have extended.

Back to basics, then.

What is it about the Queensland LNP that made voters want to see them gone? And is it the same thing that sees the federal Coalition trailing opinion polls and contemplating Seppuku?

My answer is ‘yes’. But it is actually a series of answers flowing from a series of causes. To make this a comment rather than a thesis, I will focus principally on economic policy, from which many other political causes, effects, and phenomena can be traced.

The economic policy platform sported as the emblem of Australia’s Liberals, and their vassal allies, is pretty simple. It is the imported American prescription for neo-feudalism, in which all wealth is concentrated in fewer and fewer individuals, and in which fewer and fewer but larger and larger trans-national corporations overrule democracy, destroy competition with market rigging, eliminate middle classes as political counterbalances to their own infleunce, and reduce wages to make of people a new kind of feudal peasantry, owned and controlled by their corporate overlords, who have the power of life and death over them. Quite literally.

If that seems dramatically overstated at this stage, read on a little to see why it is actually astonishingly accurate as a description of contemporary capitalism. And I confess that this is not my original assessment. It comes from American sociologist Immanuel Wallerstein, with recent amplification from American billionaire Nick Hanauer (see http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html#.VNLZvJM70gs).

Neo-feudal economics

To understand the propaganda about free markets that gives rise to neo-feudalism, there is no choice but to understand its historical foundation. Not to attempt such an understanding is a surrender to ideological lies at the outset.

Let me state categorically that anyone who quotes Adam Smith today is about to justify an overt lie. Smith wrote at a time (1750s to 1770s) in which the agrarian revolution had barely found its full expression. He is worth reading as an adjunct to subsequent thinkers, but nothing he said sheds any light on contemporary capitalism. Instead it is an admission about wanting to retreat into a mythical past.

We are better served to look at more recent thinkers. Like John Maynard Keynes, and Friedrich August von Hayek. Hayek is known as the anchor of arguments that free market activity avoids the tyranny of totalitarianism, and Keynes is still recognised today as the advocate for state intervention into the economy at times of market failure.

Hayek and Keynes

In 1944, with the war against the Nazis in Europe not yet won, Keynes wrote to congratulate Hayek on ‘a grand book’ with which he mostly agreed. The book was The Road to Serfdom, which has ever since been misquoted to justify complete freedom for private interests to do as they please.

Such interpretations overlook Hayek’s assumption that free markets were also to be free from corporate manipulation and abuse of power, particularly in the unregulated trans-national spaces of tax evasion, price fixing, and unaccountable amorality, if not outright criminality.

In the wartime correspondence it is clear that Keyenes and Hayek were not nearly as opposed to each other as they have since been portrayed, particularly in efforts to characterise Labor as the party of Keynes, and the Coalition as the faction of Hayek.

Keynes wrote:

Dangerous acts can be done safely in a community which thinks and feels rightly which would be the way to hell if they were executed by those who think and feel wrongly.

Keynes is long dead and his precise meaning can be argued ad infinitum, but it seems pretty clear he was talking about humane ethics and sound economic fundamentals.

neo-feudalism-002British peer and politician Robert Skidelski suggested the two men agreed in principle on an accommodation of economic theory with politics so long as there was an underlying understanding that it was an accommodation:

A society in which ‘‘dangerous acts’’ by governments become continuous will lose its understanding of why they are dangerous – that is, its sense of what it is to be free. And this has happened to some extent [writing about Britain in 2005, during the Blair era].

Admittedly, the threat Hayek and Keynes faced was totalitarianism in the concrete manifestation of fascism and then communism. But the words are eerily appropriate to describe the contemporary circumstance where communism and fascism are the lesser threat to a totalitarianism perpetrated by corporations and their super-wealthy beneficiaries.

Since the 1980s, Hayek has been invoked by free market economists as the intellectual justification for deregulation, lowering taxes on the wealthy, and cutting back welfare measures.

