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April 01st 2015 print

John O’Sullivan

What Passes for Wisdom

It's not as if there aren't enough grim testaments to bad ideas and bad policy, from the growth of ISIS to Europe's many afflictions and the leadership vacuum of Obama's bumbling, without  folly's march reaching our own shores. Alas, that is not the case

count olaf“Dost thou not know, my son, with how little wisdom the world is governed?” is one of those famous sayings that most people can’t quite place. I couldn’t do so myself until I checked with Wikipedia and discovered the words were written (in Latin originally) by Count Olaf Oxenstierna (left), Chancellor of Sweden at the height of its imperial power. Oxenstierna was accounted the greatest man of his age by contemporaries as formidable as Richelieu, Mazarin and Grotius—and a never-ending source of good advice.

He gave this particular piece of advice in 1648 to his son who, en route to the negotiations that led to the Peace of Westphalia, had expressed nervousness about his diplomatic skills. In that context his father’s remark was intended to comfort and encourage. It has a slightly more chilling effect on us today because almost four centuries after the Peace of Westphalia brought an end to Europe’s wars of religion, the world is witnessing war and religion-tinged conflict on a massive scale. And the wider Europe we call the West seems threatened by it—by the Russo-Ukrainian war, by the advance of ISIS, by the post-2008 fiscal crisis, by the continuing breakdown of the euro—to the extent that even so level-headed and prudent a writer as Greg Sheridan glimpses the possibility of its breakdown.

What makes this anxiety so unsettling is that the West, judged objectively, is in a strong political and economic position in world politics. America alone disposes of more military force than the rest of the world put together. Its economy is an innovation machine. Europe is collectively far wealthier than Russia, China or the other BRIC countries (which have anyway fallen out of investor favour recently). A main long-standing source of Western vulnerability—its reliance on Middle Eastern and Russian energy supplies—has now been ameliorated by the development of fracking and the collapse of oil prices. And Western countries lead the world in scientific and technical innovation.

This technical lead is unlikely to change any time soon since a recent world ranking of universities by the Times Higher Education Supplement named Harvard, Cambridge and Oxford as the top three universities and eight US and two British ones as the top ten, placed forty-two American and twenty-two universities in other English-speaking countries, three of them in Australia, in the full list (giving the Anglosphere two-thirds of it), and finished the total almost entirely with European ones. That holds out the prospect that the West (and as James C. Bennett predicts, the Anglosphere in particular) will maintain a future lead in innovation and productivity once China, Indonesia and other Asian and African countries have exhausted their “catch-up” stage of growth.

Objectively (again) the West’s main obstacle to future prosperity and power is the overhang of massive indebtedness that stands in the way of a healthy recovery. Achieving a “soft landing” from the monetary expansion of quantitative easing without sparking either an inflationary breakout or a market crash will require skill and prudence. But these are problems of our own making—or rather problems made by our governments and systems of government. Which is where Count Oxenstierna comes in.

Consider some recent examples of government failure:

The 2008 fiscal crash—which is the root cause of the West’s current low morale and economic sluggishness—was prepared and sparked by the successive decisions of the Clinton and Bush administrations to promote home ownership among low-paid and minority Americans by instructing the banks to extend mortgages to those unable to afford them. Hence the sub-prime mortgage crisis.

The current collapse of the Western alliance system in the Middle East can be traced not only to Bush’s Iraq War, but also to the Cairo speech by President Obama which offered an olive branch to Islam in terms that in effect embraced the Muslim Brotherhood, alienated America’s Sunni allies in Egypt and Saudi Arabia, and opened the door to Iran’s advance in Iraq, Afghanistan and the Gulf.

The continuing crisis of the euro which is impoverishing Mediterranean Europe, spreading political instability and reducing growth across the continent is the direct result of a massive multi-government experiment, endorsed by all the experts, to unify Europe by placing it inside a financial straitjacket—which has turned out to be a Shirt of Nessus, fatal to wear, agonising to remove.

None of these policies have been abandoned, or even seriously reconsidered by the governments that adopted them. The reason is simple. When utopian folly establishes a program, political embarrassment maintains it indefinitely.

My final example is Australian and therefore a pale shadow of the catastrophes sketched above, since Australia is a comparatively well-governed country even when it is badly governed. Most Australian governments from Robert Menzies onwards have been sensible, practical, problem-solving, attuned to realities, and only occasionally tempted by utopian illusions. Thus, Labor governments under Hawke and Keating began the process of moving Australia from economic protectionism to a regime of free markets and free trade. This was continued by John Howard’s governments. On the whole it has been a great success, and as with Thatcher’s reforms in Britain, it represents a new consensus in politics.

