Inequality

Alex Oliver

Alex Oliver is the Director of Research at the Lowy Institute where she oversees the annual Lowy Institute Poll.

Alex in an expert in foreign affairs and has authored several major studies on Australia’s diplomacy. She is a prolific author for international press including Foreign AffairsForeign PolicyThe Wall Street Journal and BBC.com, and for all major Australian publications.

Misha Zelinsky caught up with Alex for a chinwag about how the Australian public see the world, the politics of climate change, what’s driving attitudes on immigration, why Aussies are so worried about the CCP and just what the hell is going on with polling results.

EPISODE TRANSCRIPT

Misha Zelinsky:             Alex Oliver, welcome to the show.

Alex Oliver:                   Thanks very much Misha.

Misha Zelinsky:             It’s great to have you along. There’s so many places we could start. One of the places I thought we could start was, the concept of how Australians see themselves vis-à-vis the world. Perhaps some people say, “Australians aren’t interested in the world”, what is your research and work tell you about Australian’s general attitude? Are they interested in the world? And how are they interested in the world?

Alex Oliver:                   It’s a very good question and for an organization that’s been taking public opinion polls on Australian’s relationship with the world for 15 years, you would think it would be easier to answer. But in some ways it depends on how you ask them that question. So if, as we did in 2016, we ask the question of whether Australia should play a more influential role in the world or whether Australia should mind its own business, and concentrate on our national problems, you’ll get a really divided population. Australians don’t know if they want to be forward-leaning in the world. They don’t know if we should just be insular and inward looking.

Alex Oliver:                   If you ask a question in the way that big American think tanks have asked the question, which is perhaps slightly less pointing, which is, “Should Australia take a more active part of world affairs or should it stay out of world affairs?” And you’ll get a much stronger response. So that suggests to me, and that response is sort of 80 to 15, with a few undecided, so that suggests to me that Australians don’t want to be too much of an active middle power, if you want to use that expression, that can be quite politically loaded, whether we’re a middle power, whether we’re an influential power or a significant power, there had been some disagreement about that. But we do want to be internationally engaged.

Alex Oliver:                   So that’s my long answer to your short question. We do see ourselves as having a role in the world, but we don’t want to be too forward-leaning as far as being too aggressive in the way that we prosecute our interests. And then there’s the other question, which is a geographic or geopolitical question, which is, where are we in the world? This is more a question of international identity, and this was a really interesting question we asked in 2010 and I’d really like to ask it again, except every year, in a 20 minute survey, it’s very hard to squash everything you want to ask into all one poll. So it’s a question that we need to revisit. But it was a really interesting set of responses in 2010.

Alex Oliver:                   When we asked Australians, “Do you think you are part of Asia, part of the Pacific, part of Europe or not really part of any region?” 30% said, “We are a part of Asia”, 30% said, “We are a part of Pacific”, and 30% said, “We’re not really a part of anywhere.” So that suggests our response, which is, we still are a little bit undecided of our place in the world. So not how view the world, but a really big question about our own identity. And Paul Keating of course said that Australia is, you know, this is the Asian … It wasn’t the Asian Century then, but we should be considering ourselves a part of Asia. And-

Misha Zelinsky:             You see, he was saying, “of Asia”, not “from Asia.”

Alex Oliver:                   Yeah, that’s right. And we had an Asian Century whitepaper and we had a whole, a political era of when we were thinking ourselves as part of Asia, and as far as I can tell, Australians are not really quite sure about that still.

Misha Zelinsky:             And so then, in that context, given there is a bit of confusion and perhaps space in the politics of the country for this, what do you make of Scott Morrison’s recent discussion about this sort of anti-globalist thing that we shouldn’t be accountable to unelected bureaucrats, presumably, a global institution like the United Nations or the WTO, they didn’t name them, what do you make of that? Firstly, what should we make of that generally? But is there a constituency for this in Australia more generally?

Alex Oliver:                   Another very good question. This was a speech that the prime minister made at the Lowy Institute just last week and I think we need to understand the context in which that speech was made, because that element of it was a little bit surprising, a little bit new and certainly quite different from the speech that he made to the Asia Society just a few months before up at Bloomberg, when it seemed to be a much more conventional and quite disciplined sort of approach to our various relationships in the world. This was a bit new and I guess, it could be read as being a bit reactionary, having come back from a very successful trip to the United States, well at least the first part of that trip was, with the State Dinner and only the second national leader to have been invited by President Trump for an official visit, and then going straight from Washington and that very positive affair, to the United Nations in a big climate change meeting, some criticism of Australia’s climate policies. Morrison not going along to that particular forum and having taken some criticism from that both internationally and domestically.

Alex Oliver:                   So it might have been a bit of a reaction to that, but I think that probably he’s a strand beneath that immediate context, which suggests something of the way the government is currently thinking about where we sit in the foreign policy firmament. On these issues, it is getting hard for Australia now, our stance on climate change and emissions, and on some of our immigration policies, but our asylum seeker policies, where we have been held up to criticism by some of those, I guess he calls or thinks of as sort of faceless international organizations. So I think there probably is something beneath just a reaction to a particular visit and him feeling a bit irritated by that and wanting to answer that.

Misha Zelinsky:             Well it was consistent with what Donald Trump said to the UN where he said that the future belongs to patriots not globalists.

Alex Oliver:                   Yes, but I wonder whether it’s that …? I would hope that that’s not where we’re headed, into that sort of populous, isolationist, inward-looking policies, because we’re not America, we’re much smaller than America and we’re a trading nation, we can get on to that later. Or we can actually get on to it now if you like.

Misha Zelinsky:             Well I was just curious about-

Alex Oliver:                   Australians understand that we have to be an international, an outward looking country, because we rely on free-trade, globalization has been good for us and we consistently get those sort of responses in our polling. We’d have close to 80% of Australians saying that globalization is a good thing. We have three quarters of the population saying that free trade is good for our national interest, it’s good for our economy, our standard of living, it’s even good for job creation, which is where there is sometimes some point of disagreement on whether if we have all these international relationships and allow all this freedom of movement and freedom of trade, that that will somehow impact our jobs for native Australians.

Alex Oliver:                   So we have been very outward looking and it’s been very consistently, if not actually growing. So if it is about a sort of an Australia-first, a move in an Australia-first direction, well then I don’t think that will resonate with Australians. If it is just about not being dictated to by … or being criticized by those multilateral organizations for specific, very difficult policy issues that where Australia’s interests differ from the interests of other nations, as the government sees them, and I think that’s probably where the government, where that Morrison speech was pitched.

Misha Zelinsky:             Now, in terms of you’ve talked about polling already and you’re obviously responsible for managing the Lowy Poll. I mean firstly maybe, for people that aren’t policy nerds like me, what is a Lowy Poll? How does it work? Maybe just give a little bit of background on that?

Alex Oliver:                   Yes, well firstly, I have to fess-up, and that is that now I’m a director of research at the Lowy Institute, and I’m not personally responsible for the poll anymore, I’ve handed that over to our very capable new pollster Natasha [Kasam 00:08:34], but obviously I supervise the whole research program, and I’ve had a long time dealing with the Lowy Institute Poll, so I take a particular interest in it.

Alex Oliver:                   Right, well, 15 years of polling. Our first poll was in 2005, the Institute was set up in 2004 and the then executive director and the team at the Lowy Institute thought that we really needed an opinion pool, which gauged Australian attitudes to the world, because those sort of questions were rarely asked of Australians. Not just to understand how they feel about these issues, but also to give them a voice on these issues and get these sort of issues into the public domain, get them talked about in the press. And then convey those to the political guys who make decisions on the basis of them rather than making decisions on some sort of instinct, which it may have been doing a decade and a half ago.

Alex Oliver:                   So the first Lowy Institute poll was pretty controversial. It was at a time in 2005 when we were headed towards the end of the Bush presidency. There was some very unpopular foreign policies then.

Misha Zelinsky:             The Iraq war.

Alex Oliver:                   Just to name one. The president himself was not particularly popular in Australia and for the Lowy Institute to come out with a poll, which probed that, a whole lot of things, but also that American relationship and, which found that Australians ranked American foreign policy at about the same level of disfavor as they ranked Islamic fundamentalism. It was quite shocking, I think, to politicians who, and even to the bureaucrats who may have known about these sort of undercurrents in Australian public opinion, but to have it boldly stated out there on the front page of a newspaper was confronting.

Alex Oliver:                   Since then we have taken public opinion polls every year. It’s one of our flagship products. It has evolved methodologically and I kind of think we probably need to get to that point, which is that every polling organization has faced some methodological challenges.

Misha Zelinsky:             Well let’s talk about that. You’re a pollster. It probably started with Brexit, into Hillary Clinton’s loss and then polling has been heavily discussed in Australia in light of some surprising result with the federal election in May this year. Is polling still something that we can put stock in? Or has it been somehow bastardized by the way people conceive of it? Because the maths underpinning it are not necessarily … The way pollsters conceive a polling is not the way the public interprets it … and others.

Alex Oliver:                   Well, I like to see the polling world in sort of two spheres. One is political polling, and as you say, the Brexit vote was surprising, because none of the polls really predicted it. It actually started before then. There was the 2012 election where most of the Republican pollsters predicted a Romney win.

Misha Zelinsky:             Yeah, that’s right.

Alex Oliver:                   There was a Scottish referendum where that was all completely unexpected. There was the 2015 UK election and that was a very notorious polling error.

Misha Zelinsky:             But Labor believed it was going to win.

Alex Oliver:                   Correct.

Misha Zelinsky:             Yeah, and Ed Miliband had prepared a victory speech-

Alex Oliver:                   And it was a Tory win by a wide margin. That in fact prompted a government ordered independent inquiry, the Sturgis Inquiry, which reported back in 2016, and raised some of the issues, which polling organizations the world over are encountering and, which we then encountered in our election in 2019. The sort of things that the Sturgis Inquiry reported on were … it’s overall finding was that the poll samples were unrepresentative, that it inadequately represented older demographics and over-represented younger demographics, because most of those polls were using internet-based polling methodologies.

Alex Oliver:                   Now, the Lowy Institute poll, and most of Australian political polling has been using phone polls. In the last few years, as everybody knows, almost nobody uses a fixed line phone anymore. The NBN has exaggerated the effect, because most people when switching over to the NBN don’t even bother with their fixed line phone anymore, they just use their mobiles. It’s really difficult to get people on their mobile phones, because they can screen calls and they don’t pick up, and also, they don’t want to sit with a mobile phone on their ear for 20 minutes, which is how long our surveys are.

Alex Oliver:                   So we’re all grappling with the same problems and the result of that has been that, depending on the polling organization, they’re either using a combination of phone and robo-polling or they’re using internet-based polling or they’re using a combination of internet and phone and SMS polling and so this is all in flux. When you put a cycle together and you’ve got a mixed set of methodologies like that, you need to weight each, because how do you know which bits are more important? Is each sample exactly equivalent?

Alex Oliver:                   So there’s a series of sets of post-weightings that you apply to the results to get the right answer and that can make a big difference. It can make several percentage points difference if you weight one part of the sample more than the other. What we’ve done in the last couple of years, is made, knowing that we have to make a transition to online polling, because otherwise you can’t get young people, because you can’t get them on the mobile phone either, we’ve made a graduated transition. So we’ve moved from a telephone-only poll including mobiles, to a part-online, part-phone model to, this year for the first time, a fully online model and we’ve been able to see if there have been any remarkable differences that will help us to decide how to apply the weightings to the results to get the most accurate result.

Alex Oliver:                   Now the other point, and the one that I said about the two spheres, is there are political polls and then there are issue polls like ours. A political poll, you can get sort of distorting factors like the so-called Shy Tory.

Misha Zelinsky:             The Shy Tory, yeah.

Alex Oliver:                   … which you’ve obviously heard of.

Misha Zelinsky:             Well, and maybe explain those?

Alex Oliver:                   There’s also the Lazy Labor. And the Shy Tory is the person who, when particularly on the phone, because it’s quite confronting talking to a human on the other end of the phone, and in this era of political correctness, are sort of unwilling to admit that they will vote for something like Brexit or a conservative party that doesn’t believe in climate change or whatever the factor is. So those things that they’re kind of a little bit shy about or embarrassed about saying on the phone. They’re probably actually much more prepared to do it online, because it’s a much less personal forum.

Alex Oliver:                   Then there what they call the Lazy Labor voters. Now this is a factor, and you could say the same in America about Democrats. This is a factor that refers to nothing about their work effort, but actually about turning out to vote. Now that is relevant in America and in the United Kingdom, because they don’t have compulsory voting on these things and they might a turnout of anywhere between 60% and 70%. We have compulsory voting, it’s much less of an issue. But it is a small issue and we do have turnout issues and we also do have informal voting issues. So there might be a small factor there.

Alex Oliver:                   Anyway, they’re the sort of issues that we’ve had to grapple with as an industry in the last 15 years, but it’s become particularly difficult in the last five years as we’ve made the move. Really, it was a wholesale move from doing our business on telephones to doing our business online.

Misha Zelinsky:             We still rant about politicians and union officials, so you guys are doing okay, but … I’m curious, I mean, diving into the Lowy Poll, you’ve said it’s been going since 2005, so 15 years, right? What are the big shifts in Australian attitudes over the time that you’ve noticed in running the poll?

Alex Oliver:                   I’m going to nominate, and I have thought about this, since you asked me the questions, three big shifts. But firstly, I wanted to just make a point, that 15 years is, in the way that we segregate our demographics in our polling, is about one generation. So the 18 year olds that we polled in 2005 are now 33. So they’ve really sort of grown-up.

Alex Oliver:                   That gives us an opportunity to look back over those 15 years and trace those attitudes. It’s not a strictly longitudinal poll, we don’t poll the same person. It’s not like the Seven Up program where we poll the same person every year. But we do poll the same demographic groups every year and we make sure it’s a representative sample in terms of education levels, gender, age obviously, income level … Have I missed anything? I think they’re the … Oh geographic location, urban, rural, metropolitan, the city centers versus regional centers.

Alex Oliver:                   Then whatever we don’t use that as a way of sort of measuring, in the pre-polling part, we then weight for it afterwards. Weight, W-E-I-G-H-T. We do a post-weighting process afterwards to make sure that the sample we’ve got is completely representative of the national population. So some of the shifts that we’ve noticed, and this is where the generational thing comes in, are on climate change, immigration, and I think we are just beginning to see in the last couple of years, some emerging shifts on attitudes towards China. Now I’ll start with climate.

Misha Zelinsky:             Yeah, that will be great.

Alex Oliver:                   There is a real gap between younger generations and older generations on climate, but more importantly than that, I think, is this … Can I use the hockey stick imagery? We’ve got a hockey stick picture when you look at our pictures and I’d encourage people to go online and have a look at all these numbers in pictures, because it becomes so obvious how things have changed over a 15 year period.

Alex Oliver:                   In 2006 when we first asked the question we now still ask on climate change, 68% of Australians said that global warming was a serious and pressing problem and we should do something about it, even if it involves significant cost. From that very high result, which I think the Rudd campaign then used and talked about climate change as being the greatest moral challenge of our times, and as the drought waned in the late 2000s, so did concern about climate change on the question that we asked.

Alex Oliver:                   We’ve asked the same question every year in exactly the same way to technically the same group of people. That almost halved, the concern about climate change. That’s a huge movement in six years. Now we’ve seen it swing upwards again, to the point where 61%, not quite at the same extreme level as we were back then in 2006, but 61% of Australians say that global warming is a serious and pressing problem, and we need to do something about it, even if it involves a cost.

Alex Oliver:                   There are three questions that we ask. It’s a three part question, you can choose one of three responses. There’s a middle response that says, yes, it expresses some concern about climate change, but that the problem will be gradual, and we can do something, like taking gradual steps and then the bottom one is, “We shouldn’t do anything until we know it’s really a problem.”

Alex Oliver:                   So 61% of Australians saying that, is a significant response now, and that’s actually up 25 points since 2012. So in seven years, we’ve seen the tick back up on the hockey stick to a really strong level of concern. Now the generation thing, which is that, when we ask that question for the first few years, there was very little generational difference. It was sort of surprising. You would sort of expect that the younger generations would be more concerned about that sort of thing because it concerns the future, whereas the older Australians who are less obviously personally physically affected by it, would be not quite so concerned, or to bring their old understandings of industry and coal and science and mining and all of that sort of thing.

Alex Oliver:                   But in the last two or three years, we’ve noticed a really big demographic divide on this, where 81% of 18 to 29s take that strong response, a serious and pressing problem. But only 43%, so half the number, of people aged 60 and over say the same thing. So there is a divide. Overall, the overall average is 61% and that’s where the other two age groups kind of fit in to that. So overall, you would say this has become a really pressing problem, except perhaps for that 60-plus age group. So that’s the first big shift, and one we’re we’ve seen, well, not just a shift in attitudes, but a shift in the way that generations are responding.

Misha Zelinsky:             So just on climate, I mean I think, perhaps a lot of Labor people might tear their hair out in frustration to hear that there’s 61% of people support action on climate change, and yet it seems to bedevil the party politically at most elections, including the last election. Is that young person, old person divide also, is there a similar divide on a rural regional, urban divide? Or is that almost represented by the fact that young people often live in cities? I’m curious about it because, that 61% arguably, I mean we’d have to look at the numbers are probably not overlaid across the majority of federal seats.

Alex Oliver:                   The rural, urban thing isn’t as clear-cut as the generational divide. We’ve got a bit of a problem with an error margin because with the sample, we’ve got a pretty big sample, it was 2,000 people, but once you start dividing it down into rural and urban, unless there’s a very big difference in attitudes, we can’t say that that is statistically significant. And that’s the issue with that one. So it’s the generational divide that is more important than the urban, rural split, from our interpretation of the results.

Alex Oliver:                   The other thing to note about climate change is that it’s, now we ask a question almost every year as well about what are the threats to Australia’s vita interests? And these threats are not confined to foreign policy threats. So we do ask about climate change, we ask about cyber-attacks, we ask about terrorism. This year we asked about North Korea’s nuclear program. We ask about the Australian economy. In the past we’ve asked about water issues. But this year for the first time, climate change was the number one threat. Equally ranked with cyber-attacks and just above terrorism, whereas in previous years, terrorism has been the foreign policy threat that most Australians are concerned about.

Alex Oliver:                   Then we’ve asked a different question, and we’ve only asked this once, which is to your point, which is, “How do you situate all of these threats in terms of Australia’s policy priorities?” What make them decide to vote for a particular party and for a particular policy-

Misha Zelinsky:             That’s right, because you can have all these issues at once, and they kind of compete with one another. You can be concerned about climate change, but worried about your job, and then, how do you vote?

Alex Oliver:                   It seems to me, and based on this question, which we asked in 2016, which we might revisit and we asked it in a different way in about 2007, with not much different results. Education, health and the economy, not in any particular order, but those three issues are the things which Australians rank as the most important issues facing Australia.

Alex Oliver:                   Once you get down to things like immigration, climate change, terrorism, more important than both of those, but less important than education, health, and the economy. There you start to see what actually might drive votes. Foreign policy in Australia, it’s possibly different in America, where foreign policy is a big issue and the Iraq war was obviously a huge issue there and America’s sort of global interventions generally, but in Australia, foreign policy is less motivating in terms of getting people to decide where they put their tick on the ballot box.

Alex Oliver:                   Except, and there have been a couple of exceptions, and one was the Whitlam election and the other I think probably was arguably the Rudd election, although it’s hard to know there whether that was a time, it was time to move on from a very long Liberal government to a different government. It’s hard to say and I have been grappling with this question about, you know, do these issues like climate change, which repeatedly come back to us in our polling as being a really quite serious concern and in this years poll, the most serious concern, far more so than the prospect of a downturn in the Australian economy. When do those issues actually start to drive votes, and obviously not in 2019.

Misha Zelinsky:             I mean you touch on the fact that in 2005 climate change was very concerning, then it dipped down, the drought broke, it rained significantly and then now we are in another period of drought. The polling would at least, on an anecdotal basis or a correlation basis, seems to be-

Alex Oliver:                   It correlates with the weather.

Misha Zelinsky:             … moving together. Yeah. It’s interesting that people seem to need a measurable or visible demonstration of what can be an abstract concept of carbon emissions. You can’t sort of see or touch it, but you can certainly see the consequences through drought.

Alex Oliver:                   I think that’s probably the most important factor driving concern about climate change, is the very physical, confronting presence of a drought, and I think that’s one of the main reasons why we’ve seen rising concern about climate change since 2012 to the point where it is now and if the drought continues, I expect it will keep going up.

Alex Oliver:                   The other factor I think is the policy environment and if, you know between 2007 and 2014, when attitudes about climate were much less concerned, there was sort of a sense that there was some policy movement happening. There was all sorts of prospects of a carbon tax, a carbon pollution reduction scheme. The carbon tax was eventually introduced, it was then dismantled, but in those years when concern about climate change was falling, there was a lot of policy activity.

Alex Oliver:                   In the years after the election of the Abbott government 2013 to now, I think there’s been a sense of either policy vacuum or a policy paralysis or a policy indecision, probably until the last couple of years when we’ve talked a lot more about a climate policy with the Finkel Review and now, we have an energy policy now, not so much as a climate policy. So I think the policy settings, the policy environment has something to do with it as well, but I think, you’re right, the driving force is the climate, funny enough.

Misha Zelinsky:             Now, so the next big one you mentioned was immigration. Maybe you can take us through how the attitudes are shifting there, because I’m sure it’s not just an Australian phenomenon, we’re seeing this all around the world.

Alex Oliver:                   Well yeah, so this one’s hard to read here. I mean it’s easier to say that we’re suffering the same sort of anti-immigration backlash as is being reflected in the populous politics of other western nations, the United Kingdom, the United States and across Europe. What we saw last year was a big spike in anti-immigration sentiment in that, we went from 40% in 2017 who said in response to a question, “Do you think that the immigration rates to Australia are too high, about right or too low?” 40% said that they were too high in 2017, and that shot up to 54% in 2018. Now a 14 point rise in one year is something we consider quite dramatic.

Alex Oliver:                   We then of course asked the same question in 2019 and we found that that response had moderated. It had then dropped seven points in one year. Now, we changed methodology in the middle there, where we shifted from a 50/50 panel online and telephone to a completely online panel. That may have had something to do with it, but I suspect not all to do with it, because we had had that spike and then a moderation, in that second result there, where 47% of Australians say that our levels of immigration are too high, is still significantly higher than the 40%, so seven points higher than the same people we said that in 2017 and 10 points higher than when we asked the question in 2014.

Alex Oliver:                   So there does seem to be some underlying rise in sentiment against high levels of immigration, but not as dramatic as we might have thought last year. Now, the sort of things that we were talking about last year when we polled that in 2018, where we’re talking about house prices, we were talking about Chinese investment in residential real-estate, a question we’d asked the year before and we’ve got very strong responses on that. We’re talking about congestion and crowded cities and urban overcrowding and all those sort of things. There was a lot of conversation about it, and it seemed that the respondents might have been responding to that sort of debate that was happening in front of them.

Alex Oliver:                   That debate seems to have eased as house prices, as we all know, came off the boil. But there is still a conversation, very much a conversation about congestion and lack of infrastructure and urban crowding and that sort of thing, so I think that is what is driving this concern about immigration, is that Australia can’t sustain those high levels of immigration, unless we have some really positive, strong policy responses that address overcrowding in our cities.

Misha Zelinsky:             It’s interesting isn’t it that what’s essentially an urban planning question, capacity around roads, rail et cetera, has a sort of a dimension that’s related to foreign policy or immigration, but I mean, do you have a sense of how much of it relates to …? You know, because often people say, well it’s an economic scarcity argument or it’s a cultural backlash or it’s a racism question. I mean, Australia has a rather vexed sort of background relating to immigration, particularly with the White Australia policy. It’s very difficult to get to the bottom of what is truly driving that question. I mean, you seem to be saying congestion, but could it be those other things as well?

Alex Oliver:                   Well, we have asked the question. We’ve asked it a couple of times, about a range of aspects of the immigration question to try and find out what might be driving attitudes towards the rate of immigration, but overall, we get overwhelmingly positive responses on the idea of immigration. That it makes the country stronger, that it’s good for the economy, we get very low responses on things like, “Immigrants are a burden on social welfare systems”, or “They take away jobs from other Australians.” That they respond to the idea of sort of a cultural mix making Australia a stronger place. So as far as we can tell from our polling consistently over the last few years, is that generally attitudes towards immigration are very positive. That the problem is not immigration per se, the problem is the rate of immigration and that’s why I came back to overcrowding and lack of infrastructure.

Misha Zelinsky:             That’s interesting, because one of the other things that people that talk about these issues, discuss them, is that there seems to be a correlation between, and certainly a thing at 2010 and 2013 elections, around the question of refugees and control of migration. Now Australia has relatively settled that political debate, but you’re seeing this backlash of nativism in Europe. It seems to have correlated with a sharp up tick in refugees out of the Syrian crisis. Is there a link between those things? Between control of migration, refugees and immigration at all? Or-

Alex Oliver:                   Well, I don’t know-

Misha Zelinsky:             … is it hard to know?

Alex Oliver:                   Yeah.

Misha Zelinsky:             I appreciate that you’re correlations, not causation et cetera-

Alex Oliver:                   Correct.

Misha Zelinsky:             … but I’m just curious.

Alex Oliver:                   I mean John Howard always used to say that unless you have control over your borders, you won’t have any confidence in your immigration program. From what I can see, that’s probably right, in the sort of results that we get from the questions we ask about immigration. I mean, obviously the refugee flows in Europe are nothing like the refugee flows we get to Australia, so we’re talking about magnitudes, orders of difference. But I think he was right to say that if we don’t have that, in the coalition sense, that control over the borders, then that does undermine confidence in a strong immigration program. His expression of a view, which I think probably resonates with the Australia public based on those sort of results.

Misha Zelinsky:             And John Howard, not to speak for John Howard, or advocate for him, but he of course, said that by being tough, some would say too tough on refugees, that Australia was able to sustain a large intake of permanent migrants and skilled migrants. So it’s an interesting nexus there. That-

Alex Oliver:                   We’ve asked a number of questions about offshore processing and about the treatment of asylum seekers. We noticed a softening of attitudes. We got very, very strong responses to Operation Sovereign Borders around the time of the Abbott government’s election, sort of just after say in our 2014 polls.

Misha Zelinsky:             That “Stop the boats” rhetoric?

Alex Oliver:                   Yeah. “Turn back the boats when safe to do so”, the idea of protecting Australia’s sovereignty, that was a strongly favorable policy. 70% of Australians agreed with that. Where there is much more division is on the idea of offshore processing about never allowing asylum seekers to come onshore regardless of their refugee status. Those policies were much more polarizing. Temporary protection visas, going back through the years, we’ve asked a dozen questions at least on this and there was much more division about that.

Alex Oliver:                   What there was a strong response was on the idea of turning back boats and I’m pretty sure we used the expression Operation Sovereign Borders and I think that was a clever piece of policy naming because it really seemed to resonate with the people we asked that question to.

Misha Zelinsky:             You might accuse the Liberal party of polling their policies but … So just turning to the third big trend you talked about, which is the relationship with China and I thought that this really stood in the last poll, in the 2019 poll. Was the way the Australian public perceives the relationship with the Chinese government and how China it acting in the region. I was curious about, do you think that Australians are somewhat ahead of the political class in this? Because it was interesting that big shift that we saw in those numbers, maybe you can explain that?

Alex Oliver:                   Yeah, this was a really interesting year to be asking questions about China. We’ve asked questions about China since 2005, but this year we really noticed a shift. So in the past I wouldn’t have characterized Australian’s relationship with China, not the government’s relationship with China, but the Australian people’s relationship, as a little bit bipolar. So on one side of that center line, the strongly positive responses, really strongly positive responses on the Chinese people, its history and culture and China’s economic performance.

Alex Oliver:                   On the other side, and very strongly negative responses, so you’re really seeing that sort of polarization of attitudes, were on things like China’s political system, its record on climate policy, and I think that relates to actually just its sheer size and the fact that it’s a big emitter, even if it’s not per capita. The strongest negative response is on China’s human rights record. In the mix there also, is a little bit of anti-Chinese foreign investment in Australia.

Alex Oliver:                   What we’ve noticed this year is that there are some real subtleties starting to emerge. We asked a couple of years ago for the first time, about foreign interference and this was about the time when the first political scandal emerged about Chinese attempts to influence, operators, businessmen attempts to influence through political donations and through their own networking, the attitudes and stances of Australian politicians. It was front page news and there were ABC documentaries about it and it was a very prominent debate, and yet when we asked that question, we found that in the hierarchy of things that Australians were concerned about as a threat to our vital interests, it came very low down in the list. And in fact when we asked the question first, we asked about foreign influence from China and we also asked about foreign influence from the United States.

Alex Oliver:                   Now in the context, where nobody was talking about America’s foreign influence in Australia at the time, and they were obviously talking about influence from Chinese businessmen and the Chinese government, that was a pretty weird response, that the reaction was about the same. It was, “I don’t like the idea about foreign interference, but I’m not really sure where it’s coming from.” Two years later, we find that around 50% of Australians think that foreign interference in Australian politics is a threat to our vital interests, but overlaid on that, a whole lot of other really equivocal if not very negative responses on things like foreign technology, which was obviously a question geared to the Huawei issue and the way that the government has responded to that.

Alex Oliver:                   When we asked about whether in considering such an issue of bringing sophisticated technology to Australia, “Should you be most concerned about protecting Australians from foreign state intrusion, or bringing the most sophisticated technology to Australia, or whether cost to the consumer is the most important priority?” The highest response there, with nearly half of Australians saying that the most important thing is to protecting Australians from foreign state intrusion. So it’s not about costs, and it’s not about technology, it’s really about the idea that there is some sort of threat to our sovereignty and our freedoms if we are to allow a foreign company like that to come in and potentially undermine our security.

Alex Oliver:                   We also see some strong concerns about the Pacific and China’s increasing presence and influence in the Pacific, where 73% said that Australia should try to prevent China from increasing its influence in the Pacific. That China’s infrastructure projects, so that’s the Belt and Road initiative, where China is building these big infrastructure projects across Asia and more broadly, and nearly 8 in 10 Australians said that those infrastructure projects are part of its plan for regional domination.

Alex Oliver:                   Then I think the final one was, a question about Australia’s economic relationship with China and this was very striking, because in the past, there have been some clear results that suggest that Australians see China as having been very positive economically for us, that it has been the reason why Australia has avoided a recession through the Global Financial Crisis and that the Chinese economic story was a positive one, whenever we’ve asked about it.

Alex Oliver:                   But, this year we asked about Australia’s economic dependence on China and we’re finding 8 in 10 Australians who say that we’re too economically dependent on China. The economic story has shifted from being a positive story, and a very positive story to being quite a negative factor in the relationship. Then of course, finally, human rights. There’s been a lot of discussion about the Uyghurs internment camps, reeducation, and then-

Misha Zelinsky:             And the Hong Kong situation?

Alex Oliver:                   … now, the Hong Kong situation, but that’s actually emerged post our policies.

Misha Zelinsky:             Well that’s interesting. Could we even [crosstalk 00:42:30].

Alex Oliver:                   But I suspect if we asked the same question about Australia doing more to protect human rights in China, we will get an even stronger response on that post-Hong Kong.

Misha Zelinsky:             I think what was interesting, and you’ve sort of taken us through a great tour of the numbers, but the one that stood out to me was that nearly the same amount of people that said that Chinese investment in the BRI was a part of regional domination, nearly the same number said that Australia should do more to resist China’s military activities in our region, even if this affects our economic relationships. That’s quite interesting that security, and the sense of the Chinese Communist Party’s intentions in the region are being viewed with a lot of suspicion. I think a lot of people maybe underestimate how sophisticated the Australian public are in viewing the behaviors of the Chinese Communist Party and the Xi regime. Would that be a fair thing to say do you think?

Alex Oliver:                   Yes, and I often say that when people talk to me about polls, and they’d say, “Well, do Australians really care about this stuff? This is all very complicated.” One year we asked them about freedom of navigation operations, and we got a 75% response saying, “Yes, we should be conducting freedom of navigation operations.” So I say, underestimate the Australian voter at your peril, because while they may not devote a huge amount of time thinking about it, when they do think about it, and they’re asked questions about it, they respond with some sophistication.

Alex Oliver:                   You’ve raised a point that was a result that I didn’t mention, but it’s exactly in the same lines as the ones that are concerned about Belt and Road, who are concerned increasing China’s influence in the Pacific and who are concerned about Australia’s economic independence, is yes, that its military presence in the region is of concern and that we should be doing something to stop that, even if that’s going to involve some economic hit to Australia and that’s of course new.

Alex Oliver:                   The concern of the business community and industry in Australia and any exporter, is that if Australia sticks its head above the parapet, and responds to China’s moves in any sort of … In a way that China would read as aggressive or interfering, is what is going to be the blow back?

Misha Zelinsky:             Well that’s right, yeah.

Alex Oliver:                   The retribution on Australian business. So will there be more coal held up in Chinese ports? More wines stuck on Chinese ports, unable to get to its markets.

Misha Zelinsky:             And fewer students being sent here-

Alex Oliver:                   Fewer students being sent here. I think that’s our third-largest export, foreign students, so we’re at a point where there are some very serious tensions between what we do in a policy sense towards China and how that impacts on our economic relationship. Two years ago I would have said Australians would have said, at almost all costs, the economic relationship must be preserved. 8 in 10 Australians say it’s possible to have a good relationship with China and a good relationship with the United States at the same time. Any sort of question like that, they’ve always leaned very strongly. They would have said, a year ago in fact, when we asked a question about whether it’s the economic relationship, or the military threat from China was the biggest factor, most people would say, 75% of Australians would say, China is more of an economic partner than a military threat.

Alex Oliver:                   I think that’s changed, and I think that will be interesting for the government to weigh into its policy settings, when it starts considering this balance of having the cake and eating it too, and just how much will we allow China to make those incursions on our sovereignty and constrain our freedom of expression and choice in relation to these issues.

Misha Zelinsky:             It’s interesting the way that Australians seem to have responded to the concept of a foreign power interfering in our way of life here, and I think that that seems to have manifested in the numbers. One of the things I’d be curious about, you’ve talked about the Chinese relationship. I suppose the other side of the coin is the US relationship. At the beginning there, we talked about the negative views of the US president at the time, and US foreign policy, the Bush administration, 2005. How much has the Trump administration undermined the perception and prestige of the United States in the Australian mindset? It’s something that I think is a challenge for the United States in that context.

Alex Oliver:                   It is, and they’re obviously very concerned about the numbers coming out of Australia, including our own public opinion work, which shows that the American president is actually less trusted than the Chinese president. With only 25% of Australians saying that they have confidence in Donald Trump to do the right thing regarding world affairs, whereas 30% will say that about Xi Jinping, which is interesting, but when you look at the picture overall, Australians seem to be able to separate out their views about an individual who is sitting in the oval office from the relationship as a whole.

Alex Oliver:                   When you look at the relationship as a whole, well we can look back 100 years, but I’ll confine that to the 15 years we’ve been taking public opinion polls, overall, never fewer than 90% of Australians have said that the alliance is important for Australia’s security. Overall, attitudes towards America on our feelings thermometer, where we measure feelings on a scale of 0 to 100, so 100 is warm and 0 is freezing, never have feelings towards the United States fallen below 60 degrees.

Alex Oliver:                   This year the gap between the United States and China are on that thermometer, which is a basic question, but really quite revealing, the gap there is around 15 points, so the warmth towards the United States, despite the fact that we have two very unpopular presidents, or one very unpopular president and one president that Australians might be slightly scared of in Xi Jinping, the relationship between the United States and Australia operates on many different levels and not just about the interpersonal relationship between our prime minister and their president or the character of their president.

Alex Oliver:                   So it has weathered those changes in presidents, yes President Obama was very popular here and yes, the relationship with America generally warmed during those Obama years, and it was warmer than it was during the waning years of the Bush presidency. The Iraq war was an unpopular policy. Here in Australia, we wearied of our engagements in the Middle East and the American relationship and our feelings towards it took a hit, but never severely and never to the point where we felt less of it than we did of China, our other major partner. So I guess we are at a bit of a delicate balancing point in the relationship in that at some point where our relationship has been grounded in similar values, and we know that Australians have responded to that sort of question when we ask about what underpins attitudes towards the United States.

Alex Oliver:                   It’s not just the idea that they’re our security guarantor, or that they’re going to come to the defense of Australia, but that we have similar histories, we’ve been involved in wars together, that we have similar values and political systems, we are like-minded in many more ways obviously than we are with the Chinese. The question I guess is, if Australians start to perceive the values of America as diverging too far from ours, will we start seeing that relationship falter? At the moment, I don’t see any evidence of it. At the moment, I think there’s an unpopular president, well he’s unpopular here anyway, and that-

Misha Zelinsky:             His popularity hasn’t gone above 50% of the US either, but, on approval, but …

Alex Oliver:                   Yeah, Republicans love him though, 90% of them say he’s doing a good job.

Misha Zelinsky:             Indeed.

Alex Oliver:                   But at the moment, the relationship is solid. There a bit of a difference in generational attitudes towards the United States, so younger people are less favorable towards it and older people are much more favorable towards it, but the young are not negative towards it, so that’s an important point. The other important point is that it’s quite a non-partisan relationship as well, in that if you look at the responses from people who identify as Greens, who identify as Labor, who identify as One Nation, Liberal, National, across all of that political spectrum, the results are still positive towards the United States. So it’s not a particularly partisan relationship.

Alex Oliver:                   We see that, and in that we see both Labor and Liberal spokespersons on foreign policy talking about the US alliance as the bedrock of our foreign policy, so around the bedrock of, the foundation of Australia’s security.

Misha Zelinsky:             One thing I saw in the poll and I’m curious to get your take on this. It was the perceptions of how much of Australia’s budget is made up by foreign aid spending and what does that tell us about the way Australians perceive foreign aid? Is it possible that it might shift over time as we see these threats emerging in things like the Pacific or in our neighborhood? Australians have identified, I think 55% have said they’re very afraid of a Chinese base being built in the Pacific, in our region and it was reported that they had contemplated doing that via the BRI in Vanuatu. So the perceptions of foreign aid and cutting things like the Australia network, how can those attitudes … Do you think they’ll shift over time? How can policy makers convince Australians of the need to be more invested in our region? A big question.

Alex Oliver:                   Well there’s a couple of questions. You’ve got a couple of points here to your question, which is a tricky one and that is, if you ask Australians about the proportion of budgets that is spent on foreign aid, they will grossly overestimate it. But that’s unsurprising because nobody knows how the budget is cut up. The government is not particularly transparent about the way that it cuts it up. There’s a pie chart every year in the budget papers, well who looks at that?

Misha Zelinsky:             Joe Hockey looks at it I think, but that’s it.

Alex Oliver:                   Apart from the bureaucrats, and obviously the expenditure review committee or whatever goes into making up a budget every year, what a nightmare. I’m not surprised that Australians get that wrong. They do think we’re more generous though than they think we should be, so on average in 2018, the average response when you ask them what they think is spent on foreign aid, they’ll say 14% of the budget. When you ask them what they think should be spent on foreign aid, they say 10% of the budget. So they actually think that we’re being a bit more generous than we should be, even though the numbers are completely wrong. The actual amount that Australia spends on aid is less than 1% of the budget, so they’re wrong by a factor if 10 at least.

Alex Oliver:                   The other question is, do they actually characterize support for the Pacific as foreign aid? I think it’s the way that you talk about it. If you just say foreign aid, they’ll say, “We’re giving money to starving people in Africa”, or whatever it is, drought relief in some other country. Once you make it very specific and you say, “We want to help the people in our region to do better in life, to give them better development outcomes, to support them to become stronger countries”, then I think you get a much more positive response.

Alex Oliver:                   Whenever we’ve asked, and this is before the Pacific step up of the current government, whenever we’ve asked about Australia’s responsibility towards the Pacific, we always get a very strong response, as in 8 out of 10 Australians say that we have a moral obligation towards the Pacific. If you talk about specific obligations with aid and whether we should be spending money to help our nearest neighbors, you’ll get a very positive response. I think the step up has obviously made a difference and I think the idea of a potential Chinese encroachment into, and I say, a port in Vanuatu or in PNG or some other Pacific nation, then it starts to get more pressing, but I think Australians generally feel generous towards the Pacific, even if they don’t feel generous more generally with respect to aid.

Misha Zelinsky:             So it’s the context right? I mean, take for example-

Alex Oliver:                   I think it is the context and I think that governments focus on the Pacific and on our near region in terms of spending our development dollars-

Misha Zelinsky:             Because that feels tangential and you know?

Alex Oliver:                   … is something that will be much more present, pressing, relevant for the Australian public, than spending it … dispersing it more broadly across the globe.

Misha Zelinsky:             So we just sort of for the tape, we just knocked over a bottle of water, but everything’s fine, everything’s fine. So on that, I know you’ve spoken about this in the past, but how important is something like the Australia network in the role that you play in that soft power part? The American government for example is very concerned with the soft power it projects. The Chinese government is very concerned about the soft power and it’s united front work, the way it projects itself. I mean are we doing enough to forward project our soft, benefits of Australian way of life and values in our region?

Alex Oliver:                   Well, no. We don’t have a huge amount of public opinion data on this. I did ask the question, I think it was back in 2011 before I was running the poll, and my colleague Fergus Hansen was drafting the questions and I said, “Can you please ask a question about public diplomacy and international broadcasting?” And the response was very positive. It’s hard to disagree that we should be projecting a positive presence of Australia abroad, but again, it comes down to budgets and priorities and this government has not prioritized Australia’s international broadcasting. That’s a completely different and very complicated story.

Alex Oliver:                   We’ll be releasing a paper on it actually later this year. We did a big study on it in 2010 and we’re now updating that, looking at how the countries as you mentioned, who really do prioritize their public diplomacy and their international broadcasting as a way of communicating their soft power to other countries around the world in the idea that that will warm them to us and it will make it easier for us to get the thing done that we need to and to build international constituencies for policies that are favorable towards us.

Alex Oliver:                   I mean I think it’s a non-brainer, it’s not that expensive, it’s an incredibly cost-effective way to reach large audiences, and the fact that we have not even been able to do that in the Pacific, and that we’ve cut the budgets. Having cut the Australia network, which was a program that was funded by the Department of Foreign Affairs, that was cut by the Abbott government and now the ABC’s international division has been disbanded and its budgets for international broadcasting cut even further to the point where we don’t even broadcast shortwave into the Pacific anymore for vast parts of the Pacific, which can’t receive any other forms of communication, that certainly don’t have effective broadband connections, is kind of a travesty to me. But that’s my personal view.

Alex Oliver:                   I think that we should be doing much more to project Australia’s values, way of life, political system, democratic ideals around the region. If this is what everybody else is doing, it’s what China is doing, it’s what America is doing, and we need to be part of that story, particularly in our region, obviously particularly in the Pacific. So I have torn my hair out, I actually do still have some hair, but … over the last decade about this. This really difficult policy issue, but really, it shouldn’t be that hard.

Misha Zelinsky:             Yeah, because if we don’t do it, someone else will, right? There’ll be a vacuum that will be filled by another country no doubt.

Alex Oliver:                   Well that’s what the issue has been with the dropping of our shortwave frequencies. We had shortwave frequencies where we broadcast in many languages actually, eight languages, into the Pacific as soon as just about five or six years ago, and now we broadcast in two languages, Tok Pisin and Australian and we don’t broadcast in shortwave anymore. The risk always was that all of the countries, and some other countries, not just us, are dropping their shortwave frequencies and opting for cheaper FM and long-line “broadcasting”, that China would pick up those frequencies, and China has been picking up those frequencies. There’s actually no evidence that they’ve picked up our frequency to broadcast into the Pacific. We haven’t seen any evidence of that. They’ve certainly picked up the frequency, what they’re using it and where they’re broadcasting it to is another question. But yes, of course, that is the risk.

Misha Zelinsky:             Now, the next question I want to ask you about, and I know you’ve spoken about this publicly, but the question of gender balance in foreign affairs, it’s a, dare I say it, a very blokey world? It still remains that, of course, we had our most recent first ever female foreign minister Julie Bishop and now we have another one, Marise Payne, but that’s the first two ever in very near time. Now how do we get more gender balance in foreign affairs, but also, how do we encourage young women, young girls, to get more interested in it at an early age, and build that pipeline?

Alex Oliver:                   Very good question. We released a paper on this, which was a three year study that dredged up all this data, which is not particularly easy to find, from intelligence agencies, defense agencies, foreign affairs. We did some comparisons with other countries, and we found out that overall, Australia is neither particularly better nor particularly worse than any of its international counterparts. If you look at America and the United Kingdom, Canada, we might be marginally worse than a couple of them, it’s not dramatic.

Alex Oliver:                   But yes, the overall picture is that this is a sector of Australian society that is blokey, it’s male. About two thirds for example, of appointments to ambassadors positions, our ambassadors abroad, are male and Australia has never appointed a female ambassador or high commissioner who’s the equivalent in the Commonwealth countries to the United States, United Kingdom, Indonesia, Japan and Thailand. The exception was China.

