Saturday, June 05, 2010

Threats to Western Democracy

In a recent edition of Quadrant, Professor James Allen outlined some of his observations on how democracy is declining in many parts of the world. However, he didn't address the issue of the major causative factors which are helping to weaken democracy. In the following letter that I sent to the editor of Quadrant, I suggest what some of these factors are.

James Allen's valuable article on "Intimations of the Decline of Democracy" (Quadrant May 2010) correctly points out how democracy has been weakened in various ways. He appears not to have asked himself why or how these changes have come about? Had he done so, I would have suggested three of the major reasons as being: the power of the media; government being all about the leader rather than the team and its policies; and the almost unbelievable level of wealth within those democracies.

The media's ability to control and direct public opinion has never been stronger, in spite of the diversity of media types, with the internet and world wide web being the most recent. As people's lives in most free (i.e., democratic) countries become even more complex and time poor, so they turn to the all-pervasive media not just for the news from which to form an opinion about an issue but to adopt opinions already prepared for public consumption by the media. Countless examples exist of important but complex issues being synthesised down into simple, one dimensional 15 second statements on radio or TV or encapsulated within a single emotionally-charged photo in newspapers or on the internet. Here in Australia, human-caused climate change, logging of native forests, saving the whales, illegal immigrants in leaking boats, the expected high achievement by a new prime minister being replaced by realisation of his and his ministerial team's short-comings plus the proposed Resources Super-Profits Tax are just some of the issues where the media doesn't just present the news as a source of objective information. Instead, the media quickly chooses its position and then attempts (usually with success) to sell that position to the Australian public.

In a similar vein, the media has to accept much of the blame for Australia's state and federal elections being turned into little more than presidential campaigns. Whether our prime minister has broken every promise or not; whether the leader of the opposition ever speaks the truth: these are relatively unimportant issues compared to what the Rudd government has actually achieved in its two and a half years and compared to the policies that Abbott will be taking into government, should he win the next election. Focusing on the person rather than the policies trivialises the intent of what the democratic process is trying to achieve: good governance by an honest, competent government, yet the media can't seem to stop itself focusing on personalities.

So, in turn, this begs the question of why the media behaves this way. I believe the key determinant that controls media behaviour is also what motivates 99% of people around the world: money and the desire to own all the things that money can buy. The media doesn't need to be relevant or accurate or even responsible to make money for itself. It only needs to sell more newspapers or have more people watch its TV programs or subscribe to its online services. If it dumbs down the message so that even a 12 year old enjoys and understands the news, the photo, the video or the TV program, it's not the media's problem if this causes the population at large to ignore important issues or events happening in the world around them or to vote at election time on the basis of which leader is better looking or has involved him or herself in more media-savvy but irrelevant campaign stunts.

The third cause of weaker democracies in many countries is financial: our modern society seems to have an unthinking and unyielding determination for individuals to make an amount of money that is beyond what is necessary for the sustenance of a comfortable life (admittedly, 'comfortable' is a relative term but most people can quickly visualise what it means and how it should be unnecessary to go beyond a certain comfortable level of existence). The recent global financial crisis can be simply described as an excess of financial capital wanting to be traded on as many new, different but often artificial financial constructs as can be created by human imagination. Long ago, the name of the game ceased to be investment for long-term economic and societal reward, instead replaced by short-term speculative gambling, in part to create even more wealth even though the actual need for more wealth was absent, as exemplified by the excessively large bonuses paid to investment bankers, for example. The end result of this financial fanaticism includes perverse outcomes such as the investment in speculative holdings of crude oil contracts being twelve times larger than the actual value of the world's annual production of and trade in crude oil. The physical market has been overwhelmed by the artificially constructed, non-material market.

One only has to look at the unbelievably large amounts of money that have been lost as a result of the global financial crisis: trillions of dollars. The amount of money promised by the European Community and the IMF to help sustain the financial and psychological crisis caused by Greece's debt problems is far greater than that country's total private and public debt. Yet this crisis money is primarily required because the developed world (which is mostly democratic) has too much money to profitably put into medium- and longer-term, nation-building investments, so speculation becomes the only alternative. In fact, the amount of money is so great that, when things go wrong, virtually no single country is economically large enough nor financially secure enough to save itself. Instead, as has happened in Europe, rescue is required from multiple countries, not just one or two near neighbours or those with strong cultural links.

To conclude on this final point about the amazing wealth held within democratic countries, Adam Smith correctly pointed out that the invisible hand of the market, guided by the aspirations and dealings of the billions of people in both local and global marketplaces, was the ultimate determinant of an individual's and a nation's wealth. Today, however, the concentration of money into a relatively small number of very wealthy hands has allowed short-term speculation to dominate and control the decision-making processes of democratically elected governments. Personally, I see no merit in 'naked' short selling - offering to sell something I don't own. I see no merit in computer-controlled market purchases and sales of shares or commodities carried out in micro-seconds for profits of a fraction of one percent. The artificiality of these transactions and the almost total lack of on-ground outcomes able to improve national economic outputs or provide social benefits (buildings, roads, ports, schools, services to people, etc) should suggest that they're not really needed in a modern wealthy society. Yet these types of financial activities are now so large and so important to government through the employment they generate and the taxes they pay that meaningful regulation (or bans if appropriate) by government or its regulators is almost impossible to countenance. Our democratic processes are simply not up to the task of standing up to these people and institutions with their incredible wealth.

Professor Allen's article describes the indisputable weakening of democratic processes within countries like the USA, Australia and New Zealand and within supra-national bodies such as the new Europe. If my explanations of why democracies are now under threat are correct, then we now face the hardest task of all: arriving at solutions to the problems posed by a dominant media, the presidential nature of modern politics, and the power and influence of enormous amounts of money largely surplus to the day-to-day needs of its personal, corporate or national owners.

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