The Whitehaven Coal Hoax: Climate Change, Liberal Democracy and the Drawbacks of 19th Century Ideology

Francis Fukuyama’s prediction about the “End of History” might be fulfilled after all, although not in the way he intended.  Fukuyama argued in 1992 that liberal democratic capitalism was the best ideological and economic framework yet devised for fulfilling the want of human societies for good governance and economic development.  It turns out however that some of the very assumptions underpinning liberalism may contribute to the end of history in a very literal sense.

They are out of kilter with the integrated reality of biological, economic and social systems that once-triumphant liberal democratic ideals are inhibiting the ability of liberal democratic societies from addressing the looming catastrophe of global climate change.  This incongruity poses pressing moral questions to us as political actors in a liberal democratic state, nested within a rapidly changing biosphere.

This posting is an imperfect thought bubble exploring some of the problems of a liberal-democratic compromise born in the nineteenth century for twenty-first century realities, through the example of the recent ANZ Bank-Whitehaven Coal hoax.  I am still working through these ideas myself so readers’ feedback is most welcome.

On 7th January 2013 anti-coal activist Jonathan Moylan, member of New South Wales group Front Line Action on Coal, circulated a fake press release purported to be from ANZ Bank stating that a $1.2 billion to mining company Whitehaven Coal for the Maule Creek mine project had been withdrawn.  According to the Sydney Morning Herald, Whitehaven’s share price dropped nine percent in thirty minutes, wiping $314 million off the value of the company.  The stock recovered at the end of trading to be down by only two cents, after a temporary trading halt was lifted.

Underlying this episode lies a three-headed ideological convergence: Ideological conflicts about individual rights and the protection of private wealth versus the good of the greater society that hark back to the class conflicts of the 19th century, superimposed upon the distinctly 21st century debate about human beings existing as atomised individuals or actors nested within broader biological systems.  Or in shorthand, liberalism meets democracy meets environmentalism.

Let’s explore this ideological mélange through the perspectives of three key protagonists (bearing in mind that the three actors involved personify some key elements of liberalism, democracy and environmentalism but are not pure embodiments of the entire cannon of the respective ideologies).

Democracy: Jonathan Moylan

“[T]he main concern with us is what happens at the end of the day to the local community here, to the forest, and to the impact on people’s health, and on the climate. This is a hugely destructive project, and I made [the] announcement that ANZ should have made, that it wasn’t going to be investing unethically.” Jonathan Moylan on Breakfast—ABC Radio National, 9th January 2013.

Jonathan Moylan’s creative piece of share market sabotage can be interpreted as a democratic action.  This is certainly how he and his defenders interpret his actions.

Democracy comes from the Greek words demos meaning ‘the people’ and kratos meaning ‘power’. Effectively, the word ‘democracy’ means ‘people power’ – the right of people to make decisions on how they are governed.   It places emphasis upon popular participation and popular sovereignty, such that all members of a polity have more or less equal access to power.  It emphasises public duty and responsibility to the common good.  In a democratic society, wealth and social mobility are distributed more evenly.

Moylan has argued that Whitehaven Coal’s Maule Creek development is proceeding against the wishes of the wider community and will adversely impact the common good in three ways: (1) though compulsory land acquisitions forcing multi-generation farmers from their land, or by stranding landholders adjacent to the development site who are unlikely to be able to sell their properties (in effect destroying their social mobility); (2) through negative health impacts stemming from the coal mining process; and (3) through its contribution to global climate change, the current and pending impacts of which have been extensively documented.  Climate change is recognised as a threat multiplier phenomenon; those people with least capacity to adapt are most at risk because climate hazards exacerbate existing socio-economic inequalities.

'No Hoax' cartoon

Moylan’s potentially law-breaking deed should be considered within the long tradition of unlawful democratic protest actions dating back to the 19th century, where changing economic and social relationships stemming from industrialisation led to greater demands to broaden the democratic franchise to include members of the working class.  Those democratic rights were claimed by resisting, circumventing and breaking existing laws and property relations.