Alex Oliver:                   Part of this problem is political appointments. We also have a very blokey politics and so when you’re looking at appointing a plum political position to one of your political mates, then it’s more likely to be a male than a female, because there’s just simply more. So it’s sort of a vicious cycle.

Misha Zelinsky:             Yeah, one begets the other, sort of thing, yeah okay.

Alex Oliver:                   So that has a real impact. The male political appointments has real impact on the gender balance of our ambassadorial makeup and Department of Foreign Affairs, with its professional appointments, so professional diplomats, has been doing its level best to get a better gender balance, but it’s kind of hobbled by these political appointments. But there are other parts of the sector, which still need a lot of work. The intelligence sector is dramatically male. Security clearances could be part of that. We did look in detail at security clearances. If you’re going to work for an intelligence agency or the Defense Department in a classified kind of role where security clearances are necessary, there was a clear correlation between the higher security clearance and the number of, and the proportion of males and females. It may be that women are kind of put off by the whole security clearance process, which can be quite invasive. Once you actually got into the process, we didn’t find any gender imbalance in whether you were awarded, whether a male or a female was awarded a clearance once they were in the process. But that might be a deterrent factor.

Alex Oliver:                   I think more broadly the sort of things that you see across all sectors of society in the male female imbalance, if you’re looking at accountants or lawyers or other professionals where males dominate, you find the females dominate at the graduate level, you’ll get more women law graduates for example, coming in to work, that you will male graduates, but by the time you get up to the senior levels, you’ve lost half of the women, then you’ve only got a third of the leadership group being women. Some of that you can sheet home to families and family responsibilities, but some of it you can also sheet home to, it’s much more difficult for women to work and mange childcare and manage home responsibilities. They are the sort of things that are not unique to this sector, but really need to be looked at.

Alex Oliver:                   Networks, men are good at networking, it comes naturally. I’m making gross generalizations, but we did a survey on this, we got about 600 or 700 responses, and that was a consistent theme was that, male networks are effective, women are not as good at leveraging those. That suggests that there’s an opportunity for better mentoring programs, for coaching through the promotion processes. How do you apply for a promotion? How do you perform in an interview or a promotion round? Looking at the way that you measure merit.

Alex Oliver:                   Now merit is one of those things that some are constantly harping on about, while we always … We rely on merit as if that is some sort of gold standard. Without acknowledging that built-in to the concept of merit, is a whole lot of and potentially biased measurements of what actually good performance is. Is good performance presenteeism, is good performance going out for a lot of networking lunches or bringing in potentially lots of new clients when, in fact, it might have been a lot of the background work that made that happen. It might have been a lot of the work at home, if you were able to work flexibly, that you weren’t able to be physically present.

Alex Oliver:                   The idea of merit can be quite a loaded concept, and we should be aware of that when we say that we promote on the basis of merit. The other thing is, and particularly for this sector, is overseas placements. So it’s very important if you’re working in this sector, to get an overseas posting. So if you’re a diplomat or a defense expert, or somebody who, like me, works in foreign policy in a think tank or in an academic institution, then it’s really important for your career that you go abroad.

Alex Oliver:                   There are all sorts of misperceptions about whether women, like me, with children, would actually want to go abroad and sometimes they’re just simply overlooked and discounted for those sort of placements. Or they are told that, you wouldn’t want to do that, or you couldn’t do that or it’s a six month placement or it’s a three year placement or whatever. We get quite a lot of feedback about those sort of misperceptions of females motivations, in terms of overseas placements. They were just a few of the things that we were looking at in ways to address this very obvious imbalance.

Alex Oliver:                   Then finally, transparency. A lot of this data was very hard to find. One of the reasons why we spent so long on it, was we got really stuck on digging out some of the data. It’s there, but it’s hard to find and sometimes, particularly across the intelligence sector, it’s quite secret and you have to ask for it. Now if the data is public, then the issue is in the spotlight and there’s a continual pressure to maintain and to keep working on, you know, continuing to work on your gender balance. If the data is secret, well there’s no pressure at all. So I think one of the most simple steps is actually to make this data public.

Misha Zelinsky:             Well, that’s a lot of good lessons there. Now, just to round things off, we’ll pivot to, seamlessly as I always do, to the final question I ask all my audience members. I’m quite eager to hear your answer to this. So a barbecue at Alex’s place, three foreign guests, alive or dead, who would they be and why?

Alex Oliver:                   Oh, well you didn’t say alive or dead. Well, that’s a whole different question.

Misha Zelinsky:             Oh well, alive, then it might be more interesting!

Alex Oliver:                   Let’s just focus on the live ones. Well, because you know, I like having friends at a barbecue.

Misha Zelinsky:             Yeah, you do.

Alex Oliver:                   And I would never have described myself as a good networker, so my first person would be Mana Rawlings, who was the UK high commissioner here for a few years, she left last year. She’s a great girl. She became a friend while she was here. She was a fantastic ambassador for the United Kingdom or high commissioner, as they’re called. She’s now what we would call a deputy secretary level. They called her director general at the Foreign and Commonwealth Office, so very senior in the role. She’s got responsibility for Asia Pacific, The Americas, whole parts of Asia and global Britain and of course that’s a very-

Misha Zelinsky:             A tough portfolio.

Alex Oliver:                   … that’s a very tough portfolio in the context of Brexit, but I admired her enormously, apart from the fact that she was very good fun. She was such a valiant promoter and defender of Britain, even in the face of a very contorted and convoluted and complicated and at times, shocking Brexit process, which she was here as high commissioner. That, she would be a great person to have around, particularly around about the time of the Brexit vote, to get her interpretation of it all.

Misha Zelinsky:             Absolutely.

Alex Oliver:                   I’m going through a bit of a spy frenzy at the moment. I seem to be reading a lot of spy novels and watching a lot of spy TV, The Bureau, was the last one, the French one, and I’m currently reading a book called, The Spy and the Traitor, by Ben Macintyre.

Misha Zelinsky:             A great book.

Alex Oliver:                   You read it?

Misha Zelinsky:             Yes.

Alex Oliver:                   I’m about a third of the way through it. It’s absolutely fascinating. Oleg Gordievsky I assume that’s how you pronounce it, was a Russian-

Misha Zelinsky:             Defector.

Alex Oliver:                   … KGB colonel who defected to the United Kingdom, but he was a double-agent for Mi6 on behalf of the British for a whole decade. He’s now 81, and I would kill to sit down and have a conversation with him. He sounds like an absolute character.

Misha Zelinsky:             A fascinating story, yeah.

Alex Oliver:                   I don’t know, that’s a tough one with the rest. I met only once, briefly, but would love to get together with her again, Kelly Magsamen, who’s the vice president of national security and international policy at The Center for American Progress, which is sort of a fellow think tank in America. She’s a real dynamo, she doesn’t mince words, and I would love to have a chance to sit down and have a drink and a good chat with her. Pete Buttigieg.

Misha Zelinsky:             Yeah Pete.

Alex Oliver:                   I’m intrigued at how a mayor of a small town in Indiana South Bend, runs for president. The youngest-

Misha Zelinsky:             A 37 no less-

Alex Oliver:                   … mayor of a US city with at least 100,000 residents, which is not very big. But, supremely qualified, Harvard, Oxford, Rhodes Scholar, McKinsey, intelligence officer, having served for I think for seven months abroad. I think that would be a fascinating chat too.

Misha Zelinsky:             Well, I tell you, so we would have an ambassador, a KGB spy, the head of a think tank, and a presidential candidate and then-

Alex Oliver:                   Pretty good huh?

Misha Zelinsky:             … all at a pollster’s house.

Alex Oliver:                   And all alive.

Misha Zelinsky:             At a pollster’s house, so it’s almost like you feel like as though, there’s a good focus group there, but look thank you so much for joining us Alex. It’s been a fantastic chat and I hope everyone’s learned just as much as I did.

Alex Oliver:                   Good luck with the editing. Thanks Misha.

Misha Zelinsky:             Thanks.

 

Wayne Swan: Economic inequality and the global rise of right wing nationalism

Wayne Swan is the President of the Labor Party. He served as Australia’s Treasurer from 2007 to 2013 and was Deputy Prime Minister. Wayne is credited with helping save Australia from the GFC and in 2011 was crowned World Finance Minister of the year.

As the author of numerous books on social policy, he has lead the domestic and global debates on the dangers of economic inequality. 

Wayne joined Misha Zelinsky for a chinwag about what went wrong at the 2019 federal election for Labor, why fiscal policy still matters in economic management, how far right nationalists are using inequality to win government around the world, why big philanthropy is a big problem for democracy, how Australia should manage an assertive Chinese Communist Party and where to from here for social democrats around the world.

 

Misha Zelinsky:             Wayne Swan, welcome to Diplomates. Thank you for joining us.

Wayne Swan:                Good to be here.

Misha Zelinsky:             Now, what a place so we could start. It’s been a few months since the 2019 federal election. It was a difficult one for Labor Party people, the Labor Party supporters and members. I’m kind of curious, firstly, did you see it coming? And then, to your mind, what went wrong is the big question. But we can start there maybe.

Wayne Swan:                Well, I didn’t think we were going to have an easy victory. And I think the way in which the opinions polls were hyped up and the expectations got out of control and the bookies got it all wrong simply heightened an inevitability about our victory that wasn’t there in the foundations. And indeed, I don’t think it was there in the published opinion polling either.

Wayne Swan:                Yes, it was wrong, but it was not out in many respects and there’s no way in the world that anyone who was studying the opinion polling closely could’ve formed a conclusion that we were headed for a massive victory. Changes of government in Australia are always difficult, particularly for the Labor Party, and that applied last time. There are some things we did well, there are some things we did badly. We’re having a review about all of that, but I don’t think that there should be any automatic knee-jerk reaction when people are analyzing the result.

Misha Zelinsky:             So there’s been a lot of talk, I mean, your state of Queensland, Labor did most poorly there until in terms of our primary vote, but there’s a lot of discussion about labor’s performance in regional areas, outer suburban areas and this sort of discourse that we’ve lost touch with traditional labor voters, more working class voters. Is that something that you think is true or something you’re concerned about?

Wayne Swan:                Well, there’s no doubt that the Liberal Party campaign managed to dislodge many low-income, insecure and loosely politically aligned voters from the labor camp. No doubt about that at all. I think part of that was a very effective scare campaign, and particularly a campaign run under the radar via social media, which was promoting an economic Armageddon through death taxes and other claims that were terribly effective, got under our guard and dislodged those voters from our camp.

Wayne Swan:                So we’ve got some fundamental reassessment to do there, because if you look around the Western world and you look at the progress of social democratic parties, there’s no question that what I call the radical right, and I include the Liberal Party of Australia, which has now been taken over, if you like, by hard right elements. There’s no smaller liberals in it. Around the world, those groupings have been successful in removing voters, particularly lower income working people, from support for social democratic parties through the use of wedge politics, through the use of race, through the use of gender and increasingly through the use of climate change to pull those voters away from their traditional social democratic support.

Misha Zelinsky:             And so, you talked a little bit about this, yeah, the online campaign that we saw, but also there was the impact of the Clive Palmer money.

Wayne Swan:                Sure.

Misha Zelinsky:             How much did that influence the outcome [crosstalk 00:03:03]?

Wayne Swan:                Well, there’s no question that the Clive Palmer money supercharged the themes that the Liberal Party were running. The Clive Palmer-

Misha Zelinsky:             Which was $80 million spend, right?

Wayne Swan:                Yeah. The Clive Palmer money was part of the conservative spend, so the biggest single spend that I can find in the Western world by a single person in an election campaign was turned into a preference recycling scheme aimed particularly at those groups that I spoke about before and it was very successful. So when people are evaluating this result, you can’t ignore the impact of this big money, which certainly had an impact in my home state.

Wayne Swan:                But I don’t believe the results in Queensland, putting aside the central and North Queensland seats, were any different to what we saw anywhere else in the country. It’s true, we did lose the outer suburban vote and we lost a regional vote, but that was no different in Queensland than it was anywhere else bar in Queensland the three seats that you would describe as directly affected by the issue of coal, where there were separate circumstances. So I don’t think the result in Queensland was little different to the result that we saw in outer suburban Sydney, regional Victoria or regional New South Wales. Or, for what matter, in cities like Perth.

Misha Zelinsky:             Now, unpacking this. You touched on the global phenomenon. I think that this is a challenge for all social democratic parties around the world since global populism. In many ways, I think this is almost the U.S. 2016 election result or the Brexit result arriving in Australia, it has similar characteristics. So I’m kind of curious, firstly, what’s driving this global populism? And then why is it that the right, and the far-right, seem to be able to dig into it a bit [crosstalk 00:04:41]

Wayne Swan:                This is the critical question. The fact is that the Great Recession, or otherwise known here as the global financial crisis, really shattered the foundations of modern capitalism, which had already been loosening through 40 years in the growth of income and wealth inequality. And that growth of income and wealth inequality has bred resentment. And that resentment has materialized in the form of much more insecure work, the disappearance of what were once solid career opportunities with decent pay.

Wayne Swan:                And that, in many ways, shattered the faith of those people in basically their democratic arrangements. And as that’s occurred, unless governments domestically put in place a range of policies to look after those people, indeed as we did, principally, in this country, those votes increasingly became lost to basically what I’d call the center-left, and they’ve been increasingly captured by what I would call the radical right.

Wayne Swan:                You’ve seen this most particularly in recent elections in Scandinavia, you’ve seen it in Sweden, you’ve seen it in Finland, you’ve seen it around the world, that the use of race, the use of gender, to play into the insecurities of working people, and to play in to their loss of faith in the authority structures and decision making structures, in a society where they see the great gains of their labor principally going to a few at the top, has been the driver of the radical right and the great failure of the post-war period.

Wayne Swan:                See, for 30 years following the war, policies were put in place to drive a more equal and fairer society. And they were done as a hedge against communism on the left and fascism on the right. Following the rise of Thatcher and Reagan, and the advent of trickle-down economics, otherwise known by many as neoliberalism, we’ve seen a growth in rampant income, wealth, and inequality. And that has seen a fracturing in societies where there was once a consensus about a fairer share being the best way to drive prosperity and growth into this notion of trickle-down economics that if you give more to the top, then somehow, everyone down the bottom will benefit.

Wayne Swan:                Well, that’s just produced an enormous amount of distrust and it has created, if you like, the political space for the rise of the authoritarian radical right, which we now see so dominant in many countries across Europe, and you see represented in the leadership of Donald Trump.

Misha Zelinsky:             Yeah. And you covered a lot there about, I suppose, the conditions that are allowing this radical right to rise around this insecurity, economic inequality. The thing that’s got everyone, at least that’s on the center-left of politics about how do we respond to this, is that the conditions would seem to be good for a social democratic agenda around inequality and [crosstalk 00:07:35]

Wayne Swan:                They certainly are, but there hasn’t been the sort of social democratic leadership that we’ve required. I mean, we’ve done best here, in Australia and New Zealand, where we’ve had our social democratic aspirations reflected in Labor parties. And the anchor of our Labor Party is, of course, the trade union movement, which provides that direct linkage. And I think that has been why you could actually say that the big difference, say, between the radical right in Australia having a section of a Liberal government, and manifested, say, in the form of Pauline Hanson with a couple of senators, the big difference between that, and the election, say, of a Donald Trump in the United States, has been 30 years’ worth of real wage growth in Australia and 30 years of wage stagnation in the United States.

Wayne Swan:                But we started to see that wage stagnation. We started to see the profit share rise and wage share be suppressed. We’ve seen policies increasingly in this country after the six years, where pre-tax income has been suppressed in the form of wage suppression, post-tax income has been suppressed in the form of more regressive taxation. The twin combination of unfair taxes and low wage growth is tailor-made for either an ascendant social democratic party to storm to victory, or for a radical populist to storm the victory if the social democratic offering is not up to scratch. And when you translate that into our last election result, we should’ve won, but we didn’t have the sort of defeats, either, that you’ve seen in various other social democratic offerings in the past.

Wayne Swan:                That’s not an excuse for our outcome.

Misha Zelinsky:             And so, in terms of connecting with working people and sort of reflecting their concerns, one of the challenges seems to be that there’s a perception, at least, that all sides of politics have been sort of colonized by so-called elites. And that seems to particularly hollow out that social democratic side of politics, both here and abroad. I mean, do you think there’s something about this question of big elites being from nowhere and people being from somewhere, and this question of place [crosstalk 00:09:58] communities?

Wayne Swan:                Well, I think that is really important. And I think it’s a reminder to all of us, on the center-left of politics, that to be out there with the people all the time, or of the people all the time, as comfortable in the tea room as you are in the boardroom, is absolutely critical. And I think many of our comrade parties around the world, in particularly the U.S. Democrats, have fallen prey and have not really learned that lesson.

Wayne Swan:                So I think it’s something we all have to keep in mind, but it is also something that the radical right specializes in through their authoritarian leadership and the associated gutter campaigns that they put into the system beneath the radar. And I would cite, in this example, the vilification and the smashing of the standing and reputation of Bill Shorten behind the scenes through one of the most aggressive and unprincipled demolition jobs on a politician’s character and standing that I’ve seen my whole time in politics.

Misha Zelinsky:             Well, and so, in terms of… One of the things I think is challenging for social democrats is that, as faith in democracy, faith in government, goes down, it almost suits the right-wing agenda because they don’t like government [crosstalk 00:11:18]

Wayne Swan:                Well, of course it does. You see, the whole right-wing agenda, and this is what you see at the core of this government here, is to destroy the credibility and standing of government and to demonize government intervention. So, stage one of that was to demonize our stimulus, which saved our country from recession. To continue to demonize it, to do that, and to get into bed with plutocrats and parts of the business community so that when next time a huge global event comes, no government will have the guts to stand up and do what the Rudd and Gillard governments did in a time of need, which was protect our people and to use the power of government to do so.

Wayne Swan:                But it is ongoing, you’ve only got to pick up a newspaper or observe just about any policy of this current Liberal government, and find, at its core, an attempt to destroy the credibility and efficiency of public service provision. And there is perhaps no program that demonstrates that more than the so called robo-debt campaign that’s going on in Centrelink. The treating of people, that they fired the hired staff in Centrelink so that when the public wants to actually ring and find out what their entitlements, they’re on hold for 30 minutes an hour. This is all part of a systematic attempt to destroy the quality of public service provision so they can turn around ain the end and say to social democratic parties like mine, “Look, you can’t trust government, they can’t deliver services. I’ll tell you what, we’ve got a better offering. Have a tax cut instead.”

Misha Zelinsky:             And so, you touched on plutocrats. And one of the things that I’m so curious about, and there’s been a big backlash against what they called the Davos tops. And so, I mean, how do we make the case that democracy in government is still the answer, given that you see, increasingly, these big philanthropists plutocrats, where the argument is we can return the benefits of this inequality actually-

Wayne Swan:                Well, it’s outrageous and shocking. If people want to give money and make their society a better place, fantastic. But don’t expect a tax deduction. Don’t erode the basis of the government to provide the basic service provision upon which a civilized society depends. It’s just shocking that people who don’t actually pay the right amount of tax in the first place then turn around and want to give more money and get a tax deduction for that.

Wayne Swan:                Look, I know many people in the Australian business community who pay their taxes and they give away a lot of money, but equally there are plenty of people with a lot of money who aren’t paying their fair share of taxes and still expect a tax deduction and be regarded and favored in the community because they’ve given away money when they have shattered the very linkage between collecting tax and service provision by becoming tax termites and ripping away at the very essence of a civilized society.

Misha Zelinsky:             And it also is fundamentally undemocratic in that, ultimately, you want to see taxes collected by the government people deciding where those taxes should be [crosstalk 00:14:07] correlation.

Wayne Swan:                Exactly. And no wonder people then lose faith in democracy, because they see people who obviously have a lot of money, they see the publication from the Tax Stats that they’re not paying it, and then they see them standing up pretending to be very generous because they’re at some very worthy cause using these people as a shield against the underlying evasion they’re engaged in, and they expect to be clapped. No wonder the average person gets cynical.

Wayne Swan:                I mean, no wonder the average wager could get… well, actually, gets really cynical when all they ever hear is of high profile people, be they sporting people in Rugby Union or whatever, who are earning millions of dollars a year, but no one’s out there debating at the same time the fact that they can’t even get an enterprise bargaining up for a 2% increase. And they see this conflict. A news agenda dominated by elements of identity politics and big money for the top-end of town, and on the other they don’t hear many reports about the fact that their enterprise bargaining’s being squashed and they’re not going to get a decent wage increase for the next couple of years.

Misha Zelinsky:             And so, yeah, in terms of this question of identity politics and economic justice, I mean, do you see those things in conflict? Because a lot of people say, “Well, we have to choose one or the other,” but my view is the thing that can unify people the most around whatever their identity is, is around economics and class.

Wayne Swan:                Exactly, and just ask Martin Luther King. I mean, it’s just not well known that when he went on his freedom march it was called Jobs and Freedom, and it was called Jobs and Freedom for a reason. That gender equality, racial equality is always going to be ultimately completely unattainable without a degree of economic inequality. So, we don’t ignore them. They’re all part of the same equation. But when you’re a truck driver in Western Sydney, or when you’re a steel worker in Wollongong, and all you ever hear about is a sporting hero on a million dollars a year having a court case dominating the news every night, and then you’re told in your latest bargaining round that you’re not getting even a reasonable increase, well, you really get the shits.

Misha Zelinsky:             Mm-hmm (affirmative). And so, I mean, it’s interesting, isn’t it? Whereas you talk to people in the business community or you talk to the Davos set and they say, “What are we going to do about populism?” You say, “Pay taxes and lift wages.” And they’re like, “Well, I guess we’ll never solve it then,” right?

Wayne Swan:                Well, the two most fundamental elements of doing something about the entrenched long-term inequality in our community are progressive tax and a stronger voice for workers, principally through unions.

Misha Zelinsky:             Mm-hmm (affirmative). And so you touched a little bit about the economy, GFC response or the Great Recession response. I’m kind of curious, firstly, you’re a former treasurer, what’s your take on the state of the economy at the moment? So, current… we’re in the weakest period of growth we’ve had pretty much for a decade.

Wayne Swan:                Well, it’s weak and anemic growth induced by the federal government’s refusal to put in place decent spending on infrastructure. It’s pretty simple, really. And it’s galling to watch the current treasurer somehow go out and try and blame the Reserve Bank for the fact that their fiscal policy isn’t working and that he intends to put pride ahead of outcome. We didn’t put pride ahead of outcome when our economy was challenged.

Wayne Swan:                I mean, imagine if these clowns were in charge and there was a pronounced international downturn, the likes of which we had back in 2008 and 2009. Well, I know what they’d do. They wouldn’t act, because they’re part of a weird brigade out there that wants the cleansing impact of a recession. Because they see that as eating away at the power of workers and a way of reducing wages, and they also see it as a political opportunity to run some of the authoritarian lines that may work for the sort of parties of the far-right elsewhere when people feel dreadfully insecure.

Misha Zelinsky:             And so you talked about, basically, that the Reserve Bank, which is a controlled monetary policy-

Wayne Swan:                Yeah.

Misha Zelinsky:             … and the treasurer who’s ostensibly in charge of fiscal policy. Now, there’s a suggestion they’re going to be pulling against one another.

Wayne Swan:                That’s right. Well, the treasurer’s fiscal policy is wrong and to cover that up he’s seeking to somehow say that the Reserve Bank governor should fix it through monetary policy.

Misha Zelinsky:             Despite [crosstalk 00:18:18] big 1%.

Wayne Swan:                Monetary policy is tapped out. Tapped out. Everybody’s saying, and it’s not just the governor of the RBA in Australia, I mean, there has been an excessive reliance on monetary policy because governments around the world have been dominated by an austerity ethos and therefore a reluctance to effectively deploy fiscal policy. Fiscal policy here and around the world should be playing a much, much larger role as we seek to deal with the economic challenges that we face 10 years on from the Great Recession.

Misha Zelinsky:             And obviously when you were a treasurer in the then-run government, there was a massive intervention via stimulus package. Do you think it’s possible today with the world the way that it is for the-

Wayne Swan:                No.

Misha Zelinsky:             … global response that we saw from every country to be coordinated through the G20 or any other mechanism?

Wayne Swan:                Well, 10 years ago, in fact, in March, early April, 2009, the world came together via the G20 and put in place a massive stimulus package to save the world from a Great Depression Mark II and to ensure it was only the Great Recession. Despite that package, it’s taken most developed economies over a decade to come out. Australia sailed through that period. Our economy now is almost 35% bigger than it was in 2007. The American economy is in the low 20s. The British economy is around 20 or a bit below. We sailed through. And because we didn’t see the loss of hundreds of thousands of jobs and the destruction of so many small businesses, we averted the skills and capital destruction that dragged other economies around the world down.

Wayne Swan:                Yet still, the conservative parties in this country carry on as if this was a massive mistake. Now, because of, if you like, the rise of the radical right it’s hard to see us getting the sort of international cooperation that we got from the London Summit in 2009 that dragged the world out of their recession and didn’t become a depression. If we have to go into those circumstances again, I don’t think we are or will see the sort of actions that G20 took 10 years ago. And that will be a tragedy, if that happens.

Misha Zelinsky:             And so a lot of this dysfunction we’re seeing principally probably arises from the election of Donald Trump in the United States which has been a disruptive force for the old world order, if you can call it that, and also the rise of China. Australia finds itself in the middle of this, particularly one of the big headwinds in our economy relates to this so-called trade war between China and the U.S. I mean, how do we navigate that in a political sense and in an economic sense?

Wayne Swan:                Well, sensibly, because our principal trade relationship is with China and our principal investment relationship is with the rest of the developed world, and our principal security relationship is with the United States. So we have to be incredibly careful and deft in what we do. We can’t be compliant if the China is out of step when it comes to really important issues like the South China Sea or, for that matter, even Hong Kong. But equally, when we are seeing some of the absurd decisions announced by the U.S. President, we can’t be seen to necessarily be compliant there. There is a real challenge for diplomacy and nuance for us to navigate what is a very, very difficult period.

Wayne Swan:                You see, this issue of inequality, however, is not just one that’s a problem in the U.S. and in the developed world. It’s a massive problem in China itself and, I think you’ll find, a massive problem behind the protests that you are also seeing in Hong Kong as well, because-

Misha Zelinsky:             Yeah, there’s a real challenge around the rental market there and the average wages from Hong Kong.

Wayne Swan:                Yes, that’s right. That’s right. Intergenerational issue. You know, it’s not just a question of political rights. But they have no political rights and are facing, if you like, economic prospects that they can have no say in or real impact on their government’s arrangements. So it’s a complex world. There’s no doubt the rise of China has been tremendously beneficial for the Chinese themselves but also for the rest of the world, but what it requires is principled and nuanced leadership, not bombast.

Misha Zelinsky:             And you touched there on an intergenerational inequality. I’m kind of curious about that, because one of the big things of the last election, just returning back to the election, was this question of the, imputation credits became a big focus and the impact on retirees. What about the impact on young people who are unable to get a secure job or are unable to enter property market? How are we going to balance the intergenerational pact?

Wayne Swan:                It’s a very good point. Well, we have got a huge intergenerational inequity problem. And my view is that our actions on negative gearing were broadly supported across the community for the very reasons that you have just outlined. I’ve got lost track of a number of people I know who have got negatively geared properties, but absolutely understand that there has to be fundamental change in this area if their kids and/or their grandkids are ever going to get a toehold in the market. So I don’t think that was one of those policies that was responsible for the blowback in the election. There might be ways in which you could be nuanced and change, but the fundamental generational inequity involved in those arrangements is one I believe that is understood in the community and the consequence was a tolerance for change in that area.

Misha Zelinsky:             Well, the thing is as well, I mean, on the question of negative gearing, that’s a policy Labor took in 2016-

Wayne Swan:                Exactly.

Misha Zelinsky:             … when it very nearly won in the election by one seat majority, or left a Turnbull government a minority government at the time. So, in terms of what are the policies we need to do though to make sure that we can… because one of the things that worries me is young people increasingly feeling disenfranchised from the countries that they’re residing in in terms of youth unemployment in the regions. And I think some of this sort of far-right politics we’re seeing there was a trumpification of the regions, a lot of it is from young people not feeling they got a chance to get their hand on the first rung.

Wayne Swan:                Well, we got to spend a lot of more time interacting and communicating in this area. I think a lot of young people want to know that principle matters, I think a lot of people want to know that values matter. Now, our challenge is to live up to that creed. And this is the point that I’m going to continue to make as president of the party, that principles and values matter. But so too does compromise from time to time, because to ultimately implement your principles and your values you’ve got to hold power. And we have to be seen to be able to do that in ethical ways.

Wayne Swan:                And I believe there’s probably no party around the world in a better position to actually do that properly than the Australian Labor Party. The period of government under Hawke and Keating, the period of government under Rudd and Gillard, over and above any of the blemishes those governments had, did achieve an enormous amount. Very much in the tradition of earlier labor governments whether it’s a post-war reconstruction under Chifley. Labor’s got a tremendous history to draw from as we go forward and to demonstrate to people that politics and government can be a force for good and can make a difference in the lives of people.

Wayne Swan:                But it’s just, making a difference through a government decision-making is not something that happens one day and is seen the next. To convince people that these objectives could only be achieved in the long-term, not the short-term is the challenge, because the populace from the radical right will never give a principled and effective policy a chance to get off the ground. No greater example of this than what the Conservatives did to the carbon price. If that carbon price had survived in Australia, we would be having an entirely different political and economical debate. And what sections of the business community aligned with the radical right of the Liberal Party did in destruction of the carbon price will go down in history as one of the most wanton acts of economic and social destruction in the history of our nation.

Misha Zelinsky:             Mm-hmm (affirmative). I actually also would give a special shout-out to the Greens who were voting against the ETS twice in 2009.

Wayne Swan:                Exactly. Exactly. [crosstalk 00:26:36] that as well. Yeah.

Misha Zelinsky:             I always like to remind my friends of that if they are particularly left-wing and inner-city Greens that there’s only one party that’s put legislation as a party of government to the floor and enacted price and action on climate change.

Wayne Swan:                Well, if we would’ve got it through back in 2009, a lot of the other events that occurred may not have occurred either, but anyway.

Misha Zelinsky:             And so, how does Labor… I mean, the last 10 years, I think, the climate wars for the last decade in Australia have been pretty devastating, both the cause of climate action, but also on progressive politics. I mean, how do we square this circle between these young people who are very energized about climate change and people in the inner city that I think are energized?

Wayne Swan:                Well, we’ve got to get them to understand that when you’re tackling climate change and doing very substantial emissions reductions it’s just not a question of coal. It’s a question of emissions reductions across the board. Of course we have to move as quickly as we can from fossil fuels and replace that with renewable energy. And it has to be driven. It has to be driven by a price on carbon. And the problem at the moment it’s not driven by a price on carbon. Many of these well-intentioned people think that their obligations are discharged by fighting against a particular coalmine here or there. The truth is that our coal, our thermal coal is 4% of world’s thermal coal. Most thermal coal around the world is mined-

Misha Zelinsky:             Locally and used locally. Yeah.

Wayne Swan:                … and used locally. What the world needs, what Australia needs is a carbon price for us to make the transition across all of those elements. To think that if you knock off Adani or knock off a couple of coalmines in the Adani basin, that this is some substantive contribution to the fight against climate change in the short term or the long term is simply not true. Yes, we have to make that change. We are, despite the government’s opposition, making substantial headway in renewable energy thanks largely to the NASA progressive business and the Clean Energy Finance Corporation that I set up and that the Conservatives did not manage to destroy.

Wayne Swan:                So this climate change debate is broader and more complex than it appears in the media, and as a progressive party we’ve got to continue to argue for a strong set of emissions reductions which are far greater in their impact and their scope than any one particular coalmine at any one point of time. I was with Nicholas Stern the day that he announced the Stern report back in two-

Misha Zelinsky:             Was it 2009? ‘8?

Wayne Swan:                No, not ‘9.

Misha Zelinsky:             ‘7?

Wayne Swan:                Yeah. ‘6, probably.

Misha Zelinsky:             ‘6? God, that was a long time ago. I remember [crosstalk 00:29:15]

Wayne Swan:                When I was in Whitehall visiting Gordon Brown.

Misha Zelinsky:             Yeah.

Wayne Swan:                And if you go to the Stern report, it always envisioned that coal production would go down gradually as renewable energy went up. And that has not fundamentally changed. We are not getting the emissions reductions across many of the other critical sectors that we need, and so much of this concentration on a particular mine here or there drags critical attention away from what is a diabolically difficult area of public policy achieving these reductions across a whole range of sectors that people never talk about.

Misha Zelinsky:             And the other thing I think we need to… those that are passionate about climate change and the environment, except we need to make significant action in that space. I think one of the things that challenges the politics of it is the asymmetry of who’s impacted.

Wayne Swan:                Yeah.

Misha Zelinsky:             And so the people that are very passionate about it in the city, their job’s not impacted. But the people that are going to be impacted, have to wear the costs of it have to-

Wayne Swan:                Exactly. Yeah. And where the people are impacted, they feel that the people that have strong views don’t care about them.

Misha Zelinsky:             Yeah.

Wayne Swan:                So you get a political backlash that ultimately undermines the progress on climate change.

Misha Zelinsky:             Correct.

Wayne Swan:                Because a very significant section of the progressive alliance is told by another section of it that they don’t count anymore, or that they don’t like their lifestyles, or they don’t know how to think, or they’re ignorant.

Misha Zelinsky:             Yeah.

Wayne Swan:                And that was the problem of the Bob Brown caravan.

Misha Zelinsky:             Indeed.

Wayne Swan:                And yeah, we just can’t go down that road if we are going to win this fight against climate change.

Misha Zelinsky:             Yeah, and we need to build those coalitions and find ways… I think there’s a role for industry policy in terms of finding ways… industry’s going to decline over the time.

Wayne Swan:                Absolutely. You know what I find when I go out? In the business community it’s a generational thing. If you meet anyone now involved in business under 50, they’re talking the economics of climate change. Because what’s going to drive climate change is not necessarily reductions targets. It’s going to be the fact that the market won’t lend to these people. That there’s good business to be done. So you could have a decent conversation with many in the business community who are younger, because they actually get the economics of climate change as well as the environmental issue and outcome. And they are actively out there, involved in the fight in a commercial way, and we need all of them in the tent.

Misha Zelinsky:             And so I just want to turn a little bit back to your time as a treasurer and deputy prime minister in the Gillard government, commissioned an Asian Century White Paper. I’m kind of curious to contrast the view of the government then with how the world’s turned out. I mean, it was a very cheery or upside sort of document about the economic potential and perhaps overlooked maybe some of the bigger challenges of an assertive China that we’ve seen in the [crosstalk 00:31:54]

Wayne Swan:                Well, it wasn’t meant to deal with security matters. I mean, it was a very good paper. And these people would’ve been burning books back in the 1500s. I mean, they eliminated the Asian Century White Paper from every government website.

Misha Zelinsky:             Is that right?

Wayne Swan:                Yeah, absolutely. Absolutely.

Misha Zelinsky:             So it’s just gone? I didn’t know that.

Wayne Swan:                I mean, I recommend it to anyone who’s interested in the future of our country should go and read the Asian Century White Paper, because-

Misha Zelinsky:             How will they find it?

Wayne Swan:                Well, it’s-

Misha Zelinsky:             It’s on Wayne’s website.

Wayne Swan:                Well, fortunately, it’s still around, but-

Misha Zelinsky:             Right. Well, that’s an interesting aside. But anyway, we were getting into the… yeah.

Wayne Swan:                Anyway. And it was so well received in the region. And in many ways, as I moved around and the members of the committee moved around, it was, if you like, putting the final nail in the coffin of White Australia, that they finally thought, over a whole range of issues, this seemed to bring together the notion that Australia saw itself as Asian-facing and part of Asia. And we have a different discussion now about Asia and Australia than we had when I first went to university or indeed was in politics for the first decade or so. You know, that we all understand that it’s part of a growing region and with it come the challenges, one of the biggest one we were talking of, climate change.

Wayne Swan:                And the other one is growing inequality, because unfortunately the trickle-down model that has been used in the developed world is now being aggressively used in the developing world including by communist China and resulting in rampant wealth and income inequality in both types of countries. So the problems we face are similar. Of course, in our region at least a third of the countries are in dire poverty in what you’d call the broader Asian region and a lot more work needs to be done in dealing with their challenges. It’s not just a question of China when you’re dealing with Asia. Non-China Asia is bigger than China.

Misha Zelinsky:             Sorry, India and Asia and somewhere else?

Wayne Swan:                Well, but all those other little countries that there is so many of them where the very basis of development has not even begun. So there’s still a lot of poverty alleviation to be done in Asia. We do focus on the Asian middle class because it’s what brings so much prosperity to our country, but we shouldn’t lose focus either in Asia or in Australia on those struggling countries across the Asia-Pacific.

Misha Zelinsky:             So when you said the White Paper was an economic document, obviously, there were defense white papers at the time, and there’s that duality that exists in public policy in Australia which is that kind of that Tony Abbott describes as fear and greed. Do you think the relationship with China since the Rudd -Gillard government has changed and how would a Labor government best interact with a more assertive China now?

Wayne Swan:                Well, I think the Abbott government bungled it from day one when they held that completely dysfunctional G20 in Brisbane and Prime Minister started lecturing global leaders about the Australian health system and all sorts of bizarre things and he banned climate change from discussion at the summit.

Misha Zelinsky:             That’s right.

Wayne Swan:                So President Obama went and gave a speech up the road at the university about the importance of climate change. It hasn’t been a great start in terms of our relationships with China. I think the government’s playing catch-up there now, but still is deeply confused about where we are and who we are.

Misha Zelinsky:             And so one of the things you responsibility when you’re treasurer is the FIRB decisions and the FIRB board reports treasurer in the cabinet. But I’m curious about foreign investment decisions. Should we worry about state-owned enterprises buying up shares [crosstalk 00:35:21]

Wayne Swan:                Absolutely. And I-

Misha Zelinsky:             … by an autocracy.

Wayne Swan:                Well, of course we should. And one of the first statements I made after I became treasurer in the middle of 2008 was putting obligations on approvals for state-owned enterprises. We don’t want any government body dominating a supply chain or dominating a market. I didn’t-

Misha Zelinsky:             And you talked about Chinalco trying to buy Rio Tinto?

Wayne Swan:                Well, far bigger than that, but takeover… it was actually always an attempt to take over a BHP. So if we had five medium-sized companies in a particular area and they wanted to buy one, well that’s fine, but if they wanted to come in and buy the lot, no. So we put down some principles about competition being observed, the whole series of principles, because ultimately you don’t want another government directing the private enterprise activities of its subsidiaries in your country.

Misha Zelinsky:             Mm-hmm (affirmative). And what about things like critical infrastructure? We’ve had [crosstalk 00:36:15]

Wayne Swan:                Absolutely. Absolutely.

Misha Zelinsky:             … network, but, of course, [crosstalk 00:36:19]

Wayne Swan:                Well, in fact, I did that.

Misha Zelinsky:             That was from the NBN, yeah.

Wayne Swan:                Yeah. For a good reason. So yes, there are national security implications of these things, always has been, always will be. You shouldn’t be letting foreign countries buy companies in your missile launch zone, for example. And I stopped one Chinese company from doing that. I say there’s another example of that that’s almost live at the moment, of course.

Misha Zelinsky:             Correct.

Wayne Swan:                There’s always been a national security element of any form of economic policy. And I think in recent years the capacity, including under us the broader part in this outlook, if you like, has increased.

Misha Zelinsky:             And so what about situation where government makes a decision and then China often responds with a fair bit of hostility about those decisions. You’ve got sort of this use what they call hostage diplomacy with the detaining of Canadian citizens, Australian citizens in response to 5G decision here and also with the arrest of the Huawei executive in Canada. I mean, how did you stand up to Chinese decisions at the time and how does a government do that going forward?#

Wayne Swan:                Well, I had a couple of particularly difficult and tense meetings. In fact, went I went to China to explain the fact that for the first time Australia was going to enforce responsibilities on state-owned enterprise investments in Australia, I was accused openly of being a racist. Now, that regime exists to this day. It was put in place for a good purpose. But when you look at these people, you got to go and look them in the eye and tell them what you’re doing. I think one of the problems that we’ve got is a lot of this diplomacy doesn’t necessarily come from what’d have been across-the-table discussions.

Misha Zelinsky:             You’re talking about megaphone diplomacy?

Wayne Swan:                Yeah, megaphone diplomacy rarely works. But if you got to engage in it, you’re want to make sure you go and look in their eyes first.

Misha Zelinsky:             Mm-hmm (affirmative). So you think there’s a bigger interpersonal thing that we should be working on in that sense?

Wayne Swan:                Well, I think you got to work on it, but you got to be realistic it won’t always work.

Misha Zelinsky:             Although [crosstalk 00:38:23]

Wayne Swan:                You don’t know until you try.

Misha Zelinsky:             Indeed. But, I mean, for example with Turnbull, when he was making some decisions around foreign interference around donations et cetera, Australia was essentially put in what they call the freeze where meetings were all canceled. So how do you handle that sort of stuff?

Wayne Swan:                Well, I don’t know whether that was what caused that… I mean, but we’ve got, and any country would have responsibilities. For example, China wouldn’t let us invest in a company in their missile launch zone, so we most certainly wouldn’t let them do it in ours. And that was the conversation I had with the minister at the time, and it turned out to be amicable. So you got to have these discussions. They are difficult. There will be positioning publicly. There will be conflicts. But the most important thing, and you don’t always know what’s going on, is that there needs to be under the surface, effective dialog by other ministers, diplomats or both.

Misha Zelinsky:             That’s right. That principal reciprocity, I think, is a good one and I think it’s a very useful one for us to use. So do you see a new… you know, we haven’t had blocks in the world since the fall of Berlin Wall. Do you see increasingly blocks emerging between the so-called liberal democracies and autocrats?

Wayne Swan:                Well, what I see emerging is a hard-right movement which has its roots in both United States, in a number of European countries and most particularly Hungary, backed in by some pretty sophisticated operations coming out of the Soviet Union. And there is plenty of documentation now about how that worked in the last presidential campaign in the United States, how it worked in the Brexit campaign and how it has played out in a number of other countries. So yes, I think we have to be alive and alert to the fact that there is an authoritarian push across a number of democracies to influence domestic outcomes.

Misha Zelinsky:             And so how do we deal with this challenge of these open systems? You know, this use of Facebook, social media, and yeah, you touched on it at the beginning with [crosstalk 00:40:25] question about it.

Wayne Swan:                Well, by making sure that your capacity to repel it is high, to detect it and then repel it.

Misha Zelinsky:             And should we be holding these… Facebook’s in America [crosstalk 00:40:37]

Wayne Swan:                There’s no question that Facebook and those organizations are going to be subject to much more regulation and scrutiny than they have in the past and that will be a good thing.

Misha Zelinsky:             And so just turning back to Australian politics, you recently retired from parliament, though you’re not retired, I know that, otherwise you’d jump across the table on me, I’m sure, if I were to say that, but are you missing politics at all, the [crosstalk 00:40:57]

Wayne Swan:                Well, I got out of parliament, but I haven’t got out of politics.

Misha Zelinsky:             Yeah, still the president of the party, so…

Wayne Swan:                Yeah. No, but I got out because I wanted to have a bit more time to particularly spend with family. I’ve got two grandchildren, two children living overseas, so a bit of travel. I’ll never give up my public policy interests and I’ll never give up fighting for the Australian national interest, but I thought it was time to move on in terms of the parliamentary party, but I’m not giving up the discussion or the battle of ideas, because that’s something I’ve dedicated my life to. I just want a bit more time to get into surf which I’m doing a lot more of and to be with and talk to my family.

Misha Zelinsky:             And so one of the things you talked about in your valedictory, but also in other, in the last few of years of being in parliament, was the impact of time away-

Wayne Swan:                Yeah.

Misha Zelinsky:             … and what politics does to families and the people. I mean, give us a bit of insight about the difficulties.

Wayne Swan:                Well, it’s a cruel world and if you’ve got a busy job, you’re away a lot, so you miss so many important events and you run the risk of being emotionally separated from and decoupled from the most important people in your life. And I said it in my main speech, that I wished I’d actually made more time for that, and I do regard that as a failure in my career. I have just been fortunate to have a very tolerant family, but it’s something that I want to spend more time on.

Misha Zelinsky:             In your time in politics, it’s probably fair to say that the prestige of the political class and of their institutions has probably diminished and faith in the institutions is much lower now when you look at any survey, not just in Australia, around the world. What’s driving that and can we get it back, and how? Because I think it’s so important.

Wayne Swan:                Well, I think the radical right is driving it. I think there are political forces driving this who’ve got an interest in demonizing the role that government has in our society and that is a vested interest so they can grab more of the product of the labor of our people than they’re entitled to. I think it’s very much driven. It’s also driven in an underlined way by many of the technological changes, the speed of communication and the nature of communication, or sort of hyper drive that or make it a hyper circle, if you like.

