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Dimensions of Power, 31 May 2010

Speech to PowerUp, Our Community Conference, by David Hetherington, Executive Director, Per Capita

Good morning, ladies and gentlemen. It’s a privilege to be here at the pre-eminent event for the community sector in Australia, and I’m particularly thrilled that you’ve chosen such a fascinating topic to explore over the course of the next couple of days. Power. I’m not sure how many of you have seen the musical Keating but the first thing that came to my mind when I was asked to speak on power was the wonderful sketch of John Howard marching up and down in his green and gold Wallabies jersey…

I want power! I want power!
I want to smell my own ambition in flower!

They don’t call it power walking for nothing! For those of you who haven’t seen it, I do recommend a quick visit to YouTube. It’s a wonderfully satirical ditty that captures both the allure and the anxieties of real power. I only hope I can offer something half as entertaining this morning.

What I’d like to do today is set the scene for the next two days by offering an intentionally broad sweep of power, drawing a range of diverse, historical examples. What I thought I’d is to cover four main themes. First, I’ll outline where power comes from. What is it that enables the powerful to exert control over the disempowered? And how have the various sources of power changed over time?

Next, I’ll touch on how much power we possess as individuals in Australia. That’s not a simple story. In some ways, we have become far more powerful over the last 30 years. And in other quite fundamental ways, power has drained away from us as individuals to other actors in society.

Thirdly, I want to move from the individual level to the institutional level, to explore how power has ebbed and flowed between various institutions within Australian society. Who’s up and who’s down? Whose newfound power should we support, and who should we be wary of?

Finally, I want to explore power in the community sector, amongst the clients you serve. As organizations, you serve some of the most disempowered groups in Australia – the homeless, the mentally ill, people with disabilities. So I’d like to conclude today by offering a couple of ideas for how you can exert greater power on their behalf.

Denis and Joe have asked me to begin by giving a brief overview of Per Capita – who we are and how we came to be.

Per Capita is a progressive think tank which seeks to generate and promote transformational policy ideas for Australia. By ‘progressive’, we mean three specific values: prosperity, fairness and community. We think prosperity is important, but that it must be delivered in ways that promote fairness and sustains communities.

In establishing Per Capita, we were motivated by a belief that the quality of public debate over ideas in Australia was poor, and that this was partly due to a lack of investment in ideas generation. There were few well-resourced think tanks, and these tended to be long-standing conservative, ‘free-market’ institutions. The result was an imbalance in the public debate in favour of free-market ideas: these institutions had power far beyond their size. Even today, our national broadsheet newspaper will frequently devote two of the three articles on its opinion page to conservative think tank writers. This is not just a result of the ideological positioning of the paper in question, it’s also a reflection of the unbalanced investment in ideas institutions in Australia.

These powerful conservative think tanks had transformed a set of old, tired debates into a set of new, false debates – classic wedge politics. What we wanted to do at Per Capita was to focus on the real debates the country should be having. So they turned the old divide of bosses vs workers into a false argument over union power. We think this overshadows the real debate we need to be having – how to address skills and pathways to work to improve both productivity and participation.

They turned the old divide of economy vs environment into a false argument which contests the science of climate change. We think this overshadows the real debate… how to price environmental costs like carbon to ensure that polluters are incentivized to reduce their emissions.

In both these cases, vested institutional interests are using their power to divert attention from the genuine challenges we face, because addressing these challenges will undermine those same vested interests. This is an example of the kind of institutional power that Per Capita seeks to counterbalance.

OK - enough about us, let’s cut to the chase. We all know what power is. It’s such an intuitive concept that I won’t bother trying to give you a formal definition. John Howard’s satirical ditty is as good as any definition. Power is many things. It is an addictive drug which releases endorphins into the bloodstream. It is an asset which confers immense status on those who hold it. It is an aphrodisiac. And it brings with it enormous responsibilities.

Where does power come from? Theorists will tell you that there are three main sources of power – violence, money and trust. Almost all power is exercised because the holder possesses one of these three things.

The ability to exert violence is an obvious source of power. Prior to the 19th century, violence was by far the dominant source of power; even money was only useful in that it could buy control of private armies, militias and the like. In the 19th century, national governments gradually brought the exercise of power under state control to the point where well-functioning states now have a monopoly on the use of force. The result has been that the actual incidence of violence has diminished dramatically. However, the capacity to deploy force (even if unused) remains an important source of power today. While violence is less important today than in earlier centuries, the state monopoly on force remains central to a rules-based society and an effective legal system.