In the USA, as is so often the case, Hayek’s ideas were given local names to play to the jingoistic illusion that Americans have always been first with better solutions and ideas than anyone anywhere else in the world. In terms of the free market intellectual framework this means Americans think of the Chicago School and Milton Friedman, even if Friedman was really just a bowdleriser and propagandist for the Chicago chapter of Austrian School of neoclassical economics. This point is not just gratuitous ridicule, even if deserved, but has a major bearing on how terminology has obscured what is actually at stake.

Neoclassical economics is today misappropriated, by people who are economically illiterate, to mean complete freedom from any law or regulation for corporations and the wealthy. Worse, left critics have mislabeled this ignorant, incompetent approach to economics as ‘neoliberalism’ when there is in fact nothing new or liberal about it.

The most accurate description for what has been the ascendant economic doctrine, emanating from Wall Street, Washington, and London (probably in that order of impact on the rest of the world), is plutocratic authoritarianism, or a plutocrat driven neo-feudalism (more of that later).

The doctrine persists despite the demonstrated failure of all its justifications. These failures include the absence of any ‘trickle-down’ effects, sustainable and stable economic growth, competition and greater consumer choice, and its compatibility with democratic freedom.

Instead we have seen much faster concentration of wealth at the expense of creating massive new economic underclasses, a contraction of competition and consumer choice as huge corporations rig markets to keep new entrants out and maximise their own profits, and massively unstable markets fuelled by the casino economy of an unregulated speculative free-for-all on Wall Street and in the City of London.

This is the doctrine proposed by the Coalition as the sole answer to Australia’s aspirations and possible futures.
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Australia’s neo-feudalist policies

The American plutocratic economic blueprint pushed relentlessly by the Coalition is described by Harvey and Manfred & Roy to include deregulation of the economy, trade liberalization, and privatisation of state assets and service providers. These broad strategies are usually accompanied by unsustainable tax cuts for business and wealthy individuals, deep cuts in anything resembling welfare (including healthcare), monetary policy as the instrument to keep inflation low, anti-union measures to drive down wages, and conservative social policies coupled with big spending on police and enforcement as instruments of social control.

It is no accident that since the later 1990s such policies have been explicitly recognised as bulleted list known as the Washington consensus (see http://www.cid.harvard.edu/cidtrade/issues/washington.html).

The left has uncritically adopted the term ‘neoliberal’ for this prescription for reasons best explained by David Harvey (see references below), but I regard it as an inaccurate label since there is nothing new about neo-classical economics, and there is no hint of liberalism in the intentions or outcome of the policies. Instead I see it as more appropriate to refer to such political designs for what they aim at and achieve: autocratic plutocracy, and the neo-feudalism to which plutocrats aspire.

Let’s look briefly at what each policy item means.

Deregulation is a fancy word for removing the legal constraints on business. The more deregulation there is, the less businesses, particularly the larger ones, have to comply with laws about issues as wide ranging as paying taxes, not endangering human lives, lying to customers, or engaging in other deceptive practices. In America this has led to brazenly open and unpunished criminal activity not just on Wall Street, but by Silicon Valley corporations and many others in between the two coasts. It is compelling to conclude that this lawless state of affairs is exactly the goal of the people arguing for deregulation.

Trade liberalisation means removing tariff protections for local business. These protections were usually created as taxes and charges on imported goods competing with local ones, to make the imported competitors artificially more expensive. What has never been acknowledged is that huge corporations tend not to be Australian, and are able to kill off local manufacturers, suppliers, and primary producers by flooding our markets with goods at prices we will never be able to match. This is part of a transnational corporate strategy to eliminate competition from smaller businesses not able to achieve their buying power or economies of scale, and then to further concentrate ownership by reducing even the number of larger corporations. The long-term outcome is completely lawless market manipulation, price gouging, and reduced choice, making a mockery of the term free markets.

Privatisation is not just the sale of state assets and service providers, but the repudiation of a long-held principle that the state should intervene in economic activity when there has been market failure (Keynesianism, but also traditional liberalism). As such, when the state uses taxpayer assets to provide goods and services back to taxpayers, it may do so more effectively than the private market, and corporations wish to remove that level of competition because it reduces their ability to artificially raise prices and reduce choice. It is also ‘money for free’. Buying up valuable public assets at a fraction of their cost or potential profitability in monopoly or near-monopoly conditions allows price-hgouding, which is artificially inflated prices people must pay with no choice because they need the goods or services and there is no competition in the market. This is particularly true in Australia for Telecommunications (including ISPs), and power generation and transmission. In both areas privatisation has led to massive cost increases without any greater choice or quality of service.