Misha Zelinsky:             And politics is sort of slow, the legislative process is slow, the world is quick.

Wayne Swan:                Yeah. Yeah. So it’s a combination of all of those things, but we got to get back to a bit more moral base and value base in our politics we got at the moment. And to do that you’ve got to out these people and hidden actors behind the scenes who are setting out to destroy trust between people.

Misha Zelinsky:             And you talked again, in your valedictory, about a turning point in Australian politics being the Tampa crosses, and you sort of touched there on values and morality. How did that impact on politics and what are the [crosstalk 00:43:38]

Wayne Swan:                Well, it was the beginning of the radical right in Australia purposely, deliberately using race as a wedge. And we hadn’t seen that in that way in this country before. It’s been a feature of politics in the United States for a long period of time, but the first we really saw of it as the country basically came out of its White Australia and embraced multiculturalism was Pauline Hanson.

Wayne Swan:                And what we’ve now seen as the embrace of Pauline Hanson by the conservative side of politics and the use of race and gender issues both openly and covertly, and I mean covertly even in the recent election campaign, where most people would say to you, “Oh, the refugees or all these things weren’t an issue.” They were. They were out there and they were pushed hard by that radical right under the scenes in many marginal electorates around the country. So we’ve got to try to eradicate that again. But my fear is that Liberal Party has been taken over by the extreme right and we’re in for an extended battle here. A battle for the nature and the type of Australia that we all want.

Misha Zelinsky:             And it’s interesting, because you talked, in ’87 Howard was basically pilloried for his attitude to Asian immigration.

Wayne Swan:                Yeah.

Misha Zelinsky:             Then when Hanson first came to parliament she was basically excluded by the entire political class, but also by the media.

Wayne Swan:                Now you’ve got Channel 7 paying her and TV channels paying her to do interviews, when she’s an elected member of parliament. It is an outrage and a disgrace that media organizations in Australia are involved in that sort of activity.

Misha Zelinsky:             And then the other… you know, the somewhat perverse one is that Tony Abbott, of course, was famously involved in destroying One Nation Pauline Hanson and then the next iteration, when Hanson returned back into parliament in the 2016 double dissolution election-

Wayne Swan:                Yeah. Well, the big-

Misha Zelinsky:             … he was photos with her and saying that One Nation’s now different.

Wayne Swan:                Well, the big change in my time in politics has been the elimination of smaller liberals for a Liberal Party and its takeover by a U.S. style republican right. And significant sections of the business community as well. The Americanization, if you like, of the conservative side of politics has occurred in our lifetimes and we’re now living with the consequences of it. And, as I said before, exhibit A is energy policy.

Misha Zelinsky:             And so I was curious, and I’ve put this question to you before to give you a bit of a chance, but, your best day on the job and your worst day on the job in politics, I’m kind of curious about, what are the things that make politics so powerful and what can make it so hard?

Wayne Swan:                Oh, well, the best day was the day we found out that we weren’t going to recession. That all the stimulus that we put out there had effectively worked. It was the very, very, very best day that I’ve ever had in public life. Because we didn’t know. We were operating in a very difficult policy environment. The worst day? Oh, there’s lots of bad days in politics.

Misha Zelinsky:             I’ll bet.

Misha Zelinsky:             And, well, I won’t explore that any further, but now, the final question I always ask everyone, so it’s a foreign policy podcast largely, we’ve covered all the terrain, but, three foreigners alive or dead would be at a barbecue at Swannie’s. Who would they be and why?

Wayne Swan:                I think I’d go for Neil Young, just for a bit of sort of music interludes. I could’ve easily picked Springsteen.

Misha Zelinsky:             Well, I was going to say, I mean, I think you could’ve picked a few.

Wayne Swan:                Or even Dylan. So I would just take those three.

Misha Zelinsky:             Okay. Practical list, practical list.

Wayne Swan:                I would just [crosstalk 00:47:20] in terms of-

Misha Zelinsky:             I think everyone… you’ll pay in about odds on to pick Springsteen, but we’ll go with Neil Young.

Wayne Swan:                I’m just in the Neil Young phase at the moment for some reason.

Misha Zelinsky:             Very good.

Wayne Swan:                Secondly, it’s a sort of toss-up, but I’d actually say Lyndon Johnson.

Misha Zelinsky:             Yeah, LBJ.

Wayne Swan:                Well, you know, he really stuffed up the Vietnam War, but I tell you what, what he did with the Great Society, just about every big social and economic change of a progressive nature, most of which have now been eliminated now was put in by that guy. Anyone who reads the Robert Caro books will understand why I’ve chosen LBJ.

Misha Zelinsky:             He’s a fascinating character as well because he’s considered to be the ultimate machine politician who did so much progressive change, right?

Wayne Swan:                Well, that’s it. Well, maybe there’s a connection. Maybe he knew how to get it done.

Misha Zelinsky:             Mm-hmm (affirmative).

Wayne Swan:                And thirdly, well, I better choose an Aussie.

Misha Zelinsky:             No, no. It’s got to be foreign.

Wayne Swan:                Oh, foreign? Oh, right.

Misha Zelinsky:             Yeah, yeah.

Wayne Swan:                Well, you probably got to go for Mandela, right?

Misha Zelinsky:             Oh, well, Nelson Mandela. Yeah, indeed. I mean, Nelson Mandela, LBJ and Neil Young all in a room at Swannie’s would be a good one, right? Well, look, before we go, I’m going to give a plug to the podcast. If you haven’t rated and reviewed it yet, please get on. It’s been a great chat with Wayne. If you don’t do it for me, do it for Swannie because he’s going to want to see this getting out to as many people as possible. So Wayne, thank you so much for joining us and I really appreciate the chat.

Wayne Swan:                Pleasure.

 

Chris Bowen: Reasons to be optimistic and the future of progressive politics and liberalism

Chris Bowen is the Member for McMahon in the Australian Parliament. In his time in public office, he has served as Treasurer, Minister for Human Services, Minister for Immigration, Minister for Financial Services, Assistant Treasurer and Minister for Competition Policy.

As the author of the books of ‘Hearts and Minds’ and ‘The Money Men’, Chris is a noted public policy thinker and expert. 

Chris joined Misha Zelinsky for a chinwag about the future of democracy and liberalism including the threat to democracy posed by inequality, the role of faith in politics, how Australia can properly engage with India and Indonesia, what the future holds on Australia’s China policy, why we should be much more worried about global debt and how progressive parties can rebuild trust with the public. 

Misha Zelinsky:             Chris Bowen, welcome to Diplomates, thanks for joining us.

Chris Bowen:                Long time listener, first time caller. Good to be here Misha.

Misha Zelinsky:             I think you’d be one of our very, very few listeners that have become calls so it’s very pleased to hear that.

Chris Bowen:                I did get on early, so it’s a great listen. Well done.

Misha Zelinsky:             Thank you so much for that plug, we’ll make sure that we’re putting that out in the socials. There’s so many places we could start obviously, but one of the places I thought we could start was interesting recently leading into the G20 we had Vladimir Putin come out and say that liberalism was dead, is a dead project, that the West effectively had lost the post Cold War era. I mean, what do you make of those comments firstly, and secondly what does it say about the state of the world given that perhaps ten years ago that would have been laughed off, now it’s a serious point?

Chris Bowen:                Yeah, I think that’s right. That’s a good way if putting it. I’m more optimistic than that, I think we have to be more optimistic than that. We can’t accept that as being the statement of fact, we have to fight back against that. But the fact that a world leader could even say that with some credibility tells you where the debate’s at. The one thing we know is that the Francis Fukuyama theorem of, “History has ended, liberalism has won”, is not how things have panned out. For a long time we thought he was wrong because Islamic fundamentalism and religious fundamentalism was a challenge to liberalism and that remains an issue.

Chris Bowen:                But also, authoritarianism has become a much more accepted framework in many countries of the world to some degree or other, whether we’re looking at what’s happening in Turkey or Hungary, but the United States is on a different part of the continuum. The trend is all to populism/some form of authoritarianism and at the other end of the spectrum, whereas say twenty years ago we might have been having the discussion, will the rise of China and the economic growth of China lead to China becoming a liberal democracy? Well in fact, if anything we’ve seen Chinese authoritarianism increase, not become more of a liberal country.

Chris Bowen:                The fact that we’re having this conversation tells you that the world’s not in a great state, but I’m an optimist about liberalism. Some people question whether democracy is under challenge.

Misha Zelinsky:             We’ll get to that.

Chris Bowen:                Yep.

Misha Zelinsky:             Yep.

Chris Bowen:                And that’s a legitimate question to be asking, and then I guess to subsidize smaller liberalism under challenge, or liberalism as a world view in the international context. It is under challenge, but I think we have to think of ways to ensure that it’s not only survives, but prospers.

Misha Zelinsky:             So what are the reasons to be optimistic about it? It’s so obvious to give all the counter examples about the insurgence of autocracies and all the crisis of confidence in the liberal democratic order. So, what are the reasons to be optimistic? Very easy to point out the problems.

Chris Bowen:                Yeah, that’s right. Well, just looking around the world a lot of the defeats of, if you like, liberalism or, in some senses, progressivism, have been narrow. Trump didn’t actually win by much, as you know he lost the popular vote, and actually a swing of not many votes in key states would’ve changed that result.

Chris Bowen:                UK politics is highly contested. We may or may not get into the inner workings of the British labor party.

Misha Zelinsky:             We’ve got a bit of time! Cover all sorts.

Chris Bowen:                The two party system is pretty closely contested in the United Kingdom. You’d be a brave person to predict the result of the next UK election. Macron in France now, we all have our criticisms of Macron perhaps, but he’s a force of centralist liberalism, maybe slightly to the left. Trudeau in Canada, he’s had a few challenges, but he’s got one good election win and will probably win another election in the next twelve months. So, you can look at those places, and of course New Zealand, Jacinda Ardern didn’t win an election, she won a parliamentary majority, but I don’t think there’s much question that she’d win an election now.

Chris Bowen:                So there are some bright spots. And, the fact that the forces of progressivism are being challenged means that we do need to think about what our answers are. I think we are doing that, thinking around the world, parties of the center left, to some degree of success or otherwise. Or at least asking the right questions. And I’m an optimist because we have to be, otherwise you wouldn’t get out of bed in the morning, that we will come up with the right answers.

Misha Zelinsky:             One of the things that troubles me, is this intersection of economics and politics, right?

Chris Bowen:                Yep.

Misha Zelinsky:             One of the consistent things everyone talks about from a public policy point of view is this level of inequality that you’re seeing, both within and between countries. Can you have an increase in equality, where people feel more disenfranchised, particularly when you look at the pattern of that inequality where it seems to be regional areas, where regions that are distressed tend to become less hopeful.

Misha Zelinsky:             Are democracies and healthy democracies consistent with inequality, or do we have to address one to address the other, where you’re addressing them isolation?

Chris Bowen:                Well we should address inequality, one, because it’s the right thing to do, and two, because it is leading to this populism. You can look at inequality through any number of frameworks or spectra, but I think the most useful one for this conversation is the one that you’ve given a nod to, pointed to, which is geographic inequality. If you look at this challenge to the forces of the center left or liberalism, progressivism, what ever you want to call it around the world, it is very much a geographic divide.

Chris Bowen:                Brexit one outside London. If it was up to the people of London, they’d be very firmly in the EU. Trump one in rural America. Not in the cities. If it was up to the people of California or New York, Hilary Clinton would be preparing for re-election. Macron won in Paris. He lost in the region of France to Le Pen. And, if you look here to our recent kick the guts election defeat, we had swings to us in the city, in wealthy areas, in both safe labor and safe liberal seats, the inner ring. We had swings against us in outer metropolitan areas, particularly in Sydney, which we weren’t necessarily expecting. And big swings against us in regional particularly in Queensland.

Chris Bowen:                Now these are people, in my view, who say in the Australian context, twenty-seven years of uninterrupted economic growth, give me break. I don’t see it. My kid can’t get a job, I’m maybe forty-five and I’ve been unemployed for two years. You go down the main street of Mchale or Gladstone, or Gladstone’s a bit different, it’s going better than some regional centers. Mchale, or Bowen, or Rocky, and things aren’t feeling too great. They’re saying what about us? And the straight, center-right message of, “We care about inequality”, has not appealed to them. It’s our challenge to make sure that we do put it in ways which does appeal to them, when we ensure that the product is the right one for them, and two we are expressing it in a way which speaks to their views about inequality. Because they are, if you like, victims of inequality, they are falling behind in our society.

Chris Bowen:                Obviously our message of, “We care about you and care about inequality.”, has not resonated.

Misha Zelinsky:             It is a bizarre thing when you look at the traditional, I guess, areas that social democrats care about globally, and the regional inequality that we’re seeing somehow, whether it’s message, whether it’s policies. I think there’s an element of attitude and tone about it.

Misha Zelinsky:             But, how is it that we’re just misaligned, we’re not connecting somehow?

Chris Bowen:                This is not a new challenge in some ways, it’s more intense and more acute than it has been. But it is also not a new challenge. Do you remember fifteen or twenty years ago Thomas Frank wrote the book, “What’s the matter with Kansas?”, which was about this very matter. In some countries it was published as, “What’s the matter with America?”, but the real title is, “What’s the matter with Kansas?”. And he spoke about these issues, the people of Kansas, Alabama and Arkansas, and those states are doing it tough or falling behind, subject to inequality, have been left behind by the elites. And the democrats have all these wonderful policies to deal with that, and they are turning up on the first Tuesday of November and letting some old Republican. What is going on here?

Chris Bowen:                And he put it down to cultural issues, lack of empathy with the cultural concerns of people in those states. And I think there is still something to that.

Misha Zelinsky:             And you raise that recently, talking about whether or not people of religious faiths feel at home.

Chris Bowen:                Yes. Which is, I think, an existential problem.

Chris Bowen:                If you look at the United States, the single biggest indicator of voting intension is faith. Not income, not ethnicity, not geography, it’s faith. What ever faith. Even if you’re of Islamic faith, that’s the best indicator that you’ll vote Republican, if you are of very solid faith.

Chris Bowen:                Again, I think we have a real challenge here in Australia about this. Now, we’re a progressive party of course, we believe in equality. I voted for major equality, I’m very proud of that. But, we need to ensure we are also having lines of communication to people who are economically progressive, and who believe in social justice. And some instances believe in social justice because of the ethos that they were brought up in, in their church.

Chris Bowen:                But also have some concerns about their social conservative. Now, I’m not suggesting for one second we need to not continue with the progressive project, but I am suggesting that we need to think about how we talk to people of faith, how we bring people of faith with us, ensure that they know they have a role in our party, that they can be treated with respect by the party, and have their views considered, both within the party processes and by the party in government. And we have not done that. To be frank, we have neglected that as a movement and as a party, and we have paid a price.

Chris Bowen:                I think a big part of the swing against us in western Sydney and probably in some regional areas, was the concern of people of faith, that the labor party has lost touch with their concerns and their issues going forward. People who say to me, “We just want to know that you’ll listen to us. We may have voted against marriage equality, but we accept the result, but we want to know we’ve got a place at the table going forward.” I think, collectively, the party and parties of the left, need to ensure that there is a role for people of faith. Again, many faiths teach social-

Misha Zelinsky:             That’s right.

Chris Bowen:                Social justice.

Misha Zelinsky:             It’s not antithetical-

Chris Bowen:                No, that’s right.

Misha Zelinsky:             The tenants of religion are in no way an antithetical decision. Obviously, love thy neighbor, looking after one another, there’s plenty within the-

Chris Bowen:                Quite the contrary! Quite the contrary!

Chris Bowen:                I mean, in most religions as you say, preach love, and respect, and tolerance and understanding, and justice. We might use different words, but it’s what we’re about as well. But we’ve lost the connection with people of faith, and we must get it back. I don’t mean to be melodramatic. I regard it as an existential crisis.

Misha Zelinsky:             Well that’s that. Certainly putting it at a high level.

Misha Zelinsky:             This narrowness, how do progressives, and this a global problem. You look at it globally, rightfully identified progressive parties, social democratic parties have either been marginalized or disappeared in some countries, you’ve got France.

Chris Bowen:                Yeah. Well there’s the French socialist party effectively no longer exists.

Misha Zelinsky:             Right.

Misha Zelinsky:             And so, as you say, the existential threat, Macron’s essentially co-opted that group and other parts of the center-right. Globally this retreat for the regions, this retreat from the suburbs even, this retreat from, as you say, more conservative social values, how do, rather than narrowing, how do progressive parties broaden? How do we become broader?

Chris Bowen:                Well, there’s no one thing Misha. It’s got to be part of a tableau, an embroidery of our party. It’s as simple as making sure that we’re in touch. We’re in touch with the regions, we’re in touch with people of faith, we’re in touch with people who maybe at least open to the argument that’s put by the populists, that the answer to your problem is less trade and less immigration. Now you know, and I know that’s the antithesis of what the answer is. We have to say to people who have been spoken to, in the Australian context, by one nation or even Parma, or the liberals in their own cunning way, to say look, the answer to your problem is less immigration, less trade. We have to show that the answer is not less immigration, less trade. But, we cannot dismiss the question or the issues that we come back to, moving our faith back down to the regions.

Chris Bowen:                If you’re in Mchale, or Bowen, or Townsville, and the economies not doing too great, we cannot say you’re wrong. We have to say, you’re right! But the answer to your problem is not Pauline Hanson. We have the answers. Now the essential key to those we have to have the answers, otherwise we can’t give it.

Misha Zelinsky:             But we do tend to jump to say, you don’t get it, you don’t understand the data, you don’t understand the policies.

Chris Bowen:                Yeah, what are you talking about? We’ve got twenty-seven years of uninterrupted economic growth, and unemployment’s low, and interests rate.

Misha Zelinsky:             And the macro numbers don’t tell the micro story, right?

Chris Bowen:                They certainly do not.

Chris Bowen:                When I was shadow treasurer I used to say this, I used to do a lot of board rooms with the countries most senior business people. I used to say to them respectively, because they used to say to me, “Oh well, the labor party is wrong about this and that, and everything’s going-”, well I said, “You don’t get it. With respect, you don’t get it.”

Chris Bowen:                Things look good from here. We’re sitting in a board room in Sydney, we can see the Opera house, the Harbor bridge, the unemployment rate in Sydney has a three in front of it, or sometimes a two in front. There’s no vacant shops, everything’s bustling. Come out with me. Come to Mchale and walk down the main street. Come to Emerald! Inland Queensland. Things don’t feel too great out there. We collectively, not just political parties, but the establishment, if you want to use that word, economic establishment, the political establishment, the business community, the elites, need to get it.

Chris Bowen:                Far too much, collectively, we haven’t got it. Or, haven’t communicated that we do get it anywhere near effectively enough. The door has opened for that Charlottetown [clark parma 00:15:42] and the populist Pauline Hanson, and we have to close the door by being more responsive to the concerns of people who say this twenty-seven years of uninterrupted economic growth, I think, is bullshit.

Misha Zelinsky:             Quote that!

Chris Bowen:                You don’t beep out on this podcast?

Misha Zelinsky:             No, no, that’s all right. I’m not too sure too many kids are interested in geopolitics and social democracy globally. But for those that do, close your ears.

Misha Zelinsky:             So look, that was really interesting. One of the things I was keen to talk to you about, and we started with Putin and liberalism, and we’ve talked about social democracy, but the question of liberalism, the United States being the typical guarantor. They’ve underpinned the global system-

Chris Bowen:                Shining hope of the world!

Misha Zelinsky:             Right.

Chris Bowen:                Last hope.

Misha Zelinsky:             This trade war with China, they’ve now appeared to be retreating from their own system. Firstly, what do you make of that? And secondly, what’s the implications of that war between the US and China for Australia?

Chris Bowen:                The trade war will be sorted. There will be a truce. The only question is when and how? Why do I say that? The alternative is unthinkable, because the only alternative to the trade war being sorted is in effect decoupling. Saying the United States and China will decouple from each other and not have tradings.

Misha Zelinsky:             And some people argue for that, increasing national security grounds.

Chris Bowen:                Well that’s about unthinkable as men and women decoupling. Because we need each other, right?

Misha Zelinsky:             Yep.

Chris Bowen:                China and the United States need each other. And the idea that you could have a two polers in the world, two poles of the world economy with very little to do with each other is just… The world doesn’t work like that. The production chains don’t work like that. Half the things that are made in America, the components are made in China. And that’s not about to change.

Chris Bowen:                Now, there’s an easy way and a hard way, and that’s the only question open to president Trump and president Xi is, do we take the easy way or the hard way? I hope very much they take the easy way. But even if they take the hard way, either they or their successors will sort it. It’s true to say that in the United States this is not just Trump, it is a broader concern in the political elite, including the Democrats, that China has not been playing fair in the world trading system. And it’s also true to say that in some elements they have poy. President Trump is not always wrong. And he does have some legitimate concerns about the world trading system and China’s place in it. But the trade war is very much not the answer.

Chris Bowen:                Now I’m hopeful that they’ll choose the easy way. Either they will choose the easy way, or if there’s a new president next year, but I hope it doesn’t take that long because the implications of a worsening trade war, I mean, you don’t really need us to spend much time on, because they’re pretty self evident. They’re pretty bad. They’re pretty bad for the world economy, they’re pretty bad for us as a trading nation, pretty bad for our region. Even more than the direct implications of the trade war, because you can do all the modeling, and you’ll have this impact, this flow into Australia, and all that’s legitimate. But, I think the bigger problem is just the blow to confidence around the world, just the uncertainty created by the trade war, and the general blow to confidence is terrible for a country like Australia.

Chris Bowen:                I tend to be on the more optimistic side of what will happen in the world economy and the political system, but I’m also a nice, open realist as to the implications if I’m wrong, and that they choose the hard way, and it’s not pleasant.

Misha Zelinsky:             Well, it’s interesting, because pretty much the only by-part [inaudible 00:19:34] that you can find in Washington is the attitude to China. The peace arises, you described before, China’s getting rich, China’s going to get democratic, peace will now be, perhaps… Has not eventuated-

Chris Bowen:                Well it has been peaceful, but there’s been no move towards greater democratic freedom

Misha Zelinsky:             And so we’re seeing increasing authoritarianism. The question, to your point, it’s unthinkable to decouple economically, but there’s a real push to decouple on the national security elements. How do those two things sit together when you consider the techno nationalism around Warway, and the security of data and that element of the debate? And then all the economic points that you’ve made. They seem to be completely pulling against one another.

Chris Bowen:                Yeah, it’s really hard. I know I don’t underestimate the difficulty for any government in the western world. I think the liberal national government here has made mistakes in that space over the last six years, but I’m not overly critical of them because I don’t underestimate the size of the task, or the degree of complexity of the task in navigating that. Now what you need is a national strategy. The problem Misha, I think you’re really making this point, is that in many countries, including Australia, the economic establishment and the national security establishment shout at each other.

Misha Zelinsky:             Yep.

Chris Bowen:                And the national security establishment shouts, “China’s terrible, have nothing to do with them.” And the economic establishment shouts, “They’re our largest trading partner, we’re buggered without them!”. Both sides have some evidence to their cases, the trouble is that far to often, it’s just the shouting. In the cabinet, and I’ve served in both, there’s the Expenditure Review Committee, which is in effect the Economic Policy Committee, and you’ve got the National Security Committee, the cabinet, I’ve served on both for some years. What you really need is probably a National Strategy Committee. To get the intelligence agencies and the economic agencies in the same room and say, what are we going to do about it then? How are we going to navigate this?

Chris Bowen:                Some countries are doing it differently, but we’re all faced with similar conundrums. Prime minister Trudeau is dealing with this very acutely in Canada. Prime minister May, they’ve dealt with their own Warway issue in a different way to many other countries. And they’ve obviously weighed up the evidence. And you know I’ve seen the briefings, not the classified briefings, but I’ve seen the public briefings about Warway, and there are some issues, and our position is the same as the government on Warway.

Chris Bowen:                These are tough issues and we’ve got to stop shouting at each other about them.

Misha Zelinsky:             That’s an interesting point.

Misha Zelinsky:             One of the things, to your point about China is the oscillating between greed and fear, but I think actually we don’t oscillate that much, as you say, to people that are national security minded tend to be hawkish and people who are economically minded tend to be doveish.

Chris Bowen:                We have tribes.

Misha Zelinsky:             Yeah, right.

Misha Zelinsky:             Hilary Clinton said you can’t argue with your banker. I think we have situation where it’s difficult to argue with our best customer. China touches up a little around coal exports, I mean, certainly the coal or oil type situation with the Canadians, as you alluded to there. But is there a case on national security grounds, or even just on a diversification basis, for Australia to build deeper links into other parts of the regional, global economy?

Chris Bowen:                Absolutely. This is the key question. I think you correctly put Misha. We can talk about China and how we handle it, and obviously I have views about that, but what we’re not doing as a country is deepening our links to the region. More broadly, the Indo-Pacific. Every country is important, but the two key countries for us are India and Indonesia. We’re doing a little more in India than Indonesia-

Misha Zelinsky:             Which we don’t talk about much at all.

Chris Bowen:                No, no. But, by and large we’re not very much.

Chris Bowen:                Both of those countries have been bedeviled, in terms of our bilateral relations with different but similar problems in that in both cases the relationships have been transactional. Indonesia in particular, our relationship with Indonesia is transactional, it’s not deep.

Misha Zelinsky:             Going to Bali.

Chris Bowen:                Going to Bali or, from a government-government level, we’ve got a problem with boats, can you help us? Or live exports, it’s all about a transaction. And with India it’s a related but slightly different problem, is that it’s stop start. So there’s been good intentions by prime minsters, etc., and there’s been bilateral visits, and it disputes-

Misha Zelinsky:             You would’ve thought it’s easier, perhaps on a language basis and a cultural basis. There’s cultural alignment around sport, there’s language alignment-

Chris Bowen:                Curry, cricket, and Commonwealth. That’s what they say about India. Well let’s just step back for minute Misha. In each case, let’s look at why both countries are vital for us, and then look at why we need do better, or what we could do better.

Misha Zelinsky:             Sure.

Chris Bowen:                So, let’s just take India, the fastest growing major economy in the world. Probably will be the second biggest economy in the world by 2050, probably, on track. It will overtake China as the largest, most populous country in the world. OK. You’d think that means they’re pretty strategically and economically important for us. And, they absolutely are. But, again, it’s been stop start.

Chris Bowen:                I’m hopeful though that perhaps we’ve turned the corner with India because the biggest thing we’ve got going for us with India, is that they are now, pretty consistently, our largest source of permanent migrants. So we have a critical mass of permanent ambassadors, from us to them, and them to us. Those Australian-Indians or Indian heritage who now make Australia home, are very entrepreneurial, active in business, and hopefully will help us cement that relationship and stop it being about curry, cricket, and Commonwealth, but actually deepen it.

Chris Bowen:                There are a few things we can do for India. Firstly, we should be actively, not just say we agree, but we should, in my view, very actively promote India joining APEC. APEC’s an Australian invention-

Misha Zelinsky:             Forgot institution largely.

Chris Bowen:                It’s fallen off the tree a bit-

Misha Zelinsky:             Keith talked about it a lot, obviously.

Chris Bowen:                Yeah. See when APEC started, it was the main game in town-

Misha Zelinsky:             G20.

Chris Bowen:                Now you’ve got G20, you’ve got East Asia Forum. Summit season’s a busy time. And APEC tends to now be the forgotten cousin.

Chris Bowen:                Well one, Australia should promote invigoration of APEC, in my view, for all sorts of reasons. And two, we should welcome India to APEC. It’s an anomaly that they’re not in APEC. They’ve been trying to join since 1994. And the concern about India is, it’s a legitimate concern by some of our colleague countries in APEC, that India is generally not a globalized, generally not pro-free trade, and would be a blocker in APEC. Well my answer to that is we have to bring them in.

Misha Zelinsky:             Yep.

Chris Bowen:                You can’t pretend to exist. They are going to be the world’s second biggest economy. Let’s bring them in. We’ve got to give more support to those people in then Indian system arguing for openness. Now the proportion of trade in the Indian economy has doubled. Their exports have doubled over the last period. So, they are being more openly focused. Prime minister Modi’s instincts generally on the economy are more free trade and global in their approach. It’s still a very different economic system to ours. But there is cause for hope. So we’ve got to try to build our institutional, bilateral links with India much more, and we should try to bring them into regional architecture.

Chris Bowen:                On Indonesia. Now, Indonesia is the most stable country, basically in the world, when it comes to economic growth. They just continue to grow. China does, but Indonesia’s growth rate has been, if anything, even more stable. They’re just consistent, quiet achievers when it comes to economic growth-

Misha Zelinsky:             Quarter of a billion people!

Chris Bowen:                Yes! And so much so that they will be the world’s seventh biggest economy probably, by 2030, and fourth biggest economy by 2050. They’ll overtake us, Germany, the UK, everybody.

Chris Bowen:                Guess what? Their next door to us, and they’re not in our top trading partners. I think, hello? Are we getting something wrong here?

Misha Zelinsky:             Well it’s certainly…

Chris Bowen:                Yeah! And, again, as I said, our relation’s transactional. We don’t talk to each other.

Chris Bowen:                Here in Australia, more Australian school students study parts of Indonesia in 1972 than they do today. University campus after university campus is closing their Indonesian faculty, because they don’t have enough students.

Misha Zelinsky:             Is that an emphasis question? Why is that happening? You’ve learnt the language.

Chris Bowen:                Yeah, because I decided that, for a couple of reasons, I couldn’t talk the talk, without walking the walk, and talk about Indonesia about how important it was, for example, that we left out Indonesia literacy, if I’m a middle-aged Anglo-Celtic, middle class guy, lecturing the country and young people that we need to do this, if I wasn’t prepared to do it myself.

Chris Bowen:                So, I took myself off at age forty-two, when I started, and got myself a degree in Indonesian language.

Misha Zelinsky:             Old dog, new tricks mate!

Chris Bowen:                Yeah, that’s right. That’s right.

Chris Bowen:                People say Indonesian’s an easy language, I say, no it’s not. There’s no such thing as an easy language to learn.

Misha Zelinsky:             Absolutely.

Chris Bowen:                There are just some that are easier than others. And Indonesian’s at the easier end of the scale. It’s still very bloody hard.

Misha Zelinsky:             Other languages are always challenging.

Chris Bowen:                Yeah, yeah.

Chris Bowen:                But it can be done. And it can be done at middle age, mid-career. But language is important because one, it shows respect. Well I’m going to Chicago, and my language skills aren’t as good as I’d like them to be, I’m constantly working to improve them. But I can start a meeting with an Indonesian finance company, for example, in Indonesian. They often fall off their chair in surprise that a western politician can speak Indonesian. I don’t finish the meeting in Indonesian in case I agree to something I didn’t mean to.

Chris Bowen:                The fact that you show the respect, and often when I’m there the meetings flow in and out of Indonesian and English, because they can’t half speak English, and if I can speak Indonesian we show each other respect of floating in and out of each other’s language, to make sure we understand each other. It just changes completely the tone of the meeting. If you’re just speaking English, and often it’s pro-former, it’s formulaic, it’s a lot of, “Here you are.”, and “Thanks for your visit.”, “And stay as a good friend.” It’s bullshit.

Chris Bowen:                If you actually show the respect that you’ve learnt their language, it changes the tone of the meeting. And also, because we’re getting more young people learning Indonesian, or any other Asian language, Indonesian’s what I chose because you can’t learn them all. Any Asian language. You almost inevitably are engendering and interesting the country, and their background and their history. Part of my Indonesian degree was two compulsory subjects, the history of Indonesian language, and Indonesian contemporary culture.

Chris Bowen:                But even at school. When I was school I had the choice between Italian, and French, and German.

Misha Zelinsky:             Same.

Chris Bowen:                But they also taught us about the culture as they were teaching us language. The same with Indonesian, or Mandarin, or Hindi. We talked about India, but how many schools are teaching Hindi? None.

Chris Bowen:                And recently ABC fact checked me, and I’m glad they did, because I had said in a speech, going back to China for second, but it’s about Asian languages, I said in a speech Australian’s have non-Chinese heritage who can speak Mandarin to a level of business competence. The number is one-hundred and thirty.

Misha Zelinsky:             I’ve heard stat, it’s an extraordinary stat.

Chris Bowen:                It’s extraordinary!

Misha Zelinsky:             It’s actually quite damning in a way.

Chris Bowen:                It is. And sometimes when I say to the speech people shake their head and say that can’t be true. One friend of mine slammed a pencil on the table and said, “That can’t be right!”. As I said, fact checked found that essentially it was right. So it was an educated guess, but even if it’s double that, even if it’s two-hundred and sixty! [crosstalk 00:32:21]

Misha Zelinsky:             Two fifty.

Chris Bowen:                Out of twenty-four million, that’s a pretty poor figure.

Chris Bowen:                Now, Mandarin skills aren’t bad, because of immigration.

Misha Zelinsky:             Sure.

Chris Bowen:                But that’s not going to get us there. Education is to get us there as well. So, we’ve got a massive step change to undertake, in terms of our engagement with the region. Because, to get back to your essential point, yes, we can’t put all our eggs in the China basket, share politically, economically, interest of the world, we’ve got to be lifting engagement with India, Indonesia, as young and in the entire region in particular.

Misha Zelinsky:             Yeah. Going back to the Indian question, because people look at India, look at China, now China has an economic miracle, and India tends to get forgotten. India’s mess here is democratic. I’m so curious on your take of, what’s the future for democracy, open markets, and mesial liberalism versus the Chinese model of state capitalism, state owned enterprises? At this point a lot of people are pointing saying, “Well, that model appears to be delivering, bringing people out of poverty.” Now it’s a convergence, it’s easier to catch up than it is to go forward, but is there legitimate case to stay that the state owned enterprise model, the central control model, is the way forward? Or do you still think the Indian model can prevail in the long term?

Chris Bowen:                No, the Indian model’s getting there. It’s a unique Indian model. It’s not what you recommend as a starting point with a tradition of protectionism and heavy state, very heavy handed regulations and anti-foreign investment. But they’re getting there.

Chris Bowen:                They now have a national GST, for example. It’s got seven different levels, depending on the product you’re buying, which is not necessarily how you design it from scratch in a perfect world, but it’s what they had to do to get it through, because up until then-

Misha Zelinsky:             John Howard did a deal here on the early exclusions. I mean, these things happen in politics, right?

Chris Bowen:                Well up until recently, every states had its own GST, and I’ve seen it, I’ve traveled through India and the trucks get stopped on the state borders to check the goods. That’s all gone. And they’re getting there with retail and land reform, etc. And their growth rates are strong. As I said, they’re the fasted growing major economy in the world, and probably on track to overtake the United States and become the world’s second largest economy at some point when you and I are still on the workforce Misha.

Chris Bowen:                That’s a big turnaround. So they’re getting there, and of course they’re a very robust, strong democracy. They just had an election. It’s a remarkable feat and logistical feat, the Indian election, as is an Indonesian election. But there’s two examples, India and Indonesia, two recent elections, all by and large comparatively smooth and straight forward, and democratic, and both engaged in pro-market reforms and continuing to grow.

Misha Zelinsky:             Does that give you hope for democracy in the region? Obviously, similar outcomes in Indonesia, very complex acapella go style elections-

Chris Bowen:                Absolutely!

Misha Zelinsky:             Very difficult to run them. And India’s also complex. A lot of people say, “Well, democracies on the way. China’s being more assertive. The Russian’s are being more assertive. The traditional democracies have lost their swagger. Brexit, Trump, etc.” Does that give you hope for the region?

Chris Bowen:                It does, and of course democratic change in Malaysia. An economy of similar size to us, similar population to us. I know Malaysia pretty well, I didn’t necessarily think I’d see a change of government in my lifetime, from the all-know government. I don’t think many Malaysians did either. They certainly had elections for a long time, but one party happened to win them every time, until this time. So, we shouldn’t discount that either. I’m not commenting on the details of Malaysian politics, but there’s been a change in government, which was unexpected.

Misha Zelinsky:             A peaceful change as well.

Chris Bowen:                They had a peaceful change, yeah!

Misha Zelinsky:             Which is always the test.

Chris Bowen:                Yeah.

Chris Bowen:                And you could not have guaranteed that a few years ago, if there was a change of government, that it would be peaceful. As I said, they tend to be forgotten, but they’re a significant economy roughly. A roughly comparable economy in terms of middle power, and there’s another example.

Misha Zelinsky:             One of the things I wanted to get your take on, former treasurer of Australia, you had the portfolio a long time in opposition, one thing that gets overlooked a lot in the debate is this question of debt, global debt. Since the GFC effectively money around the world has been effectively, if not free, subsidized, and we’ve just cut our own straights yet again here in Australia to 1% levels, unthinkable even five years ago. How concerned should we be about one more generally, what it’s doing to the global economy, and how concerning is debt when you look at the debt loans that individuals and countries are carrying? Big question.

Chris Bowen:                Yeah, it worries me. It wouldn’t worry me if I was currently serving as treasurer of Australia. If you look at the global debt levels, it’s about 234% of GDP at the moment. Pre GFC it was 208%. So we have higher exposure than we had pre-GFC in the globe.

Chris Bowen:                Now, then you’ve got to look underneath it and say, what’s driven that? Now the good news is, is that a lot of that is driven by states, sovereign states. About eleven trillion has been handed by the United States. About five trillion has been added by China. Debt created by a sovereign government has its issues, but in terms of economic [stability around the world, it’s probably one of the less ‘badish’ types of debt.

Misha Zelinsky:             Owing it to yourself in your own currency.

Chris Bowen:                Yeah, exactly.

Chris Bowen:                Some comes from corporate in United States. And some comes from corporate in China, which is perhaps a cause for instability, if, because there are concerns about the opaqueness of some of that debt. If there is a downturn or a problem, it could be that, that is the cause of it. I don’t want to be too alarming, but you have to be realistic about where the shock could come from, and that is one.

Chris Bowen:                And some is household debt, which is a concern, and that’s our problem.

Misha Zelinsky:             Yep.

Chris Bowen:                Australia and Canada, household debt.

Misha Zelinsky:             World champions in that dubious area, right?

Chris Bowen:                Yeah, that’s right. Second highest in the developed world. Not a record we should be looking for. And that does expose us. If there was an international downturn, whether it be caused by Chinese debt crisis, whether it be caused by a US recession, which the markets would indicate. Possible/likely.

Misha Zelinsky:             Not to get in a super wonk-ish discussion, but inverted yield curves.

Chris Bowen:                Yeah, exactly. Exactly right.

Misha Zelinsky:             Predicting a US recession in twelve months, or so.

Chris Bowen:                Exactly right.

Chris Bowen:                And there is some rushing after that. Or it’s caused by an elongated, worsening trade war, or it’s caused by Europe/Brexit. Europe’s hasn’t been in a great state. Germany’s narrowly avoided a recession. Italy’s bouncing along the bottom. Greece continues to be Greece. Europe’s not in a great state, so from somewhere you could see the makings of an international downturn from one of the above. And if that happens, one of our exposes is our very high household debt.

Chris Bowen:                I think most households can cope with an increase in interest rate, obviously they’re going down at the moment, but even if they did start to move up, most households have factored in some buffer. What you can’t cope with is unemployment. And that’s where, if there is a downturn, and we’ve got very high household debt, we are in-

Misha Zelinsky:             The assumption is you’ve still got your job.

Chris Bowen:                Correct.

Chris Bowen:                Debt does worry me.

Misha Zelinsky:             What’s the role of government? Because one of the things that troubles me, it’s a global question, going right back to basic economics, cheaper money means businesses borrow, means they invest, households borrow to an extent they can consume, but largely, we want to see this investment piece. Now, the rate of capital formation. So, i.e. people borrowing money to invest in new things to build. New factories, new businesses, etc., is on the way. You’re seeing largely this subsidized money being driven into asset markets, property shares and other forms of equity.

Misha Zelinsky:             Is there a role there to make sure that we actually, well, if we’re going to subsidize money, it goes into job creation, or into things that are going to create economic activity?

Chris Bowen:                Well, ideally.

Chris Bowen:                I don’t want to go through the war, but that was one of the policy rationales for our negative gearing reforms, for example. Obviously the pay will go through a process of revising our policies. But one of the things that drove us on negative gearing reform was that we have the most generous property tax concessions in the world. I mean it’s almost irrational not to be a property investor in Australia.

Misha Zelinsky:             Well the tax system tells you to do it, right? You can watch my essay on this, but I find it crazy for every ten dollars that’s borrowed in Australia, six bucks go in the property market.

Chris Bowen:                Because we provide such incentives to do for the tax system.

Misha Zelinsky:             People go with incentives like water goes down hill.

Chris Bowen:                Yeah, exactly.

Chris Bowen:                And so, that’s one of the reasons why we have the second highest household debt in the world. It’s because our tax system encourages it. Now, again, as I stress, the party has got to go through the process of a review, but that was the number of rationales for that reform, one of them was housing affordability, one of them was budget repair, and the other one was financial stability and high household debt.

Misha Zelinsky:             What’s the way forward here, in terms of actually getting consumption going? Because 60% of the economy is driven by consumption. So the focus tends to lead largely on supplies, so let’s get monetary policy-

Chris Bowen:                Well the reserve bank governors made it clear they can only do so much, right?

Chris Bowen:                Again, it’s a bit hard to avoid the recent election, but we had policies on the investment guarantee to encourage businesses to invest. But we also, unapologetically said, well you can’t expect people to consume when the wage is going backwards. And so we did have some, you might call them radical, but strong policies on the living wage, on penalty rates, because unless we get wages growth going, and it did require a degree of intervention because the systems not sorting it. And this is an international problem, I don’t hold this government entirely responsible for all of it, but I hold them responsible for the lack response, and for saying-

Misha Zelinsky:             And incoherence in the policy, cutting penalty rates-

Chris Bowen:                Exactly.

Misha Zelinsky:             Demand for consumption.

Chris Bowen:                Well we can argue about the way it’ll increase wages, but I think we could probably agree the way to increase wages is not to cut them on weekends.

Chris Bowen:                We saw wages growth as being pretty important for social justice and fairness, and equality, but a pretty important economic stimulus as well. Unless there is a solution found through those mechanisms or others, we are going to continue to bounce on the bottom of consumption. And the economy will continue to be anaemic. In my view.

Misha Zelinsky:             Well I could probably pick your brain all day, but you’re a very busy man with a lot of things to do. But, before you go, and one of my classic clunky segues into the lamest of all questions, Chris Bowen’s barbecue, three international guests, three international shows, so who are the international guests alive or dead that you’d have at a barbecue at Bowen’s? It’s got alliteration, so already-

Chris Bowen:                There you go, I could get an apron printed or something.

Chris Bowen:                Three international guests! Well, and they can be dead? Well first-

Misha Zelinsky:             Might be less fun.

Chris Bowen:                Well, OK, to show my pure [wonkiness 00:44:15], in the fantasy football world, and they could be dead, Winston Churchill. I was born eight years after he died, so never walked the planet with him, but I’ve read basically everything you can read about him, an enormous, remarkable figure. And then you’d put Clem Attlee in. You’d see those to be in the same room as those two. Being a bit more realistic around the world, pretty interested in the US presidential race at the moment. I wouldn’t mind spending a couple of hours with Pete Buttigieg.

Misha Zelinsky:             Yeah, I met Pete, he’s really a compelling guy isn’t he?

Chris Bowen:                Yeah! Yeah, I’d have him over for a barbecue. I’d have Ruth Bader Ginsburg over as well, if she could make it. Very admirably figure, powerful intellectual, extraordinary figure.

Chris Bowen:                And then just to mix it up completely, I’d probably have, this guy is actually a friend of mine, I’ve come to know him, I’d have, just to mix it up a bit, a guy who I think is probably the best, in my view, the best living novelist in the world, I’m bias, is John Boyne. He’s an Irish novelist. He wrote the Boy in the Striped Pajamas, and he wrote The Absolutist, which I highly recommend. A compelling read. I’ve come to know him, he’s a good fella. An Irishman, an Irish novelist. He loves Australia! He comes to Australia at every opportunity, that’s how we got to know each other.

Misha Zelinsky:             [crosstalk 00:45:48] I think Churchill might have an interesting discussion.

Chris Bowen:                Yeah, yeah! That’s right. I don’t think Churchill’s appeared directly in any of his novels. He certainly has written about the issues of the day. So I’d have John over as well.

Misha Zelinsky:             So we’ve got a novelist, a former British prime minster-

Chris Bowen:                And the nearest south bender [crosstalk 00:46:08]-

Chris Bowen:                I added one.

Misha Zelinsky:             And that’s right, a former president of Australia. So that would be a great barbecue, I’d definitely like to be a fly on the wall with that one. Chris Bowen, thanks for joining us, I really appreciate your time mate.

Chris Bowen:                Been a lot of fun Misha. Good on you.

Misha Zelinsky:             Cheers.

 

Max Bergmann: Center for American Progress

Foreign Interference and Russia 2016 Election Special.