It’s worth noting that there is one area in which violence remains a particular ugly feature of contemporary society: domestic abuse. DA remains widespread, massively underreported and is sustained by a persistent power imbalance rooted in the ability of some men to inflict violence on female partners. It is one area where the state finds it difficult to exert power and controle.

The second primary source of power is money. While money has mattered since humans first accumulated crop surpluses, the relative decline in violence means that wealth is more important than ever. Money has certainly displaced violence as the single most important source of power in Australia today. Money matters. To see just how much money matters, consider two vastly different groups.

On the one hand, look at the reaction of the mining companies to the proposed resource profits tax and before that, to the carbon trading scheme. It is no exaggeration to say that the orchestrated campaign of these enormously wealthy companies was the single most important factor in the defeat of carbon trading and potentially, the scaling back of the resources tax. They lobbied. They advertised. They briefed the media. They scared the public. You can only do this if you have enormous wealth to deploy.

Then consider another group – the communities which your organizations serve. Many of them are not wealthy, and do not wield any significant power. This is no coincidence. They do not have the money to mount expensive campaigns, to duchess politicians, to buy out unco-operative neighbours. The lack of money matters because, at the end of the day, it is money that allows you to access the decision-making processes that affect our everyday lives. I’ll return to this question of access a little bit further on.

The final source of power is the most fragile and the most ephemeral – trust. I’m sure that trust is where you in the community sector derive your power – your integrity is probably your greatest asset.

Societies with high levels of interpersonal trust expend far less resources on coercion and compliance because contracts are usually honoured, laws usually observed, taxes usually paid. This has immense value – freeing up resources for us to invest in public goods, to save against future adversity, to pursue the good life.

The institutions which command trust are those which can influence thoughts and opinions within a population. They define community values, articulate social norms, and sustain taboos. Often, they decide who belongs to a society and who doesn’t.

For centuries, the churches have been amongst the institutions that have commanded the greatest trust, inspiring people to great feats of good and occasionally, terrible evil. More recently, nation states have won the trust of their citizens, particularly through the spread of democracy in which the people allowed governments to exercise power on their behalf under a social contract.

Yet this trust in government has now dissipated. The Gallop International Millennium Survey found large groups in the mature democracies who believed that elections in their countries were free and fair, but did not believe that their country was ruled by the will of the people. These findings were particularly strong in the UK, Sweden, Denmark, France and the Netherlands, states which are generally thought to have a strong social contract and a high degree of social cohesion.

As leading public thinker Geoff Mulgan has observed, “in many of these countries, the most democratic institutions are among the least trusted. This disillusion with democracy explains why election turnouts and party memberships have begun to fall across the western world, and why activist energies have moved away from parties and towards single issues.” Mulgan notes that there has been a steady increase over the last 30 years in the share of the population who’ve taken part in a demonstration, strike, consumer boycott or petition, at precisely the same time that the more conventional politics of election and parties has contracted.

Alongside falling trust in governments, we’re also seeing declining trust between citizens. The growth of cities and increases in high-density housing mean that we don’t trust our neighbours like we used to – often we barely know them. In a sense, it is the weakening of community bonds that results in this loss of trust. One of Per Capita’s driving motivations is to reverse that weakening of community bonds, and I have no doubt that aim is shared by many of you.

If trust in all these various groups is falling, then it’s worth asking whom we do trust these days. There are many answers to this question, but I’d like to offer one intriguing candidate: Google. I think we place remarkable trust in what we’re told by this vastly profitable, multinational corporation. This is not to say that what Google tells us is wrong, or misleading or immoral, but I find it curious that we’ve substituted trust in our flesh-and-blood neighbours, for trust in an American legal entity that communicates with us through a keyboard and screen. Food for thought.

Let me know move on to my second theme - the power we possess as individuals. I want to ask you a question. Do you think you have become more powerful during your adult life or less? I suspect the answer is actually both: in some ways, you’ve become more powerful and in others, you’ve been disempowered. Let me explain what I mean. I’m borrowing an idea from Robert Reich, an exceptional American thinker who was Secretary of Labor in the Clinton administration. In his book, Supercapitalism, Reich argues that capitalism has evolved in the last thirty years to displace democracy as the dominant organizing force in Western societies. He claims that this has been a mixed blessing for us as individuals. We have benefited greatly as consumers and as investors, but suffered considerably as citizens.

