One of the things that I have noticed with the free market commentators is how often they give priority to the free market at the expense of democracy. These comments have been fairly consistent on public opinion so I am going to use this post to try and construct the public philosophy behind the comments. What I will explore is the tensions and contradictions between capitalism and democracy.

One response to the persistant left wing bias of a public broadcaster (the ABC in Australia) is to privatise it. This is a way of dealing with the dark forces ----evil that lurks in the heart of the national broadcaster says Frank Devine. It means that the ABC becomes a media company providing information services and entertainment for urban lefties (the ones with totalitarian tendencies) who claim a privileged place in the order of society. Alternatively, says Devine, the corporation could be cut free of the taxpayer and mutualised through a million Australians raising $500 a year each to keep it going.

The argument for cutting the public broadcaster free of the taxpayer is that paying for it out of general revenue is middle class welfare for the urban lefties--and that ultimately smacks of socialism. It is government telling us what to think. This undermines the liberal order, as it leads to enslaved minds, no sturdy individuals and stagnation and servitude. It is pretty much Hayek's old road to serfdom thesis. Underneath the serfdom thesis sits the view that the citadel of Anglo-America is under seige from the dark forces of German historicism.

Hence we have a liberal order that is onguard against socialism, is based on economic co-ordination through markets, and where politics is kept to a minimum. Presumably politics is organized so as to preserve the values of the liberal social order. It is an active government to ensure that the right institutions are created to release all the spontaneous energies and talents of entrepreneurial individuals. The right institution is one based on market exchange, as it facilitates the spontaneous energies of individual initiative in creating wealth, prosperity and innovation.

There is silence about the public broadcaster being a watchdog for democracy or the media being the fourth estate. The media are seen as commercial enterprises providing media services for consumers who have the freedom to choose what they want to receive or hear. Democracy is barely mentioned, or it is mentioned in passing that they do not care much for democracy. It is the competitive market they get excited about, and there is sense that political institutions are subordinated to the market. The polity is a sphere of coercion whilst the market is the sphere of freedom. Thus democracy and capitalsim are placed in opposition.

If there is a marked silence about democracy then the silence about citizenship is deafening. The topic is avoided. We are primarily consumers in the marketplace pursuing our own interests. Yet, as citizens we have civil rights that provide protection from the state (basic legal rights to property, personal liberty and the principle of equality before the law); political rights (the right to vote, to speak and to hold political office) that facilitate participation in a liberal democratic state; and social/welfare rights (entitlement to a universal redistribution of income in the form of unemployment benefit, superannuation, universal education and medical care). These social rights in social democracy established a safety net of resources from which those citizens who had fallen on hard times could collectively make claims to the state for income support, and so continue to be able to fully exercise their civil and political rights.

This political rights indicate that we have a liberal democracy in the form of parliamentary governance as well as a market order. If we presume that removing the restrictions/regulations on media organizations means that they will become ever more concentrated and powerful (Rupert Murdoch is a good example of this), then the democracy that is favoured is one that is compatible with the concentration of power in giant corporations. Democracy is trimmed to suit the concentration of power in the market. If parliamentary governance can be more or less democratic, then what is favored is a form of parliamentary governance that melds with plutocracy and the concentration of corporate power.

This limited democracy is one in which there are passive citizens who vote for different governing elites who offer themselves and their political packages up for election at periodic intervals. Between elections public opinion has little place or role to play. That means public opinion has little role to play in going to war with Iraq, which was inbetween elections. If you have problem with that democratic deficit as a citizen, and you don't like the Howard Government taking Australia to war, then you can vote them out in the next election.

There is nothing here about democracy reflecting citizens’ policy preferences and judgements based on citizens engaging an issue, considering it from all sides, understanding the choices that leads to, and accepting the full consequences of the choices they make. The democratic deficit is built in to the very design of liberal democracy and, as the justifications for the Iraqi war showed, we have attempts to persuade and manipulate domestic public opinion through publicity and spin that fabricate non-existent threats.

The dangers to a liberal order come through democracy, as it becomes the means for an assault on a liberal order and so endangers the market order. Democracy is seen as the doctrine of popular sovereignty (the mob) and there is a strong tendency towards demagoguery (populism). So democracy must be organized to ensure that it supports liberal principles. Liberal principles are the only true ones.

Thats the construction of the public philosophy. It is rough but it will do.

Now I want to turn to the way in which democracy is beign kept in place--the techniques deployed, if you like. You can this at work in this event, which involves Peter Costello, the federal Treasurer. The event is about Costello's proposed charities legislation that clamps down on critique.

Now Costello waxed lyrical about charities in his civil society speech a few weeks ago. (My comments on this speech here. The comments by John Quiggin can be found here,whilst those by Steve Edwards are here.)

Costello's positive remarks about civil society and voluntary organizations nurturing social capital need to be read in the context of the radical transformation of the Australian welfare state. This transformation the role of government from big to small has resulted in reduced social services, restricted and altered eligibility criteria for the remaining social programs, and the increased policing of unemployment benefits under the guise of mutual benefit.

The neo-liberal dismantling and re-ordering of the Australian welfare state means that the nation's most marginal citizens are rapidly losing their ability to participate in Canadian society. It means that the poor are not merely poorer under a neo-liberal regime (less services), they are also less deserving of basic social rights. The moral order of a market society does away with social justice and replaces it with charity. Since market outcomes in terms of liberty and prosperity are deemed just, the poor become second class citizens.

Costello takes a much dimmer view of charities in civil society this time round. He is addressing is the overlap between between civil society and democratic politics in the key disqualifying section from the draft charities Act. (Margo Kingston has the core bits of the Act here scroll down). What the draft Act establishes is that a charity is a not-for-profit body with a charitable purpose for the public benefit, and which 'does not have a disqualifying purpose'. If a charity does have a disqualifying purpose it is not a charity, and will be denied charitable tax benefits.

What is meant by disqualifying purposes? The draft Act is clear:

8. Disqualifying purposes

if it is, either on its own or when taken together with one or both of the other of these purposes, more than ancillary or incidental to the other purposes of the entity concerned.

Little ambiguity there. The intent is clear. It seeks to clamp down on those charities that also acting as advocates or criticise public policy. They cannot speak out about the failures to provide sevices for the increasing numbers of homeless people in our cities.

If we put Costello's civil soceity speech to Anglicare and his Charities legislation together, we get the following. Though charities in civil society do good by picking up the people falling through the holes in welfare society but they cannot speak out about what is going on. Margo Kingston is on the ball--see here and here.

So what does this legal instrument say about democracy? It puts a lid on the formation of public opinion through public debate. And this from a advocate of liberty and a free society. What we have is democracy as a method of choosing governments between competing poltical elites; but it is a democracy emptied of substantive content and divorced from the doctrine of popular sovereignty.

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Posted by: Observa | August 6, 2003 1:49 AM