The corporate campaign backing a change to Australia’s Constitution is the latest installment in large business bludgeoning not just customers, but everyone, over woke causes.
It’s a form of crony capitalism verging on fascism. It’s bad for the country, and it is bad for the government.
Large companies are primed for it by the ideas of “stakeholder” capitalism. This suggests a role for business beyond merely making widgets and returning profits to owners.
It is turbocharged by the decreased role of private capital in big business, and the increasing bureaucratisation that goes with scale.
Where once owners might have stalked the corridors, now it is paid employees, there for a few years, and then on rotation to another higher paying job at a rival.
Trained by schools and universities to think their role is to change the world, they become euphoric with the idea that not only are they a businessperson, but they are inadvertently one of the natural aristocracies of mankind with authority to dispose and shape the masses.
A good example of this is Alan Joyce, the CEO at Qantas.
Over the course of his tenure, the airline losses netted out profits to more or less zero, but there was no problem aligning the business and its immense resources with specific causes.
Another example is new tech billionaire, Mike Cannon-Brookes. Here is a man who owns a tech company valued at $40 billion (US$26 billion) which has only $2.8 billion of turnover and after 20 years is still making a $600 million loss.
Empowered by a decarbonising zeal, and convinced he knows more than people running profitable energy businesses, he managed to parlay an 11.8 percent stake in Australian energy giant AGL into de facto control, derailing the company’s strategy so he had the power to close power stations.
(This is from a man who owns a Point Piper mansion with nary a solar panel on its roof, and a garage where 50 percent of his vehicles are powered by internal combustion engines.)
Meanwhile, other companies are corralled into obedience because they have a fear of being cancelled.
Sometimes this is from external threats, like the Black Shirts at Sleeping Giants. This is an organisation that mobilises mobs to threaten companies with loss of customers or suppliers unless they tow the ideological line.
The threats are largely, in reality, insubstantial, but barely anyone, apart from retail magnate Gerry Harvey, an owner, wants to take a risk.
Media companies are particularly susceptible. Australia’s most prominent media commentator, Alan Jones, was taken off air because advertisers wouldn’t advertise, for fear of retribution.
The other cancellation threat comes from within.
When tech billionaire Elon Musk took over Twitter the staff threatened to revolt. Musk is an owner, he knew what to do. If you weren’t aligned with his interests, you went.
It must have been a lot harder for publisher Random House when staff revolted on the news they were publishing Jordan Peterson’s “Beyond Chaos.”
Regulatory Creep Sinks Australia Further Into Crony Capitalism
Risk can also be magnified by lawfare. As state and federal governments extend the right to sue because you are offended, the potential for litigation against heterodoxy increases.Legislation in Queensland will give third-party organisations the right to sue for discrimination, even though they are not directly affected. It doesn’t matter if the case fails, the process is the penalty, and it brings unwanted publicity with it which could be damaging to business. It’s a situation ripe for coercion.
This brings into the spotlight the way the relationship with the government can coerce business. As the size of government has increased, the need to keep on the right side of laws, rules, and regulations also increases.
The range of businesses that can be adversely affected by regulation is huge. While they legitimately lobby to protect their interests, there is a political need to appear a good corporate citizen as well.
What a good citizen is will be defined by a combination of the government in power and external and internal public opinion.
This leads to an unhealthy vicious cycle where elected governments are not shy in pushing back on corporate non-government constituencies for support. Just asking implies a threat of retribution, whether real or not. Most businesses will hedge their bets at the least and comply.
Trust Being Lost in Highly Divisive Era
All these factors appear to be at play in corporate approaches to the Indigenous Voice to Parliament.Even if you think your customers or shareholders would vote “No,” the likelihood is you are not going to stick your neck out. It seems some stakeholders are more equal than others.
While I can’t see anything changing with the corporates over The Voice, there is a revolt brewing which may result in The Voice being rejected, partly because of the corporate pressure.
The peasants are in revolt.
In the United States, Gillette and Anheuser-Busch are just two companies experiencing boycotts from right-of-centre voters. New media businesses like Google and YouTube, which have been debauched by governments, have seen alternatives spring up.
The outcome of this is that society is becoming sectarian. Previously in the Anglosphere, it was along religious lines, now it is on a left-right divide.
But if half the community (or in some cases more) will not commercially deal with the other half based on their views, then we are all the poorer.
Trust is the most crucial resource in a modern liberal democracy, but not any trust. It is a trust that doesn’t ask about motivation, only about performance. Performance is judged on the product that is provided.
But when a commercial interaction partly takes on the character of an affirmation of a political cause (and an inadvertent donation to that cause at the same time), that trust is damaged.
Low trust raises the costs of doing business, sometimes to the extent that the business can no longer occur.
There is also a breach of trust occurring between shareholders and management, as well as damage to the retirement prospects of ordinary citizens.
There is plenty of evidence that allowing ESG rather than merit to dominate your corporate decision-making can be bad for profits. If it’s bad for profits, it is bad for investors.
The Albanese Labor government is more than comfortable riding this wave, but it is yet another productivity-destroying trend, along with profligate government spending, increasing workforce restrictions, price controls, interference in energy and resources markets, and the scramble towards a net-zero economy.
Bad economic outcomes are the spark that can ignite a bushfire of resentment.
Adding a culture war element to it raises the temperature and fans the flames. No telling who will get burnt.
