Rule of production (capital), they in effect control
Rule implies ‘collective domination, [and] the maintenance of an institutional structure within which the class appropriates benefits’ (Connell 1977: 58). The capitalist class does this in several ways. Firstly by controlling the means of production (capital), they in effect control most economic decision-making (Jagtenberg & Alton 1995: 41), not in the sense of choosing budget outlays or setting interest rates but in what goods/servides are produced and the methods of production (within the constraints imposed by consumer tastes and effective demand).
They are also able to exercise control over the workplace, how it is organised and working conditions. Capitalists have this power because capital in our society is the scarcest input of production. Individual workers, no matters how skilled need their employers far more than their employers need them, as workers do not own capital. If a nation were to be called a true ‘democracy’ then one would assume that there would be economic democracy, at least in some form.
However in its common usage democracy usually refers to liberal democracy where most decisions concerning the economy (‘the institution that organises the production, distribution and exchange of goods and services’) (Furze et al 2008: 561) are seen as outside the jurisdiction of the state, instead being left up to the ‘invisible hand’ of the market. It is then assumed that decisions that fall within the jurisdiction of the state will be ‘democratic’ in sense, however the ruling class can influence state decision making. Before going further the class interests of capitalists must be explained.
On the most basic level it is to maintain the institution of private property (which allows control of capital), to accumulate capital and ‘defending the social order which affords them privileges’ (Connell 1977: 42). These are the basic interests of the capitalist class as a whole. One might assume that the drive to maximise profits would be included. This however is part of the drive to accumulate capital and there may be situations where capitalists are willing to forgo higher profits in the short term in order to achieve long-term profits.
They could be understood as seeking to maximise profits, within various constraints. This is not to suggest that the capitalists are completely united, in fact ‘conflict within the ruling class is chronic’ as ‘different businesses have different interests’ (Connell 1977: 76). They compete with each other in order to gain greater market shares and disagree over government policy depending on how it affects them, eg financial capital may want more trade liberalisation, while manufacturing capital may want greater protectionism.
In fact the manufacturing capital’s interest in the previous example may temporarily be in line with a domestic union’s, as they both wish to prevent trade liberalisation. Therefore capitalists’ interests could be in line with third parties but only to the extent to which it benefits them. It is this competition between capitalists that causes them to act in a ‘consistent’ manner, as competition forces them to reduce costs and increase profits, in order to reinvest and gain a greater market share lest they lose out to a competing firm (Connell 1977: 77).
On any issue that does not relate to their class interests they may be divided (eg same sex marriage) as it does not affect them as a class. In general, the predominant ideas within society support the status quo, eg monarchs’ divine right to rule or the modern belief that parliamentary democracy and free markets lead to the best outcomes for all. As Marx suggested ‘the ideas of the ruling class are in each epoch the ruling ideas’ (Marx in, Edles & Appelrouth 2005: 31).
Because the structure of society places capitalists at the top (i. e. they are the ruling class) it could then be assumed that most of the ‘ideas’ within modern Australia support their position. Although this is a difficult position to prove, none of the parties in the federal parliament could be considered ‘radical’ (at least in the socialist sense). The Liberals are openly pro ‘free enterprise’ (LPA no date) and Labor is ‘enthusiastically committed to ideology and policy that favoured [favour] employer interests’ (Hollier 2004: 50).
Capitalists and major political parties are not necessarily in cahoots, merely political parties and voters, tend to support the status quo which maintains capitalists position of privilege. The ruling class could be seen to exercise this cultural power through the control of mainstream media outlets which ‘justify the [existing] social-economic system’ (Connell 1977: 192) and the funding of right wing think tanks who ‘identify business needs and … market these needs as the public good’, seeking to justify it as ‘just common sense’ (Murray 2006: 171).