Max Bergmann is a senior fellow and director of the Moscow Project at the Center for American Progress, where he focuses on European security and Russia policy. Previously he served in the U.S. Department of State where he focused on political-military affairs, arms control and international security. He was also speechwriter to Secretary of State John Kerry. A graduate of the London School of Economics, Max joined Misha Zelinsky to discuss foreign interference in democracy, what the Mueller Report uncovered about the US 2016 election, whether the Congress should impeach the President, how Russia interfered in the Brexit referendum, and how democracies can fight back against hostile actors. 

Misha Zelinsky:             So, Max, welcome to Diplomates. How are you?

Max Bergmann:            Good, how are you?

Misha Zelinsky:             I’m well, and we are obviously doing this by the miracle of the internet. I think it’s about the end of the day in DC and the start of the day here in Australia, so welcome to the show.

Max Bergmann:            Thanks so much for having me.

Misha Zelinsky:             And so, I was thinking about the best place to start. Now your background is foreign interference. You have a background in the US State Department and you’re working in foreign interference at the Center for American Progress. I suppose firstly, before we get into the specifics, why does foreign interference matter at all? Why would we at all be concerned about this?

Max Bergmann:            Well, I think it matters even more now than it has in the past and it’s partly because of how our politics work now. It’s how people get their information, how the Internet has transformed people’s lives, has made, I think modern societies particularly vulnerable to foreign interference in a way that wasn’t really the case, I think, in previous eras, at least not to the same degree. Partly because, now, it’s very easy to reach people to connect with people, to influence different segments of the population and so, the way foreign governments are interfering, I think is particularly important because for our Democratic politics, both in Australia and the United States and everywhere there’s a democratic country, it’s important that that be an internal conversation. It’s always going to be influenced in some ways by the broader world, by broader dynamics, but when you start having foreign governments saying, “We are going to deliberately get involved and find a way to tip the balance, put our thumb on the scale in a particular direction,” where you start undermining the very legitimacy of democratic politics. And the way we live now with this modern network society, it’s increasingly easy and available to foreign countries to try to put their thumb on the scale.

Max Bergmann:            And so, I think it’s a particularly pernicious threat to open societies, to open liberal democratic countries where our openness is our big great advantage and what these foreign governments are trying to do is really undermine that and take advantage of it. And so I think it’s a real worry, it’s a real threat and a real concern and something that all democratic societies now really have to pay attention to.

Misha Zelinsky:             And, of course, the most famous example, there are other examples we could get into, the most famous example that’s been debated lately is the 2016 US presidential election and the interference of the Russians there. Before we get into the Mueller report and the political dimensions of all this, what do we know specifically? What are the uncontested facts in this space?

Max Bergmann:            Well, so there’s a lot, actually of uncontested facts and Mueller’s 400+ page report I think, most of that, almost all of that, is largely uncontested. But I think when it comes to the foreign interference dimension, in particular, now I think the way the Mueller report has been interpreted, I think, particularly outside of America and abroad is, well it didn’t quite have the smoking gun to nail Trump. I don’t actually think that’s quite true, but the more important part of the Mueller report for foreign countries, for foreign democracies, is the first 50 some odd pages where he outlines a Russian conspiracy against the United States. We forget that Mueller has brought all these criminal charges and what Mueller effectively identifies in Volume I, in the first 50 pages, are two distinct Russian lines of effort to influence American politics. And they’re quite successful in 2016.

Max Bergmann:            And that first line of effort was to social media, through the creation of the Internet Research Agency. This is sort of a pseudo-private oligarch funded operation in St. Petersburg. And what does it do? It was trying to influence American, the political discussion on social media, facebook, on Twitter, this is where we hear about the troll farms, the bots, which are automated accounts. And what the Russians effectively figured out is how to game the American debate, how to game the social media companies by, if you amplify content, if everyone’s retweeting the same thing, if you create automated bots that is all retweeting racist content, some of that racist content gets amplified. Lots of people then look at it. He gets promoted. And so that was one major line of effort. Where the Russians were trying to interfere both to sow discord in American politics, basically amplify our racial divisions, amplify aspects of American political debate that they wanted to promote, and then the other aspect was to simply promote Donald Trump. There were a lot of Russian accounts that were promoting Donald Trump. And this was not a Mickey Mouse sized operation. It had roughly 80 people devoted just to the United States, just to the 2016 election with a multimillion dollar budget.

Max Bergmann:            Now if you look at the Clinton campaign’s digital operation, this is the presidential campaign of Hillary Clinton, she had roughly 80 people devoted to digital. So you see what is, in effect, a Russian online campaign, digital campaign, devoted to influencing American politics. And probably, it’s not going to be as effective as the Clinton digital campaign, but, on the other hand, this is the campaign, on the Russian side, willing to say things that normal political campaigns wouldn’t do, push certain messages, attack candidates in ways that people that were had to be true to who they were, had to represent themselves wouldn’t say.

Max Bergmann:            And so the second line of effort, so the first line is the social media campaign that Mueller outlined. The second line of effort is the hacking. Now this is basic intelligence operations. A Russian military intelligence unit within the Russian GRU that was devoted, not to hacking the State Department or hacking a diplomat’s phone, but to hacking an actual political campaign. And hacking the personal email accounts of John Podesta, who is the cofounder of Center for American Progress, who I should disclose the place that I work at, but also, penetrating the Democratic Party, which they were able to successfully do.

Max Bergmann:            When we think about political campaigns, political campaigns, especially in the American context, are basically like small start up companies that suddenly balloon overnight and have all these young twentysomethings working for them. And so they are quite actually easy in some ways to penetrate or should be. Actually, the Clinton campaign took cybersecurity incredibly seriously. So the Clinton campaign actually wasn’t breached. It was a personal email account of Podesta and it was the Democratic Party. But so the Russians broke in, stole tens of thousands of emails from both the Democratic Party and from John Podesta. And not only that, they also stole a lot of stuff, like their field operations research, basically their battle plans for the campaign, and we don’t know what they did with that. We know that they release the emails into different waves through Wikileaks, which was an online transparency organization that felt no bones about releasing content that was given to them by Russian intel and release that right before the Democratic convention in July, which was the first release. And then the second release, which came in October was sort of the October surprise of the election.

Max Bergmann:            And so it had a huge impact on the race, in a race that was so close there is no doubt that when you look at the impact of both those lines of effort, it definitely swung the election, tilted the election in Donald Trump’s favor. So that’s in the Mueller report and I think it’s something that all countries, that all democratic societies should look at those, especially the first 50 pages, to learn about, hey, if this could happen in the United States, how could this also happen here in our country?

Misha Zelinsky:             And I suppose I should apologize on behalf of the Australian people for the role that Julian Assange played in Wikileaks. We won’t get into that too much, but that was a really good run down of the 400 page report and a two-year investigation, but I think you’re right. One of the things that’s fascinating to me is that, you’re right, the question of the smoking gun that if Mueller wasn’t able to find a recording between Vladimir Putin and either Donald Trump himself or someone in the Trump organization, campaign, that this was all going to be a farce of an investigation, that it wasn’t going to be that… One of the things that I think would be good for you to unpack would be all the people in the Trump campaign, that worked on the campaign, that have since been indicted and arrested and charged, and in some cases, imprisoned. So if you could give us some idea, a quick rundown of the rap sheet, I think that would be interesting.

Max Bergmann:            Yeah, no sure. The Mueller investigation was probably the most successful special counsel investigation that we’ve ever had in the United States. And the report that he produced is the most damning thing ever written, most damaging official document ever written about a President of the United States. And as you mentioned, the Mueller investigation has led to guilty pleas of Donald Trump’s campaign chairman, Paul Manafort; his deputy campaign chairman, Rick Gates; his personal lawyer, Michael Cohen; his first National Security Advisor, Michael Flynn; as well as a Foreign Policy Advisor, a guy name George Papadopoulos. It has produced a tremendous amount of indictments and charges also against Russians and Russian affiliated individuals. So this was an investigation that found a lot of lawbreaking, found a lot of crime.

Max Bergmann:            I think when it comes to Donald Trump, what we see here is, in fact, a classic counterintelligence investigation, that what Mueller found was a lot of smoking guns. What he didn’t find was Donald Trump pulling the trigger. When we think about famous, if we go back to the Cold War era or post-Cold War era, where the US was busting a lot of Russian or KGB agents that were embedded in the CIA, the FBI, we have the famous Aldrich Ames case and the famous Robert Hanson case, what happened in both of those, the FBI caught them at the dead drop. They got them in the act of committing this crime. In this case, Mueller was only appointed to investigate a year after the election almost and what seems pretty clear is the FBI was very slow on the uptake in terms of Russian interference during the actual election. Some of this was actually the fault of the Obama administration not being super focused on the threat of Russian interference at the time. It caught everyone off guard. And so that gave people a lot of time to delete messages, to delete emails, to erase things on their phone and coordinate stories.

Max Bergmann:            So what we see in the Volume II of the Mueller report is the crime, is the crime that implicates the President of the United States, his obstruction of justice. And we have the famous story here in the US of Al Capone who was this famous mobster during the prohibition era in the 1920s and how did Al Capone go down? Well, of tax evasion. No one says that Al Capone wasn’t this famed mobster, he was avoiding taxes because he was this famed mobster. But it was the tax evasion that got him. And I think what we see here is Robert Mueller, the reason why there’s 198 pages of Volume I devoted to Trump’s Russian contacts, the Russian contacts with Donald Trump in the Trump campaign with Russia is because Mueller was describing a story, a story of something that Donald Trump wanted to hide, wanted to conceal, wanted to obstruct from the investigators that were looking into it.

Max Bergmann:            And I think in some cases Donald Trump was successful. But there’s also a lot of smoking guns. Maybe I’ll just run through them quickly. One, they have the campaign chairman, Paul Manafort meeting with someone who the FBI believes is a Russian intelligence agent. But it’s not only the FBI, it’s also Paul Manafort and his deputy, also believe this individual Konstantin Kilimnik is connected to Russian intelligence. And they meet with him on August 2 in the midst of this campaign. Throughout the election, they’re sharing polling data, internal polling data from the campaign. This is sort of the crown jewels of the Trump campaign. This is confidential information about how their polling numbers, the messages they’re looking to push, and they also shared the campaign battle plan, the states they’re looking to focus on. And they’re sharing it with Konstantin Kilimnik, who they know is sharing it with Oleg Deripaska, Who is this Putin connected oligarch who’s been sanctioned by the United States. And why to they want it shared with Deripaska? I think it’s fairly clear that they knew Deripaska was sharing that with the Kremlin more broadly.

Max Bergmann:            So we have a very unique chain of events to Russian intel from the trunk campaign to Russian intel with very few actors in between. Now Mueller identified all that. His problem was Paul Manafort was a cooperating witness, decided to not cooperate about why he was providing that information to Konstantin Kilimnik. And so Mueller withdrew the cooperation agreement, Manafort’s now going to jail for a very long time and the question is why did Manafort not want to disclose that information? And I think the conclusion is pretty clear. It’s because he was sharing that information with the intent that it was going to get to the Russian government.

Max Bergmann:            Now there’s other examples of Donald Trump’s advanced knowledge and awareness of the WikiLeaks releases. In fact, not only that, instructing his campaign to establish a back channel to WikiLeaks knowing that WikiLeaks was getting the content for the releases from Russian intel. And why did they know that? And this is the other bombshell, because the Trump campaign was told about it. The Trump campaign was informed by this Maltese professor, Joseph Mifsud, in London that the Russians had “dirt on Hillary Clinton” that they had thousands of emails. And this was in April and May before it was known to the world.

Max Bergmann:            So what we see are all these sort of… this awareness on the part of the Trump campaign about what the Russians were doing, this willingness to share internal Trump campaign data and information that would be very useful to the Russian campaign that they were running, that I mentioned earlier. And so Trump’s awareness of this crime, Russia was doing and his willingness to say go out, collude, connect, meet with the Russians. The Trump campaign effectively ran toward the crime. And that’s what Mueller outlines.

Max Bergmann:            Now he says, I wasn’t able to find any tangible agreement, tacit or expressed, that could amount to a conspiracy between the Russian efforts and the Trump efforts, but he did find a lot of collusion and then he found a lot of obstruction of justice in the Volume II.

Misha Zelinsky:             And so, I’m keen to turn to, I suppose, where this goes from here. But just going back a step, you talk about, you outlined a very concerning and alarming series of facts, the concerning part, I think, is some of this was known. The Obama administration certainly knew. The FBI had some concerns. Why was there no red flag going up before the election? Why was this, in effect, sat on and we didn’t hear about it until after the fact?

Max Bergmann:            So I think there’s a few reasons and it’s a great question. I think, one, I think everyone was just caught off guard. We’re the United States of America, no one messes with our internal democratic politics. It’s just not a threat that we expected or anticipated, partly because we can deter foreign actors from doing that by the very nature of us being the world’s largest superpower. And so I think there was a little bit of just lack of imagination that occurs in every major intelligence failure, whether it’s 9/11, whether it’s Pearl Harbor, of just not anticipating how a foreign actor would actually go about attacking you.

Max Bergmann:            When the DNC, the Democratic Party was hacked, and it became known on June 14, 2016, it was actually reported in the Washington Post that day, the initial response from US government or thought process was that, well, this is happened before. It’s not unusual for foreign countries to want to hack a political party, political campaign. Barack Obama’s campaign was hacked by the Chinese in 2008. Lots of Washington think tanks are hacked all the time by China, by Russia. And so it was sort of viewed as this was traditional intelligence gathering, this wasn’t about influencing events, it was about, you know that the Russians wanted to know where the Clinton campaign may be going or where the Democratic Party may be going on certain issues. You could very quickly scratch the surface there and say, well that didn’t quite add up based on what they were doing. I think that was the basic sense at the time.

Max Bergmann:            That all changed on July 22 when the Russians, through WikiLeaks, release the DNC emails right before the Democratic convention. This was a huge deal. This resulted in the resignation of the head of the Democratic party, Debbie Wasserman Schultz, at the time, it left a massive rift between the Clinton and Bernie supporters. And so suddenly, at that moment, there is a realization in the US government that they have a problem.

Max Bergmann:            After this point where the FBI, who had sort of been slow on the uptake of conducting counterintelligence investigation gets information from a good Australian diplomat in London who had actually had drinks with George Papadopoulos in early May where Papadopoulos who’s a foreign policy advisor to Trump, told him that the Russians had this dirt and were going to release it. This information is passed to the FBI. The FBI opens a counterintelligence investigation. But then what we see… Donald Trump’s stance during the election was problematic. Because he was saying, dismissing the notion that Russia was involved, it meant that if President Obama got involved and said the Russians were doing this, they were worried it would be seen as partisan, they were worried it would be seen as tipping the scale on behalf of Hillary Clinton.

Max Bergmann:            And so what we saw, in September and October, was the Obama White House going to the Republicans in Congress, Mitch McConnell and Paul Ryan, who were the two leaders in Congress, and saying, “Hey, let’s issue a bipartisan statement.” And both of them turned it down and said no. We think this would be partisan. And so what we saw was actually a breakdown, I think, it wasn’t just a failing on the Obama administration, it was also a failure on behalf of the Republican Party. We have political parties to act as guardrails for our democracy and here was a Republican Party failing to step up.

Max Bergmann:            Now that being said, there’s no doubt that the Obama administration’s response was way too weak, was way too timid. They should have gone out and spoke out more loudly than they did. When they did try to speak out, well, there was two things that happened. One, they tried to pick up the red phone and tell the Russians, the red phone was used during the Cold War to avert a nuclear crisis, this was actually picked up where John Brennan, the head of the CIA, told his counterpart, “Cut it out. We know you’re doing this.” And Obama told Putin at the G 20 summit, I believe in China.

Max Bergmann:            The second thing that happened was they decided to go public. On October 7 about noon, this was a Friday they released from the head of the Department of Homeland Security the head of the director of national intelligence, a statement about Russian interference. Then a few hours later the biggest bombshell of the election happens, which is Trump’s Access Hollywood tape comes out and this is where Donald Trump is basically bragging about committing sexual assault on a hot mic. And then 29 minutes after that tape is released, we have this good Australian, Julian Assange, of WikiLeaks, releasing at 4:32 PM on the Friday on October 7, the John Podesta emails. And so, suddenly announcing to the public that yes, Russia was doing this just got completely buried in the news cycle and no one paid any attention.

Max Bergmann:            So I think what we have is a failure of imagination, slow in how to respond and how to react, being hamstrung by Republicans, and finally acting and then it getting consumed in the broader news environment. So that’s a pretty long answer to the simple question, but I think anyone in the Obama administration who says they would do it exactly the same as they did it is lying. I think everyone looks back, and also has the assumption… The last thing I should say is everyone assumed she was going to win. So it’s easier not to do something. It’s always easier not to act than to act, especially when you could say well she’s going to win it.

Misha Zelinsky:             They certainly weren’t alone in predicting that Hillary was going to win. I was certainly on board with that prediction as well. So I think… Thank you for that really concise answer.

Misha Zelinsky:             So I suppose she sort of touched on a bit of the politics. I think it’s a good time, because this has now become political but first there is a National Security element discuss, but there’s a political dimension to this.

Misha Zelinsky:             The Mueller report itself has become politicized. So I’m curious of your take, the Republicans are effectively now saying through the Attorney General William bar put out a summary of the report, effectively saying that case closed. The president is saying he’s exonerated. Some Democrats think it’s time to move on. Is it time to move on from this in your opinion?

Max Bergmann:            No. As you and your listeners could probably tell, I’m fairly committed to this topic. No, I think it’s the exact opposite. I think the last few months of inaction on the Democratic side of the house, the stonewalling from the White House, have been a real disservice. I think there’s a real need to act. I think what’s broadly happened here is, to step back for a minute, the last two years the Democrats were in kind of a tough spot actually. They were wanting to let the process play out, not prejudge an ongoing criminal investigation. Now Donald Trump was not doing that. Donald Trump was working the rest. Donald Trump was basically running, for the last two years a campaign against being impeached. He was telling the American people there’s nothing there, this is all a hoax, no collusion, no collusion, no collusion. I didn’t do this. I didn’t do this. And so he sent a very clear message while the Democrats’ message has been where basically protect the Mueller investigation, wait for Mueller, which isn’t really a clear message.

Max Bergmann:            And I think that continued after the Mueller report where what you now have is, I think a Democratic Party that wasn’t prepared for the Mueller report to be as damaging as it was. And so, partly because of that, they’ve also had to view this through a more political lens of is this a smart political step to move forward with impeachment because, perhaps if we move forward on impeachment, then Donald Trump will be able to say that we’re just obsessed with impeaching him and the public will view us as not really focused on their interest but focused on just getting a Donald Trump.

Max Bergmann:            I don’t really view it that way. I think that what this is… That impeachment is bad, that being impeached is bad. It’s not something anyone wants. It’s fairly simple and that if the Democrats in the house move forward on impeachment, that will send a real signal to the public that Donald Trump’s actions have been unacceptable. I think they’re walking… There’s all these other competing domestic political issues as well, but I think that’s the basic thrust here is that it is important for House Democrats to hold Donald Trump accountable for the action that’s outlined in the Mueller report, because failure to do so, I think essentially means that what the Mueller report then will become is, that sort of a new guide, it’s a new precedent for how you can actually collude with the foreign intelligence service in running a political campaign and get away with it. And I think that’s a terrible precedent to set, especially getting into a 2020 election cycle.

Misha Zelinsky:             So what about the facts. Not to make the arguments for the House Democrats, because you’re certainly more plugged into the Democratic Party than I could hope to be, but the argument seems to be, yes the House could impeach Donald Trump now that there’s a majority since the midterms. Then the Republican Senate would likely exonerate, given the way that you require a super majority to remove a president and the Senate to find him guilty of high crimes and misdemeanors. So is that a relevant point? Do you think that’s relevant? And would that make the case for exoneration greater?

Max Bergmann:            No, I think that’s a very relevant point. And that’s the argument that House Democrats are making saying that this is a symbolic exercise. Here’s the thing, is that every piece of live legislation that Democrats in the House are passing as well is a symbolic exercise because there’s this roadblock called Mitch McConnell who runs the Senate and is the Republican leader and is not going to pass any legislation that goes forward and actually impeaching… My counterargument would be, look, Republicans in the Senate have been like frightened turtles over the last two years. They haven’t wanted to talk about this. It has been something that they are very glad not to have to be confronted with. The problem, I think… I think that if Democrats were to move forward and actually impeach and then move it forward to the Senate and there would be a trial in the Senate. That has happened very rarely in American history. Bill Clinton, it happened in 1999. Richard Nixon, we never got to that point because he resigned. And then it happened in 1866, I believe, with Andrew Johnson, after Abraham Lincoln.

Max Bergmann:            So this would send, I think, a big signal to the country. It would be treated very seriously in the press. And then you’d be forcing Republicans in the Senate to stand up and to defend the actions and conduct as outlined in the Mueller report. And I think where it makes sense for me to do this is I think you’ll actually get some Republicans to join forces with Democrats. No I don’t think you’re going to get the two thirds majority to remove Donald Trump, but I think you could see a real strong bipartisan rebuke. And that will also be very useful for a Democratic candidate opposing Donald Trump in 2020 that can then run on the argument that Donald Trump is, in fact, a criminal and should be going to jail. That strikes me as a strong argument to make in 2020.

Max Bergmann:            And if you get the 2020, and it doesn’t poll well, you can always just run on other issues. But, to me, the conduct outlined in the Mueller report just cannot stand, and I think the political calculation here, the political machinations don’t make a lot of sense to me, number one. Number two, even if they did, I think there’s a duty on the part of members that took an oath to uphold our Constitution to act. We’re not a parliamentary system. We only have one way to remove a leader and that is through the impeachment process And the impeachment process-

Misha Zelinsky:             As an Australian, mate, I should probably say that removing leaders is not without its problems, but sorry not to cut you off.

Max Bergmann:            That is a good flag. On the other hand, not removing leaders that are hugely problematic, having to sit out and wait for four years, is also a problem. And the designers of our Constitution back in 1770s, 1780s, put this in there for a reason. And they put it in there for a guy like Donald Trump who is basically used corrupt means to gain the office, who has committed high crimes and misdemeanors while in office in the obstruction of office. So if you’re not going to use it now, then when? And I think not acting just sets an incredibly terrible precedent for the future of our democracy.

Misha Zelinsky:             And so you talked about Watergate. The Clinton comparison, I mean I think it’s an interesting one given when you consider the relative conduct, I think it speaks for itself, but the Watergate ones more instructive because that was a Republican president in the end who while was not impeached, was removed because the Republicans Senate abandoned him or the Republican senators. Do you have any confidence that that’s the case given where the Republican Party is at now? And is it not relevant political calculus? You’ve talked about some may be coming over, but is that enough, really, in the…

Max Bergmann:            So the Nixon example, I think is one that we… in America’s not been totally internalized. It’s viewed through this, All the President’s Men movie with Robert Redford and Dustin Hoffman where, aha, Woodward and Bernstein got it and then Nixon resigned fairly quickly. But it was a two-year process. It was very similar. It was the slow burn of information that came out. It wasn’t until the very end that political support for Nixon collapsed. Nixon’s approval ratings had gone down throughout the process and Watergate helped push them down, but Republicans actually stood by his side up until the very end. And suddenly the dam broke and it broke completely and Nixon saw that there was no future. And so I think the… Here’s what I would tell the Democrats in the modern age is that you don’t know unless you try. You don’t know unless you push forward.

Max Bergmann:            And why did Nixon’s support collapse? Because House Democrats were moving forward with an impeachment inquiry. It was the impeachment inquiry which then elicited new information, get more information out there, the tape broke, but it was that that was the forcing function that put pressure on Republicans to justify it. And the political results through the Democratic Party in the 1974 election, it was the biggest wave election, I think, in modern history where Democrats won by 17% and two thirds majority in the house. And then, the only Democrat to win in the period between 1968 and 1992 was Jimmy Carter in 1976. And why did he win? Partly on this backlash, this anti-Watergate backlash.

Max Bergmann:            And so I think, if I were the Democrats, I would look at that example as the high-end. Nixon resigning essentially confirmed everything that everyone was saying about him. And then you’d look at the ’98, ’99 Clinton scandal. And what happened in ’98 was Republicans lost five seats in the house. This wasn’t this huge backlash against Republicans for pushing it, for pushing impeachment. And then George W. Bush won in 2000 based off of basically restoring honor and integrity back to the White House. He ran against Bill Clinton’s image.

Max Bergmann:            If the Clinton case is the backlash example of pursuing an unjustified impeachment process and it only, the backlash is that minimal, losing five seats, having George W. Bush sneak through in the controversial election in 2000, okay. And then you look at the 1974 and if that’s the high-end, where we are, at the very least, with the Mueller investigation, why I think it’s a bigger scandal than Watergate, the political dynamics are different. We’re much more in the Watergate space than we are in the Clinton space. And I think if Democrats push this and pursued it and actually made this a big political issue, I think it would bear political fruit for them, but they’re very reticent to do so.

Max Bergmann:            And I think there’s a number of reasons for that that go beyond there’s a larger psychology here. Democrats don’t like to run a scandal. While the Republicans, their whole, what drives them when they run political campaigns is to search for political scandal, for Clinton emails, for some sort of Obama-ish scandal that they could make a big deal out of. The Democrats like to talk about policy and are very wonky in some ways lovable and sort of boring in that sense. And that’s, I think, really hurting them here.

Misha Zelinsky:             That’s an interesting point. The progressives don’t tend to dial up the outrage on those types of things, they like to make it about the issues. We’re often outraged about the issues but it’s a really valid point. The 2020 election is anyone talking about this to your mind? We just had the debates, do you think this is getting enough air time because there’s been significantly a pivot to perhaps the issues health education, etc. Do you think that this is getting enough air time or are the candidates still mind waiting to see what that House does and see if there’s a tailwind there?

Max Bergmann:            Well actually the Democratic political candidates have led on this. I think Elizabeth Warren, in particular, was the first major political figure to come out in favor of impeachment. She was then followed by a number of other Democratic presidential candidates. And most of the top-tier candidates have all come out calling for Donald Trump to be impeached and for the House to move to an impeachment inquiry. So I think they’ve actually led. The debates that occurred, I was sort of surprised that there weren’t more questions related to impeachment. There was one on the first night, not on the second, in that this hasn’t played a bigger role in the questioning.

Max Bergmann:            Some of that is because it’s a lot of the folks agree internally, but I am a little surprised it’s hasn’t been a bigger issue. I think it’s now been a few months since the Mueller report has dropped. It shows that how if you don’t react and if there’s no outrage, the outrage will decline over time, people’s attention spans are short especially with Donald Trump in the White House and there’s a scandal every 15 minutes. But we’re about to have a big thing happen in a couple weeks where Robert Mueller is going to testify, or is scheduled to testify, and I think that’s going to put this back into the news. I think it’s going to put more pressure on House Democrats. And what we’ve been seeing is this trickle of more and more House Democrats are coming out for impeachment. So the numbers are sort of ticking up and I think the big question is…

Max Bergmann:            August is sort of this mythical month actually in American politics where there’s no news, boring eras, like the 1990s, August will be dominated by news of shark attacks and other things. But it’s also a month that because it’s a limited new cycle there’s not much happening that one issue could sort of dominate and perhaps the one issue to dominate might be Russia, and I think that’s one of the big, the Russian investigation. In 2009, it was the Tea Party movement sort of developed then. Two years ago it was Charlottesville. It was Donald Trump’s racism dominated. So we’ll see what sort of drives the news in August. And if it drives the news, this investigation drives the news, I think you could see House members coming back from that long recess, having been home speaking to their constituents, and say okay, I can’t look my constituents in the eye and not move forward on this. We’ll see.

Misha Zelinsky:             You’re right, I think Mueller testifying will be interesting because in his report, as I understand it, he’s effectively said, you can’t indict a sitting president and the mechanism for that as you pointed out is an impeachment through the Constitution. So that case might come out and that evidence as well.

Misha Zelinsky:             We talked a lot about US, there are obviously other democracies in the world and quite a bit of interference, particularly in the European context. What sort of work are you doing looking at the level of Russian interference or foreign interference in the European elections or particularly in the Brexit election? How concerning is that, given that you talked about driving to those schisms that exist within societies?

Max Bergmann:            Been doing a significant amount of work looking into those. I think one of the things that when we think about, at least in the Russian case, Russian interference, is that they look to exploit the gaps that our domestic politics make available to them. In the United States there’s lots of gaps in terms of the financing of campaigns of money… And the Russians were able to identify those gaps. I think in the Brexit case, for example, we see a lot of the same similarities. So a lot of the things happening in the United States were happening in the UK.

Max Bergmann:            I think one of the things that’s most troubling about Brexit is that while we’ve had this two-year long investigation and discussion and focus on Russian interference that has resulted in the Mueller report, and the one thing the United States can firmly say is we know Russia interfered in the 2016 election. The one thing that you still cannot say about Brexit, or at least that is not accepted in UK politics, I think you can say it, but is not accepted as conventional wisdom in UK politics is that Russia interfered in the Brexit Referendum. And to me, there’s very little doubt that that occurred. And you just have to look at the way Aaron Banks, who is the main financier of one of the Leave campaigns, what we see is exactly the same thing that was happening with Donald Trump. Almost exactly at the same time.

Max Bergmann:            Donald Trump was being offered this Trump Tower in Moscow, this too good to be true business deal and at the same time he was then running for office in which, and Donald Trump was using his pro-Russian statements throughout the campaign as a way to advance his business deal that involved working with the Russian bank, involved coordinating with the Kremlin. And we see the same thing with Aaron Banks, where he essentially he’s being offered this too good to be true deal to take to run the merger of these gold mines in Russia, something that would be well beyond his depths. It would be incredibly lucrative. He’s having meetings with the UK and the Russian ambassador with in the UK. He’s in talks with a Russian bank and so you see very similar, a lot of similarities. You also see the Russian online social media arm, the Internet Research Agency didn’t just start operating in 2016. It started years before that. And Brexit would be something that the Russians would have definitely worked to promote. There’s a lot of digital, computer scientists that have looked at the Brexit referendum and have seen the same sorts of social media activity in the UK during that period that we saw in the United States.

Max Bergmann:            But the UK has not conducted a similar sort of investigation. And when they have, when the Parliament did, it found a lot of there there, referred Aaron Banks to the National Crime Agency, the FBI equivalent, and it raised a lot of questions about some of the digital campaigns, one being digital companies, Cambridge Analytica, who worked on the Trump campaign who is now out of business because of the practices that it used. And so, I think that is a particularly worrying case of lack of actual energy and resolve on behalf of British authorities to actually protect their politics from Russian interference.

Misha Zelinsky:             It would be a significant win for for Vladimir Putin and Russia to split apart the EU. That’s a foreign-policy aim of the Russian government.

Max Bergmann:            Yeah, I think particularly, one of the things that occurred, I think, after 2014 is pre-2014, so pre the Ukraine crisis, the EU was seen in Russia as a second-tier thing. NATO was the major focus. But what the Ukraine, the Maidan Revolution was about, which then resulted in the collapse of the pro-Russian, pro-Kremlin government of Viktor Yanukovych, It was about whether Ukraine was going to have an economic agreement with the EU. And Russia was offering an economic agreement with Russia, the Eurasian union as they described it. And Yanukovych decided to go with Russia. It led to mass protests in the streets, which then an occupation of Maidan Square, which lasted for months. And so here was a revolution started, essentially by EU bureaucrats, not realizing, basically, how far they were going and offering Association agreements with the EU. And the power of the EU that countries like Georgia and Ukraine wanted to be part of the European Union. They looked at countries like Latvia, Estonia, Lithuania, Slovakia, their neighbors, that were part of the EU and said we want that.

Max Bergmann:            And so, think after 2014, you see a particular Russian focus on how do we undermine the European Union. One of the ways, you cultivate and you build up and you amplify the far right leaders of Europe and seek exits, Brexit. Brexit would totally be in Russian interests, but then you also see it in France with Marine Le Pen. This is probably a much clearer example Marine Le Pen’s National Front party was funded by a Czech Russian bank, they got around €10 million to operate. There was lots of online social media support from Marine Le Pen’s campaign and attacks against Emmanuel Macron in the 2017 election. And then, of course, what did the Russians do? They also hacked Macron’s campaign and released the emails a la the same thing we saw in 2016. And Marine Le Pen was running on an anti-EU, anti-NATO, pro-Russian platform.

Max Bergmann:            And we’re seeing it now in Italy with Matteo Salvini government where he’s potentially a recipient of millions of dollars from Russia, or at least his party is. And so the playbook is very straightforward. It’s the idea that you can corrupt politicians. And so why not corrupt Democratic politicians, especially those on the far right who, in fact, seem more corruptible than those on the left and seek to cultivate them and amplify them and try to promote their candidacies. It’s been particularly effective and I think it’s one thing that I think were seeing in Europe, one positive, is that there’s been a strong backlash actually against Brexit and so the EU seems, in some ways, more solid than it was a few years ago in 2016.

Misha Zelinsky:             One of the things you talked about and I think is relevant to basically all these issues that were having with foreign interference is this question of openness versus closed systems. Up until now, the theory’s been that openness wins liberalism wins markets, tends to win, democracy wins. As you said, they’re driving, foreign interference creates schisms in society. They’re already pre-existing but the openness And messiness of democracy and the openness of the media, the openness of social media, in particular, seems to now being a tool used against liberal democracies in the West and Europe and other parts of the world. And so how do democracies guard against that, that openness, without losing a sense of self?

Max Bergmann:            It’s a great question. I think it’s in some ways the question of our age. Now I think step one is to have a degree of confidence in the success of open systems. I think in some ways close systems are more afraid of us then we should be of them. There’s a reason why Vladimir Putin, in particular, is striking back at the West. It’s because he is incredibly nervous of a color revolution, of a liberal uprising happening within Russia. Why would that happen? It’s because Russian citizens decide they want to have more of a democratic society. They want to be more open, more like us. And so Putin needs to make, and I think China as well, democratic societies seem unattractive. And so, I think it’s one where we need to have a degree of confidence.

Max Bergmann:            The second thing is, I think we need to be aware of this challenge, of this threat, of the fact that we done all this business, we need to pivot, reassess that after the 1990s we assumed that if we opened our economies and opened our societies to autocratic governments it would change them, and it wouldn’t change us. And, to a degree, we were right. It has changed autocratic societies, but it hasn’t changed them to the degree we thought it would. In this glide path to democratization, I think we have to reassess. And in some ways it’s also changed us. So it doesn’t meet that we need to close off an autocratic societies, but I think we need to be more guarded. We need to have a real focus on transparency within our democratic politics, really focus on our rules and legislation, foreign interference, foreign registration, other areas where how do we make sure that yes, we can have foreigners here in our society, but they can’t covertly influence our politics. So that remains, I think, a critical challenge.

Max Bergmann:            I think the other larger aspect is that it means that we need to go back and look at our democratic allies and partners and value them much more and work together much more closely, look to have our economies of democratic societies linked together more closely. As opposed to having it be just generally open, we should focus on like-minded partners, democracies. And so, I think that is both a broader challenge in terms of… And also protecting ourselves in our political systems.

Max Bergmann:            And the third component is that I think we do need to go on offense a bit more. There does need to be a bit more of pushing public diplomacy of competing more with autocratic states, particularly in areas like the Balkans and areas in Asia and Africa where authoritarian countries are moving in, offering lots of resources, working to corrupt those countries and turn them away from liberal democracy. And we need to counter that.

Misha Zelinsky:             One of the other areas, and we talked a lot about safeguarding systems and making sure that the institutions themselves are safe, but I think one of the areas that we need to address as societies are the schisms that you’re seeing between rural and urban, between educated and uneducated, between the economic uplift that people are experiencing or not experiencing, these are relatively present in most advanced economies and advanced democratic societies. And I think there’s probably a need for us to address the schisms themselves. We can stop them from being exploited but the best way to stop them being exploited is to probably try to remove them as best we can. I’m sure you probably agree with that.

Max Bergmann:            Yeah, no I think that’s dead on. And I think one of the ways that foreign interference works is that it can tap into discontented populations within society. And it’s particularly problematic when a large portion of your democratic population is extremely discontent. A lot of the discontent is over the different economic inequalities, economic setbacks that have occurred, divergence between urban and rural areas I think is particularly something we see very strongly here in the United States. We used to talk about red states, blue states, but now it’s really blue cities, red country. The dynamic is very clear. And so part of that is because, and part of the resentment of globalization that were seeing, resentment of liberalism is that from rural areas where economic growth in the United States has flat-lined over the last 20 years and, in particular, were particularly hard-hit by the great recession. Cities like Washington DC have thrived, actually in the past 20 years and have become super expensive, have become plugged into the global economy, to the global intellectual architecture, the hub of ideas that are flowing around the world. And I think there’s a resentment of that and a willingness on the part of large parts of the population to vote for anyone that will change the system, that will break the system.

Max Bergmann:            So one immediate remedy for addressing foreign interference, and it’s complicated, but is to try to address that broader discontent. And if your public is not as discontent about the current situation, then democratic societies will thrive, you’ll create less space for foreign interference. And so I think that is a major focus, should be a major focus of policymakers. I think one good thing we’re seeing here in the Democratic political discussion is a lot of focus on that in a way that hasn’t actually occurred in modern memory.

Misha Zelinsky:             I completely agree. Democracy needs to deliver. It’s not purely just of voting process of itself. They need to deliver for people. If it delivers for people than the rest takes care of itself. The one thing I was curious to take you on, we talked a lot about Russia. There’s been an enormous focus from the administration on the question of China and the use of Huawei potentially moving liberal democracies and the concerns about its links to the Chinese Communist Party and whether or not… It’s a company in Australia that’s been banned from joining the 5G network. Do you see perhaps… Is China the main game when it comes to interference? We talk about it a lot in Australia. It’s tended to dominate the discourse a little bit in the US, but from a public policy point of view, how do you see the threat posed by the use of Huawei and the use of Chinese interference?

Max Bergmann:            I think it’s a really significant threat. I think it’s one where… Sometimes the Trump administration isn’t wrong. And the problem is we’re used to them just being wrong all the time that when they’re right it becomes a little bit… It can fall on deaf ears. But I think this is super problematic because if you control the broader telecommunications architecture of a democratic society and that’s being controlled by an autocratic government that has its own political designs and intentions, I think that the potential for abuse is huge. Now, we’ve worried in the past about Russians hacking into the communications links of sea cables under the sea, of satellites of intercepting all sorts of communication. And so if you basically allowed China to control your information technology backbone structure, I think you’re potentially exposing yourself, not just from a potential foreign interference, China’s potential ability to observe and monitor Australian society or whatever society they’re in, but in a national security contingency, in an event where there’s a conflict or if something were to happen, then you’re already compromised and how to combat that threat and challenge.

Max Bergmann:            And so I think one thing for countries to assess, especially if you’re Australia, is what is the potential contingency like? What side would you want to be on, and I hope that would be, I think as we see the new sort of geopolitics of the day, it’s clear that the US and China are, I think, hopefully will always avoid conflict, but they’re going to be two competitors and I think the alliance between the US and Australia, and I saw this at the end of the Obama administration, has sadly actually come to supplant the special relationship with the UK and its importance. That’s partly because of the UK’s own actions of austerity, of Brexit, but it’s also because Australia’s now pivotal role in a pivotal region. It’s also Australia’s partnership throughout the years with the United States. And I think part of that is our democratic values that are so closely aligned. We speak the same language, we have similar forms of government, we’re democracies. And I hope, and I think that is something that… So if Australia when it’s making a geopolitical decision here, sees that as the trend line to be with the United States or to make a choice, I don’t think China’s the right bet.

Max Bergmann:            Now it’s hard to make that case when we have Donald Trump in the White House, someone who, I think, is not quite an attractive figure and makes America, I think embarrasses the country a lot, but we are a democracy. We’ll have an election next year and hopefully, at least from my perspective that will pivot. I think having a Chinese company control something so vital is something to really be wary of.

Misha Zelinsky:             You’ve ended on an uplifting message there. And as one of my famous clunky sort of segues, you managed to bring it back to the Australian American alliance So I can pivot out of that to say, the last question I ask every guest, foreign guests, who are the three Australians that you might reluctantly, perhaps there’s not enough of us, but that you would bring to a barbecue at Max Bergmann’s place? I should give you up the fact that you were desperately googling famous Australians so I’m curious to see who you came up with in the top three Google searches?

Max Bergmann:            No, the problem is I got distracted. And I wasn’t really able to go through it. I think so… Famous Australians. Well I mean I think I would have to have dinner with the former Australian ambassador to the UK, Ambassador Downer, who met with Papadopoulos. So I think that’s a no-brainer given my role. I’m sort of friends with another Australian ambassador who used to be posted here in the United States who would also get me drunk quite frequently, but I won’t say his name because I don’t want to get him in trouble… So the famous Australian NBA player Bogarts would be one. And then, oh Tim Cahill of soccer, also played for the New York Red Bulls, who’s not my team, I’m a DC United supporter, but Tim Cahill seems like a great guy. So I think that’s, that’s three.

Misha Zelinsky:             Alexander downer, Tim Cahill, and Chris Bogut at and an unnamed ambassador who would be bringing the booze, I assume. So that sounds like a good barbecue.

Max Bergmann:            Yeah… Often times Americans are bad at dissecting American accents, often times from our movie stars were all be like that person’s not American? Or that person is not British? So I know there’s more Australians among us that should be brought to the dinner party.

Misha Zelinsky:             Will there’s a whole heap of Australians that are actually New Zealanders that we claim, like Russell Crowe. So there’s a whole system in place where if you become famous your Australian, if you’re notorious you become a Kiwi right?

Max Bergmann:            Yeah.

Misha Zelinsky:             Anyway, look thank you so much for joining the show, Max, it’s been a pleasure. And thank you for your time.

Max Bergmann:            Yeah, my pleasure, thanks for having me.

 

 

Gillian Triggs

Gillian Triggs was Australia’s Human Rights Commissioner – and is someone that doesn’t require introduction.  Formerly the Dean of the Sydney Law School and now Professor of the Melbourne Law School – she is a globally recognised legal authority on human rights and is author of the book ‘Speaking Up’. 

Gillian Triggs caught up with Misha Zelinsky to talk about all things related to foreign and domestic human rights.

It was an incredibly diverse discussion covering issues such as the rule of law, the future of democracy, how governments use executive power to bully individuals, how do deal with indigenous reconciliation and why Australia lags so far behind in when it comes to tangible gender equality.

EPISODE TRANSCRIPT

Misha Zelinsky: So, Gillian Triggs, welcome to the show.

 

Gillian Triggs: It’s a great pleasure to be talking to you.

 

Misha Zelinsky: And, well, thanks so much for joining us. Now, I was thinking, there were so may places we could start this conversation. You know, global human rights, a lot of people will say that things are tracking terribly, and you can point to lots of data points that will say things are going badly. We’ve got rise of autocracy, populism, et cetera. Other people say things are going well. Infant child mortality’s on the way down. Living standards are up across the world. So, would you class yourself as a pessimist or an optimist? I mean it’s a broad topic but maybe we’ll start with it.

 

Gillian Triggs: Well, I’m definitely an optimist, and I think that there are significant improvements in human rights globally, partly because we live in a global environment, so that we’re much better informed about what’s happening than we ever used to be. But there are some pockets of absolute horror, one, of course, being the Rohingya, the civil war in the Yemen at the moment, the continuing problems of Palestine and Israel in the Middle East, and poverty in certain pockets in the world that is really appalling.

 

But I’d have to say that, on balance, I think that we are inching our way forward. I read, just by way of an example, because it’s International Women’s Week this week, I’ve been doing a number of speeches on the advances for women globally, as well as in Australia, and the irony of this report by the World Economic Forum is that women are actually doing better progressively, in developing countries, and in developed countries, they are actually regressing. Now that’s an extraordinary fact, apparently, documented by the World Economic Forum [crosstalk].

 

Misha Zelinsky: I think that would come as a big surprise to a lot of people-

 

Gillian Triggs: Yeah, it would.

 

Misha Zelinsky: … because I think the discourse at the moment would suggest, with the Me Too movement, et cetera … and we’ll probably pick up gender a little later on, but that’s just a … I’d like to return to that, actually, if we could.

 

Just in terms of one of the big trends we’re seeing at the moment, you know, the end of the Cold War, there was this sort of march of democracy, liberal democracy, and free markets, and now … and that seemed an inevitability at the end of-

 

Gillian Triggs: The Arab Spring. [crosstalk].

 

Misha Zelinsky: Yes. All these things, and now we’re seeing, perhaps, things swinging the other way. Not only the more nascent democracies falling into autocracy, but we’re seeing populists being elected in very established democracies. I mean, do you see that as a problem for human rights, more generally?

 

Gillian Triggs: I do see it as a problem. I think there’s been an extraordinary phenomenon of a rejection of some of the underpinning elements of contemporary democracy, that I thought would lead us onwards and upwards, but are now being challenged, particularly, of course, the major human rights treaties, the Refugee Convention. But the Convention on the Rights of the Child, where children are being detained, in unprecedented ways, for unprecedented periods of time.

