JERRY ROBERTS. The Corruption of Representative Democracy

Nov 7, 2017

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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