It is true we have become far more powerful as consumers. The range of goods and services available to us is vastly broader and deeper than anything our parents dreamed of, and the price of all these goodies has fallen dramatically. We can eat seasonal fruit all year round, we can purchase individual tracks from our favourite Puccini or Powderfinger records, we can fly to London for $378! We are drowning in choice. When we don’t like a product, we can take our custom elsewhere, and frequently do. Some of us do this in favour of ethical consumption, but most do it on the basis of quality and price. Consumption is one of the few areas where individuals, collectively, are as powerful as other entrenched institutional interests.

The other area where individuals possess such power is as investors. That contention may seem strange to many of you. Most of us have a few shares, maybe a rental property, so how much power do we really have? But we all have superannuation and have the power, in theory, to decide where that is invested. The key point here is that the one thing that big powerful companies fear is desertion by consumers or shareholders. It’s the only area where the aggregated actions of individuals can truly affect their behaviour.

All this is well and good, but do you honestly feel more powerful because of your purchasing or investment patterns? My guess is no – you don’t. And you don’t for one very important reason which Robert Reich correctly identifies. Because while we’ve become more powerful as consumers and investors, we’ve lost power as CITIZENS.

Robert Reich describes the period before supercapitalism as “democratic capitalism”, an era in which a consensus existed between business, government and community groups over shared responsibilities for advancing economic and social welfare. As the CEO of General Motors testified to the US Senate in 1953, “What is good for our country is good for General Motors, and vice versa.” What he meant was that General Motors had a shared interest not only in the American economy, but in the American community.

Contrast this with more recent US Senate hearings in which American banking chiefs have lined up to say that they have no other obligation but to advance “shareholder value”. Any damage to the public good is simply not their problem – instead, it’s the fault of incompetent regulators.

What is happening here? And why does it disempower us citizens? Corporations no longer define their interest based on sustainable profitability and strong communities. Instead, shareholder value is all that matters. And they have realised that they can maximize shareholder value by capturing democratic process. As I said before, they lobby, they advertise, they wine and dine. They commission ‘independent’ research with predetermined answers to support their arguments. What they are actually doing is subverting our power as citizens to control the democratic process.

This is why millions of people around the world are unemployed, while big investment banks have returned to billion-dollar profits. This is why we can’t put a price on carbon without paying exorbitant compensation to polluters. This is why a timber company can build a pulp mill on a Tasmanian river over the opposition of local residents and the broader Australian community. It is because as citizens we have lost the power to compete in the policymaking process against these vast commercial interests.

Let’s turn now to our third theme and move on from individuals to institutions. If individuals have lost civic power, then which institutions have expanded their own power in recent times? And which have been on the wane?

I’ve already indicated that big companies wield enormous power in Australia, particularly the miners and the banks, and that that corporate power has grown disproportionately over the last generation. I won’t say much more about this.

But what about government? There are two critical trends which have influenced the power of government agencies over time: 1) centralization and 2) the capture of information. Wherever possible, government agencies seek to centralize activities, which allows them to steadily accrue power. This starts from the top and flows down. Recent Prime Ministers have accrued power from the Cabinet. Executive governments have accrued power from Parliament. The Department of Prime Minister and Cabinet has accrued power from the rest of the public service. The Commonwealth has accrued power from the states. And so on and so on.

Those departments that provide human services - DEEWR, FAHSCIA and their state equivalents – have become particularly powerful as a result of their need to capture information. This is not a power grab by government, not a deliberate plan to disempower anybody. This is in large part because they’ve invested in IT systems whose purpose is to track case information, but whose effect is to multiply both rules and compliance processes. I’ve no doubt many of you have experienced this form of power first-hand.

Other actors in the political process have lost power over time. Political parties are on the wane as trust in politics has eroded. While they are conduits to power for those ambitious individuals who reach high office, they confer little power on rank-and-file members. Unions, too, have declined in power as their memberships have dwindled. This is not just because of punitive IR laws, but because the modern workplace has become much more fragmented, with small businesses and self-employed contractors on the rise.

