banking royal commission catherine livingstone
Commonwealth Bank of Australia chair Catherine Livingstone. (Image: AAP/Lukas Coch)

CommBank chair Catherine Livingstone

Despite appearances, we don’t talk much about power in Australia. We talk around it, we mythologise it, we hype it, but we rarely analyse it. Power in Australia, as in most countries, is wielded out of sight, and the powerful prefer to keep it that way. But that’s not because the powerful operate as a cabal, or a small number of individuals wield disproportionate control; to analyse power as the operations of individuals is to miss the point, and in a way that serves the powerful. Power operates systemically, and unless it’s analysed that way, we can’t properly understand it.

That’s why the Financial Review‘s “hotly anticipated Power Issue” tells us little about how power operates (and a similar criticism might be made of our own Power Index of years past). “It might seem incongruous that the AFR Magazine corporate power list is led by a banking sector leader: Commonwealth Bank of Australia chairman Catherine Livingstone,” the AFR‘s James Thomson wrote about the corporate power list. He’d be more aware than most of the incongruity given he’s been providing excellent coverage of the financial services royal commission for much of this year.

The incongruity lies not in selecting a banking leader — that’s actually the best choice, though not because of anything to do with Livingstone — but in focusing on individuals. Power is systemic, not individual or personality-based. Any good Marxist will tell you that, but we’ve been witnessing the evidence of that all year.

Take Livingstone’s business. The big banks used their dominant market power, too-big-to-fail status and huge resources to achieve regulatory outcomes that boosted their profits. They contributed millions in political donations to the major parties and especially the Liberals. Former bank executives have occupied key ministerial positions affecting financial regulation. They employed former political staffers and armies of lobbyists. They cowed under-resourced, “soft-touch” regulators — and all in the name of maximising profits by exploiting customers. Eventually, they overplayed their hands and induced a backlash so great that their erstwhile political allies, who had long protected them, were forced to take action. But this doesn’t change the reality of their power; it only reflects misjudgement in using it so relentlessly in a democracy.

It’s been a similar story in energy, in aged care, in private health insurance, in media, in mining. All have seen large companies wield their power to exploit customers and/or taxpayers and prevent negative regulatory outcomes, even if not all of them have done it to such a degree as to provoke a backlash.

The wielding of this power occurs out of sight, and not merely because corporate representatives meet with politicians, bureaucrats and regulators in private. It extends to the shaping of debate, the pervasive legitimisation of the agenda of large companies, the belief that what is good for large companies is good for Australia, an invisible but rigorous mental framework that regulates the way policymakers and journalists think, unexamined even when out in the open.

A failure to understand the nature of this power, and the capacity for community backlash against its abuse, is a key lesson from the banking scandals of the last decade that culminated in the royal commission. But a similar failure has occurred on a grander scale — the way corporations have exploited their market dominance and the deliberate tilting of industrial relations laws in their favour to impose wage stagnation or wage cuts on workers across the West, even when labour markets have reduced to near-zero surplus. 

The resulting backlash on the part of electorates — expressed in the form of Trump, Brexit, Hanson et al, support for protectionism, hostility to open borders and immigration — has alarmed business, which rails against populism. But, as with the banking royal commission, they’ve brought this on themselves.

This abuse of power has been even more systemic: there’s the same lobbying and legitimisation of the corporate agenda, of course, but power has been wielded in millions of workplaces in Australia, and the US, and the UK, and Europe, and New Zealand and Canada, with companies, even in the face of rising productivity, actively trying to curb wage rises, or cut wages, or, as we’ve seen in Australia, engage in systemic wage theft that the industrial relations regulator ignored until alerted by the media.

This is how real power has been used in Australia, just like elsewhere. Personalities and individuals are mere colour, a distraction even, especially in an organ like the Financial Review, which is a tool of corporate power in its promotion of the business agenda. We should talk more about power in Australia, and less about powerful people.

 

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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