Tax cuts for corporations and the wealthy. Why would anyone oppose tax cuts! Removing the ability of the state to fund infrastructure or welfare means extra taxes on the bottom of the socio-economic pyramid every time it comes to necessary maintenance of that infrastructure (roads, ports, schools, hospitals, etc), and double-dipping user-pays charges that can be afforded only by the already rich, as well as coming on top of taxes already paid to fund the goods and services now subject to extra fees. This is exactly what the Abbott Government is attempting to do. For example, by removing Medicare: make people pay for health care twice by having already paid the taxes for it, but now imposing a charge that the wealthier Australians can afford, but that will hit poorer Australians already struggling to make ends meet quite hard. This is particularly the case for injured, disabled, or elderly Australians, who may need to see a GP regularly.

Monetary policy. This usually means policies designed to influence the interest rate paid on loans. By keeping that interest rate low, it is argued businesses will feel empowered to borrow more to invest in new economic activity, including employment. But it also encourages consumers to borrow more to fund lifestyle with debt, which may become unsustainable if interest rates rise and debt repayments exceed the capacity to pay. Coupled with deregulation in financial markets, it has also led to egregiously fraudulent lending practices. More highly visible in Australia are obscenely large bank profits. Interest rates have been used by banks to skim profits off the difference between the rate at which they can borrow, and the rate at which they will charge consumers. Massive profits for no value-added activity at all. As for business investment, Nigel Lake of the Pottinger consultancy wrote an assessment of extraordinary timidity by Australian businesses here (http://www.businessinsider.com.au/australia-is-in-crisis-2015-2) which all but alleges they are bludgers waiting for handouts and expecting captive markets rather than taking the risks of competing in international markets.

Anti-union measures are an article of faith with the Coalition parties. This has two deeply seated reasons. The first is that Australian trade unions are the industrial, economic, and principal support base of the Labor Party. Killing of unions is seen as killing off Labor. The second reason is that unions are the principal obstacle to Americanising minimum wages by abolishing any kind of benchmark at all, leading to full-time jobs that pay less than subsistence level incomes. This is plutocratic greed, pure and simple. In Queensland the LNP’s notional anti-bikie laws were actually 1960s revamped anti-union laws, and unions were the real target of rules that allow arbitrary arrests of people simply for associating with other people.

Conservative social policy is a bit of a misnomer in Australia. These policies, most notable in areas like marriage equality for gays, or stem cell research bans for religious reasons, are in fact reactionary hysteria against social and technological change that has already happened. Real conservatives are opposed to legislated rapid changes, not to acknowledging organic changes already evident in society. In themselves reactionary social policies serve nothing but contrived divisiveness. That is, people claiming to be conservatives are really class warriors asserting their moral superiority over less narrow-minded or deluded citizens.

Police and security subversions of liberty seem never to lack funds even when politicians decry the most dire economic circumstances. We always seem to have enough money to fail to prevent real crime, particularly the high-cost white collar variety, but pursue and gaol extraordinary numbers of people for piddling offences like jaywalking, not having paid fines, or smoking a joint. Such spending is usually a smokescreen for building public service empires, slipping public funds to private providers in the legal and correctional industries, and to make people afraid so they don’t focus on the real issues that should concern them.

neo-feudalism-005To all of these acknowledged features of the new feudalism, I would add another. The white-anting of democracy itself. It works like corporate plutocracy, removing competition and choice by insinuating that only one political economy is valid – that of the corporate thieves – and all other options must be decried under threat of slipping credit ratings. Credit ratings set by known corporate criminals in the USA (see the ABC about the USD $1.5 billion fine for Standard and Poor’s rôle in defrauding world markets: http://www.abc.net.au/worldtoday/content/2015/s4173830.htm). From that confected credit ratings threat flow other lies, like the refusal by cortporations to invest or do business with a nation that doesn’t cater to neo-feudal policies. But the reality is that if there’s any buck to be made, some enterprising individual or business will find a way to make it. And if not, that market failure could be filled by the state.