 

So, I think that we are in a very disruptive, tumultuous global environment where we have … I mean, you almost can’t have this conversation without discussing the influence of Trump on the post-truth world we live in. The things that I thought were crucial in my early days from university, the 60s, the 70s, 80s, all the way through. Fact-based policy making was crucial. The reliance on evidence, science was king, in my youth. Today, governments may receive reports from experts on all sorts of issues, climate change, trade war issues, rising inequality, the loss of the manufacturing sector and the rise of IT, all of these areas are subject to factual reports and expert evidence, but governments are increasingly free to ignore them, and to challenge them, or reject them.

 

Misha Zelinsky: People are even making it a virtue. During the Brexit debate there was a … you know, people are sick of hearing from so-called experts.

 

Gillian Triggs: Right.

 

Misha Zelinsky: But what’s the way to address that? How do you actually cut through in that situation? Because, you’re right, when you don’t have facts, and when my opinion’s as good as your fact, that becomes very difficult-

 

Gillian Triggs: That’s right.

 

Misha Zelinsky: … to actually have an agreed starting point. Because it used to be, you know, you’d have, here’s where we’re starting, and perhaps we should go left or right, but now we can’t even agree on the starting point of the facts. So, what is a way that you think you can actually address that?

 

Gillian Triggs: Well, I’m hoping that this is a phase, that we’re dealing with a truculent child almost, and in some … some respects we are. There’s been a very interesting piece of work done recently in Australia, between the New Democracy group, which is a very interesting approach to expanding the role of the community in civil society and the democratic processes, along with the Institute for Public Affairs, which, in my view, is an extreme right-wing vehicle for misinformation. But nonetheless, apparently they’ve worked together, and I happened to be present at some of the New Democracy meetings, to get a sense of what was one of the most … what was a top priority for a good functioning liberal democracy? And both those entities, coming from different spectrums, agreed with their participants that the number one thing of importance now in Australia was evidence-based policy making.

 

In other words, there’s a … Those who think about these sorts of things, and see the threats, in my case, to classical, long-established principles of international human rights law and treaties, that underpin much of what was happening in Australia in this area, right up until the 90s, I feel that we must get back to that fact-, evidence-based policy making process. And it’s clear that the fact that we’re not, that governments are so quick to override them, ignore them, whether it’s on climate change or defense policy, that’s been extremely … I think it worries a lot of people.

 

Misha Zelinsky: Yeah, and so, interesting is you’ve talked about facts and evidence. You’ve got a legal background. Think of, what’s the role of the rule of law in all these things, in terms of human rights? You’ve mentioned before, the deficit of democracy is starting to creep in, and the advance of technology, so quickly, in a lot of areas, with data retention laws, and facial recognition, and all of these things. I mean, what’s the role of the rule of law here in preserving, particularly in advanced democracies, preserving human rights?

 

Gillian Triggs: Look, I think that’s an important question, because the phrase ‘the rule of law’ slips off politicians’ lips as it does off lawyers’ lips, and those looking for social justice or civil society. It’s a very key principle, and … but it’s made up of different ideas. One is that it’s absolutely dependent … Well, the rule of law absolutely depends upon a liberal democracy, a functioning liberal democracy. Separation of powers, between executive government parliament and the judiciary, which is severely under threat in Australia at the moment, with the rise of executive decision making and discretions that are not subject to judicial review, for practical purposes.

 

So, those are the elements of the rule of law. More precisely, it might be that one has to emphasis not so much the legislation passed by Parliament, which is the law, but the rule of law is broader than what Parliament might have just passed last week. In other words, it encompasses common law principles.

 

And if I could give you a very, very quick example, a federal court judge has recently ruled that a child with … who’s been attempting suicide on Nauru should be brought to Australia, ordering the Minister for Home Affairs, Mr. Dutton, to do so, contrary to his views, it’s feared. The minister has stopped this over the previous nine months.  What this judge did was look beyond the precise terms of the Migration Act, to look at the duty of care that governments owe unto their citizens. Now that’s a sort of broad common law principle that’s embraced within the idea of legality and proper process, and what he said was that the government owed this duty of care to the child, and, therefore, the child had to be brought to Australia for psychiatric and medical care.

 

So, that’s one example, but there are many others that are essentially dependent upon transparency, fundamental common law principles, the right not to be detained arbitrarily without charge or trial, for example, the right of criminal trials before you’re detained. These are fundamental ideas of the rule of law. So, that’s what I mean by the rule of law, and I think we’ve lost track of what that means. I think many Australians, if you ask them on the street, they’ll say, “Well, you know, if that’s what the Parliament has passed as a law, then that’s the rule of law.” It isn’t actually the rule of law, the rule of law is the … are deeper fundamental principles.

 

Misha Zelinsky: That’s an interesting point. So, in terms of … you know, the rule of law, these things have tended to come from western liberal democracies, in the way you’ve just explained it. Do you think that this … the lack of … as we’ve eroded our principles in this space, and … has it made it more difficult to prosecute a human rights agenda more globally? Because if you’re not living up to your own ideals, how do you … You know, when you look at some of the examples you’ve cited, the Rohingya, or if you look at the Uighurs in China, is it a-

 

Gillian Triggs: Yes, indeed.

 

Misha Zelinsky: … difficult thing to highlight in other countries, perhaps, that are more autocratic, when they say, “Well, you know, you guys aren’t living up to your own ideals at home”?

 

Gillian Triggs: That’s always a difficult position to be in. I mean, other governments in the Human Rights Council, for example, have been very critical of Australia’s incarceration rates for Indigenous Australians, the highest in the world, violence against women, deaths of women in domestic violence, and of course, asylum seeker refugee policies. So, Australia is getting a lot wrong, but when we come to, say, dealing with the Chinese, on, let’s say … let’s take the Uighur in China or Myanmar on the Rohingya, it’s very hard to argue, and persuade those countries, because they are not culturally, historically, as committed to the rule of law, in the way that I’ve described it.

 

They will see the autonomy of the state, the right to … for a state to manage its own peoples, in the way they see fit. Human rights are for the state, not for the international community. It will be interference in their domestic policies. The Chinese will always say that, so it’s extremely difficult, and that partly adds to the argument that human rights are not universal, but they are a Western construct. I don’t believe that that’s true. The truth is that China, and Japan, and many other Asian countries, African, Latin American countries, support the basic principles of the rule of law. And the Chinese talk about the rule of law. The trouble is that there’s a huge discrepancy between the rhetoric and the reality.

 

Misha Zelinsky: Well, it’s often easy to talk about, but what are the safeguards … I’d like to get your opinion on this. One of the safeguards that those who have studied democracy, and when you go to the United States, prime example, the Bill of Rights, and the way the concerns you had, where if you … the primacy of parliament over all laws, or if … to say, well, there’s a check and balance, and they typically have the courts. Another way to do that is to have a Bill of Rights. Now, Australia, of course, doesn’t have one. There’s always been debate about whether or not we should have one. What’s the role of a bill of rights in human rights, from the respect … within a democracy?

 

Gillian Triggs: Well, I think we have to be … firstly, distinguish between the sort of American system, where they’ve got a constitutionally entrenched Bill of Rights. That gives the Supreme Court, and other courts in America, an enormous level of power. They are a very powerful check and balance on the power of the executive. Executive … the decision-making of the current government, for example, and on the powers of Congress. In other words, if something is passed, or a low is passed, which breaches those fundamental rights, the right to equality before the law, the right to freedom of speech, et cetera, then the American courts have the right to strike it down. And that’s a very powerful remedy.

 

But then we have the other kind of model, which most other countries are more familiar with, and more comfortable with, and that is a legislated human rights charter. Britain, Canada, New Zealand, just to name a very few, have legislated human rights charters. Australia is the only democracy in the world, and the only common law country in the world, that doesn’t have one. So, if you’re in Canada, New Zealand, France, Germany, many, many, many countries have these charters, you can go to the courts and say, “The Parliament is passing laws, or proposes to pass law, that is in breach of the Charter of Rights.” The court, depending on the terms of the legislation, may, and this is what’s called the dialogue model, will be able to say, “Well, the law that Parliament’s planning to pass, or has passed … is in violation of these … of one of the rights in the Charter, but we now are … we won’t … we’re going to strike it down. We can’t make it invalid. What we can do is send it back to Parliament, and ask Parliament to re-draft what they’re doing, so that it complies with the Charter.”

 

So, it’s creating this sort of dialogue between the executive parliament and the courts. But it’s nothing like as powerful, really, as … Well, most models are not as powerful as that. It’s interesting that … the state of Victoria, here in Australia, has such a dialogue model, and Queensland just voted for one, two or three days ago.

 

Misha Zelinsky: Do you think … you know, notwithstanding that … So, the constitutional model brings with it its own problems. The United States Supreme Court now has become a battleground for partisans, in a way, and particularly, you see problems around, you know, the Second Amendment, with gun rights, and those types of things. Do you think this sort of consultative model is a better way? Leaving aside how realistic it would be to get a referendum up in Australia on a constitutional bill of rights. We have a checkered history here with getting referendums passed. But do you … Which model do you think is better?

 

Gillian Triggs: Well, I think the best answer for me to give is to say that, in the current political and historical environment of Australia, we will not get an entrenched constitutional bill of rights. So, for practical purposes, you’ve just got to say it isn’t going to happen. I’m very much coming to the view that Australians, over time, have preferred, if you like, a parliamentary sovereignty model. They don’t like the idea of the courts being too powerful, but they want proper check and balance on executive governments. What they’d rather … I think most Australians would rather do is to give Parliament the stronger power.

 

Now, my problem with that is that Parliament has actually explicitly breached fundamental human rights in legislation, and particularly over the last 15 years or so, so that you can’t rely on Parliament to ensure fundamental human rights. So, where I come down is to say, I think, because things often have to be taken in steps, so that people learn to trust the system, I think if we had a legislated charter, a longer dialogue model, just to get everybody used to it, so that the courts could hold up Parliament and say, “You’ve just passed a piece of legislation that is in breach of fundamental rights under the Charter. We now ask you to go back and look at it again.” Now, that does make it … it politicizes it of course, but it’s not giving the power … absolute power to the courts.

 

Misha Zelinsky: How would you settle what goes in … So, let’s assume that a government of the day was to legislate the charter. What goes in the charter? I mean is it … is that [crosstalk]-

 

Gillian Triggs: Well, Queensland’s just done it. Now, one thing that a lot of people raised with me, on public debates about this is, “Oh, well, we don’t want an American system, because we don’t want the right to bear arms to be interpreted in the way that it has been.” Well, of course, I can’t imagine for a second that Australia would ever want a right to bear arms. Australians don’t have arms. We have no history of that.

 

Misha Zelinsky: Yeah, and I think we’re quite … I mean, the John Howard gun reforms, I think, are very well received and for all the-

 

Gillian Triggs: Very well received. It was a very, very important move that he made, to use that moment of power, to reduce the right of access to these kinds of guns, and I think the Australian public has been right behind it. So, with exceptions, I think, we just saw on the news last night two more people shot dead in Sydney and another couple in Melbourne, I mean, it’s going on all the time. People are still having guns illegally and killing each other with them, but it’s not in … not remotely comparable to the United States, and I don’t think Australians would be tolerant of any provision of a charter that allowed an individual right to carry guns. I think that’s out of the question, so I think we can put that one to one side.

 

Perhaps the more controversial one, that we probably would have to think about, because you’ll have right to freedom of speech, right to privacy, right to freedom of association, et cetera, et cetera, but the one that would be likely to raise the greatest level of debate, I suspect, would be the right of Indigenous peoples to self-determination, or to recognition of their culture, and right to, let’s say, an advisory voice to Parliament. Well, you could include provisions of that kind in the charter, and many, perhaps, would be … will be concerned about that.

 

Misha Zelinsky: Would you bundle the two things together? I mean, it strikes me, perhaps Indigenous issues … I mean, that … You know, and I’ve experienced … You know, I was formerly a defense lawyer with the Aboriginal Legal service, you know, so these issues are dear to my heart. But I wonder whether or not there is a case for that to be dealt with-

 

Gillian Triggs: Mm-hmm (affirmative), separately.

 

Misha Zelinsky: … on its own merits. I mean, I don’t know …

 

Gillian Triggs: I think it … Just as it was odd to have a constitution that didn’t really talk about our First Nations peoples, I think it’d be very odd to have a charter of rights that didn’t. The Queensland one has got recognition of the cultural and spiritual, sort of heritage and importance of the Indigenous peoples to Australia. I forget the exact wording. But I think that’s a pretty powerful recognition of Indigenous as the First Australians, and that their right to be consulted in relation to matters that concern them.

 

Now it doesn’t have to be all … well, it could be along … with that kind of language, cultural respect, and so on. But I am … I mean, I haven’t thought through in my own mind how to handle this, really. I would hate to see us not go forward with constitutional change to recognize Indigenous Australians at the … you know, in order to get a charter of human rights. I think constitutional recognition of Indigenous Australians and to eliminate the race power from the constitution are absolute constitutional priorities. And I think with political leadership, we could do it.

 

Misha Zelinsky: Where do you think the debate’s at on the Indigenous acknowledgment question? Because it seemed we were moving towards a Respect-

 

Gillian Triggs: That’s right.

 

Misha Zelinsky: … campaign, and then suddenly there was Uluru Statement from the Heart …

 

Gillian Triggs: The Recognise campaign. Mm-hmm (affirmative), that’s right.

 

Misha Zelinsky: Sorry, the Recognise campaign, apologies.

 

Gillian Triggs: Yeah, and then the … the Uluru-

 

Misha Zelinsky: And then the Uluru, and then, seems now there’s a split, and you know, history shows, unfortunately, that you need bipartisan support on referendums in Australia, given the high bar to get over the-

 

Gillian Triggs: That’s right.

 

Misha Zelinsky: … you know, the vote.

 

Gillian Triggs: I think that’s right. I’ve come to see political leadership and bipartisanship absolutely vital to really moving forward. It’s very, very hard in Australia in the current polarized, and really quite toxic, political environment. I think it’s a tragedy, but I do think it’s enormously important that we get recognition. I mean, it was extraordinary, after the Uluru Statement from the Heart and the Australian Human Rights Commission was engaged with assisting with the collaboration and discussions, across the whole of Australia, to get some agreement on that Uluru statement. So, we were a little bit involved with it, but mainly through Mick.

 

But I think the key point is that that was dismissed by the then Prime Minister within 48 hours, with no explanation. I think that’s horrified a lot of Australians. I think they see that as grossly disrespectful of a process that was actually a coherent process, over about 10 months, I think, and not easy for the Indigenous community … communities across Australia, to agree on that statement. They had to compromise, and they had to work it through and I think that was very commendable.

 

And what they were asking for was so little, just to have a voice of advice and consultation on the matters that concern them. It’s not a major … You wouldn’t have thought it was a major request. The Prime Minister could easily have said, “Look, this is terrific. Let us go away and work out how we can make this work.” But with the leadership of the Prime Minister, I think we could have got there.

 

Misha Zelinsky: Well, it’s also strikes me, on this question, that we need to have a national … There’s a whole heap of issues bundled in with this. You’ve got the Australia Day thing, and then you’ve got the question of a republic, and then the Indigenous question, and how to deal with reconciliation. It strikes me that … I’m a person, I think a republic is a good way to deal with some of these issues, because it’ll allow us to update what it is to be … have a modern and inclusive Australia, and perhaps, within that, the Indigenous question could be resolved as well, without the colonial symbols. But do you think that’s a pathway forward for it? Or is it, again, these are all sort of … you know …

 

Gillian Triggs: I don’t really. Not anymore. I think there was a time when we could have got close to it, and that would have been the wonderful springboard for sort of modern Australia. But that moment’s lost now, I’m afraid. I think the republican movement’s going nowhere. It’s going backwards, from what I can gather, and that’s not happening. So, I think, with the extraordinary popularity of the Royal Family at the moment, and the weddings, and the visits, it … I think, Australians, it’s way down their list of priorities. I suspect that if we had strong political leadership, again, at a bipartisan basis, I think you could probably get it across the line, but there’s no political will to do it.

 

Misha Zelinsky: It’s tricky. I mean, we just had two Prime … well, we had a Prime Minister, up until recently, and an opposition leader who were both republicans. We had the Prime Minister who led the republican movement in 1999, and unfortunately, couldn’t get there, even within that. And now, obviously, a whole heap of issues on the … that I won’t delve into, with the Turnbull government. I mean, he had capacity to make those decisions, but it doesn’t fill you with confidence when you notionally have bipartisan leadership, without that-

 

Gillian Triggs: That’s right.

 

Misha Zelinsky: … without that outcome.

 

Gillian Triggs: Well, I was in Parliament when we did have bipartisan leadership, with Julia Gillard as Prime Minister, and Tony Abbot as Leader of the Opposition. And they passed the legislation, it was about five years ago now, for a process, and it was a very exciting day in Parliament. I was there with a … some people from the Human Rights Commission, and I really thought, now, for the first time, we’re going to get somewhere on Indigenous recognition. And five years later, it’s fallen into yet another black hole. It’s going nowhere. It’s disappeared completely. Now, it may be … and that’s why I’m an optimist about these things. It may be that we’ll get a change of government in three months, and I think with … over the turn of that government-

 

Misha Zelinsky: I’m touching wood on that, for the tape.

 

Gillian Triggs: … I think … That’s right. I think there’s a chance that the Labor Party would bring these matters back and progress them. But the difficulty is always going to be that there’s not going to be bipartisan support.

 

Misha Zelinsky: And that’s the bit that worries me. I mean, I think Labor has good policies in this area, but the history has shown that, even when Labor’s been in government, with referenda, that they’ve failed.

 

Gillian Triggs: That’s right.

 

Misha Zelinsky: So, I mean, just to bring us back to Australia in a … maybe a discourse, you sort of touched on, you know, maybe once upon a time we could’ve got some of these things done, and you know, Wayne Swan gave his valedictory speech the other day and he talked about the Tampa crisis, how it changed everything, in 2001. I mean, do you see that? Do you agree that that was a pivot point in Australia’s discourse?

 

Gillian Triggs: I do. Although I’d add to that. If you look at the timing, it was really fascinating. Earlier in the year, we had the Howard blatant lie that asylum seekers, Muslims, were throwing their children overboard. Now, a year or so later, a Senate inquiry said there was not a scintilla of evidence to support that, and the government, and government officials, had falsified photographs to pretend that that … to support the argument. There was a really pretty disgraceful moment, but the problem was that, some months later, we had the so-called Tampa crisis, a really confected crisis, and then within weeks of that, we had the 9/11.

 

So, that what you … In that momentous year, you had asylum seekers arriving without visas by boat, you had … and you had international terrorism against the Pentagon and the World … the Twin Towers. And what the Howard government did, and governments did around the world, was conflate these issues, and that you’ve got asylum seekers, who are Muslims, who are terrorist, and that’s how the logic progressed. And that has been very, very, very difficult to dislodge in the public mind.

 

If you could trace the beginning of the decline of Australia’s role as a good international human rights system, that was the year. And Howard then abused the power, and used power as a vehicle for getting through laws that are more draconian than we’ve ever had in the past. For example, we had no counter-terrorism laws at all at 2001. We’re now one of the most, if not the most, heavily legislated country for counter-terrorism laws, that every so many weeks or months, we get more counter-terrorism laws, that become more and more draconian as the time goes by. [crosstalk]-

 

Misha Zelinsky: Things such as data retention laws?

 

Gillian Triggs: Well, the data retention laws, dealing with, obviously, sort of picking up things that might be relevant to spying, but also, the prevention orders, and control orders, the periods of time people can be held for questioning [crosstalk]-

 

Misha Zelinsky: Without a lawyer?

 

Gillian Triggs: Without a lawyer. Without going before a court-

 

Misha Zelinsky: And it can’t be reported on, either.

 

Gillian Triggs: And they can’t report on it. The draconian penalties for those who have reported on surveillance operations by … or any operations by the security agencies, whereas the officers of the security agencies have total immunity from the jurisdiction. No one can … They can never be sued for anything they do, right or wrong. And so, we’ve had an extraordinarily disproportionate range of laws introduced, based upon this notion of fear that the government has promoted, without very much evidence.

 

And if you look at, by way of comparison, more than one woman a week is killed by her partner, or former partner, in domestic violence in Australia. Some of that being particularly, or much higher, in the Indigenous communities, and remote and rural communities. The government announces 78 million to support domestic violence refuges and accomodation for women. Well, you know, in the same time, we’ve paid, or will be paying, 50 billion dollars a year for more submarines, and for funding of offshore detention centers, and expanding the powers of the Ministry for Home Affairs, and Mr. Dutton. I’m not saying we don’t have submarines. I’m not saying we shouldn’t support national security, but I am saying that there’s such a gross disproportionality, that this has been made possible because of the politics of fear.

 

Misha Zelinsky: It’s interesting, politics of fear, because what’s your take on this question of secure borders and sovereignty? Because I think that’s something now that … we look at the Brexit example, when you look at the way populist extremists are arising, in Europe in particular, and when you look at, you know,~ the Hungarian example, particular, Polish, how do you deal with being secure but humane?

 

Gillian Triggs: Well, I think it’s possible. In other words, there’s the Abbott government, in particular, adopted very successful slogans that, in effect, you have to have offshore processing, and all of the other aspects of asylum seeker policy, to stop the boats and save the drownings at sea. In other words, he conflated the two. It’s a false binary. My argument, and that of many others, of course, is that you can both stop the boats, stop the people smuggling, stop people arriving by sea without visas, and take a humane approach to those who actually come to Australia. That’s the bit of the argument that’s proved so hard to convince people about.

 

But one of the reasons is that I don’t think the Australian public realizes the sort of steel cordon sanitaire of shipping that’s up there on the north-west of Australia, that literally stops the boats coming through. Stopping the boats has not been done because we’re cruel to children and their families on Nauru. There’s no evidence to suggest that at all. But that is the public perception, because governments have seen it in their interests to conflate the two. So that we now have people in detention for nearly seven years, without charge or trial, contrary to the fundamental principles of the Magna Carta, let alone anything more recent. You don’t have to go past the Magna Carta. But Australia has … our government, at least, has completely disregarded those standards.

 

Misha Zelinsky: So, what’s the role of language here? Because one of the things that, you know, is … You’ve talked about how to be humane and it’s also … There’s an element of dehumanization in the language used. Do you think that’s an important part of this? In the way that, you know, the fear of the other, and the fear of people that are coming by armada, as Abbott said. Do you think the-

 

Gillian Triggs: That’s right.

 

Misha Zelinsky: … dehumanizing use of language, of boat people, in a … I mean-

 

Gillian Triggs: Yes, that right, and illegals. Yes. Oh, it’s-

 

Misha Zelinsky: Illegal immigrants, you know-

 

Gillian Triggs: … it’s absolutely crucial. This is the world we’re in, of global media, and the snappy phrase, and the slogan. So, people Make America Great Again, and Save Our Children, and Save Our National Borders. I mean, this is how today’s politician speaks. There’s no depth to it, there’s no analysis, there’s no nuance. It’s absolutely crystal clear for a massive voting public that actually doesn’t want to get much involved in politics, in any event, so it’s … it’s been a brilliant marketing exercise, if you like. It’s no accident, of course, that our current Prime Minister is a marketing man. I mean, this is what they do. They conjure up these slogans.

 

The trouble is that the slogans are very often straight out lies, or creating binaries that don’t exist, they’re false binaries. Or they are deliberately obfuscating the real issues. Language has always been important, I’m not suggesting it hasn’t, but in recent years, particularly in Australia, the use of the slogans has really stopped people thinking. They’re very, very dangerous, and I certainly encourage anybody to look behind the slogans and say what’s there.

 

One that I’ve been working on recently, for example, is the Zero Tolerance in sexual assault and harassment. Now, you know, from … I’ve just finished a report for the United Nations on this question, and leaders of, even of United Nations bodies, seem to think that all you’ve got to do is come up with a slogan, ‘We have zero tolerance for sexual harassment in the workplace,’ and it’s fixed. But of course, it isn’t. It’s just a slogan, and it means nothing unless you put money, and programs, and cultural change, and all sorts of things behind the slogan. Only then do you start to actually get anywhere. But the harsh reality is that this is the global media environment we live in.

 

Misha Zelinsky: It’s very challenging, and then the media tends to reward the snappy phrase, and-

 

Gillian Triggs: Oh, they love it.

 

Misha Zelinsky: … they’re the things that cut through-

 

Gillian Triggs: They just love it.

 

Misha Zelinsky: … and, despite the fact that they tut-tut about slogans, they like to report on them.

 

Gillian Triggs: [crosstalk] they report on them all the time. They do it all the time, and they love the … you know, if you … for … Just by way of personal example, I’ve been talking a lot recently about … for the International Women’s Day, and I use the phrase, you know, that we’ve got to disrupt, and we’ve got to stand up, and I’ve used the word, and we’ve even got to be more vulgar. Now, the word ‘vulgar’ isn’t used very much in contemporary parlance. The media picked up on it, and suddenly all my speeches are about being vulgar.

 

But that’s what they do, and in the end, you learn to use a word deliberately, because you know that’s the word that’s going to be picked up. I can write a 50 minute speech of … you know, a really considered, calm piece. they’ll pick one word up, and you know the word they’re going to pick up. You know what they’re going to do.

 

Misha Zelinsky: Well, if you know, I suppose you can use it to your advantage.

 

Gillian Triggs: Well, exactly. Once you’ve realized how to do it, then you realize that that’s what … It’s a deliberate decision, and then, in other words, you don’t fall into the trap. You know exactly what you’re doing.

 

Misha Zelinsky: Now, you sort of talked … which, going right back to the beginning, we talked a little bit about checks and balances on government, and in the absence of a bill of rights here, or a charter of rights, that we rely on our court system, our parliaments, but … and our civil societies, but you know, what’s the role of individuals? You were a Human Rights Commissioner. You very famously stood up to the Government. Can you tell us a little bit about the pressure that comes to bear from the executive, on someone speaking out against government policy?

 

Gillian Triggs: Well, as I think Australia saw, it’s huge pressure, but I had the remarkable protection of the statue of the Australian Human Rights Commission, which meant that I couldn’t be sacked by the government, unless I’ve committed a criminal act, or was bankrupt, and as I was neither at that time, still aren’t, then there was nothing they could do about it. And the government was really … and the Murdoch press was absolutely beside themselves, because they realized they were absolutely powerless, unless they could find something that would damn me, in terms of the statute, which they didn’t.

 

But I think your point about the individual is quite an important one, because I certainly would never have put myself forward for this role, but you find yourself in it, and in the end, you just accept the challenge, or you don’t. I felt that the laws that were being breached were so important to a working democracy that I couldn’t really back away from it, and so I just stood firm. But I didn’t see myself as being any kind of hero for doing this. I very much saw myself as acting as a lawyer would, in that situation, because I was saying, “This is the law. These are the facts. This is the outcome.” It was simple.

 

But I have come to see that people are moved by stories, and moved by individual stories, and an institution could put the arguments I was putting, but it wouldn’t have quite the same effect as an individual. And in a way, the government drew attention to me, and that then gave me a vehicle for speaking up about the things that I thought were important as President. So, I suppose the lesson to be learned is, one should never underestimate the power of the individual, because it can be very, very effective.

 

Misha Zelinsky: But, you know, how do you stand up in … without the … would you have been able to stand up the way that you had, without all those safeguards around you?

 

Gillian Triggs: No, I would have been out of there in an hour. I couldn’t have stopped it. But because the law protected me, the statute protected me, and the community, to a very high degree, in a more subtle way. But no, without those protections, I would have been gone instantly.

 

Misha Zelinsky: That’s a really … It’s a profound point because you know … And they’re the safeguards that are gradually being eroded right … as we’ve sort of discussed.

 

Gillian Triggs: That’s right. That’s right. Exactly. Yes, exactly, I mean, and that’s … You know, I wouldn’t be surprised that a future conservative government, which we’re probably not going to get for a while, but I wouldn’t be at all surprised, if they had the numbers, they would amend the statute to ensure that doesn’t happen, in other words, that if they don’t like a president they can get rid of them.

 

Misha Zelinsky: Sounds like an argument for a charter of rights maybe, but …

 

Gillian Triggs: Well, that’s another … it’s another point. Exactly.

 

Misha Zelinsky: Now, so, we’ve sort of touched on gender as we’ve gone along. I kind of want to come back to the point about the advanced democracies, and the rest of the world. Sorry, just for the tape here, we’re pulling down the blinds. You’ve said that, basically, perhaps against discourse, or, like, against the narrative, that gender rights are on the decline, which is a surprise to me. Can you talk about that a little bit? Perhaps in a global sense but also in Australia?

 

Gillian Triggs: Well, if we go to Australia first, I’ve been surprised myself, and I’ve … over the … I’ve not done a lot of gender equality work, as President of the Commission, because we had a sex discrimination commissioner, and so, really, I would leave that side of the work to, at that time, Elizabeth Broderick. But since leaving the Commission, I’m asked to speak a lot on the subject, so I’ve been trying to keep myself up to date. And I use, as my benchmark, and it’s a very good one, the World Economic Forum’s Gender index, and that, not at all surprisingly, lists Australian women as number one in the world for educational attainment, along with the usual suspects of Finland and Denmark, I think.

 

But then, when you look at the other indices measured by the world economic forum, health, labor force participation, and economic empowerment, and political engagement, Australia is woefully behind, and we’ve slipped from a global assessment of us at 15th in the world in 2006, to 46th a couple of years ago.

 

Misha Zelinsky: 46th?

 

Gillian Triggs: Yes, and we’ve risen to 39th, but we are well outside the usual zone of countries that we will compare ourselves with. So, for example, on health, we’re ranked at 103rd.

 

Misha Zelinsky: 103rd for women’s health? Wow.

 

Gillian Triggs: Yes. For women’s health. We’re ranked at 46 for economic empowerment, and about 45 for political empowerment. We’re 77th in the world for ministerial appointments.

 

Misha Zelinsky: What do you put that … That’s startling, and I can’t sort of … As an economist, I’m trying to put together that data. First in the world for education-

 

Gillian Triggs: That’s right.

 

Misha Zelinsky: … which I think, it’s outstanding achievement, so-

 

Gillian Triggs: But way down on all the others, and then that … when you come together, it creates a mean of 39, I think is how it works, but … and you can criticize methodology, [crosstalk]-

 

Misha Zelinsky: Oh, sure. But nevertheless, I’m sure there’s-

 

Gillian Triggs: … but the figures are so powerful that you can’t dismiss the trend.

 

Misha Zelinsky: So, then what are we getting wrong in public policy? Because the kind of standard thinking is, if you get people educated they should be able to get jobs, and they should be able to get a higher income and-

 

Gillian Triggs: That’s right.

 

Misha Zelinsky: So, what’s going wrong?

 

Gillian Triggs: Well that’s the great disappointment for me, because when I did my law degree in the 60s, I thought, “Education will unlock this world for women, and it will be fine once they’re educated.” The truth is that higher educational attainment for women, it’s higher than for men, has not unlocked the door for me, or not fully. One of the biggest problems, I think, and it’s shown by the statistics, is … two things, one is lack of political empowerment, and we’ve seen that in the governments that have been in, in the last few years, particularly. Obviously, the Liberal Coalition, with so few women, is a real problem for the Liberal Party, but whereas the Labor Party’s adopted quotas in the 90s and they’ve got … they’re in an entirely different position.

 

But the other, that we’re all concentrating on now, much more than we ever have done, is the deleterious effect on women of a workplace of sexual harassment and bullying. And that is more of a systemic problem than I think we’ve realized, until the last few years, and now it seems that the evidence is very, very clear.

 

The other problem that I think needs to be addressed is that women do two thirds of the caring, unpaid, in Australia, and it’s true throughout the world, so that a lot of women’s time is spent on, essentially, caring roles, for which they’re never paid. The other is that women tend to be squeezed into fractional, flexible contracts, casualization of work, they’re way … in ways that men are not, to the same degree. The end result is that, in Australia, women retire on 46 percent of the male superannuation.

 

Misha Zelinsky: Yeah, that’s a huge challenge.

 

Gillian Triggs: That’s a very, very big gap, and, just to illustrate what happens when women don’t have superannuation, is that the fastest growing category of homelessness in Australia is women over 55. In other words, they are not able, if, once they’re running out of work options, and women over 55 find it very hard to get work, except in some areas, like hospital cleaners, factory cleaning, basic factory work.

 

Misha Zelinsky: Which is all very lowly paid.

 

Gillian Triggs: That’s right, very low paid, casual, subject to the employer’s needs, in particular, time. It’s nothing they could … couldn’t get a mortgage on it. They can’t pay the rent after 55. They lose their partners, sometimes. Their children have grown up and gone away, and they’re sofa surfing. They’re ringing their sons up, saying, “Can I stay on the sofa for a few weeks?” But others are living in cars. And we know, from the group that I chair, Justice Connect, just how many people. They’re in a really powerless position, and many of them women.

 

Misha Zelinsky: Homelessness for women is very hidden, as well, because of the domestic violence questions associated with it as well, and fleeing from domestic violence.

 

Gillian Triggs: That’s right.

 

Misha Zelinsky: But it’s not always … People tend to think of homelessness … I mean, my experience of the issue, as rough sleeping, which is not necessarily the case, is that … and maybe, could you explain that a little bit?

 

Gillian Triggs: That right. That’s right. Well, I think we think of a homeless person as being an 18 year old sleeping under a bridge somewhere, or some of the people that are in the shopping malls, with blankets, and the dog, often quite young. Not always, but often. We don’t realize that the homelessness that we can’t see is far more troubling, in some respects, and people are shameful. They live in their cars. They find shacks on the beach. I mean, they do extraordinary things to hide their situation, to try to survive, and then they become subject to crime, or commit crimes themselves. But it creates a downward spiral.

 

Misha Zelinsky: So, how do we fix some of these issues? I mean, you … Just going … pulling apart some of those figures, the health one jumped out of me, but also the ministerial one, at 77, and you know, you talk about quotas. Is that the way that we need to address? Do we address it through hard legislative sort of rules? Or is it about cultural shifts? Or what’s the way to do it? Or both?

 

Gillian Triggs: Well, both. Both. There never is a single answer to these things, just as education proved not to be the single answer. I think we need quotas. It’s worked for the Labor Party. It can work for the Liberals. [crosstalk] encourage-

 

Misha Zelinsky: And would you want to see it in the corporate sector, for example? I mean is that a way to break up that-

 

Gillian Triggs: Well, I’d like to see them with serious targets, for which directors of companies are accountable. At the end of the year, in other words, there’s a checklist, “Did you achieve these targets across the company? If not, why not? And what are you going to do next year?” And also, what’s the accountability mechanism? Because there’s almost no accountability for failing to meet a target, and that’s the point of targets, they’re voluntary, and people-

 

Misha Zelinsky: If they’re linked to bonuses they might happen, but …

 

Gillian Triggs: Well, we’ve just seen, I gather, the salaries of the major banks going down by a significant amount. I think maybe there should be consequences, that … If you gave it a monetary value, and that’s the society we live in, give it a monetary value, there’s every chance you’ll get an outcome. It’s a pretty tough way of doing it, but they’ve had long enough to do it. It’s not as though they haven’t had the time to do it. I think these tougher solutions really have to be made.

 

I think also, frankly, that we need many more programs to support families, so that women aren’t subject to domestic violence in the same way. We need much more workplace cultural change. Now, cultural change is easy to say, and extremely … it’s much easier to have a quota or an accountability mechanism. It’s very, very difficult to change cultures. But I think you need huge leadership from within the organizations, and often those in charge aren’t that passionate about it. What they do is, they establish a working group, and they leave it over there somewhere, in the working group reports, but that’s really not their concern. They’re not there to manage that problem. But I think that, now, we’re going to have to put things like the workplace environment front and center.

 

But I also think we need to look at this superannuation problem, and I think when a woman is leaving … or a man, for that matter, is leaving full-time work for caring for children, or caring for an older parent, or somebody close to them, then I think the employer and government should ensure that their superannuation payments continue at the same level. And then you won’t get these huge gaps. They come back into the workforce, but they haven’t missed out on their superannuation.

 

Misha Zelinsky: And it’s a very important thing, because super compounds over a lifetime-

 

Gillian Triggs: Exactly.

 

Misha Zelinsky: … so losing those earnings isn’t just their contribution, it’s the compounding effect.

 

Gillian Triggs: Yes, I think the American financial gurus say, “Never forget the power of compound interest.”

 

Misha Zelinsky: It’s the eighth wonder of the world, they call it, yeah, that’s right.

 

Gillian Triggs: That’s right. I can see that, it’s a wonderful thing.

 

Misha Zelinsky: Indeed.

 

Gillian Triggs: Once you’ve worked out what it does, compound interest is very, very nice. But that’s been the tragedy for women. And some men too, I mean, this is not only a male, female thing. You don’t want to position women against men, in any sense, it’s just that, because women tend to do the caring, they’re not paid for it, they lose salary, they lose their position with superannuation payments, they lose their promotional opportunities within a firm, and then they just slide back. And then … if their husband or partner dies, or they go off with a new model, these women are left to fend for themselves.

 

Misha Zelinsky: Well, it’s been a very serious conversation. I’ve been looking for a way to segue into my hokey question at the end here, but unfortunately I’m going to have make it a really clunky segue. But you know, I’ll always ask everyone on the show, if you’re an Aussie, who are the foreigners you’d like to bring along to a barbecue. In your case, who would you like to bring to a barbecue at the Triggs house? You know, three people.

 

Gillian Triggs: I’d really like to meet Theresa May. I think she’s dealing with one of the most intractable and difficult problems. I’d love to sit down and talk to her about what she’s proposing, and how she thinks she’s going to pull Britain through this.

 

Misha Zelinsky: She might have a bit more time in about three weeks.

 

Gillian Triggs: They might be extending it. There you go, they’re going to have to. But I think she’s … She seems to be emerging as quite a remarkable woman. So, I’m rather … I’d love to meet her.

 

Misha Zelinsky: Hard job.

 

Gillian Triggs: Mm-hmm (affirmative). Very, very tough job, the toughest job that one can think of just at the moment, and she seems to be pretty resilient, and she’s not very flexible, but she might have to be in the next few weeks.

 

Misha Zelinsky: So, Theresa May. Was there anyone else that you would bring along? To the …

 

Gillian Triggs: Oh. Nothing … Nobody … I’m sorry, this is a terribly boring answer, but I really can’t think. I’d love to have known Maria Callas.

 

Misha Zelinsky: Okay. Right.

 

Gillian Triggs: Because I love opera, and I think she was, again, quite … a quite remarkable woman. And I think I’d love to meet Obama.

 

Misha Zelinsky: Oh, okay, well …

 

Gillian Triggs: And Michelle [crosstalk].

 

Misha Zelinsky: Well, there you go. A couple of politicians. Well, I’ll let you have four, and why not?

 

Gillian Triggs: You’ll let me have four.

 

Misha Zelinsky: Why not? They’re a package deal, and a just actually read Michelle’s book. It was a fantastic book.

 

Gillian Triggs: Oh, I haven’t read it yet. I must read it.

 

Misha Zelinsky: Oh, well. Anyway. Well, thank you so much for joining the pod. It’s been a fantastic chat, and really appreciate it, and good luck with everything that you’re doing.

 

Gillian Triggs: Thank you very much.

 

 

Gordon Bajnai

Gordon Bajnai was the prime minister of Hungary from 2009 to 2010.

Banjai took charge of Hungary in the aftermath of the Global Financial Crisis and lead the country through an incredibly difficult period in its history.

As prime minister, Gordon was the last socially democratic leader of Hungary before the country took a turn towards a more right-wing, populist and now largely autocratic regime. Gordon is now the chair of global investment firm Campbell Lutyens.

Gordon joined Misha Zelinsky for a fascinating discussion about, Brexit and the rise of populism, the role economics plays in politics, the march of nationalism in Europe and just how fragile democracy really is.

To my fellow Diplomates out there – if you’re enjoying the show, please be sure to subscribe, rate and review. It really helps! 

 

Misha Zelinsky:                  Welcome, Gordon Bajnai to Diplomates. Thank you for joining us.

Gordon Banjai:                   Thank you for your time.

Misha Zelinsky:                  No, thank you, but I was just seeking before as I was walking here there were just a couple Eastern Europeans in London, so you’re we’re really living the European-London cliché right now, but given that we are in London, and I’ll say it for the recording. We’re in London right now that obviously Brexit is top of the mind here. Where to from here? From Australia, it all seems quite mad. The clock’s ticking. Where do you think this is actually heading now as we head towards the cliff with the potential hard Brexit?

Gordon Banjai:                   Well, every country have their own special kind of populism. I think the special tailor-made populism of the United Kingdom is the hatred towards Europe, and that’s probably a result and it’s a lesson for other countries that if for 40 years politicians try to blame everything on Europe and take all the credit to themselves, that’s then sometimes people start to believe them. Brexit, but it’s been a very clumsy two years since the vote.

Misha Zelinsky:                  Yeah, and it has been two. It’s gone quick.

Gordon Banjai:                   Quick, but two years after it’s still unclear what’s going to happen as we speak. We are just a couple of days from the first vote in the House of Commons about the deal that was negotiated by the British government, and they are not very likely to win that vote. The uncertainty will remain and be honest, in 80 days to go out to Brexit.

For people in business, or people with investments, or people with jobs in the UK, it’s a huge uncertainty with a very short time to react. It is clearly hurting the economy longterm. Whatever happens, it’s going to be negative for the economy, and then even in the best scenario, but there are further down downside scenarios that can hurt the UK better. But instead of, just let me give you two very interesting polls that I’ve read recently.

Within the voters, the committed voters of the Conservative Party, 54% would support no-deal Brexit, hard Brexit, and only 18% of last week, 18% was supporting the deal proposed by the Prime Minister. On the other hand, if you look at the whole country, the latest poll I have seen was 54% against Brexit, only 46% for Brexit. At the national level, it’s a turnaround-

Misha Zelinsky:                  From 52-48.

Gordon Banjai:                   52-48 yeah, the other way.

Misha Zelinsky:                  In 2016, yeah.

Gordon Banjai:                   Just still not the huge shift even [crosstalk 00:03:01], but it is a shift. It shows how far committed hardcore politics can go from the national mood if we believe both [parties 00:03:14].

Misha Zelinsky:                  Just going back to the original value, sort of touch on populars and then anti-European sentiment in the UK, but was that what drove the Brexit vote? Were there other factors? It’s been sort of debated to death, but what’s in your mind drove that vote, the leave vote?

Gordon Banjai:                   Every such political upsets or surprise votes combine many factors, but I think that the specific nature of these referendums, direct democracy, is that they give a chance for many different groups in society to express their protest by a single vote against something.

Misha Zelinsky:                  So something’s annoying you and you just vote, leave.

Gordon Banjai:                   So many people, I think, have felt disenfranchised, sort of inequality in the UK has grown significantly. It has always been one of the most unequal countries within the European Union. Inequality has grown significantly after the global crisis. That’s one factor. But that seems like a social problem, and still it transferred somehow into an identity crisis. That’s very similar to the US, where many of the disenfranchised Midwest voters who lost their jobs have turned into a kind of identity politics, who are supporting ‘America first.’

Misha Zelinsky:                  That’s right. Similarly, we see the Northern England vote to leave, which is where you’ve seen a lot of deindustrializations. It’s similar to Trump, the industrialization in the Midwest.

Gordon Banjai:                   That’s a global phenomenon, that populism, which is collecting the vote of those who are losing on the social economic agenda. Populism is often able, at least right wing populism, because this is just one form of populism. But right wing populism is able to collect that vote with an identity message. That’s very varying, and that’s very similar to what happened in the 1930s.

Misha Zelinsky:                  It’s interesting on the 1930s. Sometimes it’s seen as a very basic analysis, but do you think it’s similar? Is it 1929-1939 all over again, where you have a major economic event? The Depression is somewhere, the global financial crisis. Then the rise of communism and fascism, et cetera, across Europe. Is this the same thing again, or is it something different?

Gordon Banjai:                   Well, I think there are similarities. We are living in a different age and with different history experiences. But, yes. There are similar trends and rules applied here. First, there is a time lag between the economic crisis and the rise of populism. Second is the interesting switch from the social problem to the identity politics. Then the problem with identity politics is that it’s often cynical politicians use identity, be it the national or religious identity, or regional identity against a national identity. They use this to get into power, and to stay in power, they need to continuously escalate the feelings. They need to pump more steam into the steam room until it blows up.

The permanent escalation is an inherent feature of this kind of politics, and it usually doesn’t end well. That’s probably a commonality.

Misha Zelinsky:                  To put it mildly, yeah.

Gordon Banjai:                   If you look at the whole global politics today, the system is breaking down. One consequence of the global financial crisis, technological change, the inequality in the developed societies all ending up is that the status quo, as we have known, as you and I have grown up, you probably less than I, but we have both grown up in the Pax Americana, the system which was guaranteed or supplied by the United States. This system is breaking apart because the US is pulling up, creating a vacuum. Then some actors, often maligned actors, are occupying that vacuum, taking it over.

