Monday, 27 October 2014

Democracy 2.0

Many people are losing their faith in democracy these days with continuing corruption scandals plaguing Australian politics and the balance of power in the Senate being bought by Australian billionaire Clive Palmer.

In the late 19th and early 20th century when modern democracy was still getting going many European nations were still ruled by royalty and those that were democracies were only partially so with only certain ethnic groups, the landed gentry or males entitled to vote.

In this atmosphere it was not certain that democracy would become the dominant form of government throughout the world. German sociologist Robert Michels believed that all representative democracies would end up being an oligarchy. Oligarchy is defined as: “a small group of people having control of a country or organization.” Michels believed democracy was of a waste of time as the powerful would simply manipulate the democratic process and remain in power. Michels solution to this was to ditch democracy in favour of fascism - and we all know how that turned out.

After humanity’s failed experiment in fascist dictatorship Europe was being reconstructed and much of it was under control of another totalitarian regime the USSR. Spain after a bloody civil war remained under the control of fascist dictator Francisco Franco. It wasn’t till the 1980s that it became apparent that the USSR could not continue, by that time the remainder of Europe had transitioned to democracy, the Berlin wall came down and Germany was reunified.

For all its success modern parliamentary democracy still has that problem identified by Robert Michels. The election of Clive Palmer and the Palmer United Party in the Senate proves that a democracy can easily be turned into an oligarchy. The rich and powerful in almost all democracies have special access to politicians. Would it be easy or even possible for you to speak to the Prime Minister? Rupert Murdoch has dinner with the Prime Minister every time he visits the US. I bet Tony picks up the phone every time Rupert calls.

The oligarchic nature of our democracies is particularly apparent in the United States. Many people from the big Wall Street investment banks have been appointed to prominent positions such as the board of the US Reserve Bank. In 2008 when a ridiculous sub-prime mortgage bubble exploded taking down the majority of the world’s economy it was the criminal actions of Wall Street bankers that were to blame.

Not one of these people has been brought to justice - in fact many of them received multi-million dollar golden parachutes and bonuses and now live in the lap of luxury never having to work again. Meanwhile, the small-time mortgage brokers, who were bullied into obtaining fraudulent loans at threat of losing their job, are now in jail for what their superiors ordered them to do.

Why haven’t these people been brought to justice? Because, they are the real power behind the American government. With the American two-party system it is incredibly difficult for somebody to get elected without having huge amounts of monetary support from the military industrial complex and Wall Street. These large corporations spend billions of dollars supporting American politicians - and they want value for money. If those politicians don’t do what their benefactors wish they can forget about being elected next time.

This allows corporations to have an enormous amount of influence over, if not complete control, over the direction of American policy. In fact the whole sub-prime mortgage crisis was caused by insufficient regulation. This lack of regulation was introduced because of pressure from former executives now appointed bureaucrats, lobby groups and big business. When it all went bad, as many economists predicted it would, it wasn’t a problem for big business as the government just bailed them out and they continued getting their million-dollar bonuses.

Australian governments are similar to this but we do have some laws to keep money from influencing politics - with not much success look at Clive Palmer. The government listens way too much to big business. Just have a look at what is currently happening to the mining sector. There has been huge investment and huge government support for the mining boom over the past 20 years. Now many of these new iron ore and coal mines are coming online and starting to push the value of iron ore and coal down which in turn has caused the collapse of several small mining companies.

The mining boom has also inflated the price of the Australian dollar which has caused many manufacturing businesses to close or to move overseas. Car manufacturers also manipulated the Australian government into giving them greater and greater subsidies with the promise that they would continue to build cars in Australia. They took the money and then reneged on the promise to continue Australian operations.

So now Australia is faced with a collapsing mining sector and a manufacturing sector that is a shadow of its former self. The reason why we have got in this mess is because Australian Federal governments of both major parties have been more concerned about big business and the economy than the Australian people who elected them.

How can we fix this? For starters we need to take money out of politics. Ultimately, I think Robert Michels was probably accurate in his depiction of representative democracy. The solution is not totalitarianism and there are a number of things we can do to make the current system more “representative.”

Maybe we need to take the representative out of our democracies and create direct democracy systems that allow the general public to participate directly in politics. Parliamentary representative democracy is hundreds of years old - it’s time to update it.

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