If no political party in Australia is courageous or independent enough to call the plutocrat bluff on investment, however, the Australian public is only ever offered the narrowest range of policy options. This is usually accompanied with lies about there being no other options. What this means is that we no longer actually choose different governments. We just get to vote for different sides of the same government wrapped in different colours and slogans.

Consequences

Perhaps inevitably, but definitely observably, there have been some flow-on effects of plutocratic neo-feudalism. These are most obvious in organised politics itself.

Democratic self-destruction

For democratically elected representatives to implement policies which rent their legislative power, exercised on behalf of their electors, to unelected and unaccountable corporate interests appears at first glance to be mind-numbingly stupid.

But it is really only an ignorant variety of dull-wittedness: most of them don’t understand that this is what they are doing because they don’t understand their parties’ economic policies, let alone the consequences or any alternatives.

Worse, politicians don’t seem to realise that by following this path of ignorant subservience, they become pimps, whoring out the entire population of Australia as cheap prostitutes serving, and servicing, principally American-based trans-national corporations.

I see this reflected in and reinforced by an anti-competitive practice in political party structures, where the unelected party bureaucrats have all but eliminated longer-term planning in favour of 12 to 18-month cycles, split across election timing as implementation, coasting, and re-election phases, with no provision for strategic planning. Longer-term planning seems not to take place even during the long periods of opposition in which considerable resources ought to be freed up to do the intellectual groundwork for developing policy options.

When you compare this political short-sightedness with the almost fetishistic, perverse corporate focus on quarterly profit and loss statements, the cause for political decline becomes apparent.

Corporations work to eliminate competition, reduce choice, and artificially raise prices while reducing costs.

Political parties not yet entirely owned and operated as corporate subsidiaries, like the American Republicans, have nevertheless emulated the same tactics:

  • Eliminate competition by displaying extraordinary bipartisan cooperation in driving new or minority parties out of business, and making things very hard for independents;
  • Reduce choice by not actually offering different policies so much as different speeds of implementation and slightly different labels;
  • Increase the cost of the entire system by giving themselves and senior bureaucrats such enormous salaries and perks, including endemic corruption, they can no longer empathise with less wealthy people, much less understand poverty, anger, and electoral backlash;
  • Reduce the incidence of public funds flowing to those most in need so a larger percentage is available as perks, bribes, subsidies and tax breaks to the already wealthy, including politicians and senior public servants, while calling this cost-cutting.

All this is just a gravy train ridden by people who seem not to comprehend that they are betraying their constituents and progressively selling Australia like chattel or property to corporate interests. Since most of the corporations in question are not even Australian, there is cause to call the strongest advocates of neo-feudalism traitors, working overtly to subvert Australian interests in the employ of foreign powers.

Social division

Perhaps worse than political conspiracy to subvert democracy is the unthinking willingness of many Australians to see themselves as tied to party political lies.

This isn’t unique to Australia, and the fullest expression of that trend is evident in America, where society seems bitterly divided into a multiplying number of selfish clans, albeit polarised around a dithering Democrat inferiority complex, and the corporate brand of Republican neo-feudalism. Most people caught in this clannish behaviour are unaware of what ideas they actually support. Their activity has become just oppositional, like supporting one team over another in some mindless sport. It has become so mindless that many people actually end up voting for ideas and policies that work directly to their own personal disadvantage.

Australians may be less bitterly divided, and may have fewer people unquestioningly aligned by party politics, but the continuing message from all parties about ‘bludgers’ vs ‘wealth creators’ has caused a distinctly mean-spirited coarseness in public debate, and noticeable anti-social tendencies in public conduct. I have personally and repeatedly seen the difference in treatment I get in shops or public service offices related directly to how I dress: respectful deference when I wear a suit and tie; barely disguised contempt when I wear a singlet and football shorts.