That’s also a result of this kind of populism. Also of the fact, if you take one step back and look deeper into what’s behind populism, is that following the great financial crisis, the legitimacy of the status quo in most developed countries and the global status quo has disappeared, that the political reserve that was keeping the system together was used as a result of not just the crisis, but the way the crisis was managed in that. The real issue is, if there is a next crisis, which is going to come soon, that political reserve will not be there to back up the system.

So, we are going into the next crisis with much less political reserves, much less legitimacy behind the status quo, and less tools in the policy makers, especially economic tools. [crosstalk 00:08:52]-

Misha Zelinsky:                  Yeah, [military 00:08:52] policy being so exhausted and fiscal policy being restricted.

Gordon Banjai:                   And in that context, Australia is doing quite well actually, compared to other countries.

Misha Zelinsky:                  Well, yeah. You wouldn’t know it though, looking at our politics, which is a little bit just as crazy as well. We’ve had multiples prime ministers in recent years.

Gordon Banjai:                   One experience that I can share, speaking from Hungary, from Europe, from this part of the world, is that there is a process of deterioration, gradual moral deterioration, but seems to be radically different today, will become the new norm tomorrow. Other things will appear radical, which the day after tomorrow will become the new normal. It’s a kind of amortization of centrist politics, ethics, and morale, play by the rules, checks and balances. Those countries which can stop this amortization early on are more fortunate than the ones who go through this long process, because it can always get worse.

Misha Zelinsky:                  Indeed. But before we get to the democratic question, I was to unpack a little bit about the drivers of populism. You talked about populism and inequality, the GFC as a trigger point, though inequality was probably on the rise before that, but middle class people really got wiped out during the global financial crisis. You became prime minister in Hungary during the GFC, so you understood this crisis very well. In retrospect, did governments do enough to protect ordinary people during the global financial crisis? Is economic equality the antidote to this sort of ethno right wing nationalism? Is more equality the answer to this? How do you see that?

Gordon Banjai:                   Fortunate countries who have enough room to maneuver, i.e., take on more, to survive the crisis, the deepest point of the crisis could, or are able to protect their middle class. But unfortunate countries like my own country, Hungary, was very indebted and not trusted by the markets with new credit. So we have to take a much bigger change and shift, more radical reform that my government was running. We just have to make sure that we survive, but there was not much room to maneuver in the social arena at the time.

But you know, crisis doesn’t have an ideology. There is no left wing crisis and right wing crisis. Crisis wants solutions quickly. Like military surgeon versus the plastic surgeon, you can’t measure by the millimeter. You have to cut 10 centimeters away from the wound to make sure that it doesn’t kill the patient. You have to act quickly and decisively and focus on the core areas to stop bleeding, so that’s what you do in crisis management, because that doesn’t have a philosophy.

To put it differently, in life you can’t choose what situations you get into. What you can choose is how you behave. If you are coming from a progressive center-left approach, you can try to manage the crisis, to stave it off, and still try to keep the texture of society together. One thing that we could learn, for example, from the Thatcher era in the United Kingdom is: if you let, in certain regions or geographies, the system of labor collapse, the social inept to collapse, then it can decades to recover. If you can hold together the middle classes, the systems of employment lower in the classes. If you kept people in jobs, or if you can keep them able to get back to jobs as soon as there is some rebounds, then after the crisis, there’s a chance to recover quickly. However, if you let it collapse under the weight of the crisis, then it maybe decays.

Misha Zelinsky:                  What is it then, do you think? We’ve had this crisis. and inequality is rising. Why do you think that the ring wing populism has taken hold much stronger, seemingly, than left wing populism of, say, redistribution, high taxes, more social safety? You’ve seen a lot more similarly nationalism style populism rise up, be it the UK, the United States, other countries in Europe. Why do you think social democrats are struggling to articulate a populism message on economics?

Gordon Banjai:                   I wish I had known the perfect answer.

Misha Zelinsky:                  Probably a lot of money to be made if you knew the answer!

Gordon Banjai:                   Interestingly in some countries, the progressive forces have done pretty well. If you think about, President Obama managed the economy pretty well in the crisis, and the US bounced back very, very quickly and very decisively. It’s one of the longest period of recovery, post-crisis recovery in economic history. There are some other good examples. Portugal has a progressive left government, and they are doing reasonably well, very well.

Misha Zelinsky:                  But Obama, of course, led to Trump, which is the question.

Gordon Banjai:                   But there are some other factors in that, because if you look at when Obama left, he was very popular. Maybe it’s also the campaign and the candidate explains part of that.

Misha Zelinsky:                  Absolutely, yeah.

Gordon Banjai:                   But clearly there is a phenomenon of identity politics, and typically progressive and left parties are much weaker identity politics than right wing parties.

Misha Zelinsky:                  Which is ironic, because it’s the ring wing that often accuses progressives of wanting to play identity politics, because they’re-

Gordon Banjai:                   [crosstalk 00:15:29].

Misha Zelinsky:                  Yes, but also through the promotion of women’s rights, or the promotion of minorities groups, is that somehow that is identity politics, whereas nationalist politics is identity politics as well. It’s quite ironic in that sense. We’ve talked a little bit about economics. One issue we haven’t really talked about here, and it’s probably that when you look at the Brexit vote as well, is this question of immigration. Because when you look at some of the countries that have become more populism right wing … Poland, it’s done quite well economically, really.

Gordon Banjai:                   That’s a perfect example of how contrary to what Bill Clinton said in 1991 or 1992 in the campaign, you remember is

Misha Zelinsky:                  “It’s the economy, stupid.”

Gordon Banjai:                   “It’s the economy, stupid.”

Misha Zelinsky:                  Yeah.

Gordon Banjai:                   And everybody thought he had found the stone of wisdom. There are times when it’s the economy, stupid, and 25 years later, his wife long the election despite the fact that the US was booming economically. In Poland, there was a regime change despite the fact that Poland was the only country in Central Europe, or probably the only country in Europe, which was growing in the middle of the crisis as well.

Misha Zelinsky:                  Correct.

Gordon Banjai:                   It’s not just the economy, stupid. Sometimes it’s identity. If I need to find an explanation, the one that is closest to my heart and brain probably is that every democracy is built on middle classes, broad and stable middle classes. If the middle classes start to fear of losing their status, their stability, if they lose their perspective, their horizon looking into the future … If you think about, this is the first time in 70 years in the western part of the world, developed world, is that the middle classes fear that their kids will do worse off than themselves.

Misha Zelinsky:                  Interesting. There’s an interesting statistic on this where in the United States in the 40s, 90% of Americans believed their kids would do better than them, where today, it’s more like 40%. That’s kind of indicative.

Gordon Banjai:                   In some countries, it’s even less. If you think about youth unemployment in Italy [crosstalk 00:17:47]-

Misha Zelinsky:                  50% in some places, yeah.

Gordon Banjai:                   France as well. Youth unemployment and the general perspective is the horizon is looking down, not up. That’s a factor that explains the volatility, the anxiety of the middle classes. If the middle classes are trembling, then populism is on the growth. Just to quote you one famous English historian, “Revolutions are not made by the poor.”

Misha Zelinsky:                  [crosstalk 00:18:18].

Gordon Banjai:                   “It’s made by those who get disappointed.”

Misha Zelinsky:                  Hm, interesting. This anxiety around immigration, you’re seeing it Trump, you’re seeing it in Brexit, you’re seeing it in Europe. Merkel’s intake of Syrian refugees … Does immigration come up as an issue when the economy is doing badly? Or is it more of a cultural problem? Some people say, “It’s inequality and that’s what’s driving everything.” Others say, “Well, it’s the cultural changes that make people anxious.” Do you have a take on that?

Gordon Banjai:                   What right wing populists do is they transform the economic problem into an identity problem. They say, “Immigrants take your jobs,” although in fact, very often it’s automation or other forms of technology that take your jobs. Protectionism is the economic policy of nationalism. If you think about the trade wars that are revived in the world, and they are threatening, probably the single biggest geopolitical threat at the moment, is the US-China conflict, which goes well beyond a trade war. If you think about that, there is direct translation of identity politics into economic policy.

It’s interesting. I’m spending a lot of time in the UK. Since Brexit, there is a sharp downturn in immigration here. There is a shortage of labor in certain segments of the economy. But still, many people are opposed to immigration because they don’t see the cause of the problem and the problem together. Coming from the progressive side, we have this tendency of trying to explain all these technocratic policy different questions. In the era of populism, policy is not really a question. Policy is not the main topic of politics, it’s identity. It’s security. If you want to win elections from the progressive side, you need to develop your vocabulary, your politics, and catch up on those arguments.

Misha Zelinsky:                  And make people feel, rather than explain to them how something is going to work. Right?

Gordon Banjai:                   You have to find an answer to the issue of identity emotions, as well. Technocratic explanations make people feel … Let me take a step back to explain what I want to say. I think there was a consensus for a long time that these egg-headed technocrats are running these countries based on policies and complication explanations, which nobody understands, but they make the world run smooth, so it’s okay. The GFC just blew that up. Many people say, “Look, you egg-headed technocrats! You are corrupt. You played only for yourself. You messed up, so you were not that smart as you pretended to be. So why should we listen to you? Why shouldn’t we listen to ourselves or our own instincts? Or people who deliver, who cater for those instincts?”

That’s what populism is. You have to regain that trust, and it’s very, very, difficult. You have to find the language, and you have to find the right messages and as well as underlying policies.

Misha Zelinsky:                  Coming back to this question of democracy in Europe, after the fall of the Berlin wall, there was a kind of a democratic bloom. Everyone thought, “Well, these democracies are going to just be on the march inevitably.” Now we’re starting to see, you’ve got Poland, and Hungary, and Turkey, and Russia that are more or less autocratic. Then you’ve got Italy now that’s elected a pro-Russian government. How concerning do you think it is for the future of democracy in Europe right now? Is there any positives there to draw on?

Gordon Banjai:                   Don’t forget that democracy is a tool, not a means. It’s a means, not an end, to put it in proper image. It’s a means, not an end. I’m convinced that that’s the best means to the right end.

Misha Zelinsky:                  Sure.

Gordon Banjai:                   But for most people, they want a solution.

Misha Zelinsky:                  Yeah, they want the outcome.

Gordon Banjai:                   The outcome, and democracy doesn’t deliver. Compared to that, they believe rightly or wrongly, I think wrongly, that other types of systems deliver better results. Then democracy can go out of fashion.

Misha Zelinsky:                  Yeah. I think that’s a really good point. I say this to the people. In ’89, people didn’t sit there and read Jefferson, and then read Marx, and then say, “Well, what Jefferson’s argument is a lot more compelling, because I believe in liberal democracy.” They looked at the results, right? Middle class growth in wester countries was much better than the equality of everyone being poor in the Eastern Bloc.

Then how do democracies deliver for people? What should the focus be? Should the focus then be on economic inequality?

Gordon Banjai:                   I think it should be. Irrespective of whether it’s a democracy or autocracy or dictatorship, the leading elite tend to get corrupted unless they are very well checked and controlled. Democracy is the best way to control that, but even then, there can be a kind of self interest of people being … If the elite in any society don’t realize that they need to [keep 00:24:48] integrating people at the bottom of society, and keep broadening, stabilizing the middle class, and keep letting people into the middle class from the up, then they can destabilize themselves. It’s not a new idea. There was this Italian sociologist and philosophist, Pareto, who developed his ideas in the 1920s, 1930s. He said, “Societies, where the elite stops integrating, the best people from the bottom are breaking down sooner or later, and the elite will lose power because people are rebel against them.”

Misha Zelinsky:                  Now, that’s interesting. We’ve talked a little bit about countries, maybe, that people say, “Okay, Hungary and Poland. Then there’s autocracy in these countries, and Russians have always been a bit different.” You bring it a little bit closer to the main game, and England’s, the UK’s going through its things. But France, we’ve seen these really quite scary demonstrations in Paris with these yellow vest demonstrations against what Macron’s doing there. Democracy … He’s attempting a reform agenda, but it doesn’t seem that people are going along with him, and there’s been a violent backlash to that.

Gordon Banjai:                   First of all, France has great traditions in going out to the street, and sometimes being very violent.

Misha Zelinsky:                  That’s true.

Gordon Banjai:                   It’s not long ago. I remember in 2005 or 2006 in the outskirts of Paris. People were burning shops and cars similarly, so it’s not new. That’s part of the French political culture, which would not be part of other country’s culture. On the other hand, clearly Macron has a very difficult job to do, because he needs to reform a country which hasn’t really decided whether it belongs to the south or the north of Europe. France has this identity issue. It loves its southern identity, but it’s hard, but its brain knows that it’s better to be in the north.

So France, which is one of the biggest economies in the world, and is quite a good economy, I have to say, but it is need of some of these reforms. The problem is because of they’re relatively high in debt, it means there is little room to manoeuvre. If you want to introduce reforms, if you want to be more labour-friendly, if you want to reduce taxes to mobilize entrepreneurship, then you have to take away from somewhere else. While Macron was delivering much more than any of his recent predecessors on economic reforms, he hasn’t or couldn’t deliver on the social part to keep people happy, because he didn’t have the room to manoeuvre. So, I’m kind of understanding of his problems, but I think he realized he needs to change also style. The art of politics, it’s not just policies and facts and figures, but it’s style and explanation, and explaining people why you do things.

Misha Zelinsky:                  But the French are very important to the European project, because for a long time, Merkel was really the central figure in Europe maybe holding the show together through the crisis, but she’s now exiting and has gone out, taken a lot of damage on the immigration issue with the million refugees. But Macron was meant to be the man to lead a European renaissance. But with him under pressure, you can start to see the beginnings of what holds Europe together, what are the things that hold Europe together. Because you’ve got … We haven’t really talked about it yet, but I think we probably need to, which is the interest of Putin to very much break up Europe. There’s very much those links between Le Pen and the other nationalists in the European countries, linked to the Russian destabilization of those countries. What is the future of Europe in terms of holding itself together where Macron’s under pressure, Merkel’s gone, and the Russians are meddling?

Gordon Banjai:                   Well, there are two ways to assess this context: one is the internal, then the other is the external, naturally. The external dimension that Europe is under multiple pressure, at least three different directions: Russia, which is interested in weakening and sort of breaking up and negotiating directly in each country. And also the US recently, under the Trump administration, is interested to have a bilateral relationships. Then China, thirdly, which is interesting in maintaining the rules-based global trading system and access to the European market, but it is also trying to access countries one by one, because with many of the countries individually, each of these countries can have a much bigger, much weightier, much more sizeable player than as if Europe kept itself together.

Europe together is a 500 million market. Even after Brexit, it’s 460 million [crosstalk 00:30:34].

Misha Zelinsky:                  It’s a big-

Gordon Banjai:                   Still very big.

Misha Zelinsky:                  Yeah.

Gordon Banjai:                   And it’s one of the first world’s, probably the world’s most valuable market if you look at number of people times GDP per capita. It’s the most exciting marketplace in the world. It has actually delivered on much of the promises of a single market. It is quite a single market in many aspect. But on the other hand, if Europe starts to utilize its weight of 500 million market, and starts to negotiate in a more assertive way with other powers … Says, “All right. You want access to my market? I want access to your market as well. You have to play by the rules.”

If Europe starts to develop as a military union … If Europe starts to behave as a financial union, which it hasn’t delivered greatly on … And if Europe starts to deploy united policy on migration, and starts to protect its external border, then Europe could be a much more heavyweight player in the global order.

Europe’s natural self interest is to organize itself as Europe and not as individual states. If you think about Germany, the largest country is Europe is 82 million people. What is it compared to China, US, or Russia? But if you look at Europe with 450 or 500 million people, that’s a size in which you can remain a player at the table. Because Europe’s real question, looking ahead 20-30 years, whether it remains part of the rule setting table or will become the rule taker. It will be quite a shift compared to its last 500 years.

You could look at Europe as a kind of Noah’s ark in the flood of globalization for the nations of Europe to survive. It’s quite [balancing 00:32:54] to jump off Noah’s ark. It’s reasonable to discuss about the direction, but to quarrel at the wheel is not very good, because the ark can capsize. [crosstalk 00:33:14]. You want to keep it together. You want to discuss what is the right direction to go, but you also want to act in an orderly and coordinated way on the ark, so as that you can land in the good course.

Misha Zelinsky:                  How concerned should European countries then be, as they go through their election seasons, about Russian interference? There’s suggestions there was interference in Brexit. There’s suggestions you’ve seen it with Le Pen and the yellow shirts. How concerned should European countries be about that?

Gordon Banjai:                   I think Europeans should be concerned about external influence. There’s a asymmetric situation, because maligned powers are looking at democracies and saying, “Where is the [oculus 00:34:11] here of democracies?” And that’s elections and the daily operation of democracy. Through social media and other means, and corrupting occasionally certain parties in these countries, promoting radical parties, they can destabilize democracy.

Those countries which don’t have this nitty gritty problem of democracy and free voting, they can exploit other’s weakness this way. That’s an asymmetric war. Europe and even the United States, in that sense, should react to this by protecting themselves, protecting their democracy, but not allowing any interference.

Misha Zelinsky:                  It’s a challenge, isn’t it, though? The thing that won the Cold War was the openness of the west versus the closed systems of the Communist Bloc, and the other countries. It seems almost that openness is being used against the west in a way that we’ve never seen before. With social media, through economic means, and others. And as a result, democracy lost a bit of the swagger, so to speak. So how do you make openness a virtue again, is the question. I’m not sure about-

Gordon Banjai:                   First of all, openness is inside a country or a region, externally, you have to assert your powers much more strongly. First of all, you have to create the community of democracies and coordinate against those who don’t follow those principles. Second, you have to punish bad behavior. Thirdly, people will tend to exploit the rules-based system unless you very stiff, very firm in protecting that system. What I see today, because many of these [maligned 00:36:28] actors are exploiting these internal divisions, and that can be lethally dangerous unless re-protected. The Australian election system so far has proved to one of the most successful in the world. I don’t know if you feel that way in [crosstalk 00:36:46], but look from the outside … For example, the mandatory voting system cuts out certain things like the fight for mobilizing. Because you don’t need to fight to mobilize voters, there’s a natural gravity to work for the can tre.

Misha Zelinsky:                  That’s right.

Gordon Banjai:                   That’s a big benefit of the Australian electoral system, which others could learn from. Because in many countries, think of the US. Many politicians are working on trying to keep voters from voting.

Misha Zelinsky:                  Yeah, that’s right. Yep.

Gordon Banjai:                   Or asymmetrically, trying to mobilize their voters and keep others away. If you think about Cambridge Analytica and what they have done in the US elections, that was tactics about that. How do you keep the voters of Hillary Clinton away from voting while mobilizing the Trump voters? Those are nasty games. If you don’t have that problem, that’s already a better place.

Misha Zelinsky:                  The last thing I want to ask you about is: I’ve been thinking a lot about democracy recently. Over the summer I was doing some reading. It’s relatively new thing in human history, democracy. I take it for granted as something that’s always been in my life, but it’s really a blip in human history. What are the warning signs, do you think, that a democracy is headed down to the wrong path into an anocracy  or an autocracy? What are the things that we should be watchful for?

Gordon Banjai:                   Right. Great question. I love it. First, endangered middle classes, the destabilization of middle classes. Second, polarization of politics, political language, which you mentioned. Behavior. Third and most important probably is media. If the mass media, and that includes social media, is losing its standards, ethical standards, or it gets under the influence of malign actors … If mass media cannot be held to ethics, or it loses its balance, the balance coverage, then if private or public forces get control of a significant part of the media, then media turns into propaganda.

Misha Zelinsky:                  Yeah.

Gordon Banjai:                   And the propaganda, you can brainwash people into very stupid things. Think about the 1930s Germany. Adolf Hitler couldn’t have done in 1934 what he was doing in 1939, simply because of the Goebbelsian propaganda and brainwash. Then after media come the other institutions, independent institutions. The independence of courts, prosecutors, police, the control over political parties, checks and balances. These are very important things. Democracy is not simply the will of the majority. It’s also the ability for power to change hands if the majority changes its mind. It’s the right to change your mind and change your leaders.

It’s not only about the will of the majority. It’s also the protection of minority. Even when there is a strong majority, democracy’s about probably three years from now, the other side will have a majority. You have to maintain the probability. That’s what will keep power in control, in check.

Misha Zelinsky:                  Yeah, J. S. Mill talked about the tyranny of the majority, right? So you need to make sure that the majority is not necessarily-

Gordon Banjai:                   [crosstalk 00:40:36] countries, in many countries in central eastern Europe, in other countries, developed countries. That’s a phenomenon that’s only possible if there is a strong control of media and propaganda, because that facilitates, that’s the anteroom for dictatorship.

Misha Zelinsky:                  Well, thank you so much. One final question that I ask all my guests is if they’re in Australia, I ask them about international people. I know you’re a huge fan of Australia, regularly attend, but if you’re having a barbecue at your place, what three Australians, alive or dead, would you invite along?

Gordon Banjai:                   My childhood hero, Angus Young from AC/DC.

Misha Zelinsky:                  Very good!

Gordon Banjai:                   In his shorts.

Misha Zelinsky:                  Playing the music, yeah?

Gordon Banjai:                   Yes. Prime Minister Keating. I’ve heard a lot of good things. I’ve never met him, but he seems to be a very smart and-

Misha Zelinsky:                  He’s more of an opera man than an AC/DC man, but he’ll-

Gordon Banjai:                   It will be an interesting group around the barbecue. Thirdly, I have a good friend who I think very highly of as an investor from my close profession. Mark Delaney from Australia, super.

Misha Zelinsky:                  Very good.

Gordon Banjai:                   He is a guru of investing, and I look up to him for his investments.

Misha Zelinsky:                  Well, you’ve got investing, politics, and AC/DC. It’d be a good combination at your barbecue. I’d like to be a fly on the wall at that. But anyway, look. Thank you for joining Diplomates. It’s a punny name, and it also implies that you’re my mate. I don’t often get to claim former prime ministers as a mate, but just so you know I am.

Gordon Banjai:                   [You’re welcome 00:42:19].

Misha Zelinsky:                  But also, Hungary’s not a country that gets a lot of discussion in Australia, but my assistant Google, I did some research. There are 100,000 Hungarians in Australia, so I’m hoping that at least some of them listen and I can build an audience off the back of you as well. Thank you so much for your time. Look forward to having you back someday in the future.

Gordon Banjai:                   Thank you very much, and greetings to all of those Hungarians in Australia.

Misha Zelinsky:                  Thank you. Including our current treasurer, who is a Hungarian and a Jew. His family fled after the … Josh Frydenberg is, but shout out to Josh from Diplomates. I doubt he is someone who listens to my podcast, but hopefully he listens sometime. Thanks, Gordon.

Gordon Banjai:                   Thank you very much.

 

Professor Simon Hix

Professor Simon Hix is the pro-Director for research at the London School of Economics and is the chair of Vote Watch Europe. 

Professor Hix is a globally renowned expert on EU politics, democratic institutions, parliamentary voting behaviour, political parties and elections – and to prove it he is the author of over 100 books and papers on these topics. 

We had a fascinating discussion about Brexit, where to for Britain as the deadline for a deal approaches, what drove the Leave vote itself as well as the worrying rise of right wing nationalism in Europe.

 

EPISODE TRANSCRIPT

Misha Zelinsky:                  So, Simon Hix, welcome to Diplomates, thank you for joining me.

Simon Hix:                              You’re welcome.

Misha Zelinsky:                  And I should say, for the recording, that we’re in your rather salubrious offices here in the London School of Economics. So thank you for having me along.

But given that we are in London and this is a political podcast, what better place to start than Brexit. So, as an Australian to a Brit, what the hell is going on? Because back home it looks kind of crazy. Is it as crazy as it seems?

Simon Hix:                              It is crazy. You know, I was away for a period over Christmas and came back and it’s the same old, same old, in the sense that we still don’t know where we’re heading. So, we’ve got a vote next week in the House of Commons on Tuesday.

Misha Zelinsky:                  And that vote is for … ?

Simon Hix:                              This vote is for Theresa May’s deal. So she’s done a deal with the EU which is called a withdrawal agreement. It’s an agreement that sets the terms of the UK leaving the EU and the terms are, essentially, how much money do we still owe as part of the divorce deal? What are the rights of the citizens in the UK and UK citizens on the continent? What happens to the Irish border, between Northern Ireland and the Republic? Republic, of course, is going to stay in the EU, Northern Ireland in the UK, of course is going to leave the EU. And then a transition arrangement for two years while we negotiate the long term deal.

So she signed the deal which is more or less the deal that we knew was going to be signed. It has to be ratified by the House of Commons for us to be able to leave on the 29th of March. So the 29th of March is the deadline bias.

So if they don’t pass it through the House of Commons, we leave on the 29th of March without a deal.

Misha Zelinsky:                  A hard Brexit, so to speak. Yeah.

Simon Hix:                              A hardest of hard Brexit. So, leaving without a deal has potentially enormous consequences. We’ve got one wing of the conservative party saying, No, leaving without a deal is fine. We’ll be fine. A lot of them are very Libertarian. They have a view that this is about creative destruction. Bring it on. And we’ve gotten to the point where you’ve got this left wing of the Labour party saying, Actually a no deal would be a good thing because it would be a crisis of capitalism and then they’ll be a collapse of the government. And then Labour will get elected and we’ll be able to implement socialism. And then we’ve got the right wing and the Tory party saying, No deal will be a good thing because there will be a crisis of socialism and then we’ll be able to slash and burn the British state and they’ll be this new Singapore-on-Thames Nirvana that we’ve wanted.

Misha Zelinsky:                  It’s almost horseshoe politics with the extreme left and the extreme right, both agreeing on the outcome.

Simon Hix:                              They can’t both be right, obviously, right?

But either way, they think there’s potential disaster. Most people accept that without a deal, it will be end of Just-In-Time production supply chains which could be the collapse of manufacturing. Tariffs and quotas on agriculture, most of our agriculture produce is exported to the European market.

So I think the planes will not be able to take off and land. You know, they’ll be a tail backs at Dover. They estimate a 10 minute delay on every truck going through Dover within an hour, leaves to a 30 mile tail back. So you can imagine what that cumulatively…

That super market shelves will start to empty out. The NHS is worrying about running out of drugs because their main supplier is in Holland. A no deal scenario is a disaster. Most people accept that. Most economists, most people who work in the supply chains will tell you that. All the business interests will tell you that.

What does it mean for the citizens rights? Nobody really knows.

So, it’s potentially disastrous if we leave without any kind of deal. But the right wing or the Tory party are using this as a threat because they don’t like the deal that she’s done. They feel the EU has got a better arrangements out of this. So we still don’t know where we’re headed. If they kick out the deal next Tuesday, which they probably will, all bets are off. We have no idea what’s going to happen after that. And the EU is willing to say, Bring it on. If there’s a no deal, you guys are going to suffer more than us.

Misha Zelinsky:                  That’s interesting because this sort of concept that Europe would get a better deal, why would they? I mean, there’s no incentive for Europe to encourage other countries to leave, I should think, right? So if you’re the European Union, you want to make it as hard as possible I would have thought.

Simon Hix:                              Yeah. So there’s kind of two sides of it. So one side, I don’t think it’s the EU wants to be seen to be punishing Britain, although there are definitely voices that say that. Particularly you hear that on the left in France or the left in Germany, where they blame the Anglo-Saxon bankers for the financial crisis. And so they say, It’s about time the Brits got their comeuppance. Sort of thing.

But the general view on the continent is they don’t want Britain to leave. We’re a major economy. We’re important for exports and imports.

Misha Zelinsky:                  Defense.

Simon Hix:                              Defense. For the whole credibility of the European project globally. The EU project in general is weakened if Britain leaves. So there’s a general sense of it’s a shame that the UK is leaving. So they don’t want to punish Britain, but equally, they’re saying, why should we give Britain a particularly good deal? You chose to leave. We have to protect our interests and our interests are the continuity of the single market that we’ve worked our butt off to create a continental scale single market with free movers and good services and capital within it. Why would we undermine that? Just because you guys want to cherry pick the good bits of this and not be responsible for some of the obligations that come with being part of this single market? Why should we give that to you? We don’t give that to anybody else?

So it’s not about punishing Britain, it’s about maintaining the credibility of the EU and holding the EU together. And of course, for the economic relationship between Britain and the EU 27 is pretty asymmetric. In London, these politicians here are very arrogant about Britain. We’re the fifth largest economy in the world. We’re this great global trading power. English language is the lingua-Franco globally. London is the world capital of the world services sector. Yada, yada, yada.

50% of our trade is with the EU 27. 15% of their trade is with us. That British trade with the EU 27 is worth about 20% of our GDP. Their trade with us is worth about 2% of their GDP.

Misha Zelinsky:                  Right. That’s interesting.

Simon Hix:                              And if you talk to trade economists here at LSC, they’ll tell you that those kind of asymmetries ultimately will predict what kind of bargain you get in a trade deal. The EU’s got far less to lose from failing to agree to a deal than the UK has.

Misha Zelinsky:                  That’s interesting.

Simon Hix:                              So the UK, the deal that gets done is bound to favor the EU. So, I remember a former student of mine is in South Korea, she’s in the Korean diplomatic academy and she’s one of their experts on Europe. And I said to her, hey, Wun, how’s Brexit look from east asia? She says, well, Simon -”

Misha Zelinsky:                  About as good as it looks from Australia, I’d assume.

Simon Hix:                              Right. Exactly. So it’s kind of interesting for an Australian audience to hear her say, she said, look, it doesn’t matter if you’re the fifth largest economy or the 10th largest economy, like Korea, or the 15th or the 20th, if you’re not the US, the EU or China, you’re a regulation taker. Those three markets make up 50% of the global GDP. 50% of global trade and goods and services. And they’re bargaining deal with any… It’s a reason why none of the three of them have got deals with each other in trade. They’ve all got bilateral deals with everyone else in the world. Because they say, ‘You want access to our market? Here’s the set of rules. Take it or leave it. You don’t want to accept these rules? You don’t have access.

And so that’s the way the US negotiates trade deals. That’s the way the EU negotiates trade deals. Why would it be any different if you’re the fifth?

So, Japan is the largest economy that’s accepted that kind of an arrangement. Canada, South Korea, those three countries. So Canada and South Korea both have trade deals with the EU and with the US. And the deals they have are essentially agreeing to apply European or American rules.

So for example, Canadian beef farmers have two fields. One field with cows destined for the US market and one field with cows destined to the European market.

Misha Zelinsky:                  Interesting.

Simon Hix:                              And the cows destined to the American market are pumped full of hormones, so you get these big fat cows destined to the American market. And the kind of skinny, vegan cows destined for the European market. You know, have to follow European Phytosanitary standards. So they’re regulation takers.

Misha Zelinsky:                  Yeah. So, the Brexiteers are probably going to get mugged by reality then in the end.

Simon Hix:                              Of course they are.

Misha Zelinsky:                  But so, leaving aside whether or not you get a better deal, there’s a deal on the table. They’re talking through the politics of it with it going to a vote, it’s interesting to me a lot of the discussion is around May versus the Brexiteers within her own party. And the Parliament is bigger than one party or bigger than one faction.

Simon Hix:                              Well yeah. And she doesn’t have a majority.

Misha Zelinsky:                  No.

Simon Hix:                              Because [crosstalk 00:08:48]have majority.

Misha Zelinsky:                  But there’s not a lot of discussion about Labour in all of this and Corbyn. So I’m curious to get your take in all of that.

Simon Hix:                              Yeah so Labour, like the conservatives, Labour is also split on this. It’s split into three groups. One group are the very pro-European group that would like to cause as much problems with this ratification as possible. With the hope that there’s a second referendum and they overturn and stop Brexit altogether.

Misha Zelinsky:                  And these are the sort of Blair-ite types.

Simon Hix:                              They’re the kind of Blair-right wing of the party.

Then there’s another group, which is a more radical left group. They call them the Lexiteers. The left wing Brexiteers.

Misha Zelinsky:                  Right.

Simon Hix:                              Who have never liked the EU. They saw it as a kind of capitalist project. They want us to get out of the EU so they can have a sort of socialism in one country. Pull up the drawbridge. British jobs for British workers. Subsidized British industry. You know, they’re living in some kind of…

Misha Zelinsky:                  The old socialized, left, yeah.

Simon Hix:                              So, in a sense, I like to describe the two radical versions of Brexit are the Tory radical version of the Brexit as the Singapore-Thames. And the Labour radical version of Brexit is Venezuela on trend.

Misha Zelinsky:                  That’s good.

Simon Hix:                              That kind of epitomizes where they think they’d like to take us. Most sensible people don’t want either of those outcomes.

Misha Zelinsky:                  Yeah.

Simon Hix:                              And Corbyn comes intellectually from that wing of the party. He’s never liked the EU. He thinks that we want to leave. To give these guys a bit of credit, though, a lot of people who did vote for Brexit in the North of England, you know, a lot of these cities in industrial decline are former Labour voters. So a lot of Labour seats have big let it, leave majorities in them. And the Brexit voting coalition in the referendum were two groups. It was kind of wealthy rural southerners who were just centerphobes who never liked Europe because they want Britain to go back to Empire.

Misha Zelinsky:                  Yeah.

Simon Hix:                              Empire 2.0 is what they want. And cities in industrial decline. Post industrial cities, very angry voters who are really angry at the ruling elites in the south, in the establishment. And they’ve never liked… In a sense, voting’s really the EU’s symbolic vote against what has happened in those communities.

So I’ll give you an example. So in Sutherland in the Northeast of England, the major employer in Sutherland is the Nissan car factory. Employs about 300,000 people. It’s the largest car employer in the UK. 70 something percent of their production goes to the EU single market. Just-In-Time supply chains, meaning that any delay in their supply chains will massively increase costs. So Brexit will increase those costs because they’ll be customs checks and stuff. Sutherland voted to leave the EU and the majority of those car workers in Sutherland voted to leave the EU.

So Lisa Nandy is a Labour politician and she tells a story about being asked during the Brexit campaign, being asked by the management of the car factory to come and talk to the shop floor workers because the management was saying, we’re totally opposed to Brexit because of the risks to the factory. Can you come and explain to them that if they vote for Brexit, they could all lose their jobs.

So she stands up and she tells the story to a packed room full of production line workers, saying, you do realize that Just-In-Time production will end. They’ll be tariffs and quotas on your cars. So, Nissan, which is a global company, will probably decide to end production here and move the factory to France or Slovakia or somewhere else. And you guys could all be out a job. And she says, one guy put up his hand and he said, we’re not stupid. I’ve been working here for 20 years. Don’t you think I know how Just-In-Time production lines work? Don’t you think I know where our cars are going? He said, you know, with new technology coming along we’re not expecting to have this factory here in 20 years anyway. It’ll be robots doing this stuff. We’re not voting for Brexit for our jobs. We’re voting for Brexit for our kids and our grandkids. And to send you guys a signal that you’re not listening to what has been happening around here in the Northeast of England.

Misha Zelinsky:                  That’s interesting.

Simon Hix:                              And that’s a real challenge for the center left. And so there’s an element wing of the Labour party which is very sensitive to the fact that although the kind of cosmopolitan youth, younger voters, the Londoners, are opposed to Brexit, a lot of their core voters are saying, you’ve got to deliver this.

Misha Zelinsky:                  Yeah. So we’ll get to the vote itself because I want to pick up on some of the things you’re talking about but just to stay with the Labour party, just very quickly, so Corbyn, one of the things that I find interesting is that there’s a real enthusiasm for Corbyn amongst young people. The so called Corbynistas.

Simon Hix:                              Yeah.

Misha Zelinsky:                  They would be remain people.

Simon Hix:                              They’re all remainers. In fact-

Misha Zelinsky:                  How is he getting away with being probably a Brexiteer in disguise whilst-

Simon Hix:                              It’s really difficult. And I think he can get away with it because they’re in opposition.

Misha Zelinsky:                  Yeah.

Simon Hix:                              And so he’s able to oppose anything the government proposes. So in a sense, what he’s asking for, if you actually look at what he’s asked for from Brexit, what he wants is the UK to carry on applying EU social regulation standards, EU environment standards, frictionless trade, to try employment first Brexit, he calls it. So you want to keep as much manufacturing as you can in the country. But that’s exactly what May’s deal is. You can’t put a piece of paper between the deal that she’s negotiated and what actually Labour are asking for.

So they’re really only voting against this symbolically, to try and create a crisis. To try and bring down the government in the hope that there could be a general election.

Misha Zelinsky:                  Right. But is there any way, I mean, if you’re May, just to put on your sort of… Is there a way for her to turn the focus onto Labour in the vote and I mean, far be it from me to give advice to the Tory party, but it just seems interesting to me that rather taking all these seating internally, if there’s a way to force the opposition-

Simon Hix:                              But with the government’s opposition dynamics of British politics…

Misha Zelinsky:                  Government always owns the result, right?

Simon Hix:                              Yeah. And the opposition, nobody’s going to blame the opposition if this fails. They will blame the government, blame Theresa May. So they can get away with playing these kind of games. And if we end up with a no deal Brexit and that is a disaster for Britain, and it could be absolutely disastrous. There’s kind of a typical British sense of, oh, it will be alright on the night. People will figure it out. People come to their senses. There’ll be a managed no deal. People will just figure it out. The French aren’t going to be crazy enough to stop lories going through the tunnel. And the Dutch are still going to be sending us medicines for the NHS. Come on, people will still allow British airlines to land in Paris and Berlin or whatever. It’ll be all right on the night. That’s the sort of general attitude of the British public.

Misha Zelinsky:                  Big gamble.

Simon Hix:                              I think it’s a very big gamble.

Misha Zelinsky:                  While I speak of gambling, let’s talk about the vote. And correct me if I’m wrong, you were given the rather difficult task of being an advocate for the remain voters. You went around the country. There were a bunch of experts who went around as the go would say, so called experts. Maybe you’re one of the so called experts people speak of.

Simon Hix:                              I was, yeah.

Misha Zelinsky:                  Tell us about that.

Simon Hix:                              So no, I was part of a group of about 14 academics, political scientists, economists, lawyers, historians, who were funded by the British Economic and Social Research Counsel, so the main funding of the social science body in the UK, to be experts. We were meant to be neutral. We weren’t advocates on one side or the other. We were meant to be able to, you know, media could call on us and we’d go on TV or the radio or go on public platforms in local communities to referee debates or to be someone there who could correct facts, this kind of stuff.

And it was modeled on what had happened during the Scottish referendum campaign. They had this program for the Scottish referendum campaign and the perception was that it worked really well. They’d had a bunch of academics who could come on and sort of neutralize the craziness of some of the claims people were making.

Misha Zelinsky:                  And the remain sort of came from behind in that situation to remind of that.

Simon Hix:                              Yeah, exactly. So, we’d go to different parts of the country and it was a real eye opener going to places. I remember going to Spalding in Lincolnshire. Lincolnshire, east coast of England, very agricultural community. Lots of new Polish and Lithuanian fruit pickers and agricultural labor going into that town.

We were called by the local newspaper, can we come for a town hall meeting on Brexit. Can they send some experts? So three or four of us went out there. Difficult place to get to in the middle of nowhere on the east coast of England. We went London to Peterborough, a bus and a train and anyway. It was hours together. Just a sense of how isolated this place is. You know Britain’s a small country, it’s a really isolated place out there.

And the local town is sort of boarded up and the only places open are these Polish shops and very flat agricultural land. And, you know, about 150 people show up at this town hall meeting and it’s about 80% pro-Brexit. And we’re standing on the platform and whatever we say, they ask questions, and whatever we say goes down like a lead balloon.

So, you know, one guy said, well why do you guys think Brexit will be bad for the British economy? And my economist friend says, well, you know, 50% of trades for the year, about 20% of our GDP, 20% of the whole size of our economy. If there’s a reduction in trade that’s a reduction in the size of our economy. And no matter how different people mold it in different ways, the estimate is it will be between 2 and 8% of our GDP. A reduction of between 2 and 8% of the size of our economy. And the guy said, that’s your fucking GDP not mine. What should I care?

My initial thought was well that’s a stupid thing to say but then I thought actually, no, that’s actually a really clever-

Misha Zelinsky:                  Wouldn’t change the economy of that town for brief-

Simon Hix:                              Really! And what he’s saying is, it’s been shit here for a long time, you guys are gonna take the hit for this.

And someone else said, I’m a farm laborer and since all these polls have been coming over, my wages have gone down every year for the past three years and I bet you lot have had rise haven’t you? And it went round like that.

And then someone else said, I’ve been waiting for a counsel house and it used to be a four month waiting list and now it’s a two year waiting list.

Misha Zelinsky:                  Because the immigrants.

Simon Hix:                              Yeah. And someone else said, you know, my daughter’s at one primary school and my younger son was gonna go to the same primary school but now there’s no places left in the school so I’ve got to drop my daughter off in this school drive ten minutes to drop my son off at this other school and then I’m late for work and that’s cause all this, and all the places are full of the bloody Lithuanian Polish kids!

And we’re on the platform going, this isn’t EU’s fault. This isn’t, you know, these are choices the British government has made about not investing in public services in areas where there’s been large immigrant populations and they’d say yeah but no one’s gonna listen to us. Doesn’t matter whether we vote Labour or whether we vote conservative, you guys are not gonna listen to us, but you’re bloody gonna listen to us if we vote for Brexit.

Misha Zelinsky:                  Interesting. So out of this experience did you think the Leave vote would succeed? We’re asking ourselves after the fact now obvious, but on the night did you, after that experience did you think it was gonna go that way?

Simon Hix:                              Yeah I did. So the opinion polls are really tight actually and most people weren’t trusting the polls. The opinion polls have been so wrong in the 2015 general election-

Misha Zelinsky:                  Yeah that’s right.

Simon Hix:                              Nobody-

Misha Zelinsky:                  They predicted Labour was gonna win.

Simon Hix:                              Yeah, exactly and so nobody was trusting them in 2016 and so everyone was saying the opinion polls are obviously wrong and so then they were making up their own version of what they thought was gonna happen. So most people thought the remain was gonna win easily, the betting markets, the currency markets, the prediction models, everyone-

Misha Zelinsky:                  For the record I also said it wouldn’t happen so…

Simon Hix:                              Yeah so I was doing some consulting in various different places and I was showing opinion poll data to say this is too close to call. It really could go either way. And my experience of going ’round to different parts of the country suggested that was the case. So it didn’t surprise me on the night.

Misha Zelinsky:                  Yeah, okay. That vote itself had kind of, Brexit kind of reset the map for politics and we’ve seen a lot of things happen since like Trump. What does it tell us more generally, you’re a political scientist, what does it tell us more generally about politics?

Simon Hix:                              Yeah, I think we are seeing a lot of advanced democracies, a realignment with politics. A realignment away from… for a long time politics in the post-war period was pretty simple straightforward. Lower income people voted for the left. Left wing parties wanted redistribution of wealth, higher taxes, creation of public services. Higher income people voted for people on the right. Right wing parties wanted to cut taxes, cut public spending, liberalize markets, and so on. And that was the sort of standard politics for most of democracies for much of the post second world war period.

We’re now facing the situation where it’s largely an education divide and an urban rural divide. It’s much more geography driving it than anything else. So you’ve got cities that are globalizing cities. They’re creating growth in financial services and creative industries, film, fashion, art, design, media, tourism, higher education, and so on.

The returns you get on education are massive so the economic divide is really driven by whether or not you’ve got a degree or not so getting university education massively increases your economic opportunities. And the economic opportunities gap between those who have university certification verse those who’ve not has grown massively and the economic opportunity gap has grown between cities that are growing, that is fast growing cities, and other cities in industrial decline and then aging rural populations.

So you’re getting a kind of anti-establishment feeling which is a coalition of these aging rural populations feeling like what is happening to my country? It’s not the country I remember or the country I grew up in.

Misha Zelinsky:                  Yeah. Sort of pathos nostalgia.

Simon Hix:                              Yeah, exactly, and often that’s around race and ethnicity and immigration and a backlash against gender equality. For example, interestingly, after the Gilets Jaunes demonstrations in France-

Misha Zelinsky:                  We’ll get to those.

Simon Hix:                              They set up a bunch of citizens assemblists out of the Gilets Jaunes and you know what the very first demand that came from those citizens assemblies was? Abolish gay marriage.

Misha Zelinsky:                  So that was them… interesting.

Simon Hix:                              Which is more kind of symbolic politics about the kind of rolling back, nostalgia, world’s moving too fast and so there’s that aging rural population.

And then you’ve got cities in industrial decline and there’s very angry, and sometimes this is young people, sometimes it’s older people, particularly men who used to be in industry, collapse in industry, decline in industry, and that coaliltion, that antiestablishment coaliltion is a new force that’s very much drawing support for populous parties and as far as they’re concerned mainstream centre parties are basically the same. They represent different postcodes of the capital city. So the Tory party, pre Theresa May, represented Notting Hill and Notting Hill set and the Labour party represent isn’t. And if in France the French socialists represent the Left bank and the French conservatives represent the Right bank of Paris. That’s what it felt like to the rest of the country.