In this way they exercise their cultural power ‘behind a veil of ideas’ (Jagtenberg & Alton 1995: 42) in order to create a situation of ‘hegemony’ (Connell 1977: 206) where their privileged position is overlooked (Lindblom 1977: 203). It is important to note that it is not a conspiracy, there is no small group of businesspeople who control everything that happens in Australia, business leaders often directly influence government but at a fundamental level the ‘institutions of property have the effect of placing social power in the hands of a class of owners [capitalists]’ (Connell 1977: 43).
Flowing from their control of capital and the cultural power attached to it comes the power to influence political decisions. As capitalists control the means of production, the rest of society is reliant on them to produce goods and services as well as provide them with employment. Because of this government sees business (and its capitalist owners) as more than just an interest group, hence they are ‘privileged’ and government must meet minimum demands (provide an economic climate which allows for a minimum level of profit) in order to ensure high employment and the provision of goods and services (Lindblom 1977: 172, 174).
This combined with the often common social backgrounds of politicians, public servants and businesspeople (capitalists) as well as the ideological control that capitalists have, leads to the situation where the capitalist class potentially exercises considerable power in politics. It is important to note that the state is not a ‘neutral umpire’ between groups but is ‘part of the system of power’ which continues ‘the conditions in which the system of property is developed’ (Jagtenberg & Alton 1995: 41).
The Howard Government’s ‘Workchoices’ legislation shows how the capitalist ruling class influences government policy. In 2005 the Howard government introduced its second set of Industrial Relations changes known as ‘Workchoices’ (which came into effect in 2006). The legislation was intended to deregulate the labour market in order to give greater flexibility to employers, reduce the role of the Australian Industrial Relations Commission and unions in setting wages and conditions, and reduce unfair dismissal claims in small businesses (Federal Publications 2006).
This was seen as an attempt to reduce the power of employees and unions, increasing the power of employers, and was opposed by ’59 per cent of Australians’ (ABC 2007), which was a major factor in the defeat of the Howard government This legislation was in the interests of capitalists because it would allow them to receive greater profits (through lower wages) by forcing employees onto individual contracts.
The Business Council of Australia ran an advertising campaign in support of the legislation (BCA 2005) alongside government advertising in an effort to counter the ‘Your Rights at Work’ campaign run by the ACTU. This provides a clear example of ruling class mobilisation, as the BCA is the peak body of business (and hence the capitalist class) in Australia, colluding with government in order to further their class interests.
The fact that the Howard Government lost the 2007 election shows that workers can mobilise against the ruling class and that Australia is in some sense a ‘democracy’, however the fact that Labor’s ‘Forward With Fairness’ (Rudd & Gillard 2007) does not overturn the entirety of ‘Workchoices’, instead maintaining many elements such as exemption to unfair dismissal laws and limits on the right to strike (Coorey 2008) has prompted many to dismiss it as ‘Workchoices light’ (Skourdoumbis, Questions raised over ongoing relevance of unions 2008).
This shows the extent to which the ruling class has been able to exert their influence over a popularly elected government, despite Australia being a ‘democracy’. This could possibly be due to limitations placed on government by business (Lindblom 1977) Class has historically been (Connell & Irving 1992) and is currently an important factor in Australian society (Jagtenberg & Alton 1995: 39). In modern Australian society capitalists can be seen at the top of the class system and are Australia’s ruling class, despite it being a ‘democracy’.
Various attempts to explain the concentration of power in Australia society in terms of elites (Higley 1979 et al, Encel 1970) fail to acknowledge its structural causes (Frankel 1998) and that wealth is a ‘social category inseparable from power’ (Heilbroner 1985). This is not to say that there are no ‘elites’ who may or may not support ruling class action (eg union leaders, public academics) just that there is an identifiable class (capitalists) who hold the majority of power in society, not left wing intellectuals as some have advocated (Flint 2003).
There are other elements to power in Australian society (eg gender or race) and there are many cases where a ruling class theory fails to explain elements of Australian politics, however on a class level Australian society is structured in such a way as to give power to capitalists who ultimately seek to maintain this situation and have succeeded in doing so. The lack of discussion or even acknowledgement of the situation impedes democracy and prevents thoughtful public discourse on how our nation should be governed.
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