To have, and have no political clout -- Globalism unmasked

Shelley Gare

IT was a dark and stormy night, what with so many giddy evening frocks and a birthday celebration bringing together guests from both sides of the political spectrum. Two hours in, I ran into a politician who is busily making her determined way up the Canberra ladder. My party manners went west. What, I asked, did she think of the "disastrous" (my word) Billiton-BHP merger? She fell back daintily -- it was 10.30pm on a Saturday -- then said prettily, and I could have sworn she dabbed a lace handkerchief to her lips: "Oh, but we haven't had any reaction from our electorate."

20      THE WEEKEND AUSTRALIAN -- June 2-3, 2001
"To have, and have no political clout"
Shelley Gare

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  Whoosh! Democracy skewered to death with a cocktail party shoe. The electorate may be worn threadbare by its working hours, the GST [Goods and Services Tax] and a precarious future [by] courtesy of the collapses of HIH, One.Tel and the like, but apparently it must still also remember to tell Canberra how to look after the national interest.

  "You're a politician," I said to her. "Sometimes you're supposed to be able to decide what's good for the country without us telling you." I could have been talking to a feather duster.

  Michael Ward is the managing director of the Australian-based company, Ecos Corporation, which advises business on sustainable growth. Ecos doesn't work with governments, Ward told me a few weeks ago. The company decided that if it was going to have any effect on the environment, it would have to bypass the state and go straight to the ears that matter -- the ones on the international corporate head. Now Ecos advises multinational conglomerates Ford and Dupont.

  For it's the private sector that has power. Governments and oppositions can run around like so many high-kicking cancan girls, but it's an empty show with the knickers mostly on sale to the highest bidder.

  Maybe it was always thus, but there have been three developments that make this lethal to democracy. One is the unchecked growth of globalisation, wherein national barriers matter far less than the economic clout of the multinationals. Two is the widening gap between the rich and the poor, a process accelerated by globalisation and the free market economy. Three is the way governments around the world have reacted to the first two.

  Writing in The Observer newspaper in Britain, Noreena Hertz, author of The Silent Takeover: Global Capitalism and the Death of Democracy (Heinemann), details what happened in Germany in 1999 when the finance minister tried to raise taxes on German firms. Revenue from corporate taxes had fallen 50 per cent in the past 20 years despite a rise in corporate profits of 90 per cent, she says.

  Nevertheless, the finance minister was thwarted. Leading companies threatened to move their investment or factories elsewhere. The politicians caved [in]. An adviser commented that the industrial giants were too strong for the elected government. "This is the world of the Silent Takeover," Hertz writes.

  In its Two Australias report released mid May, the St Vincent de Paul Society explained how globalisation during the past decade has been a key factor in creating enormous riches -- more than $830 billion in Australia's net wealth -- but the dollars have remained in the hands of a small number of wealthy households. "It has not benefited middle-income Australia to any great extent ... it has certainly not trickled down to the poor ... globalisation as a free market force does not concern itself with wealth distribution."

  Here's the maths. If spending power equals clout, and you and I are losing our spending power and the upper end is gaining it, where does that leave the clout?

  Financier and philanthropist George Soros says, also in The Observer, that globalisation is neither new nor necessarily bad but it must be fair. He means human rights, environmental standards, democracy and labour standards must be protected.

  In the preface to his last book, Economics: A New Introduction (UNSW Press), Adelaide social theoretician Hugh Stretton wrote: "Bad economic theory can cause as much suffering and death as bad medicine and bad engineering can." His next book, with a working title of Australia Fair, argues for new economic strategies that will make for a fairer country. He reminds us that, "when citizens are asked if they would willingly pay more tax to finance better health and education, and fuller employment, 60 per cent or more say yes, they would."

  "What's needed now," says Stretton, "is government that won't go for appeasement of the big corporations."

  Meanwhile, Picador has just landed a hot title for next April. It's Moral Hazard by poet and author Kate Jennings, a friend of mine. Jennings went to work on Wall Street as a speechwriter in the '90s and what she saw there of investment banking and the risks it takes curled her toes. "We're in a culture of deregulation," one of her characters says. "Deep, deep in a culture of deregulation. Supervisory standards are as weak as warm spit."

  The novel will be published simultaneously in the US, Britain and here, where six publishers all bid furiously. If market-driven publishers think a novel about ethics and the global economy will find an eager audience, can our political parties be far behind? That depends on how deaf they are.

  How cowed.

sgare@ozemail.com.au
-- © The Weekend Australian, Shelley Gare, June 2-3, 2001, "Inquirer" p. 20

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