Misha Zelinsky:                  And it’s just consensus around free trade, open markets, free movement of capital.

Simon Hix:                              Yeah, open liberal immigration policies-

Misha Zelinsky:                  And there’s some differences on the margin around how you sort of dice up the pie and that type of stuff?

Simon Hix:                              Yeah, exactly and whereas mainstream center right leans a bit more towards financial service interest and big business interest and the mainstream center left leans a bit more towards creatives industries and the new economy and higher education interest and this kind of stuff but neither of them really care about rural populations. Neither of them really care about cities in industrial decline.

Misha Zelinsky:                  It’s interesting that this sort of rural urban divide and the question of people being told what’s in their best interest and I think that’s interesting about the way that economists and people that are in the political game for the last 30 years are probably looked at the macro stories and look how good it is, right? But the thing about trade is it destroys and distributes unevenly.

Simon Hix:                              Trade and immigration. Both have distributional consequences. So in aggregate we know that trade is good for the economy in terms of increasing GDP, increasing opportunities, and so on. But you don’t look at what the local consequences of that are. So there’s loads of research now that looks at the China shock where you can locally, what has been the effect of globalization.

Misha Zelinsky:                  China between the WO in 2001.

Simon Hix:                              Yeah, exactly. David Autor is an american economist and a bunch of European political scientists, what they’ve done is for every region, for every local region, they’ve worked out what is the employment in each sector, what percentage employment is there in each sector in that region, and what is the exposure to global trade of that sector. And so you can work out what has been the globalization effect regionally. And what we know is that the bigger the globalization, the bigger the negative globalization effect regionally, the bigger the vote for populous parties.

Misha Zelinsky:                  Interesting, isn’t it.

Simon Hix:                              And the bigger the vote for Trump. The bigger the vote for Brexit in the UK and the bigger the vote for Le Pen in France, for the populous in Italy and so on and so on.

So that’s one. The other one is this distributional consequences of immigration. Again we know that immigration is great for the economy. It makes… new skills, new ideas, new resources, cheaper public goods, cheaper public services. On average immigrants our net contributors to the economy, they’re not recipients of money. The usual story.

Misha Zelinsky:                  All the facts.

Simon Hix:                              All the aggregate level facts. But increasingly what we know is that there’s local distributional consequences in two senses. One is an economic one, one’s a cultural.

The economic one is in certain sectors of the economy, wages have fallen dramatically as a result of immigration. In the UK for example, it’s agricultural labor and the building trades. Why? Because they’re cash.

Misha Zelinsky:                  Yep, hard to regulate.

Simon Hix:                              They’re cash-based economies. All the sectors where there’s a minimum wage and the minimum wage is enforced, immigration has had no effect on wages. But it’s had a huge effect on agricultural labor in the building trade.

Misha Zelinsky:                  Interesting.

Simon Hix:                              Everyone’s got a Polish plumber and everyone’s got a Lithuanian fruit picker.

Misha Zelinsky:                  And they’re rural areas as well.

Simon Hix:                              And they’re rural areas. That’s where there’s been real wage competition.

And the other one, then, is competition for public services and that’s usually disproportionate. Cities of where there’s immigration being sucked into cities, public services are being cranked out and a lot of these rural areas nobody’s thinking about increasing school capacity. Nobody’s thinking about building another classroom in a primary school or you’ve got to provide more surgery spaces in the local doctor surgery. Nobody’s thinking like that. So the local population feels the squeeze in public services.

And then, of course, there’s the cultural aspect. A lot of these places have never seen immigrants before and that takes time. That’s a legacy. We forget too quickly… So my grandmother grew up in Northwest London and where she grew up in Northwest London it was very white at that time and then it became very big Indian population immigration in the 1950s and 60s.

Misha Zelinsky:                  How quickly did it happen?

Simon Hix:                              It happened in the space of about a decade.

Misha Zelinsky:                  They say the speeds often effective, right?

Simon Hix:                              Yeah, the speed. But at that time there was really vehement… I remember my grandmother being very racist, you know. Ugh they’re all moving into, why are they moving into my neighborhood type thing. And now of course we’re in London and nobody thinks twice about it, right? So we forget very quickly our own recent experience of what it was like with being whites with new immigrants.

Misha Zelinsky:                  Oh it’s a similar story in Australia as well. So before we get off Brexit because I want to step into Europe but there’s a lot of talk about second vote. I’m quite nervous about the consequence of second vote because after everything that we’ve just covered about the anger and telling people what’s what, there’s a sense to me that you didn’t quite get it right and we’re gonna give you another shot at it and I would be very concerned, and I’m curious to get your take of it, seems to be very concerning to suddenly flip and be 52/48 remain. It’s almost like it’s been stolen from people.

Simon Hix:                              I absolutely agree with you. I mean I agree with you for two main reasons. One, the call for second referendum ignores, actually, the history of Britain’s relationship with the EU which is that we’ve always had a semi-detached relationship. We’ve always been reluctant members. We weren’t members of the single currency, we weren’t members of the Schengen border-free zone, we were always semi-detached.

Misha Zelinsky:                  We had a deal.

Simon Hix:                              You know, and sooner or later we were gonna have to make a choice as the process of European integration is moving forward. Sooner or later we’re going to have to make a choice. Are we inside it or are we outside. So it made sense to have a referendum on this and the referendum was going to make the decision so you can’t pretend that history is now fundamentally changed so now we really want to stay and we want to sign up to the whole thing. Of course we don’t. So that’s the first thing we’ve noticed.

The second thing is, you’re right, it’s incredibly condescending so I get annoyed with someone of my arch remainer friends who seem to think that going around and telling people you’re stupid and you’re a racist and you’ve made the wrong decision and you’re a xenophobe and you were bought by Russians. You think that’s gonna persuade people to change their mind?

Misha Zelinsky:                  Hasn’t really worked in human history so far.

Simon Hix:                              The third thing is it would get really, really nasty and I do really worry about what the consequence is. I’m genuinely worried about violence, political assassination even. I mean we had a murder in British politics, Jo Cox was murdered in the 2015 general election campaign by a radical right extremist. The Labour MP in the north of England. I wouldn’t be surprised if we have that kind of thing again. It’s not to say that we should be scared about, it’s more the, there’s a legitimate angle which is that this was an antiestablishment anti-elite vote. It’s very dangerous in democracies to fuel an antiestablishment anti-elite movement. That’s when you really can get very dangerous types of things happening and I don’t want to fuel that and I do think there was legitimate reasons for people to vote for this.

I think my experience of traveling around the country, people were not thinking about this lightly, people were massively mobilized. They thought about this very carefully. And a lot of people say, well they weren’t considering the economic interest. Well whenever people have elections and make choices in elections, there’s lots of things that go into their mind when they walk into the ballot box. For some people it’s symbolic, for some people it’s careful economical interest of their family or their personally, for some people it’s national identity. There’s lots of things that go into what influences why people put the x where they do on a ballot paper and so that’s no different in a referendum. Why would we think it should be any different in a referendum? And it’s completely legitimate.

Misha Zelinsky:                  Now, talking about that nationalism, and you’ve got another hat, you’re the chair, I believe, of Vote Watch. It’s a European project so you’re very, obviously, across European politics. Kind of want to get your take about how loudly are you about what we’re seeing other countries across, you know, Poland, Hungary, Turkey, not in Europe but peripheral to Europe, obviously, and now Italy. More and more, sort of right wing-

Simon Hix:                              France.

Misha Zelinsky:                  Well, yeah. Like you said, more of these National upsurge but not only in opposition. They’ve taken control of governments and dismantling democracies.

Simon Hix:                              That’s right. What we’re seeing it-

Misha Zelinsky:                  Is this 1929 to 39 all over again or is a bit more complex?

Simon Hix:                              Too early to tell in that sense. So it’s true that what we’ve seen is part of this realignment of politics, it’s the rise in support for these populous parties and the populous coalition is the same coalition we’ve been talking about behind Brexit.

And almost every country in Europe now has a populous movement of some kind. Some of them a bit more radical than others but no matter what country you talk about there’s a party where it’s… I don’t throw around populism lightly so what I mean by populism is a party that says that we represent the voice of the people against the establishment. And it’s very antiestablishment type view, very simplistic policy responses. A classic mainstream party moderate their promises because they know that there’s certain things that it’s difficult to deliver on and you can’t promise this and promise that. Where as populous have no constraints so the populous will say we’ll shut down immigration. Populous will say we’ll stop globalization.

Misha Zelinsky:                  Simple responses to complex problems.

Simon Hix:                              In Italy, the populous parties say we’re gonna have a flat tax and introduce universal basic income.

Misha Zelinsky:                  Yeah, increasing spending and lower taxes.

Simon Hix:                              Right.

Misha Zelinsky:                  Great plan if you can pull it off.

Simon Hix:                              It’s that kind of pub politics, I think of it, and it’s very attractive at the moment, particularly post economic crisis and we’re growing in equality, people saying, well what the hell. Let’s just try this. Let’s just go for these guys. And it’s a wakeup call for the establishment.

Misha Zelinsky:                  But once they get control of the-

Simon Hix:                              So here’s the real test. The real test is in ten years time when we look back, there’s two possible outcomes. One outcome is you get, you know, democracy is a safety valve. If there are deep divisions in society surely Democratic institutions and elections are vehicles through which these things get thrown up and then we as mainstream establishment, we have to address this stuff.

One version is mainstream parties respond, we come up with new policy responses, there’s big infrastructure investment, we try to address some of these regional and individual inequalities that’s developed, we try and think about how to create new sectors of the economy, try to think about what do we do to address these inequalities that have come out of globalization. How do we address issues of social integration of immigration. If those things get addressed then they’ll be a restabalization of politics.

Another alternative world is these populous come to power and instead of just addressing these things they start to dismantle democratic institutions.

Misha Zelinsky:                  And you’re seeing that in Poland.

Simon Hix:                              And they say we represent the will of the people and you get a narrative which is popular in Hungary which is I’m not a liberal democrat I’m a iliberal democrat because I represent the will of the people. The will of the people is the majority, why should you guys constrain what the people want? Why should you judges and you media and you other political parties, why should you constrain the will of the people?

Once you gauge that narrative that starts to get dangerously close to the types of politics we saw in the 1930s and so we don’t know yet how robust our institutions are to that because you’ve not seen it. These post-war institutions we’ve built, they’re pretty robust so far and they’re relatively new in centuries in Europe in Parliament in Hungary and that’s why I think the judiciary and the media are quite easy to be attacked. Italy is the test case. You’ve got the populists now in Italy. How robust are the Italian institutions to what will be? And Le Pen could win in France or Le Pen’s niece, she is the rising star.

Misha Zelinsky:                  Let’s talk about the French because I think, maybe it’s an arrogance of major Western countries that some of the Eastern European countries have been on the periphery and maybe they’ll never really develop democracies anyway and maybe they’re experiments, France is a serious economy, it’s a serious country, it’s a serious democratic history.

Simon Hix:                              Nuclear power, the rest of it.

Misha Zelinsky:                  Right. How worried are you about France? If France were to become a notably autocratic nationalist sort of nation, I mean that’s the European project almost over, right?

Simon Hix:                              It is over. Yeah. They were saying you can’t have France without Europe, you can’t have Europe without France.

Misha Zelinsky:                  Right.

Simon Hix:                              So Le Pen almost won. The Nationalists in France have been growing in support.

Misha Zelinsky:                  But doesn’t feel like they’re losing momentum.

Simon Hix:                              They’re not losing momentum, they’re gaining momentum. France is the epitome of the rotation of this politics. Macron represents the global elite, Le Pen represents the will of the people against the global elite. That’s the narrative.

Misha Zelinsky:                  And the concern I had when he came to power was that, didn’t strike me as the man for the times because the inequality story, the cultural disconnect story, he’s just want to double down on all the things that people are pissed off about.

Simon Hix:                              To be fair to him, France is a bit particular because France…

Misha Zelinsky:                  They always have this history of-

Simon Hix:                              Yeah, but not just that. The structure of the labor market in France is quite particular because they’ve got highly regulated markets and you have a whole insider outsider problem meaning that a lot of young people are priced out of jobs because highly regulated labor markets make it very difficult for companies to take on new people knowing they may not be able to keep them in place in 6 months or 12 months or 18 months. So you get very, very high youth unemployment in France and so that’s very different to… So a lot of young people actually were supporting Le Pen in this election.

So Macron in that sense was saying I want to liberalize the French economy in return for big infrastructure spending. In return for big spending on new technologies like digital environment, trying to shift the economy away to new technology so in a sense it wasn’t your classic doubling down of globalization it was more of a, we’re not gonna stop the world, we’re not gonna stop globalization, we’re not gonna save manufacturing in Europe. We need to think about a new economy. How are we gonna build this new economy. So in a sense, I saw his agenda of coming to power, his policy agenda and some of the people around him were really thinking creatively about how to think about what is going to be a new economy or a new society in a globalized world in an advanced democracy. That’s a step ahead and that’s exactly what I want mainstream politics to be thinking about doing.

Misha Zelinsky:                  Yeah, absolutely. He had a lot of hope-

Simon Hix:                              The problem then is he only managed to get the liberalization stuff passed without the other stuff so then it just looks like he becomes a baby Thatcher. It looks like he’s doing what Thatcher did in Britain in the 1980s. And it looks like, well, we’re going even more down that path and so then you get the Gilets Jaunes movement, you know, the yellow vest-

Misha Zelinsky:                  The yellow vest.

Simon Hix:                              And so these guys, again it’s an odd coaliltion, the bulk of the movement are rural small town suburban and rural areas, older voters, and small towns in decline, farmers, farm related producers, social conservatives, quite Catholic, and then a small wing are kind of angry, urban, militant, radical, left anarchists. They’re the guys smashing up the Arc de Triomphe and the shops in Paris but the bulk of the movement is this quite conservative movement so it’s a kind of…

Misha Zelinsky:                  People often get hijacked with movements.

Simon Hix:                              They do. And so the radical left has hijacked the movement but the movement itself is quite a socially conservative movement.

Misha Zelinsky:                  Interesting. And one thing we haven’t talked about, we’ve touched around it, but Russia. Every nationalist movement you look at is Putin’s not too far away from it. What’s his game here?

Simon Hix:                              Yeah so Putin is trying to metal. I don’t buy the Putin is driving this but I do buy that Putin is benefiting from all this and so if there’s anything that he can do that makes life difficult for the mainstream establishments so for example Brexit. The allegation is that there’s Russian money that got into the leave campaign and there’s Russian data hackers that were used to try and identify who to target with the leave campaign and so on and so on and so on. With Brexit-

Misha Zelinsky:                  When these votes are so tight though, it’s interesting.

Simon Hix:                              It could make a difference but lots of things could make a different.

Why does he want Brexit? So there’s this sort of macro level thing, anything that destabilizes western Europe is good for Russia-

Simon Hix:                              Yeah. But there’s a micro level thing which is that Britain was the one country at the table in EU that was really pushing to maintain sanctions against Russia, right? With Britain off the table he reckons he’s got much more chance of getting the EU to back down on some of its sanctions. So there’s some really very concrete short term interests related to this. And so he’s playing both of those games. There’s often very concrete interests related to gas, relating to sanctions… The sanctions are hurting and with Europe staying together and the European Establishment have really held together with sanctions and those sanctions really are hurting Russia. So he really wants to try and loosen that so this is the game he’s playing which is not just the big geo-political one. It’s really concretial to economic interests.

Misha Zelinsky:                  Yeah, because he’s got the foot on the throat with these sanctions.

Simon Hix:                              Absolutely.

Misha Zelinsky:                  Interesting. One thing I want to get your take on, and we’re coming to the end now and you’ve been very generous with your time but right wing populous. I mean there’s this anger and very sort febrile political environment but why is it that the right wing populous are winning and you’re not seeing… in the 30s you had the communists popping up, the socialists, and all these social democrats, FDR, they’re nowhere and this ethnonationalism, this right wing populism is winning everywhere.

Simon Hix:                              And it’s interesting-

Misha Zelinsky:                  And inequalities there, I mean it’s there in the data.

Simon Hix:                              Similar circumstances in Latin America with the left wing populous so great, big impact of globalization, big economic inequalities between globalizing cities and rural populations. I think it’s largely to do with the fact that these are often middle-aged or older voters that are losing from these changes and so it’s not necessarily younger voters. So apart from what I’ve just said about France, younger voters tend to be the ones to be educated, younger voters and they seem to be the ones to support more radical left ideas. Whereas older, these are more socially conservative voters. They already got their protected interest. They’ve already got, you know, state pensions. Often they’ve got houses and they’ve paid off these debts and so this is largely driven by social values that they don’t share and so national identity.

In fact, 1930s when there was a major economic downturn and we saw votes shifting mainly to the radical right rather than to the radical left. In fact, throughout history of democracies, there’s a nice paper by simple economists looking back over from 1918 to the present looking at major economic downturns. Major economic downturns tend to lead to swing votes to the radical right or to the left and that’s what we’ve seen over the last ten years in Europe.

Misha Zelinsky:                  Interesting.

Alright well one last question I ask of all my guests and this might not wash so well with a Brit but with Australian audience-

Misha Zelinsky:                  After the last series, I’m not sure we’ve even won a game. We’ll need some sandpaper. Australian gets asked who they’d love to invite as internationals to their barbecue. So for international audience I’d say, which three Australians would you invite to a barbecue. Alive or dead, I’ll give you that.

Simon Hix:                              Oh boy, that’s a good question. Well Misha, he’d have to be one of them.

Misha Zelinsky:                  No, no, you can’t count me. Even thought the show’s called Diplomates and I know you as a mate now, obviously, so I couldn’t tap into the cult of Simon Hix online but…

Simon Hix:                              That’s a good- I’ve never thought about that.

Pauline Hanson.

Misha Zelinsky:                  As a political scientist, no doubt on that one.

Simon Hix:                              As a political scientist.

Misha Zelinsky:                  Well, okay, she can make the fish and chips.

Simon Hix:                              Yeah, I think it’d be interesting to know what makes her tick.

Misha Zelinsky:                  Yeah.

Simon Hix:                              Rudd, I think.

Misha Zelinsky:                  Kevin Rudd.

Simon Hix:                              This is getting interesting.

Misha Zelinsky:                  And the third one would probably… the swimmer with the huge feet. What was his name?

Simon Hix:                              Ian Thorpe.

Misha Zelinsky:                  Thorpe.

Simon Hix:                              So Simon Hix, Ian Thorpe, Kevin Rudd, and Pauline Hanson. Wow. I mean, people like trying to get Kevin to stop speaking but… that would be an interesting barbecue to say the very, very least.

Simon Hix, thank you so much for joining the podcast and it’s been fantastic and I look forward to chatting in the future.

Misha Zelinsky:                  Have a safe trip home, cheers. Bye.

 

 

Steve Glickman

Steve Glickman, the CEO and founder of Develop Advisors, is the world’s foremost expert on Economic Opportunity Zones. Steve joined Misha to give his predictions on the mid-term and 2020 elections, discuss solutions to geographic inequality, dissect the problems with a UBI and explain what’s gone wrong with global trade. Steve also gives tips on how to overcome partisanship in the legislative process.  It’s a BIG chat.  

A young gun in US politics, Steve was an advisor in the Obama Whitehouse and started his career as Special Assistant US Attorney. 

While at the Economic Innovation Group  – which he co-founded with Sean Parker – Steve developed the radical ‘Economic Opportunity Zones’ that are tasked with kickstarting capital investment and job creation in areas of the US suffering from high inequality and low capital investment. He is now bringing EOZ’s to life via his new investment firm, Develop Advisors. 

It’s a great and really fun chat. For policy nerds, there’s a really fascinating critique of the Universal Basic Income.

We need this guy to run for President some day (no pressure, Steve).

 

 

EPISODE 2 FULL TRANSCRIPT: 

Misha Zelinsky:                  Steve Glickman, how are you? Welcome.

Steve Glickman:                 Thanks for having me.

Misha Zelinsky:                  I should say that it’s in the evening in DC right now. Is that right?

Steve Glickman:                 Yeah. It’s 5:40. So all the government bureaucrats have already gone home

Misha Zelinsky:                  Very good. So I should say we’re obviously recording this across time zone. So it’s early in the morning here in Australia. But yeah, the wonders of technology bringing people together. So Steve, I was actually just going through your CV before. You and I first met through the American-Australian leadership dialogue where youth delegates. I’m a little bit surprised at the depth of your CV. Are you sure that you actually youth delegate or are you fudging things a little?

Steve Glickman:                 Well, you know, I make up most of the stuff that I do or talk about on the spot so you can pretty much assume it’s all one big running lie.

Misha Zelinsky:                  Well, just on that. So your main role, and we’ll talk a little bit about your broad career as we go along. But your main role is that to you are the co founder and CEO of the Economic Innovation Group. I was hoping that you might be able to tell us a little bit about what the EIG is and how and why it was set up.

Steve Glickman:                 Yeah. I think a good way to think about us is we’re social entrepreneurs. So we are trying to find a new pathway at addressing big economic challenges in a very crowded marketplace of think tanks and political organizations, and other groups that are trying to make their mark in DC. We were founded in early 2013. It was really, much of this was the brainchild of Sean Parker, who as you know is the co-founder of Napster and the first president of Facebook. And when he and I got connected at the end of 2012, early 2013, he was really focused on how you leverage the private sector to solve big economic challenges. Particularly, how you drive more private sector investors to a bigger part of country.

Steve Glickman:                 And that was really our DNA from the beginning was could we get a group of Democrats and Republicans, conservative and liberal thinkers, private sector, public sector actors to really come together around the notion that we could create a new incentive system to change the flow of capital markets in the US?

Steve Glickman:                 And as we started unpacking that problem and that approach, we found ourselves doing a lot of research around what drives inequality on a community level around America, and what the depths are of that inequality and what the impact is. And the more and more we unraveled that onion, the more questions we had and the more we realized that we think we had stumbled upon maybe the most important economic policy challenge that wasn’t really being addressed by either political party and that gave us a pretty strong feeling that we were onto something meaningful. So we’re really intensely focused just around that problem, and bringing in a whole new set of actors from the private sector to solve it.

Misha Zelinsky:                  Yeah, that’s really interesting. So we’ll talk a little bit about the bipartisan part of the EIG. But I’m just curious. I mean, I think a lot of people talking about inequality. I think what’s interesting about what the EIG does is that you are very focused on can I say, in an American sort of way, is that it’s focused on capital investment and enterprise. I was wondering if you could maybe just unpack that a little around how you see the role of enterprise in lifting people up out of inequality and rather than it being perhaps a government led solution.

Steve Glickman:                 I think our approach to it is that it involves both, but that the government at all levels. Whether it’s the federal government or local governments in the US, which is unique to the US structure that we’ve got that federalist system. That a lot of the programs initiated by government having worked very well, but even more importantly, it’s both politically, financially, they’re broke. There’s just no capital based on the changes in our tax system and the changes in the political acceptability of big government programs to do a lot more out of the public sector. And some of that’s just a factor of the economy and our debt, and the fact that between social security and Medicare, and defense spending, and payments of the debt, there’s just not a lot of additional capital to go around unless you hike up taxes.

Steve Glickman:                 And certainly in America, the political trends are in the opposite direction where you’ve been lowering taxes, or have had pretty low taxes for 30 or 40 years. So if you, go ahead.

Misha Zelinsky:                  Sorry, keep going.

Steve Glickman:                 So if you’re gonna solve the problem of how you create more economic growth, it costs money from somewhere. And the private sector is to contrast to all those trends in the public sector has never been wealthier, more profitable. The stock market’s never been higher than ever before. So clearly there’s a lot of capital that’s resting there. From our standpoint, the capital markets aren’t broke, they’re just broken. And they’re not working in the way that they could or should work. And if you’re not driving more capital places, you’re not ultimately creating more businesses places. And if you’re not creating more businesses places, there’s no other way to get jobs. So we subscribe to the notion that to change economies, it starts with the ground up. You have to create local, homegrown businesses and you can’t do that without capital.

Misha Zelinsky:                  Now, that’s really interesting. And I think you talked a lot about tax cuts there. And tax cuts at the moment, corporate tax cuts are on the agenda in Australia in a very contentious. There’s a lot of argument from both sides of politics. I think what was interesting, obviously those are major tax cut I’m brought in by the Trump administration and the republican congress. But what was within that was a small piece of a very innovative policy that the EIG championed. I was wondering if you could maybe tell us a little bit about the role that the tax cuts have played in helping the EIG actually get some rubber on the road in terms of things you just talked about.

Steve Glickman:                 Well, so the program you’re talking about is called opportunity zones. And let me separate it out a little bit from the overall tax reform package. It was a vehicle to make a certain set of tax changes, but I think it’s a little bit different in the tenure of what you see from many other parts of that tax reform package. It’s designed to do something that the US tax code has done for a long time, which is if you want to incentivize certain types of behavior, and in our case it was incentivizing moving private capital to low income parts of the country. The tax code is the most important and most powerful, most systemic way to do that. And of course we do that in the US to stimulate a charitable contributions. We do it to stimulate people buy houses, we do it to stimulate companies to make investments in research and development. We do it to stimulate the clean energy economy.

Steve Glickman:                 So it makes total sense and if you think, and we do think that community level inequality using most important problem to solve and there’s lots of capital in the private sector. Let’s utilize the tax code to systemically change the flows of that capital. And that’s basically what the opportunity zone program does. It’s essentially a deal between the federal government and private investors that we as the federal government will give you some level of tax forgiveness if you’re willing to make longterm and economically productive private investments in communities that are cut off from capital markets.

Steve Glickman:                 The program is obviously more complicated than that and we can get into whatever level of details you want, but at the end of the day, that’s what it’s about. It’s about getting capital off the sidelines. By our calculation there’s about 6 trillion with a T, $6 trillion in unrealized passive capital gains sitting in the economy. that’s in the stock market, in the real estate market that has been booming for at least a decade now. And if that money can be funneled to distressed communities around the US, there’s a pretty powerful tax incentive attached to it and we think it will move markets, it’ll change the way the market works.

Misha Zelinsky:                  That’s really interesting. So yeah, obviously taxes. It controls the flow of money. You’ve talked a lot about the role of capital in these distressed communities. I know the EIG talks a lot about the geographic role of inequality. I’m just wondering about the role. How do you see the role of responsible business in addressing inequality? And obviously we want to see capital investment in distressed communities creating jobs, but what do you think, what’s the role of the business community in addressing wage inequality and lifting up people and making sure that we don’t have a situation where you have people working one job or multiple jobs, and being unable to sustain themselves?

Steve Glickman:                 There’s no doubt that how stagnant wages have been an America is a big source of inequality on a number of different levels. And this was one of the stories of the recession and the recovery was that we gained back all of our high wage jobs. We gained back way more than we lost in terms of low wage jobs, and we didn’t gain back those middle wage jobs. And a big reason for that is the industries that really never came back were a lot of those middle wage industries like manufacturing. Now a lot of thinkers and policymakers in both parties understand that. But then your solution set gets all over the place and a lot of it has been focused for years on well, if we want to bring back those type of jobs, we have to bring back those sectors, and that’s not our perspective.

Steve Glickman:                 It’s manufacturing has fundamentally changed. But those communities that were manufacturing communities need similar quality jobs to replace it. And jobs that fundamentally don’t require a college education. On the democratic side, you hear a lot of talk about how everyone should go to college and that’s just not really a practical solution at least in the US. So you’ve really got to create new business activity in order to change that. And listen, I don’t think you’re going to be able to get there by forcing the corporations to do that, at least not in traditional ways. There is a big competitiveness problem in the US economy. It is much harder for new businesses to start and grow. We’re on this huge 40 year decline in our ability to create. So there’s this myth that the US is this entrepreneurial economy, and of course in some ways we’re more entrepreneurial than many other places around the country. But that edge that the US has is rapidly declining, and in part that’s because we’re creating businesses in such a smaller number of places around the US.

Steve Glickman:                 So again, we think it’s a homegrown problem, and that there are entrepreneurs everywhere. And the way to get at solving that problem is by getting more and more of those entrepreneurs capital. Let me give you one quick stat. If you look at the venture capital industry which is the source of much of the high growth entrepreneurship in the US, nearly 80 percent of that capital is invested in only three states. So three out of the 50 states, Massachusetts, New York, and California get nearly 80 percent of the capital. And that’s true across many other parts of our capital markets. Including how banks lend and where banks are located around the US. So this is a big problem to unravel and we think it starts with how capital flows.

Misha Zelinsky:                  That’s really interesting, and I think it gives us an opportunity to talk a little bit about this geographic inequality, these distressed communities. It’s been discussed a lot and I’m curious to hear your take on it as someone who’s a Democrat and perhaps has a slightly a nuanced view of the election. The geographic role that inequality pied in the US selection, you of course grew up in Michigan. That’s a state that’s blue state gone red, so to speak. But I think that what’s interesting is you talked about there was the loss of jobs, Trump zeroed in on very acutely around this loss of jobs and the promise to bring back steel jobs mining jobs in those distressed communities. And whether it was true or not, it certainly resonated. So I’m curious just a little bit about the geographic role that inequality played in the US election.

Steve Glickman:                 So I think there’s a couple answers to that. One is let’s take a look at how people evaluate the economy. So in a time when the national economy was booming, our unemployment rate was close to four percent and the stock market had been growing for this long bull market. That national level economy was just not resonating to people because frankly, it’s just not how people evaluate the economy. They evaluate the comedy based on what they see happening in their community. And people are really good at evaluating how well their local economies are doing. And as it turns out, a lot of national policy makers and the media don’t fully understand what the country looks like outside of big markets like New York, LA, San Francisco, and DC because that’s where they spend most of their time.

Steve Glickman:                 It looks much different than the rest of America. We for instance looked at swing districts, at places that voted for Barack Obama twice and then voted for Donald trump. And those are places it’d be hard to say that the difference in the election was based on race because they elected for an African American president twice. And much more likely, the driving force there was the economy. And if you look at those counties, and there were 200 plus of them that voted for Barack Obama twice and then voted for Donald trump. The big tying factor for all of them is that three quarters of them lost businesses during the recovery years and lost jobs on net during the recovery years. So while our national unemployment rate is going lower, in those places unemployment rate is not being affected at all. In fact, they’re losing jobs.

Steve Glickman:                 And one of the stories about the economy that people don’t fully understand even now is when we talk about the recovery, we’re talking about a recovery that really disproportionately benefited the top 10 or 20 percent of the country, that the rest of country kind of stayed even. And that the bottom 20 percent of American communities lost jobs and even a greater trajectory than they did before the recession. And in a lot of those places, it was totally rational to say the status quo establishment economic thinking from both parties isn’t working for us. It’s not changing our trajectory. So we’re going to vote for something different. And, one of the things they’re voting for is how to maintain their quality of life, maintain a community where their kids can stay and achieve the American dream.

Steve Glickman:                 And we know the reality is changing in those communities. The tragic thing is I don’t think either party is really giving folks a viable solution for how they change their trajectory. Because a lot of these jobs aren’t coming back. And a lot of the problems for their current economic situation isn’t as simple as trade, or immigration, or any number of issues that have become the threshold issues in our debate. It’s really a much more complicated, long term structural change of communities that haven’t kept up with the how fast the economy’s been changing and having diversified the industries and the opportunities they’ve given to people who have lived in a lot of these cities.

Misha Zelinsky:                  That’s the challenge, isn’t it for progressives I think is that the difficulties of the problem cannot be explained in neat, make America great again, type sloganeering. So that is always the challenge. But what’s interesting as well as you talked a lot about there about the main economies LA, New York, San Francisco. But what’s interesting as well is this so called red state blue state thing where people look at them on a headline map. But what’s actually interesting, if you dig into a blue state, you’ll see that it’s actually perhaps a blue dot or a blue island on a red ocean. And maybe just talk a little bit about the differences between outcomes and metropolitan people versus outcomes in those sorts of non metro rural areas. And the tensions that are building there.

Steve Glickman:                 And I think the problem is even a little more complicated than that. So listen, the geographies that do really well in our economy typically are the suburbs. And the suburbs can be republican or democrat. Some studies going to do really well and some cities tend not to do well. And a lot of those cities, you have large population groups, particularly minority population groups that are doing much worse than whites even in rural areas. But ultimately, I think this comes down to a trajectory. If you’re living in an African American or Hispanic community, even one that’s on absolute terms not doing as well as a lot of white communities, you’re probably doing better than your parents or your grandparents did. And that’s not just an economic issue. That’s also a social justice, civil rights status that have improved for many, many millions of Americans despite a whole set of current challenges.

Steve Glickman:                 If you’re in the white working class community and a lot of those are small town and rural America, your trajectory has gone the opposite direction. You’ve lost. Particularly if you’re in a manufacturing community, you’ve lost those industries. You’ve lost those quality of jobs. You’ve lost your main street. It’s been replaced by a minimum wage jobs. Whether it’s working for really big companies or for distributors or call centers, or whatever is left. And the quality is just different. There are rural communities and small towns in America that are doing great, but disproportionately the parts of the country that are doing the best are cities that are connected to global markets, connected to immigrant communities, and connected to the digital economy. And those are places like you mentioned, like New York and DC and San Francisco and LA, and also other towns that are, cities that are taking advantage of it. In the middle of the country, like Denver and Austin. And Minneapolis and other communities.

Steve Glickman:                 But those are the exceptions. And so the reality is this is not a rural versus urban issue. There’s just huge amounts of distress in both communities, and it’s not even a black versus white issue. But a lot of this has to do with trajectory. And, if you see yourself going the wrong direction, if you see your kids have less opportunities than you do, it makes people angry. And rightfully so. And I think at a starting point, and this goes back to our conversation around Trump, people want to be seen. They want to know that you understand their problem, and how their problem is unique and different because of where they live. And I think to Trump’s credit, he understood it and was able to articulate it. And whether or not you have a good solution for it or not, more politicians on both sides have to articulate that as the biggest problem we need to solve with this country.

Misha Zelinsky:                  I think that’s interesting. And you’ve talked a bit about Trump, but I think what’s interesting and puzzling to a lot of Australians is that you had people that voted for Obama. We had eight years of Obama, and then suddenly those very same people turned around and voted for Trump someone that not only was the antithesis of Obama, but was the leader of the birther movement. So it is quite puzzling from an Australian point of view. But I’d be curious to get your views as someone who worked in the Obama administration in an economic portfolio. Could the Obama administration done more for people, in terms of making sure that those communities weren’t so left behind in the recovery? Because I think Obama rightly put a lot of focus on saving Detroit with the auto bailout and focused very heavily on making sure that those working class jobs were not lost. But should the Obama administration done more and should the Democratic Party have detected this problem that was out there?

Steve Glickman:                 So the short answer is yes. I mean clearly, the Obama administration should have done more. I would separate a little bit the first term from the second term and not just because I served in the first term and not the second.

Steve Glickman:                 But I really think in the first term, the big focus was on the economic infrastructure of both America and the world. Which as you probably remember was teetering. And even right coming out of the recession, people were extremely nervous. Not just about the US, but Europe was going to collapse. That Italy and Spain and Greece, were going to default. And that meant the end of the EU and a new global recession and we would have all been screwed. And so that sucked up a lot of the bandwidth in the first term all the way through. And the bailout and TARP and the stimulus package, and the auto rescue in Detroit. And I’m pretty proud of the role I think the president played in, not just in America but globally in stabilizing the economy.

Steve Glickman:                 In the second term, I think we could’ve done a lot more. In part, we didn’t have as much political capital as we had in the first term for sure. And we didn’t have congress anymore. And that makes it difficult to do real big meaningful things including things that require for instance, changes to the tax code, which you need an act of Congress. Congress controls really all the spending in the US political structure and they were openly at war with the president and vice versa. So, the White House was really limited to what it could do through executive order, which is a much smaller set of authorities then you can do through law. So I think a lot of bridges had been burned by then, and all that political capital had really been used on creating health reform and creating universal access to healthcare, which I think is part of the problem you’re talking about.

Steve Glickman:                 But this is a problem that we could have focused more in on in the second, could have done more about. It’s also a really longterm problem. So the recession was not a turning point for most of these communities except in degree of distress. Most of these places where it had been distressed for at least 10 years before the recession and probably decades beforehand. Detroit hit its peak in the 1950s where it was one of the wealthiest economies in the country and had been in a downward slide as the US lost manufacturing shares to other world economies. And that’s just the way the economy works. So I do think the White House has some blame and the administration has some blame. But at the end of the day, this is as much an issue about local leadership as it is about federal leadership. And there are certain places now that are just well much better prepared to take advantage of this economy than others.

Steve Glickman:                 And once they got lazy and passive, and decided they were gonna hope and pray for another company or another manufacturing plant to take the place of the last one they lost instead of how do we take advantage of this new tech enabled economy and use our infrastructure of universities, I mean don’t forget, places like Michigan and Ohio and Pennsylvania have had world famous engineering research universities. University of Michigan, Carnegie Mellon, Ohio State, and so you have the raw firepower to take advantage of the new economy. But it requires a local leadership and local vision to get there. And I think too few places had that until the last couple years or so.

Misha Zelinsky:                  That’s really interesting. And I think you’ve touched a little bit on trade and touched a little bit on the effects of job replacement in communities where you’ve seen perhaps a steelworks shut and not be replaced with anything. One of the things I’m very fond of, and we certainly see similar things in Australia. I certainly see that in my role in the Australian Worker’s Union. One of the things I always say is that trade is good, but fundamentally trade destroys and distributes unevenly. And I think we’ve certainly seen it in the US, but I’m curious at Trump has been putting forward a very muscular focus on trade. He sees trade in a binary sense where a trade balance if it’s negative, the US is losing. And if it’s positive, the US is winning, he sees it in a zero sum manner. Just curious how do progressives grapple with this question of trade which can hurt people, and how do you make sure communities aren’t left behind in the process?

Steve Glickman:                 So there’s no doubt that trade, as a lot of people will say, the benefits of trade are dispersed pretty widely and the impact of trade and the challenges with trade tend to be very concentrated. And that’s certainly the case in the US economy. The economies that were most dominant by manufacturing, not necessarily most dominated by trade because the trade rich, trade dependent economies, some of them are booming. And a lot of the places we mentioned like Seattle and Los Angeles and New York, which are big hubs of trade are doing really well. But if you’re a dominant sector and is manufacturing and you don’t have a diversified economy, than the impact of trade can be huge. And one, as the Democratic Party or either party. I think we need to start by doing a better job giving communities the tools that they need to adapt.

Steve Glickman:                 Some of that is capital and how they access capital so they can build new industries. Some of it is how they retrain workers. We have a terrible and a terribly outdated worker retraining system in the US. It requires you to lose your job. It retrains you into sectors that aren’t producing jobs. It’s both inefficient and ineffective for people. And this is really a place where the private sector can and should play a huge role. If you’re not creating a workforce training system where the private sector is at the table to talk about where their hiring needs are and how government can offload some of that training with the guarantee or the commitment that private sector interview and hire people coming out of these programs, until that works better it’s really hard to solve this problem. But this conversation has been one that progressives have been good or even better at talking about for a long time.

Steve Glickman:                 So if you look at the height of progressivism, you’re really talking about the thirties, forties, fifties, sixties, even going into the seventies. So from like FDR through Lyndon Johnson where we had massive policies around retraining, around settling the west. And I think just as importantly and something that the Democratic Party is starting to talk about more around competition and corporate consolidation. So we really have the most consolidated and economy in the US we’ve had since the depression, since the 1920s and thirties where a smaller number of big companies control a bigger part of our economy. And that leads to a lot of this inequality and wage suppression and lack of investment, which we’re all seeing. Because workers and communities are less able to compete. And if you look at where airline hubs have gone from when you’ve gone from having 10 airlines to having four airlines. Or where banks are located. Bank of America shut down 10,000 of their branches over the last 10 years. And community banks are growing at a slower rate than ever, which means small business lending in this country is basically plateaued at a 20 year low.

Steve Glickman:                 So it matters what the private sector is made up of, not just what they do. And if they’re made up of lots more of, many more companies that are growing and more dispersed as opposed to a few really big companies, it makes a big difference in the economy. And so this question around how you create a more competitive economy in the US is really important. And Democrats used to talk about this all the time, and we really stopped talking about it in the last 20 or 30 years.

Misha Zelinsky:                  It’s interesting. It’s interesting, the concept of competition. It’s a bit of an anathema sometimes to those on the progressive side of politics, but competition is inherently good for the economy. It’s also good for consumers, which fundamentally the people that we seek to stand up for which are families, people buying things. And you want to see competition in wages, making sure that wages are going up and competing for labor, but also that you want to see competition in the cost of goods and reducing the cost of living for people. So it is interesting the level of concentration, but also what you’re seeing increasingly is a global phenomenon. We certainly see it here in Australia with many US firms where it’s winner takes all markets. And, one of the things I’m curious actually if your take on this and I think perhaps I could already know your answer. But one of the solutions being advocated is universal basic income. If there’s no jobs and jobs that are being inherently more and more consolidated into mega firms and you’re seeing market’s up ended and people unable to work, that we should have a universal basic income, which is basic principle.

Misha Zelinsky:                  Everyone gets, no matter if you’re a billionaire or dirt poor, everyone gets a certain income and then off you go to try to do best from there. But I think that there are certainly some problems with that idea, but I’m curious about your take on that because I think fundamentally, the better outcome is you want to see a good job. If you lose a good job in a steelworks, a unionized job, it’s well paid that it’s replaced with another good job and it’s not that you’re on your own driving Uber and trying to make ends meet.

Steve Glickman:                 So I dislike almost everything about UBI. One I think it’s an American. We already really have a UBI through our social security system, and it’s just for people who can’t contribute to the economy. People who are disabled or a retired, or for reasons that are no fault of their own no longer working. And then it makes sense to have a massive safety net, one that’s growing with the way the economy’s changing, for people who are no longer contributing. But otherwise our system is premised on people working. And I believe people want to work and want quality jobs where they’re contributing to their economy and being, their wages reflect their contribution.

Misha Zelinsky:                  Well there’s a dignity in work as well, right?

Steve Glickman:                 Of course. But in UBI is like giving up. It’s a form of charity and saying we can’t solve this problem of how we create new businesses and new industries and train people with new skills. So we’re going to pay people, but we’re going to pay them a poverty level wage. And I believe even if we could afford it, which we couldn’t because you gotta think in the US, if you’re paying for 350 million people, but let’s assume half of those are workers, so 150 million workers and you’re paying them $15,000 a year, you’re talking about a program in the trillions of dollars a year. And the US doesn’t have that type of capital. It can’t afford that program. And even if it could afford that program, it would suck away from every other single domestic spending program we had. We’ have a UBI program, and a Pentagon, and social security and Medicare. And that’s all the economy could withstand. The US budget $4 billion dollars a year. You’re talking about this would be something like 40 or 50 percent of our budget.

Steve Glickman:                 So I don’t think it’s either politically or economically viable, which is why I don’t spend too much time thinking about it. But I think conceptually it’s also a broken. And we shouldn’t be giving up. On the Republican Party, I think as they see the economy particularly in the lens of this new republicanism, it’s very focused on how we separate ourselves from immigrants and our trading partners. And I think that’s a big mistake, and it’s particularly a big mistake in the context of immigration.

Steve Glickman:                 Immigrants, there are very few economic thinkers who would tell you that immigration is not a large net positive to any economy. These are people that want to be here, that want at work, that are disproportionately business owners and the creator of high growth businesses. Something like half of our venture backed businesses in the US, 50 percent are backed by immigrants or immigrant co-founders. So they’re a huge part of our economy. But on the democratic side, there’s this theory around the future of work that robots and artificial intelligence are taking over and there’s nothing we can do about it. So let’s just pay everyone, five or 10 or $15,000 a year. And to me that’s just as big of a cop out.

Misha Zelinsky:                  It’s technological determinism, so that we have no control over the technology that we can’t shape it to our way either, right?

Steve Glickman:                 Well first, yes. And there is no evidence of that. Our economic evidence shows a low productive, low wage, low unemployment economy. And if there were tons of robots and artificial intelligence, productivity will be super high. Wages would be higher and there’d be a lot less jobs because robots would be doing it. So that’s not the case right. Now that even if you thought that was the case 10 or 20 or 30 years from now, which I don’t subscribe to, the fatalistic way to your point that we look at this is sad. Because there are lots of things we should try. If we thought robots were going to take over the economy in 30 years, then the solution is let’s not give everyone charity so they’re making a poverty wage. The solution is how do we prepare more American communities and more American workers to take advantage of that technology enabled economy? We need more thinking about that, not more thinking about how we’re going to spend more money to spend our way out of this problem. At least in my view.

Misha Zelinsky:                  I subscribe to that view too. I don’t think the UBI, whilst it’s interesting, I think it’s under the assumption that there’s no work, and I don’t believe there will be no work. So I think it’s actually making sure that the work we have is well paid and people are skilled for it accordingly. But so I’m just curious. You touched on immigration there and the role that immigrants play. And I think any policy person would agree with you, but that’s certainly not the mood in the community globally. You’re seeing it in Europe, you’re seeing it in Australia, you’re seeing it in the United States, suddenly with Trump with his wall. How can progressives articulate a positive view of immigration and not purely on an identity basis, but on an economic basis?

