When Democracy is beholden to corporate power

"Inverted totalitarianism marks a political moment when corporate power finally sheds its identification as a purely economic phenomenon, confined primarily to a domestic domain of "private enterprise", and evolves into a globalizing co-partnership with the state..... The former becomes more political, the latter more market oriented"

Sheldon Wolin, Democracy Inc: Managed Democracy and the Specter of Inverted Totalitarianism

In a recent speech in London the CEO of Rio Tinto made a direct threat to elected governments around the world. His message was clear- challenge the power of the mining and resources multinationals by threatening their interests and the industry will do what was done to Kevin Rudd, the Australian Prime Minister.

It is remarkable that with a few exceptions there has been little serious analysis or anger in this country about the stark reality that a powerful industry, a number of multinational corporations and some of the wealthiest Australians could use their money and power to unseat a democratically elected Prime Minister.

One exception is an article in the Age by David McKnight in which he asks- who is actually running this country? His answer is corporate power.

In the article below Gavin Mooney, the co convener of the WA Social Justice Network, writes about the speech by the Rio CEO and the mining industry's use of its corporate power.

A PS to the RSPT
By Gavin Mooney

The ‘debate’ around the super profits tax has been illuminating. For me it has said so much about the mentality of the top executives in the mining sector - and of politicians. Early on there were the suggestions that Kevin Rudd was a communist (Clive Palmer), that it amounted to nationalisation (Andrew Forrest) and the tax was straight from the pages of Das Kapital (Julie Bishop)

In the wake of their success in bringing down both Rudd and the tax, their arrogance and their indifference to democracy is now out there in full flow. According to Forrest it wasn’t the miners who brought down Rudd – Twiggy’s pal – it was Ken Henry. Atlas chief David Flanagan divulges to The Australian that he would talk to his wife each night about the implications of the tax ‘and the legacy it would leave for their two children’. He went on: ‘I actually could see a scenario where the RSPT could destroy the fabric of the Australian economy… I mean, totally f…ing smash it to bits.’

Forrest asked ‘who voted for Ken Henry?’ Thank God for Forrest to alert us to the dangers of an unelected Ken Henry. And thank God for those who brought down the tax and saved us from these commies who were otherwise set to ‘destroy the social fabric’ of Australia.

These mining giants also have global aspirations. They are keen to use their power to save not just Australia. They want to save the world from nasty governments elsewhere as well! In a speech to mining executives in London last week, Tom Albanese, the Rio Tinto CEO, according to Peter Wilson in The Australian, ’issued a none-too-subtle warning about the events in Canberra to other governments attracted to the idea of “resource nationalism” and hiking taxes on mining profits’. Albanese is reported to have stated: ‘Policy makers around the world’ (and presumably that includes democratically elected governments – like ours) ‘can learn a lesson when considering a new tax to plug a revenue gap, or play local politics’. We are fortunate however that as Wilson reported Albanese ‘held back from openly crowing about the fall of Mr Rudd’.

The Fin Review joined in. ‘In a shot across the bows of Brazil, South Africa and Chile’, writes Andrew Cleary, ‘Rio Tinto’s chief executive Tom Albanese, has warned countries considering a super tax on resources to “learn a lesson” from the Australian government’s experience in dealing with the industry’s opposition’.

I would encourage readers to write to The Australian and the Fin Review to express their thanks to the big miners for saving – today - the social fabric of Australia yesterday and – tomorrow - the world. Good chance your letters will be published.

Against this background what chance any reasoned debate about the impact of the mining industry on global warming? Ah, but the Flanagan kids’ future is secure in the knowledge that their dad and the other big miners are there to look after the future of all of us.

And just a final thought: why do we need an election?

Corprate power and the "marriage" of money and politics

image courtesy of The West Australian

This picture is from the front page of Thursday's West Australian newspaper.

The photo shows the Deputy Leader of the Federal Liberal Party locked in an embrace with WA 's richest man, who is also one of the key spokespeople for the miner's campaign against the Federal Government's Super profits tax.

My colleague Gavin Mooney and I have a piece in the online publication Online Opinion under the title Power and Money to Thwart Democratic Process in which we raise concern about the power of corporate money and corporate self- interest to control the democratic process. Our concern is that the debate on the super profits tax reflects the disproportionate influence of wealth and corporate power over the political and democratic process.

In our piece we raise questions about the way that the mining companies and some of the richest people in Australia use their financial power against a democratically elected government in order to protect their private interests. And what of the role of large segments of the corporate media who have actively prosecuted the miners' case?

Currently there are few rules that limit the spending of rich and powerful individuals and corporations. We ask

• Why have limits on government spending on selling public policy and not on corporations spending on opposing public policy?
• Surely any curb on political advertising first and foremost should apply to corporations? And should there not be limits on corporate funding of political parties?

In the piece we also ask about the role of the Liberal National Party in prosecuting the miners’ case. How much money are they receiving from the mining industry and how much money is flowing into the party’s coffers from the industry?

Bill Leak on the Resources Super Profits Tax

copyright and acknowledgments to Bill Leak and the Australian

The hysteria from the mining and resources industry to the Rudd Government's proposed 40% Resource Super Profits tax demonstrates just how corporate Australia uses its political and financial power to protect its own privileged interests. They even claim that they oppose the tax to protect working Australians. As if!!!.

Bill Leak's cartoon from the Weekend Australian is priceless.

Why we need a super profits tax on all highly profitable corporate sectors

(image courtesy of WA Today)

Corporate and business power is being mobilized to oppose the Rudd Government's Resource Super Profits Tax. (In essence this is an extra tax levied on additional profits that a corporation makes because it has been given exclusive or privileged access to a limited resource).

Already the massively profitable mining corporations are crying poor and we are hearing all sorts of dire predictions from the mining and resources industry and their corporate and business lobbyists.

But the mining and resource companies make massive profits out of Australia's resources, and existing royalties and taxation regimes are a minor part of their expenditure. Between 2006-7 the value of top mineral production totalled $100 billion, of which the Australian community retained just 7% in Commonwealth and State tax revenue.

Most ordinary Australian will support the tax as a way to ensure that super profits from Australia's sovereign mining and resources wealth actually remain in Australia and benefit all Australians. Indeed, there are good reasons to extend the Super profit tax across all business sectors, particularly the highly profitable banking and financial services industry who continue to make obscene profits off the backs of ordinary Australians.

At the moment the overwhelming majority of profits earned in Australia by mining and resource companies goes overseas. Stephen Mayne reports that 80% of Australian resource profits go to overseas owners. The majority of the major mining and resource companies operating in this country are overseas owned, even those who proclaim their Australian-ness. (Stephen Mayne has a list here of Australian resource projects that are majority foreign owned).