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How corporations control our democracy

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From the editorIn this issue Dr Lindy Edwards, a former economic adviser in the Department of Prime M
 

SundayFocus

January 19 · Issue #26 · View online
Your weekly wrap of national affairs, society, culture and politics, published by UnionsACT.

From the editor
In this issue Dr Lindy Edwards, a former economic adviser in the Department of Prime Minister and Cabinet and one-time press gallery journalist, shares with us an extract from her great new book, Corporate Power in Australia: Do The 1% Rule? We also look at the potential shift on climate change coming from within News Corp and run you through some of the ways you can make your voice heard at rallies around the country this week.
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Enjoy the issue!
Guy Mosel, editor

How corporations control our democracy
by Lindy Edwards
Photo by Aditya Joshi | Unsplash
Photo by Aditya Joshi | Unsplash
In her new book, Lindy Edwards takes a deep dive into seven of Australia’s most iconic political battles to reveal how corporations exert influence to ensure decisions fall in their favour, and where the opportunities might be to resist.

In 2012 the federal treasurer Wayne Swan took the startling step of publicly declaring “the rising power of vested interests is undermining our equality and threatening our democracy”. He argued “a handful of vested interests that have pocketed a disproportionate share of the nation’s economic success now feel they have a right to shape Australia’s future to satisfy their own self-interest”.
At the time some were quick to dismiss it as the rhetorical posturing of a Labor government that had mishandled major reforms. But in recent years there has been a growing chorus of senior public servants echoing the concern.
Allan Fels, the Howard-era head of the Australian Competition and Consumer Commission (ACCC), has argued the policy process is being captured by vested interests like never before. Former head of the Treasury, Martin Parkinson, slammed business lobbyists for arguing “take money from the citizenry at large and give it to me”. Ross Garnaut, a long-time economic adviser to governments, argued the problem has become “diabolical”.
There are also good reasons to believe this may be a growing problem. Economic power has become much more concentrated over the last 30 years. The ACCC reports that the ASX top 100 companies’ share of GDP has increased from 27% in 1993 to 47% in 2015.
Even amongst the top 100 companies, wealth is concentrated at the top. Wesfarmers income was almost $67 billion in 2018, while few companies outside the top 20 made it over the $10 billion threshold.
At the same time economic power has become more concentrated, the corporations have also professionalised their approach to political lobbying. Business lobbying was described as fragmented, haphazard and unprofessional in the 1980s, but it has become a recognised career and there are now an estimated 5,000 professional lobbyists in Canberra.
Upward redistribution
I set out to test the evidence and see whether it was as bad as it looks, by examining clashes between government and nine of the 10 largest companies on the Australian stock exchange over a 10-year period. I looked at clashes with the miners, the banks, Coles and Woolworths, Telstra and News Corp, as well as unfair contract laws and big business’ treatment of small business.
These policy battles appear quite disparate at first. Yet, at their heart, they each come down to the same core phenomenon. In most cases the sector is dominated by between one and four big companies that dominate supply chains made up of tens of thousands of people.
A lot of the corporations’ business strategies are focused on redistributing wealth along their supply chains and into their own hands. In each of these case studies the corporations were battling with government over laws that shape where profits sit in the supply chain.
The struggle over these types of laws is shaping up as one of the most critical battles of the modern age. The wealth of the 1% has grown disproportionately over the last 30 years due to the powerful scraping of wealth out of chains in this way.
The question is whether our democracy is strong enough to insist on a distribution of wealth along the chains that serves a greater public interest.
Discussions of corporate power can blur into conspiracy theories where faceless figures behind the scenes are calling the shots. In following how the issue unfolded, it becomes clear that it is not possible for anyone to exercise such control. The case studies reveal the complex swirl of countervailing forces, random events, and a hundred hands on every decision.
Yet some players bring so many resources and such influence that their odds of triumphing are higher no matter which turn the dance takes.
This is an edited extract from Dr Lindy Edwards’ Corporate Power in Australia: Do The 1% Rule? available now from Monash University Press. Dr Edwards is a political scientist at the University of New South Wales. She is also the author of How to Argue with an Economist: Re-opening Political Debate in Australia from Cambridge Uni Press.
The week in review
Good news… Are we witnessing a shift in News Corp’s editorial stance on climate? For years the Murdoch empire has remained stoutly resolute in its denialism, aligning itself with the fossil fuel-boosters withing the Australian Liberal and National parties and the GOP in the US. But on Wednesday, in the wake of a shift in rhetoric from the PM on climate, matched by editorial repositioning from The Australian, Rupert’s youngest son James, a News Corp board member, slammed the company for its “ongoing denial … given obvious evidence to the contrary”.
Bad news… How did the Coalition win the unwinnable election? A combination of Labor incompetence, a partisan news media, corporate interference and, it turns out, massive pork-barrelling! The Audit Office has found that then-sports minister, Bridget McKenzie awarded 684 grants totalling $100 million to key and marginal electorates in the lead-up to the May 2019 election, concluding there was “evidence of distribution bias”. (Although, to be clear, Labor aren’t exactly averse to funnelling tax dollars into swing seats either.) Taking a page from the increasingly well-thumbed Trump playbook, McKenzie has refused to apologise for something that, in another era, may well have been a career-killer.
It’s almost like… and I’m just spitballing here… Australia needs a federal ICAC? 🤔🤷‍♂️
Good news… A global movement to ban outdoor advertising is growing. In France (of course), 29 “Resistance to Advertising Aggression” or “RAP” groups have emerged. “Adverts colonise our imagination,” national RAP mobilisation coordinator Khaled Gaiji says. Similar movements exist in the UK, Iran and India, while Sao Paulo banned outdoor ads way back in 2006. Canberra is the only Australian capital with a ban on outdoor advertising.
Bad news… Tim Flannery has expressed cynicism that the bushfire crisis will change our broken political system, “whereby politicians enter as lobbyists for the fossil-fuel industry, emerge as government ministers, and then exit politics to become directors of fossil-fuel companies”. (See Wayne Swan, Helen Coonan, Martin Ferguson, Ian Macfarlane, et al.) Flannery has called on the states and industry to heed public anger and accept the economic costs of continuing to burn fossil fuels.
Good news… Solar technology developed in Australia 30 years ago could soon be cutting five per cent from global climate emissions. Passivated emitter and rear cell (PERC) technology was invented about 30 years ago but has only taken off commercially since 2013. PERC will be mitigating about one per cent of global greenhouse gas emissions by the end of this year, and about five per cent by the mid-2020s. Professor Andrew Blakers from the ANU, one of PERC’s inventors, says that we could provide limitless solar energy for the entire world by covering less than one per cent of the planet’s land area with PERC panels.
Coming up
Feel like it’s time to hit the streets? There are plenty of options coming up over the next week:
Longreads
The Silicon Valley economy is here. And it’s a nightmare.
The centre blows itself up: Care and spite in the ‘Brexit election’
For your bookshelf
Treading Lightly, by Karl Erik Sveiby & Tex Skuthorpe
Political Troglodytes and Economic Lunatics: The Hard Right in Australia, by Dominic Kelly
Shop
"When injustice is law resistance is duty" t-shirt
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