Steve Glickman:                 Well listen. Fear and economic scarcity or the perception of economic scarcity drive bad policy decisions, and they drive anti-immigrant thinking for hundreds and hundreds of years.

Misha Zelinsky:                  This is not new. That’s important.

Steve Glickman:                 No. And I think for a lot of these issues, the question like for instance, the answer to trade is not making a better argument for trade. And the answer for immigration is not making a better argument for immigration. It’s ultimately solving that perception people have of economic scarcity and that they’re in decline. And so these are all first order questions. It starts with if you want to get those issues right, and we may get them wrong for the next four or five or six or seven or eight years. And it’s not because people are in my view, hateful or mean or irrational. It’s because they don’t see any other option. So I think we have to give people other options. We have to convince them that there’s a way they’re going to get skills and there’s gonna be new programs, new cooperation between the public and private sector around how we upscale people.

Steve Glickman:                 I think they have to see that investors are rebuilding a bigger part of this country because they buy the fact that there’s a future in more places than just a handful of cities around the country, and they have to see new businesses start in their backyard so the trend lines aren’t just Kmart and Target, and then came Walmart, and then came Amazon, and out went all the local businesses that thrive and grow in these economies.

Steve Glickman:                 And by the way, the notion that San Francisco and LA, and New York, and DC are better places because everyone’s crammed into them looking for opportunity and they have to pay outrageous amounts to buy condos. It costs over a million dollars to buy a one bedroom condo in San Francisco now, and they’re losing more people than they’re taking in because nobody wants to live there anymore, because it’s unlivable. The fact that that’s a better outcome even for those economies is crazy.

Steve Glickman:                 So this requires dramatic action. The market’s not going to work it out. People are not mobile. We have lower rates of mobility in the US than we’ve ever had before because people don’t have the connections, the skills, the capital they need to be able to move to places that have these industries. The only solution is to create more industries and more businesses in a bigger chunk of the country. And I think there’s plenty of interesting entrepreneurs and you, I think at this point earlier. We know there’s plenty of work because there’s plenty of problems to solve. Work is just a function of solving problems for other people. Whether it’s the problem of how you create stuff in mass or how you grow stuff in mass, or how you provide certain services to people. And most of those jobs you can trade away.

Steve Glickman:                 Our economy like the Australian economy is mostly a services economy. And those services are locally provided. They’re your restaurants and dry cleaners, and they’re your bars and your doctors, much of this stuff you get locally. So a lot of the economy is not going to change dramatically. We’re really talking about the parts of the economy that are globally connected, and if you just focus in on that part of the problem, there are solutions there. At least in the US, we have a huge infrastructure around our capital markets and our labor markets and it’s just working really efficiently, and we as a society and the government can fix that if we wanted to.

Misha Zelinsky:                  That’s a really interesting point. So earlier on, you touched on this concept of unamerican. I think as an Australian, I certainly understand what you mean by that and I think many people in the world would. What’s a lot of people asking at the moment is what is it that America stands for? And I know that’s a broad question, but we talked a little bit about immigration and Trump’s take on that. And, we talked a little bit about trade. The US, for many, many decades now since certainly since World War II is been the guarantor and the prorector and advocate of an open global system. Be it of immigration, be it of trade and has also added support that with its institutions. Now in recent times, the US is turning in on itself. So I’m curious about how does the US with these challenges that it has around inequality, around the negatives around trade and around the negatives around immigration and the political impacts of that is happening, and the political part is detecting that? But at the same time, the rest of the world, countries like Australia, other western liberal democracies are looking to the us to say how is it that the US can help underpin the challenges we’re seeing from China, from Russia, from other models. From non-US models. And how can the US juggle both its challenges at home but also help us friends abroad?

Steve Glickman:                 Well, listen. There’s no doubt we’re at an unprecedented point in our politics where leadership that our friends around the world who are used to seeing from the US is lacking, at least in terms of our role in the global economic stage. With that being said, nothing in my view so far has fundamentally changed. We’re still a part of an active participant in the WTO, the World Trade Organization. We still have, with some very small exceptions given the size of our economy, a very open market both for investment and portrayed. We still have a immigrant rich country, that takes in large numbers of people every year and it brings a large number of tourists here, and large number of people are educated around the world in US universities. So I think the tone and the rhetoric is certainly off in terms of where the US is traditionally lead.

Steve Glickman:                 I’m not sure anything has fundamentally changed yet in terms of how the American economy and the American immigration system fundamentally works. Now of course, some of it is starting to change. I think it’s an open question of whether Congress pushes back against that. Our system is, the president’s got a lot of authority, particularly around foreign policy issues, but very little unilateral authority around core economic issues. And that includes trade, taxes, and even immigration where the president’s powers are limited. So congress ultimately has to come along, and I think what you’re not seeing is an acceptance from either party, including the Republican Party that their norms have fundamentally changed around trade or even that our national consensus has changed around immigration yet. I wish we were letting in far more immigrants than we are now, and I wish we had not pulled out of the transpacific partnership, which I think would have put us on a much stronger footing to be closer allied to Australia and Japan, and Korea, and other countries in the region in dealing with China. That was a big I think self inflicted wound.

Misha Zelinsky:                  Let’s talk about TPP. Let’s just talk about TPP.

Steve Glickman:                 But I’m not sure how much has fundamentally changed in the US beyond that.

Misha Zelinsky:                  Yeah, because I think TPP is interesting because you talked about trade. And you said the US president has limited powers. But the TPP, I think there are a lot of problems with that deal. But nevertheless, the TPP was seen as the US as part of Obama’s pivot into Asia is about setting the rules of the game, setting the rules of the road. And the US 2016 election pulled, both parties away. I mean the Republicans got pulled away first through trump’s challenge internally, but then Hillary Clinton was also pulled to the left by a firstly Bernie sanders and then Trump himself who she was effectively crucified over NAFTA and the impact that NAFTA had rightly or wrongly at least in a perception sense on the communities we talked about earlier. So that’s I think one real world example, and China are filling I suppose the vacuum around TPP with their one belt, one road initiative, certainly in the Asian region. So I think there’s certainly already observable impacts from new us retreat from an open liberal system.

Steve Glickman:                 Yes. I mean you’re totally right. I wouldn’t buy too heavily into any of the campaign rhetoric, at least from Hillary Clinton’s camp around TPP. She was one of the architects of TPP when she was the secretary of state in the Obama administration. And if you look back at the history of trade agreements, it’s typically been democratic presidents who have done the heavy lifting on trade despite the stereotypes of the party. Bill Clinton got NAFTA done. I’m, Barack Obama did most of the heavy lifting around the TPP. Kennedy was really the initiator of the first big trade expansion in US history, and Roosevelt and Truman were big supporters of how you use economic diplomacy to solve big means here. I think what we got wrong in the TPP debate was that it’s fundamentally an economic agreement. It’s fundamentally a political agreement. I think the biggest, most important part about TPP was securing our place and our alliance within Asia and dealing with any number of issues that balanced powers in East Asia that would give us better footing from everything from North Korea to the South China Sea, to engaging with Russia and elsewhere.

Steve Glickman:                 And that should’ve been the debate we were really having because that’s where it has the biggest impact. It would have honestly marginal economic impact even though these are really big markets because we had agreements with most of these countries. The only one that we didn’t have a meaningful agreement with was Japan. And that’s where a lot of the tussling was at the end and it was around really small issues. Most of the tussling and these agreements, for instance, TPP happening around Ag. And the AG sector in the US is .5 percent of our GDP. 99.5 percent is something else. Manufacturing, services, natural resources. This is a really small part of the US economy and that’s not really what the agreement was about. It was about a new political order or at least preserving a political balance in Asia. And unfortunately we’re losing some of that.

Steve Glickman:                 What’s interesting is that the president’s in Singapore right now trying to create a new political packed with the Koreas, and we’ll see if that works and we’ll see whether his shoot from the hip model is effective. I’m not ruling it out. It’s not the only way to get there. But I do think when we take away the tools from our tool box, which trade is a big one of those tools, we hurt our standing around the world and thus hurt US security and foreign policy interests.

Misha Zelinsky:                  So you talked about China and the South China Sea. One of the things that Australia focuses a lot on is the role of China and trying to grapple with the economic underpinning relationship that we have with the Chinese, and also the challenge that China brings to the liberal world order, but also the challenges that it brings to our launches with the United States and other like minded countries, and they’ve been very city in the South China Sea.

Misha Zelinsky:                  So there is a lot of nervousness around the US’s continued role as a strategic guarantor of freedom of navigation in South China Sea. But also, do you see that the US is focused enough on the challenge that China has brought? The US tends to be at its best when it’s challenged. Much like in the Cold War, but also with the rise of Japan. And do you see that it might actually bring the best out of the US in terms of raising its own standards, but also reaching out to friends around the world?

Steve Glickman:                 Well, China is the most complicated national security foreign policy issue the US has to deal with. And we have a really complex, multifaceted conversation with China that’s ongoing and has been ongoing for years. However, I think 2018 is not the 1940s and 50s. I think that across the world, countries that have long relied on the US as a guarantor have to start taking care of their own backyard. And that’s both Europe and Asia. I think the Europeans have to step up and play a bigger role in world affairs. They’ve got the resources, they have the military technology and the military powers to do it. I think it’s the same thing in Asia. I think that Japan’s, the current construct that Japan is going to be taken care of by the US is one that’s been outdated over the course of 70 years, and that everyone needs to play a role in keeping up their own backyard.

Steve Glickman:                 The US is not the sole world power. It’s undoubtedly still be richest and most powerful country in the world, but that margin has decreased across a number of different factors. And that means other countries have to step up. And the US, listen. I have no doubt that over even the medium term, the US will know its allies from its friends and be there for its allies when push comes to shove. But it’s a lot easier if our allies have leverage in their own regions. I think frankly, not to preach to the choir here, but Australia has done a really good job of this. Australia’s emerged as a powerful force in Asia. It’s a tiny country, because it has stepped up, and stepped up in a lot places have where it’s had the US back where it didn’t really need to, in I think asserting its roll and influence. I’d like to see Japan step up in a similar way and I’d like to see Germany step up in a similar way in Europe. These are the two richest country in the world aside from the US and China, and they need to step up.

Misha Zelinsky:                  Yeah, I think that’s an interesting point. And I know the Japanese certainly are looking at amending their constitution. But I do think even from a leveraging resources standpoint, it’s important that every country unifies. Because people often look at it as though it’s a United States versus China, but when you actually look at it, if you add the liberal democracies. You add Europe, you add the US, you add the UK, now Australia and other countries. You put those together, the GDP between those countries is extraordinarily huge. And you can certainly leverage that in a number of strategic ways, further the projection of a broader liberal order.

Misha Zelinsky:                  But I just want to take it back to domestic politics. You are, as I said earlier, a senior figure in the Democratic Party. And you’re also based in Chicago, which is endlessly fascinating. From a political standpoint, it’s obviously the political home of Barack Obama. I’m curious, you didn’t grow up there, but you’re now in there. So maybe you could give us some insights as to how you ended up in Chicago from a political standpoint, and we’ll talk a little bit about the midterms as well.

Steve Glickman:                 So two small corrections. One, very few people would describe me as a senior figure in the Democratic Party.

Misha Zelinsky:                  I’m being generous mate.

Steve Glickman:                 And two, I don’t live in Chicago. I live in Washington DC.

Misha Zelinsky:                  Oh yes you do. But you are Chicago Bears, Cubs fan?

Steve Glickman:                 I do. My dad and my grand father grew up in Chicago, so spent a lot of time there growing up and a big Chicago cubs fans.

Misha Zelinsky:                  Someone needs to do better research for me.

Steve Glickman:                 No, I chalk it up to the time zone change. That’s probably what’s contributing to this.

Misha Zelinsky:                  That’s right. So your family is from Chicago. That’s right, isn’t it? And that is a very democratic political city.

Steve Glickman:                 Yeah, although every city is a Democratic city these days for the most part. But yeah, there are these very storied democratic roots in the, in the city of Chicago.

Steve Glickman:                 Listen, I think that there’s this, what’s I think interesting to me now is there’s been this incredible comeback story of the role of cities as almost replacements from actors on the federal level. There’s lots of ways you’re seeing this in ways that are kind of surprising, if you look at climate change and the pact Eric Garcetti, the mayor of Los Angeles has pulled together by getting a large contingency of mayors to subscribe to certain climate change goals. Even with us pulling out of the Paris Accords. Or whether it’s the role cities are playing in creating new economic future for their citizens without relying on the federal government to step up and do anything dramatic. The most interesting I think politics right now are city level politics. And some of these cities, their economies are so large, whether it’s LA, New York, Chicago, and elsewhere. That they rival many countries around the world, so they’re starting to pursue their own trade missions, and starting to pursue their own commercial diplomacy around the world.

Steve Glickman:                 And so I think those are really fascinating trends of the rise of cities around the world, and I wonder whether they’ll start to displace the role of federal governments everywhere when there’s more interesting things happening in the city level than on a national level.

Misha Zelinsky:                  And so just coming up to the midterms and a lot of attention on the elections. A lot going on. It will be very important, at least to Trump’s presidency, whether or not the Democrats can secure either of the houses. How do you see that probably playing out?

Steve Glickman:                 So I think as is typical in lots of midterm elections, the opposition party does really well. And I expect Democrats in 2018 certainly in the house. There’s a much more challenging playing field in the Senate in 2018 because Democrats are defending so many seats in the Senate. But I expect us to do very well in the house. I think Democrats will take over leadership of the house, and I think there’s a lot of signals you’re getting from existing members of Congress, including in the Republican Party where you see a number of senior retirements among Republicans in the house. Which is a pretty good signal that they don’t have a strong feeling they’re going to hold onto power next year. Now with that being said, being in control of one house of Congress only gives you so much when the presidency is the other party and the Senate is the other party, which I think is like most likely to be the case. Although the Democrats have a fighting shot to take over the Senate. We’re only down two seats. 49 seats are held by Democrats in the Senate and 51 are held by Republicans.

Steve Glickman:                 But it will make a difference in at least slowing down the agenda that President Trump has in the White House because he’ll be forced to work with Democrats. I think it might be a very interesting paradigm though, because I think President Trump has shown that he’s willing to work with Democrats and Republicans when the circumstances are right. And so I wonder if he’s going to have some issues he can work on with a democratic house.

Steve Glickman:                 I think the other big looming question is whether a democratic house moves forward to impeach the president, which they can do with-

Misha Zelinsky:                  I’m curious to ask you about that because you’re a former trial attorney at the Department of Justice, so it’d be remiss of me not to ask you on the Trump Russia investigation, how you see that playing out.

Steve Glickman:                 Yeah. And there’s also an investigator for congress. I investigated the wars in Iraq and Afghanistan. And so a sense for how that process works. So all democrats would need is a majority vote in the house to impeach the president. And they should I think have the numbers to do that if everyone voted that way, I’m not sure everyone would. I think right now, I think the grounds on which to impeach the president are pretty late. I think that there would be some unintended consequences of this creating some sympathy for the White House and a distraction for an agenda the Democrats may want to start to lay out going into the 2020 presidential election. And I don’t think it’s likely to result in the president being removed from office because Democrats would need two thirds of the Senate, which is likely to be controlled by Republican to be pretty close to 50/50.

Steve Glickman:                 And so they would need a number of Republican votes. Unless there’s a smoking gun that comes out of the Bob Mueller investigation of the Trump campaign, and their connections with Russia which at least I’ve not seen or heard yet. I don’t think that’s very likely to be successful. And I’m not even sure whether that vote will be taken in the house because it comes with a lot of political risk. So I think the president is likely to serve out his term and I think there’s likely to be a Democrat who’s speaker of the house. And that brings us to 2020, which I image you’re curious about as well.

Misha Zelinsky:                  Yeah you’re well ahead of me mate. You’re just naturally guiding yourself to the questions. But so 2020, you’ve talked a lot about I think a bit of a different democratic agenda for certainly in respect to the campaign that the Democrats ran in 2016. So I’d be curious to see what you think are some of the lead candidates are to take on Trump in 2020 in the assumption that he’s there, and then who you might favor?

Steve Glickman:                 So I’ll answer both those questions maybe a little differently than how you asked them. One, let me just talk about the context now. So if you ask voters, and I’ve heard this pretty recently from very experienced public opinion researchers who have looked at how voters view the Democratic Party and the Republican Party, and the president. I think you get some surprising results. One, the president’s a lot more popular than people give him credit for. And in part, I think it’s a factor of the fact that the economy is still really strong, and the president’s viewed as very strong on the economy. And he’s viewed as someone who a while his unfavorability rates are still very high and they had been all the way through the campaign, even when he won. People view him as pretty strong, as someone willing to stand up to what he thinks is right. And someone who’s good at business and good at the economy.

Steve Glickman:                 And that still holds true. And if you ask voters what Republicans stand for, it’s pretty clear to them they stand for less government spending, lower taxes, and for big business. Now as a Democrat, I think that’s a very vulnerable set of associations to have with voters, because people like a lot of the things government provide. And they’re I think skeptical of large businesses, but you have to give them an alternative vision. And when you ask voters what they think about Democrats and their economic vision, there’s a series of like 10 question marks in that answer. No one has any idea.

Steve Glickman:                 I was close with Hillary Clinton’s economic team when she was running her campaign for president. And I could not tell you what her priorities were, and I can easily tell you what Trump’s priorities were. In fact, he stayed pretty focused on them. I may disagree with a number of them, but you know what they are. And so Democrats first and foremost, they need a positive vision for the economy, which is the only game in town. People don’t vote in foreign policy issues, and they don’t vote on social issues, at least on a federal level. They really vote on the academy, first and foremost. It’s issues like one through five for when you ask people what’s most important to them, it relates to the economy. It’s healthcare, it’s housing, it’s a good job. It’s my community, etc. Wages. So we need to give them a reason to vote for democrats. We really need a new economic world view and vision and philosophy. And ultimately that boils down to a new generational thinking of this.

Steve Glickman:                 There’s this very outdated notion in I think both democratic and republican circles that we’re still having a debate that’s left versus right or left versus center. When really we’re having the most important debate is one that’s new versus old. It’s a new generation where you’d see a lot of agreement around certain issues among new republicans in new democrats. A new generation of them, let’s say under 45. And the old views of what the parties stands for, and that I think is the most important debate in the country. Now, democrats are going to run 20 candidates for president. And lots of them are impressive and maybe might be very good presidents. I’d give you some who I think are going to be front runners.

Steve Glickman:                 I think you’ll see Cory Booker, the senator from New Jersey do well. I think you’ll see Terry McAuliffe, the former governor from Virginia do really well. I think you’ll see Jason Kander, a young rising star from Missouri who ran for senate and has now become a national figure. I think you’ll see him do very well. But I think all of them are going to have a really tough time beating the president. It’s very hard to beat incumbent presidents. It’s very hard to beat incumbent presidents in a really good economy. It’s really hard to be incumbent presidents in a good economy who’s maintained a pretty high level of popularity in his own party. And he’s extremely popular in republican circles. The notion that he’s vulnerable is a total farce. His approval rating in the republican party is 80 percent or higher. This is like George W. Bush numbers after 9/11. He doesn’t have to win by much to win. So I think you need a democrat that’s got a real affirmative vision that people want. It’s got to be more than being anti-Trump. And frankly, I have not heard much of that breakthrough in the party so far and it makes me very nervous the democrats are not prepared Well for 2020.

Misha Zelinsky:                  Well that’s a very sobering analysis and we’ll leave it on that note on the serious. All our guests are asked, so I know you’ve been to Australia and this is about making, the show’s called Diplomates. So it’s about making some mateship across the ocean. So just curious about having visited Australia, who are the three Australians that you would invite to a barbecue, and obviously you’d invite me. So I’d be there anyway. So I’d be looking for you to think of three others mate.

Steve Glickman:                 Yeah. Well I need someone to drink all the beer. So that’d be you. So I’m going to stick in the political and economics lens around three Australians I’d like to have dinner with. So let’s start with politics. We’re bipartisan, so I’ll take a bipartisan approach to this. So on the left, definitely Julian Assange, I’d want to have him at the table. When I think about Australia-

Misha Zelinsky:                  You might have to get him in by Skype mate. I don’t know whether or not he’s going to be allowed out of the embassy, but …

Steve Glickman:                 You didn’t say it had to be practical. You just said who I want. If I’m thinking about someone who to me represents Australia, it’s Julian Assange on the left. On the right, the most famous Australian, most consequential Australia I can think of is Rupert Murdoch. So he’d be the Australia and I’d have from the right. I’m sure you’re loving these choices. You’ll like choice number three.

Steve Glickman:                 So choice number three would be an economics focused choice. And the person I have in mind gave probably the most compelling analysis of what happened in the economic crisis of anyone I’ve seen, American or Australia. And do you know who that would be? She’s from a very famous movie you may know.

Misha Zelinsky:                  I ask the questions on this thing mate, so I have absolutely no idea. But you’ve got me on tender hooks right now with Julian Assange and that Rupert Murdoch.

Steve Glickman:                 So number three in this trio would be Margot Robbie, because there’s no one I’d rather listen to on the economy then than Margot Robbie. I think she, Julian, and Rupert all in one room would be a tremendous Instagram photo at least.

Misha Zelinsky:                  Well, Steve Glickman, Margot Robbie, Rupert Murdoch, and Julian Assange would make quite a group. I don’t know whether or not either Rupert or Julian would want me there, but I’d certainly be happy to get along and at least drink couple of those beers you talked about. Steve, thanks so much for your time. I think it’s been a fantastic chat, a lot of great insights and good luck with everything. Hopefully if we don’t see on the ticket in 2020, hopefully see 2024, 2028 Glickman. I’ll be there handing out for you mate.

Steve Glickman:                 Well, I appreciaTe that. That will never happen, but I do appreciate you having me on the show anyhow and love talking with you. Good on your Misha.

Misha Zelinsky:                  Never say never mate. Thanks a lot.

Steve Glickman:                 Talk to you, bye.

Ambassador John Berry

Ambassador John Berry was the US Ambassador to Australia from 2013 to 2017. He is now the President of the American Australian Association.

Ambassador Berry joined Misha Zelinsky to talk about the future of the ANZUS Alliance, strategic competition in the Asian region, Chinese debt diplomacy, the rise of autocrats globally and how we can get young people to care about politics and democracy.

 

FULL TRANSCRIPT

This is a transcript from the interview with Ambassador John Berry. Please forgive any typographical errors.

Misha Zelinsky:                  Recently, I caught up with Ambassador John Berry. John was the U.S. Ambassador to Australia from 2013 to 2017. Since that time, he’s been named the president of the American Australian Association. Ambassador Berry and I had a great chat about the future of the ANZUS Alliance. Strategic competition in the Asian region, the rise of autocrats, and how we can get young people to care about politics.

Misha Zelinsky:                  Ambassador John Berry, welcome to Diplomates. I honored to say today, it’s a little bit of eponymously named, as you are a former ambassador to Australia, and obviously, I know you’ve said on many occasions that you were a mate of Australia. And we certainly consider you a mate of ours. But, welcome to the show, and thank you for joining us.

John Berry:                            Misha, it’s a great privilege to be with you this afternoon. Thanks so much, I really appreciate it.

Misha Zelinsky:                  The privilege is all mine, I assure you. But look, I though it would be a useful place to start, it’s a big sort of topic, but the importance of the relationship between the U.S. and Australia. You’re a former ambassador. You’re now the head of the American Australian Association. I think sometimes, Australians don’t think that the relationship matters from the American end. And sometimes, we feel that it’s slightly one-sided, or that we’re very much, the junior partner. I’d be curious to get your take on that.

John Berry:                            Yeah, I think there’s really no sense of a junior partner. Australia is a full-fledged partner, and really, the best ally of the United States, both in history and in current times. We deeply, deeply appreciate both the creativity, the intellectual power, and the straight-forwardness of the friendship that the United States shares with Australia.

John Berry:                            Sometimes, when you’re heading off in the wrong direction, it’s awfully good to get advice to get you back to the destination. And Australia is not afraid to do that. And you’ve never been, and never will be. We don’t ever want you to. You’re a sovereign nation. We want your straight opinion, and I think the relationship is so deep, because that opinion has been proven time and time again to be so helpful to the United States.

John Berry:                            So, it’s a full partnership. It’s an active one. It’s engaged on every level. Economic is the strongest. But, also, equally important is that the defense and the intelligence and the cultural, and the educational connections that we share, along with sports.

Misha Zelinsky:                  That’s right, and unfortunately, though, whilst we’re good friends with the Americans, we often don’t criss cross in the same sporting arenas. We very enjoy beating the English at cricket, but unfortunately, you guys aren’t really much into it. But, maybe we’ll teach you sometime.

John Berry:                            Yeah, my Tigers didn’t make it to the grand final this year, but they acquitted themselves well this season. Maybe next year for the grand final.

Misha Zelinsky:                  You can’t win them every year, unfortunately. Now, you’re showing your Australian bona fides, but of course, you were ambassador in Australia for a very long time. But, your father was also in Australia for World War II, as I recall. It always fascinated me, that story. Perhaps you could share a little bit about that.

John Berry:                            Yeah, Misha. In fact, it’s interesting. You know, right now from August until December of this year, it’s the 75th anniversary of the Battle of Guadalcanal, which was the first land offense in the Pacific in World War II. And, my father was in the United States Marine Corp, First Division, which was the division charged with taking and holding that land during the war.

John Berry:                            It was a much harder, tougher slog of a battle than was expected or anticipated. Japan appreciated the strategic importance of that battle, and knew that if they could defeat the U.S. land effort there in Guadalcanal, that likely, U.S. attention would prioritize Europe ahead of Asia, and that perhaps, the war would not end up as it did.

John Berry:                            But in fact, those Marines did hold that rock of an island, that’s an important island. And were given R and R to come to Melbourne. It was a tough six months. My dad was a skinny kid, 18 year old from Philadelphia. And he lost 45 pounds on Guadalcanal. He didn’t have that much to lose. But, I grew up with, from the youngest age, of hearing his powerful stories about what a wonderful people he found in Australia, and that not only were they good, they were true. They really reestablished his belief that there was good left in the world, which quite frankly, he and many of his mates doubted after they left Guadalcanal.

John Berry:                            And, you know, he tells a story about how he was just on the trolley car in Melbourne, and he was looking pretty, his clothes were pretty loose on him. And the ticket taker on the trolley said, “Young man, you look like you could use a good cooked meal.” He said, “You know, I get off work at the next stop. Why don’t you come home with me?” And my dad would tell us all the time how that was the best dinner he had the entire war. And he was just so stunned that someone would be so friendly.

John Berry:                            And so, till the day he died, if we were anywhere, when I was growing up and even when he was older and I was older, if my dad heard an Australian accent, he would jump up and offer to buy them a beer. And it was that deep and profound a relationship.

Misha Zelinsky:                  Well, that’s a great way to make a mate in Australia, is to buy them a beer.

John Berry:                            Yeah.

Misha Zelinsky:                  So, if he’s …

John Berry:                            Well, lest you think it’s just one guy’s story, it’s important to point out that it was so impactful, not only on my dad, but on the entire First Marine Division, which is the storied First Division of our United States Marine Corp, when they landed at Melbourne, a band struck up the tune, Waltzing Matilda. And here we are, 75 years later, the fight song of the United States Marine Corp First Division is, and always will be, Waltzing Matilda. And it’s because that tune and the spirit and welcome of the people of Australia, renewed their faith in the goodness of humanity, and taught them not only was it still very much alive in the world, but it was still damn well worth fighting for.

John Berry:                            And so, it is, whenever that division ships out even today, to Afghanistan, to Iraq, they do so to the strains of Waltzing Matilda. And when they come home, it’s to the same song. So, you get a sense of just how deep and power and lasting that friendship is.

Misha Zelinsky:                  That’s an incredible story. And we often like to hear Waltzing Matilda around the water. I never would have imagined you’d hear it in a U.S. Military Division, but that is a fantastic story.

Misha Zelinsky:                  I think that’s a good spot to sort of pivot to the importance of the relationship between the United States and Australia. Because it’s probably at it’s most contested. You recently said that it’s important for democracies to stick together when you were in Australia. And you said that we must defend democracy, our collected democracies. And that second place is not an option for democracies and the geo-strategic place in respect to military, AI, and that we need to avoid a Sputnik moment, so to speak, as you put it.

Misha Zelinsky:                  And I’m curious to take your, get your take on why democracy needs to stick together, and how we might defend our democracy in that context.

John Berry:                            Well, you know, we’ve been lucky. We have enjoyed 75 years of peace, or just under that, because obviously, World War II didn’t end until later. But, the world has enjoyed an absence of world conflict, if you will. Not to say that there haven’t been regional conflicts or terrible battles and troubles around the world, but nothing on the scale that would go back to World War I or World War II.

John Berry:                            And, I think we, you know, would be looking at history through rose-colored glasses if we felt nothing like that could ever happen again. And look, I think a lot of us who’ve worked in diplomacy over many years hoped and continue to hope that China’s rise will continue to be peaceful. But, there are many signals that are warning signals, that democracies need to pay attention to.

John Berry:                            First, we need to admit we’re not dealing with a democracy in China or in Russia, or in Iran, or in North Korea. And these countries are increasingly coordinating their efforts, and they are significantly, not only singling us out, but attacking each of us individually, through our democratic processes and using our own liberties and tools against us, if you will, in such a way that you have to call into question what their end goal and end objective is.

John Berry:                            You know, I was very happy when President Xi stood in the Rose Garden and promised that there would be no militarism of any of the land reclamation efforts in the South China Sea. He lied. We now know they’ve been intentionally militarized. There are three runways on those islands, now longer than the runway, the international runways at JFK here in New York City, right behind. Those are not runways needed for life-saving missions.

John Berry:                            The hardening and the missile installations and the radar installations that are being installed on those islands are not for life-saving missions. And no one should kid themselves about what’s going on there. And when you see what China’s done with the internet and the use of information, and artificial intelligence, what they have done has been able to increase the ability of authoritarian governments to suppress liberty, to suppress freedom, and to clearly, as they’ve shown both there, as well as other countries, like Russia’s involvement in our elections and other countries around the world, that they are not supporting democratic values, vision, or future.

John Berry:                            And we ought not kid ourselves that this is all going to end without some troubles. And so, you know, democracies are slow to recognize and prepare, oftentimes, for these things. As the world gets more technologically proficient, the time to prepare may grow even shorter. And so, that’s why I think it’s a good time for all democracies around the world to be on guard.

John Berry:                            I’m not saying it’s time to hit the panic button. I’m not saying conflict is a given. But, we shouldn’t be caught off guard.

Misha Zelinsky:                  No, it’s interesting, you’ve talked about the South China Sea. It gets discussed quite a bit in Australia. How do you think Australia and the United States should be responding to the militarization of the islands in the South China Sea? I mean, you know, part of China’s strategy is seem to be, to break up some of the will to resist, particularly with the Asian region, you know, with the Philippines. Is there a way that those countries can actually stick together in a way that gives them confidence? Or, is China gonna be able to pick countries off one by one?

Misha Zelinsky:                  Some countries in our … Well, there’s some discussions of the quad which is India, Japan, United States, and Australia. I’m just curious about how do you think you can resist that kind of, almost, irresistible force from the China’s government in the region.

John Berry:                            Well, we ought to not kid ourselves. It’s not gonna be … There’s no simple solution, Misha. This is gonna be a long-term effect. And I think Australia’s doing a great job already with your response right now. And Papua New Guinea, and you know, to …

Misha Zelinsky:                  In respect to the cables, you mean, or …

John Berry:                            Yeah, well, in terms of the one belt, one road expansion throughout the Pacific. You know, that’s not only the Pacific, but the Indian Ocean, around the world, and Africa, and beyond. And, these 99 year leases are all, when you step back and look at the map, are very interestingly located in strategic military and trade choke points. You know, again, not saying that they have to end up being military or strategic choke points, but we ought not kid ourselves. We ought to prepare. And one of the ways we can do that is to … You know, nations are already realizing this debt burden that they’re being saddled with is taking away a great deal of their sovereignty. And that’s of great concern to their populations and governments.

John Berry:                            And as the awareness of that grows, I’m concerned for this initiative as a true trade initiative will be called into greater question. But, the responses that are happening by democracies, you’ll notice, not only is the United States regularly exercising these rights of free travel and navigation throughout the South China Sea, but many other nations do as well, including Australia. And Great Britain has stepped up its actions in that regard.

John Berry:                            So, it’s again, a sign of democracies recognizing that you can’t just let an existing situation rule the day, especially when it’s been done by might and not right.

Misha Zelinsky:                  And you touched there on the 99 year leases. In Australia, we were quite alarmed to find out that there was discussions of a potential port being funded by the Chinese government in Vanuatu, and given the situation that occurred in Sri Lanka, where that port was funded by the Chinese government through the One Belt, One Road Initiative that government can’t pay. And, of course, that port is then handed over. The prospect of a port that could be militarized, 200 nautical miles up Australia’s coast, is very alarming.

Misha Zelinsky:                  It’s debt diplomacy, it’s called, which is, you know, you lend on terms that are somewhat unfavorable. And then, of course, when you can’t pay, you take that strategic asset, as you said, and in key points. How can the U.S. and Australia resist that type of easy money for these countries? You know, the Papua New Guinea government has made it very clear that they’ll take the best deal on the table, commercially.

John Berry:                            No, I think that’s where we have to be involved. And Vanuatu is a very good example of that, Misha. And Australia’s response there has been very, very helpful. You know, the United States is stepping up its efforts and increasing resources that’ll be available. I think other democracies will hopefully do that. And I think coordinating that effort is going to be something that we really need to think through.

John Berry:                            There are many institutions that can do that, but we need to, we could increase and leverage the power of our investments on the democratic front, if we were to work more carefully, in careful coordination. And so, I think that’s begun. That’s under way. And it will hopefully, only continue to improve.

Misha Zelinsky:                  And I’m just curious to get your take, you know, we’ve talked a lot about the contest between democracy and autocracy, and perhaps the autocratic countries coordinating in a way that, perhaps, they haven’t in the past. And that the importance of liberal democracies coordinate amongst ourselves. And I think that makes a lot of sense in a geo-strategic sense.

Misha Zelinsky:                  Curious about the credibility of democracy. You know, that’s another thing that is new, perhaps, in the modern debate with the Brexit debate, you know, what’s happening in Europe with the rise of autocratic governments in parts of Europe with the … Italy has a pro-Russian government. Hungary and Poland have right wing governments. You know, the Brexit election was very troubling for Britain, but also the recent United States election and the discussions of Russian meddling. What’s the … How does the credibility of democracy impact on this broader piece of countries competing against one another?

John Berry:                            Well, I think it’s important, each generation has to revive it’s appreciation for those core values of being able to have governments created that are responsive to the will of the people. That is still a very legitimate goal. And it is a goal that every one of the authoritarian nations fear mightily. And much of their actions are meant to undermine it, wherever they can, because they do not see it washing onto their own shores.

John Berry:                            So, first, we need to recommit our own selves to our own values. Those core values that our fathers and mothers fought, died, and suffered and sacrificed for, over so many generations. And I think we ought not take them for granted, because we’ve been fortunate to have enjoyed Australia … You’ve enjoyed the longest period of economic growth, I think, in any country in the world. You have a really phenomenal …

Misha Zelinsky:                  For 27 years.

John Berry:                            It’s a pretty phenomenal result. You know, you didn’t go through the global financial crisis like we did. You didn’t make many of the mistakes that we did. But, you know, so each generation can sometimes forget amidst its good times, the importance of those core values that allow those good times to exist. That allow people to exercise their creativity and earn a living, and to benefit from their creativity and their ideas and their hard work.

John Berry:                            As you, so you say it so beautifully in your National Anthem, wealth for toil. That is not a given around the world. And it’s important for democracies to continue to support and continue advancement. We have to always get better. As Winston Churchill said, it’s the worst form of government ever invented, but no one’s found anything better. And so, so we’ve got to keep at it. We’ve got to … We need to deal with … You know, in our own country, we have issues with student debt. We need to resolve that.

John Berry:                            We need to resolve our overuse of our credit card. You all are much more fiscally responsible than the United States. Here we are, in very good times ourselves, we’re running up increased debt at a time when we should be paying it down. So, you know, democracies make mistakes. Let’s not kid ourselves. But, it doesn’t mean that the core values of allowing people to control their governments and protect their liberties isn’t important and still worth fighting for.

Misha Zelinsky:                  It’s interesting, because you’ve talked about student debt and the economic piece. And I think that that’s also an interesting part of what’s going on around the inequality story and how that’s eroding the capacity of democracies deliver for ordinary people. I find it very concerning in an Australian context, but it’s certainly global, that young people don’t automatically consider democracy to be the best form of government. And I think that’s very troubling.

Misha Zelinsky:                  You’ve, in the past, said that, from an Australian context, that you’d like to take back what we call independent redistricting, or having the government, an agency, set the boundaries of electorates. In the United States, that’s a political exercise done by the politicians in charge, who unsurprisingly, draw up the boundaries to suit themselves; What you guys call gerrymandering. And also, you have non-compulsory voting in Australia, compulsory voting is in place, which the theory goes that the more people that vote, the more that they [inaudible 00:22:06], and you get less extremes. Do you think that those would be useful in an American context, still?

John Berry:                            I think they would greatly assist us, Misha. It would be a great thing, not only those two ideas, you know, correcting gerrymandering, compulsory voting. Americans don’t like to be told to do anything, so we’ll have to find a different word than compulsory. You know, maybe a national holiday voting, or something that would encourage higher turnout would be how we, maybe, have to approach that.

John Berry:                            But, you know, other ideas you do that are brilliant, I think, you limit your entire election time, is it to 60 or 90 days? I forget the day limit.

Misha Zelinsky:                  The minimum is about 31 days, I think. But sometimes that could be longer.

John Berry:                            Americans would think they’ve died and gone to heaven, if we could have a 31 day or a 60 day, even a 90 day election. You know, as you know, our presidential election for the next, which is three years out, has begun already. So, you know, obviously, we have a mid-term coming up here in three weeks, which will tell a lot. But the other thing you have … I’d say there’s four things that would really benefit our democracy that you’ve pioneered. And the last one is campaign contribution limitations.

John Berry:                            And, prohibiting, you know, the impact of so much money that can have such an untold influence on elections these days. So, you know, the secret ballot was invented by Australia. And we adopted it after much debate here in the United States. And while it was being debated in the late 1800’s, it was referred to in the United States as the Australian ballot. So, you gave us our secret ballot, which now we take for granted.

John Berry:                            I hope that the four lessons you all have also pioneered in this past generation of having a national commission that draws up unbiased legislative districts, having 99 percent of your population voting, you know, limiting your election cycle so that they don’t endlessly drag on, and controlling campaign contributions, are four very smart things for democracies to undertake. And certainly, the United States would benefit from all four of them.

Misha Zelinsky:                  No, although I will say that we actually had a … Our last federal election was eight weeks, and it was considered to be the most longest, most oneriest, you know, turgid campaign. And so, even an eight-week campaign in Australia seems like a long time.

Misha Zelinsky:                  Just on, you’ve touched on contributions and the effect of money in politics. You made some comments about, that the United States was alarmed about donation interference from the Chinese government in Australia’s democracy. It was very alarming to a lot of Australians, as well. I think it was something that we, a little bit, as a country, slip on the wheel and have sought to correct. But how concerned should all democracies be of that foreign interference of that nature?

John Berry:                            Look, I think it’s one of the areas where we have to play a very, very strong defense. There is no legitimate purpose, Misha, for any foreign government, especially a foreign authoritarian government, to be involved by contributing dollars in any other sovereign nations, a democratic nation’s, elections. There’s just no legitimate purpose. It’s illegal in the United States. It should be illegal in every democracy, because there is no argument on it’s behalf. It is, it has no good, positive effect. And, I hope, I know Australia has a number of efforts that it’s considering in that regard that it will continue, but not let the issue die. Because you know, if it’s allowed, we will eventually, if it is allowed in democracies, I believe that democracies can eventually lose control of their ability to maintain their sovereignty in dealing in important issues. And, you know, no democracy should allow itself to be so prostituted.

Misha Zelinsky:                  I think that’s very, very good advice, and that’s certainly something that we’re looking at very closely in Australia. But, I think you’re right. We need to guard against the easy money that can seem easy. But, as we talked about, even in the context of the 99 year leases with the debt diplomacy of the One Belt, One Road Initiative, money often comes with strings attached, as you rightly point out.

Misha Zelinsky:                  So, yeah, I just wanted to, perhaps, pivot to last couple of questions, but pivot to, you’re a former ambassador, but you’re also our most recent ambassador in the sense that the chair has not yet been filled. Let’s [crosstalk 00:27:41].

John Berry:                            Very, very hard to replace, Misha.

Misha Zelinsky:                  That’s right, irreplaceable John Berry. So we’ll, well, you’re welcome to come back, mate, at any time. That’s …

John Berry:                            I would in a heartbeat, but I don’t think I’ll be being sent your way.

Misha Zelinsky:                  Well, we did actually have an ambassador en route who was then directed to some important work in South Korea. Are you able to give a scoop? Are we gonna get an ambassador soon?

John Berry:                            Well, he would have been fantastic. He’s a dear friend, Harry Harris, Admiral Harris, is a brilliant man. And he would have made an outstanding ambassador. I know there’s a bunch others being considered now. I hope the president will pick a good one and send them down as quickly as he can. It’s important, and thank goodness we have a great [inaudible 00:28:28] in James Carouso there. He’s doing a great job during the interim, and I think James would make a great ambassador.

John Berry:                            So, there’s plenty to pick from. There’s plenty of good Americans who would do an outstanding job in Australia, and I just hope the president sends one soon.

Misha Zelinsky:                  Well, we’d love to have one. But as I said, mate, the chair’s still warm for you if you’d like to come back. But, just lastly, the question I’d like to ask our guests is … particularly, foreign guests, it’s a show that’s about, we call it Diplomates. It’s about mates you put in diplomacy, and it’s a hokey pun. But, I would say, in your time in Australia, if you could invite three mates to a barbecue, perhaps at the ambassadorial residence, given it’s still vacant, we could have a party there, who are the three Aussies that you would invite along as your mates?

John Berry:                            Well, the hardest thing, Misha, would be narrowing it down to three.

John Berry:                            Oh, boy, well, one, I’ll tell you, would be Quentin Bryce, who is the most wonderful person I’ve ever met in terms of everything, intellect … She has more class in her little finger than I will ever have in my entire life. And whenever I get to spend 10 minutes with her, I learn something. And so, I would love to have Quentin Bryce be one of those people. She is one of the crown jewels of Australia, in my opinion.

John Berry:                            The other is someone who I just love. He’s a native of Cambra. He’s president of the University of Cambra, Dr. Tom Calma. Tom is a brilliant leader in the Aboriginal community. He’s an indigenous Australian, a proud indigenous Australian who has done so much good in his lifetime, advancing his community within your wonderful country. And, we … Just like you, we talked about how you could help improve our democracy through some of your reforms, there’s many things that I think we could learn through more exchanges between our indigenous cultures. Because our history with Native Americans, Native Alaskans, and Native Hawaiians, for example, here in the United States, has been a sad one. And we’re still wrestling with many, many issues that are a result of that sad history.

John Berry:                            There’ve been some great success stories in Australia, just like we have had success stories in the United States. And I think Tom is one of those people who is a glass half full kind of guy, who is always coming up with new ideas and creative ways to make the future better, for not only indigenous people, but for all people in the country. So, Tom would be my second person.

John Berry:                            Who, who’d be the third? That is tough. Gosh, it’d be a toss-up between … You know, you’ve got two LGBT leaders there that I think are wonderful. Ian Thorpe and Alan Joyce. Alan comes at it from the business perspective, Ian from the, sportsman perspective.

John Berry:                            But, both of them have been amazing leaders in the LGBT community. And as you know, that’s one of my lifetime Civil Rights engagements and involvements.

Misha Zelinsky:                  Absolutely, yep.

John Berry:                            So, maybe you can give me the luxury of having four, and I’d invite Ian and Alan together, and then, we’d have a wonderful barbecue.

Misha Zelinsky:                  Well, I wouldn’t, couldn’t possibly deny having the Thorpedo there, so it’s more … And Alan can fly everyone in, so it’s no problem at all.

John Berry:                            And all of them should bring their spouses, so that would be, that makes it more than three. You can’t have a barbie without their good partners along, so …

Misha Zelinsky:                  Absolutely. Well, thank you so much for your time, Ambassador Berry. I think Admiral Phil Davidson recently said that there’s friends, allies, partners, and then there’s mates. And Australia and the United States are mates, and I think you’ve proven that today. So, thank you so much for your time. And good luck with everything over there. And we look forward to getting an ambassador soon.

John Berry:                            Misha, thank you so much.