East West tunnel – the framing of sovereign risk

For much of the history of western countries the default method of dealing with dissent was repression. While that’s still common outside the West, with usually fatal consequences, Western dissent today is generally controlled more by condescension and clever framing than overt repression.

Marxists see the manufacture of consent, as Chomsky put it, as manifestations of the theory of hegemony but that theory has its limitations in a world in which diverse communication channels make it harder and harder to effectively churn out the propaganda which produces false consciousness in the society. This reality may explain why the Murdoch media is becoming more and more hysterical, particularly about the ABC, and as its belief in freedom of speech for Andrew Bolt is hypocritically contrasted with demands for the sacking of anyone who expresses views with which the group disapproves. Mark Latham’s new book, The Political Bubble, is a good guide to how, and how often, that occurs.

Today the manufacture of consent and belief is more a product of very sophisticated framing – something the Right has been much more effective at in the past few decades than have progressives. The chapter on framing, the Holy Grail of PR, in the blog’s book on this site explains the methods by which this is achieved. See http://noelturnbull.com/new-book/

In Victoria we have seen one very effective version of this tactic in the discussions about the proposed East-West tunnel freeway proposal which the current Government is determined to sign contracts for before the forthcoming elections. The ALP, which is opposed to the project along with about 70% of the population, has said it will honour any contacts signed before the election because refusing to do so would raise questions of sovereign risk and affect the investment climate for the State.

In fact the concept of sovereign risk is a very successful example of how one can frame debates in ways which prevents change or sidelines dissent. In reality every company faces sovereign risk whenever governments change – if they didn’t miners would still be using child labour and the southern US States would still be practising slavery.

Miners in Australia raised sovereign risk during the debate about taxes on their super profits along with saying they would walk away from Australia and go to other countries – such as Ebola ridden Guinea, Mongolia and various South American countries where the mining companies have already written off huge amounts of money from poor investments.

But sovereign risk has, for the past century at least, acted as a very successful mental restriction on reformist governments. A prime example is the UK experience with the Gold Standard – a thing inevitably capitalised. In 1925 Winston Churchill, then Chancellor of the Exchequer, made one of his worst political decisions by putting the UK back on the Gold Standard at the pre-WWI rate. The Gold Standard was, at the time, one of those mystical things which all sound people were required to believe in. Needless to say, like much conventional wisdom, it was a disaster just like the financial repression which followed the onset of the Great Depression. By the early 1930s the UK Labour Government, faced with the Depression disaster didn’t consider going off the Gold Standard because that was, after all, impossible. The immediately succeeding National Government (actually Tory) promptly did exactly that on September 21 1931 prompting a Labour politician to say: “Nobody told us we could do that.”

It is a bit the same with the East West Tunnel. If the contracts are signed in the weeks before the election and a new Government decides to nullify them then the costs could well be only those the companies have incurred to that stage. To make it more palatable an incoming ALP Government could take a leaf out of Tony Abbott’s playbook and order an immediate inquiry into the issue of the contracts focussing on things such as the missing business case, the absence of a cost benefit analysis, the signing of contracts before the design is finalised and so on. As Neville Wran once observed, never hold an inquiry unless you know what the outcome will be. In this case the convenient outcome would be a finding around an outrageous misrepresentation – bordering on the fraudulent – by government of the basis on which the contracts were entered into. The ALP could even announce before an election that it planned to honour the contracts but that before work commenced it would have an inquiry into all aspects of the project in the interests of ensuring value for money.

However, with gullible progressives frightened by framing imposed by their opponents, and the fact that nobody told them they could do it, who needs repressive legislation or charges of sabre wielding Cossacks?


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