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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

undermining democracy « Previous | |Next »
June 14, 2010

In The Age Clive Hamilton makes an excellent point about the mining industry's outraged backlash over the Rudd Government's super profits resource tax in relation to democracy.

This adds to a point that Peter Martin had made earlier in the week:

If our government can't pull this off, can't exercise its sovereign right to introduce economic reform in the same way as have other governments when they reduced tariffs, taxed offshore petroleum and taxed goods and services, it will have diminished what is seen as possible.

Hamilton's point is about the exercise of power by multinational capital in a liberal democracy. He says:
A small group of obscenely rich people are acting in concert to bring down an elected government that wants to tax super profits. They want to install a new government sympathetic to their interests.

What we are seeing in its starkest form is a conflict between the raw power of capital and the public interest; a conflict that is disguised by the mining industry and the mega rich owners of capital saying that they are the victim:


The profits that mining companies make from extracting Australia's natural resources have soared, and the return going to the public hasn't kept pace. Even the mining lobby accepts this as well as the resources super profits tax being a better tax than the state mining royalties it will in effect replace.

The state mining royalties are calculated on the volume of dirt rather than dollars, and it has meant that the overall profit share from mining has turned dramatically in favour of resources companies. Now we are in the midst of a boom and the national government is exercising its ownership rights over the land. As the owner of the mineral resources the national government wants to increase the charge for the right to exploit those resources.

The response by the mining companies has been a fear campaign (all those jobs lost) marked by hysteria (communism in Canberra) and lies (eg., the super profits tax is retrospective). It has been supported by partisan hacks in the media ---Business Spectator comes immediately to mind, and "Robert Gottleibsen in particular.

Hamilton adds that:

The mining industry has been basking in its own success since its brilliantly successful campaign to defeat the introduction of an emissions trading system. It was an exercise in political thuggery rarely seen in this country. No remorse was felt over the direct thwarting of the popular will embodied in a government that won an election in which both main parties promised an emissions trading scheme.

He adds that the mutterings of Andrew Forrest and Clive Palmer about the spread of communism in Australia are laughable for their paranoid absurdity. What we are in fact seeing is not an attack by the proletariat on the bourgeoisie, but the brutal assertion of power by the richest people in the country.

| Posted by Gary Sauer-Thompson at 7:57 PM | | Comments (12)


Andrew Forrest, Clive Palmer and Gina Rinehart would not be getting a fraction of the traction they're getting if... many, many years ago... the corporations hadn't conned the workers into believing they we major beneficiaries of business.

Somewhere along the way (I'd guess the mid-80s) the public swallowed the line that big business was their friend. We are all in this together etc.

So now think we have so much tied up in the well-being of the corporations that we dare not inconvenience them. That is, we simply cannot bite the hand that feed us.

Never mind that the other hand is firmly gripping our balls!

Goodness me! Just look at the tripe BP is pushing to dodge it's responsibilities! Apparently any penalty imposed against BP is a slap in the face to the struggling "mum and dad" shareholders back in the UK. booooo! etc.

More telling than Hamilton, because of the source, and much wider and deeper in despair over the state of democracy is John Hewson's jeremiad ( which is worth reading in full, but the following is a taste:

Powerful, multinational, well funded, mining giants, fearful that this may be the thin end of the wedge from the point of view of the taxation of their global mining activities, hell-bent on intimidating a government out of "governing", where they and their narrow interests are concerned.

Why shouldn't they give it a go? There is clear, recent evidence, that both sides of Australian politics can be "bullied" or "bought", as demonstrated by the success of the "big polluters" in the climate change "debate", over the Howard, Rudd and Abbott teams.

As Ian Verrender in the Sydney Morning Herald says:

raising the rent for a bunch of tenants profiteering on the back of resources they do not own does not increase sovereign risk. It is simply an owner exercising ownership rights.

Resource companies will leave Australia only when there are no more minerals and energy to extract.

thanks for the link. John Hewson makes another good point in his Politics is a game, and rotten to the core at the ABC's Unleashed:

So much of what we call "governing" today is more about winning and keeping government, than it is about actually governing, more about politics and the politics of governing, than "the idea of government"...In this world, principles are cheap, policy promises are a means to an end, and too, even ephemeral, and policy detail and genuine debate can be a severe disadvantage. There are lies, damn lies, and statistics.

Hewson finishes by saying that our "governance" is rotting through a distinct lack of effective leadership, and delivery, in a political system that is in desperate need of reform, on so many fronts.

the mining companies cannot say they want to keep all the super profits themselves and to hell with Australia. So they use the employment jobs argument. Gunns used it in Tasmania with the pulp miill.

Good article from Hewson. In the way of the media cycle, Rudd is carrying the can for most of it, but his weak leadership has just highlighted existing problems. Some of those are inherent (democracy is the bargain between capital and labour), some have accumulated (concentrated media ownership) and some are recent (24 hour news cycle).

We're in a bad way.

"...rotting through a distinct lack of effective leadership..."

Maybe we could get some actual leadership if those we elect didn't have to worry about fickle, self-absorbed, misinformed voters screaming for their blood. We truly get the leaders we deserve.

In Question Time today the PM said in reference to Clive Palmer saying that he was cancelling mining exploration projects in South Australia that they cannot find those projects. The Rudd Government reckons these projects may never have existed.

The billionaires have mounted the barricades.
"There has been a lot of talk about resource taxes creating a sovereign risk. The real risk may well be to sovereign States and their ability to stand up for their long-term national interests."
Mining Windfalls A Taxing Problem

We can't afford to lose this one, in more ways than one.

yep, if mining corporations have too much power they would control the government and deprive ordinary citizens of a meaningful voice in political affairs. This fundamental idea is central to 20th century welfare state liberalism--- even if we did not explicitly debate how best to assert democratic control over economic power.

The mining corporations are endeavouring to repudiate democratic control over their economic institutions. The consequence are that we citizens feel disempowered-- victims of global economic forces beyond our control. Liberalism cannot gave up on the project of holding economic power to democratic account.

Rudd and Co are not talking this big picture way though.

"...The consequence are that we citizens feel disempowered-- victims of global economic forces beyond our control..."

That's not ALWAYS the case, Gary.

I live in an industrial region and truckloads of my neighbours reckon they're about to become victims of Rudd's proposed mining tax. As far as they are concerned, they are more than happy for the mining magnates to dictate policy. As long as they get to hold on to their jobs for a few more years.

yep you are right. We have a rightwing populism movement in formation today.