Keating lost an election despite this economic success because he embarked upon a quixotic utopian notion of re-branding Australia as an “Asian” country. Such cultural makeovers almost invariably fail; nations don’t change identities except under great stress and in response to revolutionary challenges such as defeat in war. And since Australia is both culturally Anglo and reasonably content with itself, Keating’s proposal was rejected unexpectedly but strongly—most strongly by blue-collar voters who would normally lean to Labor.

Undeterred, both Kevin Rudd and Julia Gillard embarked on their own utopian illusions in relation to global warming and carbon taxation. Those illusions came with a heavy price tag in the form of higher energy prices for the voters, and weakened both Labor leaders, enabling each to topple the other in turn. Aggravated by the internecine bickering between them, their commitment to these illusions, however wavering, alienated some of their strongest constituencies and distracted them from immediate realities. In particular they forgot that economic reform is a never-ending process like painting the Sydney Harbour Bridge, allowed spending programs to rise above expected revenue, and left behind a growing deficit.

Now the Abbott government has pledged to restore balance to the budget in both the short and long term. This commitment implies gradual but serious cuts in government spending over several election cycles. It is therefore a hard sell at best—as the British politician Enoch Powell once said: “In the welfare state not to take away is more blessed than to give”—and for that reason it is likely to be opposed by a conventionally opportunist Labor opposition. Despite these difficulties, the program has the broad support of the governing Coalition from Treasurer Joe Hockey to Communications Minister Malcolm Turnbull. It is a practical program to deal with practical realities.

Its success is being put at risk, however, not by the kind of utopian distractions that undermined Labor, but by personal rivalries in the simple game of Ins Versus Outs. Liberal rivals to the Prime Minister and their supporters among MPs seem to be working with critics (and even enemies) of the government in the media to undermine his leadership by an avalanche of leaks that suggest, sometimes quite falsely and even deceitfully, that he is on the verge of being ousted. The prediction is usually worded in the imperative mood.

Conflicts rooted in personal ambition are an inevitable element in politics, of course, but they usually occur in a framework of party loyalty and rules that limit their destructiveness. In this case a leadership spill was held which Abbott won. At the very least the rules should prohibit another challenge for a suitable period, say one year, unless a major issue of principle is dividing the party and making a leadership challenge necessary for policy reasons.

That is not the case here. Potential contenders Abbott, Turnbull, Bishop and Morrison are united on the budget. To be sure, there are underlying differences between them on other matters, above all on global warming and carbon taxation, but they are not currently live disputes in Coalition politics. Such issues may help to explain the media’s pronounced hostility to Abbott, since he is on one side in a culture war in which global warming is a matter of religious belief to the politico-media complex. That is utopia’s contribution to this political battle.

It’s an important influence. But it’s secondary to the personal rivalries dividing the Liberal Party. Neither explains the willingness of Liberal insiders to play along with the kind of subversion that only two years ago helped to destroy Labor. Both are helping to make the government of Australia impossible in pursuit of changing the seats around the cabinet table.

Count Oxenstierna might perhaps be surprised that the world is still governed with so little wisdom after four hundred years of greater experience. Or perhaps not.

Comments [2]

  1. gardner.peter.d says:

    At least Australia is an independent sovereign nation. The 28 member states of the EU are not and by a very wide margin. the extraordinary thing is that so many of them do not realize it. In UK’s case between 50% and 75% of its laws come from the EU and take precedence over anything the UK’s parliament might wish or do. in the EU’s governing council the UK has only 8.2% of the votes. Its influence, despite being the 6th largest economy in the world, is negligible. Even UK’s foreign, security and defence policies are ‘co-ordinated’ by the EU’s External Action Service, the primary purpose of which is to implement the EU’s policy of territorial and population expansion. To this end the EU is intent upon acquiring its own armed forces. It is more likely, should an EU Defence Force ever come about, that its first use would be to quell internal rebellion.

    The EU was founded in order to impose supranational government on European nation states. Since this obviously was and remains unpopular, deceit has been an essential strand of strategy of the European Project since its foundation. But be in no doubt, the EU is opposed to sovereign national democracy and exists to suppress it.

  2. Jody says:

    The reason the EU ‘experiment’ has not been reversed is that it simply cannot – the consequences are too dire for an about-face!! And the dropping of borders has been the most damaging consequence, IMO. I’m currently in Europe and the beggars on the street from “refugees” and the old Eastern bloc are in huge numbers. This degrades the image of the west as the weak, lame, criminal, alienated and shifty hang around most major cities hustling, scamming and aggressively begging. Astonishingly, when you discuss this with the younger generation they’re philosophical and say “it’s always been this way”. Interesting idea coming from a 20 or 30 something not actually old enough to have experienced the alternative.

    As an aside, on the issue of global warming evangelism…the CNN news today records the current Californian drought as “the worst in 1,200 years”. I’m left left wondering just who was in the United States circa 800AD to record their weather patterns!!