Populism From Above

“A permanent crisis in governance across the democratic world”. That is the threat we face, according to Greg Sheridan in an excellent article, “Populism diminishing democracies”. Sheridan is one of the few political commentators capable of seeing the big picture. While most journalists focus on trivia, Sheridan is able to analyse Australian politics in the context of a range of ominous global trends that will shape the future far more profoundly than Bill Shorten’s ‘man boobs’ or Malcolm Turnbull’s ‘harbourside mansion’. But is Sheridan correct? Is the crisis one of populism, as primal forces are unleashed within Western societies? Or is the crisis actually caused by the failure of the elites in those societies?

Populism, of both the left and the right, is Sheridan’s concern, and he attempts to define it and account for its emergence. Across the democratic world, the centre of the political spectrum is increasingly being deserted in favour of “gross, vulgar, hyper-partisan populism [which] is winning victory after victory for irrational hatreds and prejudices.” He cites the presidential victory of Rodrigo Duterte in the Philippines, the success of Donald Trump and Bernie Sanders in the US, the impeachment of Brazil’s President Dilma Rousseff, the victory of Norbert Hofer of the far-right Freedom Party in the first round of the Austrian presidential elections, the accompanying shift of Poland, Hungary, and the Czech Republic to the ‘illiberal right’, and the embrace of naked populism by the previously economically rationalist UK Independence Party.

The rise of populism reflects the impact of the Global Financial Crisis, which devastated economies and discredited the financial system, together with the mainstream politicians and governments that supported it, often bailing out banks and other corporations with massive transfers of taxpayer money and loans. (And, consequently, Shorten’s election promise to institute a royal commission into the banks is attracting significant support.) It also reflects the impact of the global Muslim insurgency as the ordinary citizens of Western societies realize they are being sold out by their ruling elites. This is especially the case in Europe, where the EU continues its progression towards the ‘Eurabia’ prophesied by Bat Ye’or in Eurabia: The Euro-Arab Axis (2005) and Londonistan: How Britain is Creating a Terror State Within (2006) by Melanie Phillips.

Other longer-term factors may be even more important. These involve the delegitimization of liberal democracies that began under the Comintern in the 1920s, was re-invigorated by the New Left in the 1960s, and then found fertile soil in the 1970s with the Watergate scandal in the US and the Whitlam dismissal in Australia. Capitalism and Western governments (and especially their security agencies) are now invariably portrayed as greedy, corrupt, murderous, ecologically rapacious — as power-hungry monsters, basically, accountable to none but themselves. Western society is similarly demonized as racist, sexist, homophobic, consumerists, etc, etc, and such notions have achieved mythic status in the education system, popular culture, and especially in cinema and television (exemplified by Oliver Stone’s mendacious Untold History of the United States (2012), currently on Foxtel). All this is massively magnified on social media. As Sheridan observes, this “is now many people’s mental reality”, and they approach politics from this blighted perspective, making political mavericks and outsiders attractive political candidates. To make it worse, politicians themselves now make no attempt to preserve the integrity of the system by observing the long-standing conventions that make it work. This has been recently demonstrated in Australia by the Senate’s behaviour, the ALP’s repeated attacks on the Governor-General and that party’s attempts to embroil him in their campaign against the Royal Commission into Union Corruption.

In Australia, populism takes the progressivist-statist form historically championed by the ALP and the left generally. At its extreme, the Palmer United Party was populist par excellence and managed to have several ferals and no-hopers elected to the Senate, where they demonstrated an historically unprecedented level of irresponsibility. Disrespecting the constitutional role of the Senate as the states’ house of review, they connived with the Greens, the ALP, Nick Xenophon, and a couple of ‘accidental senators’ to form a populist ‘government in exile’. Then, in collusion with the ABC and a compliant media, this two-bit would-be junta blocked passage of much of the Abbott government’s election mandate. This laid the groundwork for the Turnbull coup and subsequent political paralysis as the new Prime Minister seeks to appeal to the populace while struggling to establish his pwn political legitimacy. As Sheridan says:

“The Turnbull government … is a prisoner of populism … unconsciously apeing the rhetoric of the populist Occupy Wall Street movement, the anti-1 per cent movement [that] demonises high-income earners.”

Under the Turnbull government, we are seeing the consolidation of a soft form of progressivist populism. Devoid of principle but (so far) avoiding the explicit language of class hatred, it has nevertheless given up on any hope of downsizing government and the reach of the Nanny State wile paying mere lip service to reducing taxes and regulation. The entire economic rationalist narrative emphasizing government-spending restraint, free markets, economic deregulation, privatisation, tax cuts, and labour-market flexibility that began in the 1980s has been jettisoned.  Instead, Turnbull is following the lead of the Rudd-Gillard-Rudd years in massively expanding the interventionist role of government.

For example, the National Disability Insurance Scheme is the epitome of populist politics, based on emotion and sympathy for the unfortunate and provoking hysteria when the viability of the scheme is questioned. It is projected to have a total annual cost of $22.1 billion when fully implemented in 2019-20, yet the National Disability Insurance Agency administering it has admitted this figure will blow out by many billions of dollars annually because it cannot control the cost of the program as it lacks the power to define ‘disability’ or even to require adequate evidence that any such affliction exists. Consequently, there will be some 460,000 people immediately supported under the scheme (at $48,000 each), and that number can be expected to grow exponentially as its ready accessibility becomes widely known. It has the potential to wreak economic and social havoc.