Australia’s culture wars

This difference in treatment gives weight to claims of a contrived class warfare in Australia, albeit that it is principally the Coalition aligned politicians and voters who create it, and then blame it on everyone but themselves.

This is also conspicuously evident in what we call the ‘culture wars’, in which Coalition-aligned people congregate around positions that call for cuts to funding for the ABC, SBS, the arts, and any public centre for ideas and people who don’t stroke them the right way. The cuts are justified with vague cries about bias and hatred of the Coalition. But no quantitative evidence is ever produced to substantiate such claims.

What is really counterproductive and destructive for Australia is that it has given rise to a culture in which there is to be no middle ground.

The notional left has become obsessed with totalitarian witchhunting under the guise of political correctness, to discredit ideas it cannot defeat intellectually, usually by vilifying the people who propose them.

The notional right has retreated into Fortress Murdoch, like a gated community, from which only very few sally forth to snipe disdainfully at everyone else, regardless of whether they deserve it for their ideas or political alignment.

The entire nation misses out on any new ideas thus destroyed or crippled by internecine feuding among the already few and élite public voices in Australian national debate.

The failure of journalism

Leaving aside the grim legacy of concentrated media ownership, the most appalling sabotage of journalism has been perpetrated by journalists themselves. They gather in incestuous small groups to eliminate independent thinking, and most of what they write about politics is written for audiences of other journalists, politicians and senior public servants. The idea of a broader audience seems to have been abandoned.

The Guardian’s Jason Wilson illustrated exactly that anodyne homogeneity in his comment on media commentators following the LNP rout in Queensland (http://www.theguardian.com/commentisfree/2015/feb/03/the-rightwing-reaction-to-queensland-shows-they-want-to-rule-not-govern?CMP=soc_567#comment-47073785), in which it is quite plain that public voices sought to colour voters as stupid and irresponsible without ever considering the more difficult terrain of reality.

neo-feudalism-006Since when does democracy require people to vote only for pro-corporate policy? Is that not in fact an explicit statement of support for autocracy coming from journalists? Does it not say: ‘We know better, and you peasants should do as we say’?

This dull subservience of journalists to corporate propaganda is again an elimination of competition and choice, this time in the realm of publicly expressed ideas. Most shamefully of all, though, it is a kind of surrender to Orwellian Newspeak that is imposed by journalists themselves more often than by censorious editors or meddling owners.

The consequences appear to be a dumbing down of the entire national debate. Fewer ideas with fewer justifications, pitted against fewer counterarguments with equally fewer justifications, repeated endlessly. Is no one in the public sphere willing to admit that no one in the cities, suburbs, or regions of Australia actually cares for debates that don’t relate to the realities they face in their daily lives?

No conclusions

There is no magic cure for all the contradictions and tensions to which I have pointed.

There is no manifesto at the end of this, nor any suggestion for concrete policy alternatives. Creating these as more than meaningless rhetoric requires the hard work of hundreds of people, with access to detailed information about the Australian political economy as it really is, not just as it is presented to us by politicians and journalists.

And it requires that work to be carried out with a will to formulate a new political vision with a strategy to realise it in practice. A vision on the scale of ambition we last saw in the 1980s as ‘Australia Reconstructed’. It does not have to be a Labor vision. It does not have to be a party-political vision at all. But I assert that it must be a vision for an Australia that exists as a community of people, not just as a pool of cheap labour and mute consumers for corporations.

Politicians, journalists, and other public commentators could do us all a favour by at least trying to talk about alternatives to serfdom and ignominy.

 

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Sources not cited in the text include:

Harvey, D. (2005). A Brief History of Neoliberalism. Oxford: Oxford University Press, pp. 1-38.

Skidelski, R. (2006). ‘Hayek versus Keynes: the road to reconciliation’, in Feser E., ed. (2006), The Cambridge Companion to Hayek. Cambridge: Cambridge University Press, pp. 82-110.

Steger, M. B. & Roy, R. K. (2010). Neoliberalism: A Very Short Introduction. Oxford: Oxford University Press, pp. 13-20.

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