JERRY ROBERTS. The Corruption of Representative Democracy

John Menadue’s lament in his Thursday post for the loss of trust in our public institutions was so comprehensive that it left me feeling devastated.  His re- posting was inspired by Senator Jacquie Lambie’s criticism of lobbyists and it is to the Senate that we must look for assistance.

Around the world there is a wave of discontent with representative democracy.  In a nutshell, the political system is representing vested interests.  It is not representing the people and their countries.  Various expressions are used to describe this phenomenon such as rent-seeking and regulatory capture and stronger words such as corruption and treason.

The critical lesson to remember is this:  Vested interests have time and money on their side.  When you are filthy rich you can afford to be patient. You take your opportunities as they occur.  Who would have thought that the American Republican Party would be reduced to such nihilism that all it can offer is tax cuts for billionaires?  Yet we have watched it happen in broad daylight. Who would have thought that the mining industry in the space of a few days could have exposed the Australian Labor Party as a cheap bordello?  Yet we saw it happen in 2010.

If you want to see how vested interests operate on a global scale study the life and times of Harold Luhnow, the second major figure in the neoliberal revolution. Friedrich Hayek had the brains and Luhnow had the money.  Through his trusteeship of the William Volker Charitable Fund in Kansas City, Missouri, Luhnow financed Hayek in Chicago and at Mont Pelerin.

Yet he never received from Hayek what he most wanted.  The object of Luhnow’s desire was an American version of Hayek’s book, “The Road to Serfdom,” dumbed-down for American rednecks, a simple, easy-to-read hymn of praise for laissez-faire, dog-eat-dog, poop and bust, yankee doodle capitalism.

This was not Hayek’s cup of tea but Luhnow continued to fund him because he understood that Hayek’s intellect and political savvy were crucial to the success of the neoliberal project.  Nor did Luhnow get his wish from Aaron Director, hired on the recommendation of Henry Simons to lead The Free Market Study at the University of Chicago.  Yet he continued to pour in the Volker Trust money.  Eventually his patient investment paid off and he got what he wanted with knobs on from Director’s brother-in-law, Milton Friedman, in the 1962 publication of “Capitalism and Freedom.”

There is no such thing as a social or political responsibility of corporations, wrote Friedman. “The wider are the range of activities covered by the market, the fewer are the issues on which explicitly political discussions are required.”  This is precisely the problem Malcolm Turnbull is now trying to solve as he attempts to find some Australian gas for Australians.

Within existing Australian political structures our best chance to stop the rot appears to be the Senate and a strengthened committee system recommended by Ian Marsh. In this respect we were unfortunate to lose our best parliamentary talent in the person of Scott Ludlum thanks to the trivial citizenship nonsense.  Watching Scott in the Parliament reminded me of a boy who sat in the desk behind me in our high school class. He spent his time drawing circuit diagrams in green ink.  Most of the teachers had enough brains to leave him alone.  Last I heard of Garth he was in America working for the National Aeronautics and Space Administration. He was in a class above the rest of the class.  So was Scott in the Parliament.  So much so he was probably glad to get out of the place.

We don’t need our Senators to be brilliant but we do need them to work hard.  They could second professional assistance for their committees on an ad hoc basis.

The Senate may come to resemble a continuous Royal Commission subjecting policy and programmes to clinical scrutiny in the public spotlight.  This might encourage honourable members in the House of Representatives to ease up on their personal slanging matches and take an interest in what is happening in Australia and around the world.

Jerry Roberts is a former parliamentary reporter who lives in the region of north-west Western Australia known as the East Pilbara and is interested in politics.

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5 Responses to JERRY ROBERTS. The Corruption of Representative Democracy

  1. Rosemary O'Grady says:

    There is such a thing as social/political responsibilities of corporations – globally the duty to be honest is enshrined in all relevant legal code as Duties of Directors. But who shall regulate the codes? that’s the issue throughout known history. I resist the temptation to pomposity / Latin epigrams…etc. (Ferdinand Mount can help here). Much is written in these pages about corruption & vested interests. Regulators (excuse the expression) resist having to call to account the Big End of Town – notoriously examining Soft Targets and evading the big game.Regulators, apparently, are human too and they want post-career seats on the Big Boards; or so the mantra goes. Economists are not only gloomy, they are also sometimes wrong. Kahnemann & Tversky might, yet, help.

  2. You are not wrong. Three is a Gilded Age feel about our times.

  3. Where else do we start, Paul? The House of Reps and the media keep falling into the swamp of triviality, as we see yet again with the citizenship nonsense. On the day of John’s post we received news of Glenn Stevens going to Macquarie. Five year bans on politicians and civil servants from making this type of move have been suggested and that sounds like a good idea but I wonder if it would stand up to legal challenge. Certainly worth trying.

    Among your suggestions in recent comments are the formation of new,anti-corruption political parties and what I understood to be a proposal for a review committee of expert people drawn from outside the political system. That struck me as your best idea in this area. I wasn’t so keen on the ex-Prime Ministers. The less we see of them the better.

    Labor will win a substantial victory at the next federal election, not through any inherent merit but because the Liberals are divided. I will be surprised if the Labor majority extends to the Senate. Australians have developed a habit of electing bolshy Senators and I don’t think it is a coincidence. I thought the proposals from Ian Marsh made sense.

    It is a depressing scene. We are up against it. Australians don’t have a great record when it comes to political activism. Jack Curtin was tearing his hair out when the Japanese were knocking on the door and Australians were heading for another gala day at the races.

    • Paul Frijters says:

      the more the Senate is openly pushing against corruption, the better of course.

      There is an ‘up against it’ element and the corrupt are still winning big time, but I am not without hope. The winds are favourable and getting stronger. But once they get stronger, the corrupt will look for distractions and alternative ideologies using the full power of their machinery. It feels like 1910 or 1926. I fear the elites will not let go of their victims without a very dangerous fight. Let’s hope I’m wrong.

  4. paul frijters says:

    May I shout hurrah for the title of your post, Jerry? 🙂

    Interesting that you have high hopes for the senate. I thought they didn’t have enough powers to be more than a nuisance to the rorting, and of course full of the wrong people in the main. How would – let us be generous – 20 honest senators who work hard take down the thousands of others professionally engaged by the corrupt?

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