The same thing is projected to occur with the Higher Education Contribution Scheme. Pursuing the absurd and deceitful populist notion that everyone should of right have a place at university, the government will increase the number of government-supported tertiary students from 522,000 in 2015 to 696,000 in 2026, increasing the annual cost of HECS from $1.7 billion to $11.1 billion.  Over that period, the contribution of the program to the national debt will balloon from $13.4 billion (4.8%) to $48.1 billion (18.3%). It has been projected that by 2026, $4 billion worth of new and unpaid loans will need to be written off annually.

Although this is presented as a populist response to the alleged desire of most young people to go to university, HECS is really a scheme to transfer much of the cost of a bloated university system, with its absurdly expensive but grossly underutilized staff and facilities, onto the shoulders of those young people seduced by the alleged status of university credentials, with the tax payer picking up the bill for the rest. The tragedy of all this is that young people are being enticed into tertiary study for which they are not suitable and are acquiring often crippling debts (projected to be some $50,000 for a three-year degree) that will financially handicap them for decades. And this is happening at a time when many could go into essential trades and earn far more than an a degree in arts or journalism or feminist ecology will ever produce. For example, plumbers and electricians are now charging more than double what the average lawyer earns on an hourly basis and have no HECS debt to deal with (and many may also be able to use their trade contacts to build their own home or investment property).

Incredibly, while it is conniving in such budget-busting schemes the Turnbull administration has sought to establish its populist credentials in this ‘race to the bottom’ by targeting its own political base with draconian retrospective changes to the superannuation system, apparently operating on the assumption that its life-long ‘rusted-on’ supporters have nowhere to go and will be forced into line by the spectre of a Shorten prime ministership. In fact, all they are doing is placing even more pressure on the political centre, driving perfectly reasonable people out towards whatever party they feel represents their legitimate interests — or at least offers them some respect.

This is a grave political miscalculation, of the sort in which the Liberals have come to specialize. Although the government’s assault on the superannuation system is presented as a clampdown on the super-rich, it appears to a great many people as an existential threat, easily comparable to that conjured up by John Howard’s WorkChoices scheme. As Paul Kelly discusses in Triumph and Demise (2014), this threatened the implicit social contract that had long existed in Australia between employers, employees, and the state, and actually “unravelled a consensus that had been building up over a long period of time in favour of the de-regulation of industrial relations,” as an industry leader observed. The attack on superannuation will elicit the same type of outrage, and prove just as counter-productive, as people re-shape their financial positions to protect themselves and avoid tax as best they can (by, e.g., pouring their capital into the family home, further exacerbating the housing crisis). Politically, it could prove as fatal for Turnbull as WorkChoices did for Howard, especially if Shorten (with union support) is politically adroit enough to present the ALP’s position as a fairer alternative and thus attract a substantial protest vote.

Nevertheless, it seems that Turnbull has no alternative but to appear hairy-chested in this vulnerable area. Trapped within the Nanny State paradigm, his eager capitulation to populist pressures means he is unable to carry out the major reforms that are required on the side of government expenditure. Consequently, he has decided to pillage retirees. Ominously, he has also implicitly joined in the steady demonization of his own generation that will have tragic and divisive social consequences in the near future, as it increasingly comes to rely on a younger generation that has been encouraged to see itself as cheated, a case strongly made in Generation Less: How Australia is Cheating the Young (2016) by Jennifer Rayner.

Ultimately, Sheridan is right to lament the rise of populism, but it is too easy (if apparently paradoxical) to blame the people for this. Perhaps he should have paid some attention  to Robert Michel’s Iron Law of Oligarchy, according to which democracies will  tend always to succumb to the rule of a leadership elite, which, far from representing the masses or being their servant, comes to dominate them, centralizing power and controlling the flow of information, resources, patronage, and rewards. Politics is shaped by the pursuit by the elite of its interests, not the interests of the people.

Culpability for the crisis in governance therefore lies with the political leadership and especially their egos and pursuit of self-interest, along with the presidential mode of campaigning, which almost verges on the Führerprinzip. Desperate to be elected, the leaders and their parties are prepared to promise anything, and to prevaricate and lie whenever necessary, ultimately discrediting the entire political process. In this they are supported by the broader elite apparatus, in particular the media. These share a common limited world-view, connive together and increasingly overlap, as the prominence of ex-politicians and political staffers amongst the commentariat in the present election campaign so vividly reveals. Their focus is tactical, sensationalistic, cynical and insular, with little capacity to broaden the analysis to encompass or drive home to the electorate the full ramifications of the often ruinous policies being promoted. Consequently, elections come across as a reality TV show, with the key question being: Who gets voted off the island? Not: how can the nation survive and flourish?

Populism is a disease of the elites, imposed by them on the people as they struggle to maintain control, and the present crisis and popular revolt is best seen as a reaction to this.