Corporations against the democratic state, not democracy versus autocracy, is the main battle

From Washington to Beijing to Canberra and Sydney, there’s a thread through events of the last week linked to one of the bigger geopolitical conflicts of our time.

In Canberra yesterday, Scott Morrison threatened, in words sopping wet with hypocrisy, to regulate anonymous “cowards” on social media. “You can expect us to be leaning even further into this,” he warned.

While it’s not exactly up there with welfare crackdowns, Morrison is a perennial cracker-downerer on social media, announcing crackdowns in March 2019 and May 2019 and September 2020 and saying satanic forces used social media in April this year.

But his comments, and the froth-mouthed ranting of Barnaby Joyce against social media, resonated more in a week when a whistleblower exposed Facebook’s obsession with profit over minimising harm in the US, and an expressed willingness by both sides in Congress to regulate social media — something social media companies themselves have taken to calling for.

Then again Democrats and Republicans have been talking about breaking up big tech for years now without noteworthy action. That may relate to the $65 million tech companies spent last year lobbying in Washington.

Here there’s the entirely different problem that it is traditional media companies that hold the lobbying power and have literally written the government’s policy to extort Google and Facebook. Like fossil fuels, like financial services, like hospitality and gaming, the media in Australia buys the policy outcomes they want — except they pay in airtime and headlines, not in donations (though Nine, of course, helps to fundraise for the Liberal Party as well).

In China, the issue of the regulation of big tech isn’t the subject of lobbying or political donations or whistleblower testimony to politicians; the Xi regime has simply gone at China’s tech giants with a very large blunt object, using competition and data protection laws and its ability to control the internet to pummel them, unconcerned about stripping over a trillion dollars off their market value.

The Chinese government has also been cracking down on steel manufacturing, given that sector is China’s biggest source of industrial carbon emissions, by the simple expedient of shutting down steel manufacturers and reducing steel production and exports.

Not much worry about “sovereign risk” in Beijing, then.

This week also produced yet another round of major tax leaks demonstrating the continuing inability of governments to prevent the use of tax havens to siphon trillions of dollars beyond their reach. While the Pandora Papers primarily focused on the actions of individuals, it confirmed yet again the massive global industry, led by major multinational audit and law firms, that effectively conspires against governments to deprive them of revenue. And those firms all have close links with government themselves.

In a speech not long after his inauguration, President Biden claimed “we’re at an inflection point between those who argue that, given all the challenges we face … that autocracy is the best way forward, they argue, and those who understand that democracy is essential — essential to meeting those challenges.”

While autocracies like China have no rule of law, and are prone to rampant corruption, the problem in democracies like those of Australia and the US is that corporations know how to exploit those systems to prevent them from addressing major challenges.

They exploit the needs of politicians within democracies — their need for campaign finance, their need for staff, their need for policy advice, their need for jobs after political careers are over. Fossil fuel companies have thwarted climate action for decades; the world’s major financial institutions continue to persistently break laws relating to money laundering and helping organised crime; the major audit and consulting firms continue to produce major scandals ranging from participation in human rights violations to rorting taxpayers to enabling tax dodging.

The mechanisms for preventing corporations and influential individuals from exploiting democratic systems have also been on display over the last week in NSW: a powerful integrity body, transparency around who influences politicians, restrictions on who contributes to political parties.

The fact that much of the media, and primarily News Corp, has attacked those safeguards illustrates how in Australia the media is just another industry engaged in soft corruption to achieve its own ends.

The competition between autocracy and democracy, between Beijing and Washington, is — for all the “clash of civilisations” imagery that it evokes — less applicable than an alternative competition that more accurately describes what’s happening in Australia, the United States and a number of other western countries: between a democratic system that is unable to deal with problems because it is controlled by powerful corporations and influential individuals, or one that can operate, however imperfectly, with a degree of transparency and integrity sufficient to negate efforts to pervert decision-making and enable complex challenges to be addressed.

Between Canberra and Sydney, if you like.