I have a Canadian friend who lives in Taipei, where he works for the Taiwan international trade development corporation. We have been friends for many years and I have a high regard for his judgement, especially when it comes to China. Most of his friends are, and always have been, Chinese. On politics, however, we are polar opposites. I am a free market conservative and he is a Trotskyist.
He began going on about the "One Percenters", the target of so much wrath around the world, the one percent of the population who are supposed to rule the world. I initially wrote it off as part of his Trotskyist leanings. When I said it was hard for Australian workers to "maintain the rage" when many of them earn $100,000 a year, live in million dollar houses and change cars every couple of years, he said they were being "bought off". The Occupy Wall St movement did much to highlight the alleged role of the One Percenters. According to my friend, the Sage of Omaha, Warren Buffett, said the One Percenters were a bunch of crooks. That is irrelevant. Membership of the One Percenters is not decided by personal nomination.
I have been involved in politics since I was a teenager and I have been writing about business-related topics for over 30 years. I will restrict my comments to Australia, as I have a fairly intimate knowledge of Australian business, government and politics. I also know quite a bit about Taiwan and China, both of which are very different to Australia.
The first thing to note is that Australia is a small country in terms of economic activity and population. The population of Australia in mid 2012 was just under 23,000,000. Second, Australia is, and always has been, an importer of capital and an exporter of raw materials. Its finance and trading industries are not internationally significant and are oriented towards the domestic market. As Australia is a young country, very few of its business and financial elite are more than a few generations removed from the farmyard or factory floor. Few people would rate as being wealthy by intrernational measures, with obvious exceptions such as Rupert Murdoch (now officially an American), Gina Reinhart, the iron ore heiress (said to be the richest woman in the world) and Frank Lowy (Westfield shopping centres, one of the world's largest chains). The Australian business elite is highly concentrated, less than one percent, but its membership is not a secret.
Australia has only four significant centres of economic activity. Sydney, capital of New South Wales, and its hinterland, the financial centre of Australia; Melbourne, capital of Victoria, mining, commercial and manufacturing centre of Australia; south-east Queenland, centred on Brisbane, the coal centre of Australia; and Perth, capital city of Western Australia, administrative and service centre for iron ore production, Australia's number one export. South Australia, the Northern Territory and Tasmania are mendicant states that contribute little to national output.
Thus, we have four more or less distinct centres of economic activity. Not so long ago, most enterprises were restricted to one State. They would be closely related to the State governments, over whom they would exercise significant influence. National players, like the Broken Hill Proprietary Co (BHP) would tailor their investment decisions to maximise their political leverage. Now, most of the regional companies have gone and have been consolidated into national or international enterprises. The business elite has thus become more concentrated. I would, however, doubt that the membership of the business elite would be much of a secret to regular readers of the financial press. I have only ever met one businessman who didn't like getting his name in the paper. He introduced himself only as "Michael" and said his investment bank made several billion by buying up pubs and their accompanying poker machine licenses when they were introduced into Victoria. He certainly wasn't the average pub blowhard but I have no idea if he was telling the truth. He valued his privacy above all else. As indicated, the fact that membership of this elite is widely known does not mean shonky deals between business and government do not occur.
Other elite structures, such as goverment, public service, police, armed services are, in Australia at least, largely meritocratic and contestable. Some, such as the Australian Labor Party, are developing family linkages similar to the Mafia. While deals are done under the 'old mates act' and many institutions are more corrupt that we would like to think, Australia is a fairly clean country. Blatant nepotism in official structures is rare.
That a governing elite exists is beyond doubt. The important thing to keep in mind is that membership is contestable In my (brief) socialistic youth I toyed with the idea of confiscatory death duties to 'level the playing field' but it would be almost impossible to imagine a more unpopular policy for the average Australian voter than death duties. Death duties are political poison. No-one seems to mind, or even envy for that matter, billionaires like James Packer or Gina Reinhart as long as they are gainfully employed. Australia is a young country and dynastic fortunes are not common. Most second and third generation "trust fund babies" don't like to dirty their hands with business and go in for philanthropy, the arts and so on. China is not a meritocractic country. The elite is co-opted into the Communist Party, which is ruled by the 'princelings.' We have no idea what goes on in the Communist Party. That is not the case in Australia. Shareholders in companies with a family tradition, such as the Myer department store chain, find it reassuring that the founding family still takes an interest in the business.
Thoughtful post. Thanks.
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