Control of information has also affected the distribution of power in the media. The traditional media – newspapers, radio, TV – have become less powerful as people get information and opinions from online sources – search engines, blogs, Wikipedia, the iPhone. This is why our longstanding debate over media ownership has largely disappeared – it’s far less relevant.

It’s also why Google has become so powerful. Google’s model is based on control and organisation of almost inconceivable volumes of information. They photograph streetscapes, they map landscapes, they track the details of every single search you make. It’s not always clear what they’ll do with all this information, but whatever it is, you can be sure it will make them even more powerful.

So what’s the power scorecard for Australian institutions then? By my reckoning, those institutions gaining power include the miners, the banks, the Prime Minister and his department, the major human service bureaucracies like FACHSIA and DEEWR, and new media. Those institutions which have lost power are the Cabinet, the Parliament, state governments, political parties, the unions and traditional media.

I’d like to wrap up today by suggesting a couple of approaches with which you as community organizations can increase your own power to serve the interests of your communities. They involve a response to the two trends around government power in Australia I mentioned before: capture of information and centralization.

Firstly, I would suggest that you can increase your collective power, your shared effectiveness, by capturing and pooling information within the community sector. There are enormous benefits to sharing information between community organizations, on program effectiveness, on organizational processes, on human resources, on legal compliance issues, even on funding.

Too often in the community sector, programs are undertaken in isolation without reference to each other. An adult literacy program might be trialed in Logan with mixed results. Two years later a similar pilot will be run by a different organisation in Doveton without drawing on any of the findings from the original study. Community organisations write business plans and governance documents from scratch because they’re not aware of a common template on which to draw.

One of the dynamics of the community sector is that funding is always scarce which can make collaboration with other organizations seem threatening. But we need to overcome this dynamic and share information better. To their great credit, Denis and the team at Our Community have taken the lead in this area, through their Lessons Bank, their Policy Bank, their Plans & Tools Bank. I would encourage them to continue this important work, and I would encourage each of you to pool information with Our Community and each other just as much as you can. This will lift the power of the community sector by increasing program effectiveness and fundraising capacity. It will build on your greatest single asset – integrity – and enable you to tell your many wonderful stories to ever bigger audiences.

The second way I think you can consolidate power in the community sector is to provide creative resistance to the never-ending trend of centralization. The essence of the community sector is that it is local – as a sector, you understand local issues and offer local solutions. The control of decision-making by remote bureaucracies in Melbourne or Canberra is unlikely to lead to the best possible local outcomes. So you must gently persuade these bureaucracies to devolve some control to local actors – community groups, housing associations, municipal councils, and small businesses. And you must propose innovative models to government for how to do this. Jenny Macklin mentioned one such innovative model this morning with Goodstart, the reborn ABC Learning – a great example of community sector / government collaboration.

For example, a community group sets up a new social enterprise to build local skills - anything from truck driver training to IT repair services. Potential employers could directly invest with seed funding or start-up capital. Local government relies on flourishing businesses for rates income, and housing authorities gain higher rents if more tenants are in work. So these bodies could invest in the enterprise, with capital and infrastructure or advice and support. Such an approach returns power over local community decisions to local communities.

The Federal Government has trialed a model of this kind through its Innovation Fund, part of Job Services Australia, and based in part on policy research undertaken by Per Capita. While it’s only a small first step, the Fund demonstrates a refreshing decentralization on the Government’s part, with important emphasis on allowing local communities to experiment with alternative models in the clear understanding that some will fail, but others will succeed beyond expectation. The community sector should be pushing governments at all levels to expand this model beyond employment services. Over time, such centrally funded, locally designed initiatives will return power over local issues where it belongs – to local communities.

These are just a couple of ideas on improving the power of community groups to serve your communities – I’m sure you’ll hear many more great ideas over the next two days. I hope I’ve painted a very broad-brush outline on the nature and distribution of power in Australia. If I can leave you with one message, it’s this: citizens and communities have lost much power in an era of supercharged capitalism, particularly the power to influence government decisions over important aspects of our everyday lives. It is enormously difficult to counter this, but this is the challenge Denis gave us this morning. The right place to start is by asking the questions you’re addressing here over the next two days. I hope you enjoy the journey. Thank you.

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