An opposing argument suggests that Moylan’s sabotage of Whitehaven’s stock price hurt a large number of small-time investors who may have sold out during the price slide.  In making his point, Moylan may have harmed more people than he has helped (the antithesis of the common good), although, as John Quiggin and Sarah Joseph have argued, this point may have been exaggerated.

Liberalism: Mark Vaile

“It’s quite un-Australian that an individual can conduct a fraudulent act like this…There were many investors, and many small investors, that lost significant amounts of money during that period [of the hoax].” Mark Vaile on Breakfast—ABC Radio National, 9th January 2013.

Mark Vaile is the chairman of Whitehaven Coal and is a former Nationals leader and Minister for Trade during the Howard government.  His response to Jonathan Moylan’s hoax illustrates many of the hallmarks of liberal ideology, in relation to property rights in particular.

At the risk of over-simplification, liberalism is a set of ideas about the rights of individuals and about market-based mechanisms for economic production and distribution. The rise of liberal ideology accompanied the development of capitalism and therefore legitimises essential elements of the capitalist system: individual rights, the ownership of private property, the accumulation of private wealth, and the use of markets for production and exchange of goods and services.

The public interest is advanced when individuals are guided—as if by an ‘invisible hand’—by their desire to maximise their own individual economic welfare.  This is because a free market will reward individuals who satisfy the preferences of others, and hence create incentives for individuals to act in that way.  Government should stand back and let the market economy function according to its own logic of the profit motive, the price mechanism and the division of labour in a hands-off approach known as laissez faire.

From this perspective, Moylan’s hoax represents a perversion of market forces—cuffing the invisible hand, if you will—and a threat to the legally protected private property of individual shareholders.  We can see this perspective in the comments of Liberal Senator Eric Abetz, who chided the Greens for their “extremism” and “disrespect for the rule of law” over their qualified endorsement of Jonathan Moylan’s actions.

Because property interests are protected by the law, liberalism often has an inherent bias in favour of those people and entities that hold more property.  Not surprisingly, we see Vaile and others (including ALP whip Joel Fitzgibbon) calling for the state to make an example of Moylan to deter copycats, because ultimately such actions, if repeated strategically, are potentially a real threat to the property interests of mining companies.  If a mining claim cannot be developed because of economic or physical sabotage, it becomes a liability and not a source of wealth.  And equally unsurprisingly, the government is obliging through an investigation by the Australian Securities and Investments Commission (ASIC).  That is what happens when real power interests are challenged by protest actions.

Breaking the Liberal-Democratic Compromise

Over the course of the twentieth century and particularly after World War II, when Australia, along with other liberal democracies around the world, moved into a period of sustained prosperity.  The argument between liberalism and socialism over the best way to organise the productive capacity of society was won by liberal capitalism (the argument advanced by Francis Fukuyama).

The appeal of class-based politics declined as the working classes got a taste of this prosperity, which dampened their enthusiasm for participating in the mass politics of the labour movement.  Many working class families became property owners themselves through the process of suburban sprawl.  As a consequence, the economic interests of the working class began to align more closely with those of the property-owning bourgeoisie and began to internalise liberal ideas about property rights that underpin those interests.  Anyone who has sat through a mind-numbing dinner party conversation about property values can attest to this.

Let’s rewind however to mid-nineteenth century and the genesis of these class antagonisms.  During the late-eighteenth century, the invention of the steam engine to pump water out of flooded English coal mines led to profound changes in the socio-economic and cultural conditions of English society.  During the nineteenth century, the industrial revolution spread throughout Europe, North America, and eventually the world.

The onset of the industrial revolution marked a major turning point in human history, impacting on almost every aspect of daily life for the people of industrialised societies. Millions of peasants abandoned their lives as bonded labourers on feudal estates to take up work in the new industrial factories that sprang up in cities like Manchester and Birmingham.  It ushered in an era of great upheaval, a transformation of life away from the cyclic rhythms of nature into the mechanistic forms of social organisation that are familiar to us today.

This was a dirty era.  The huge mass-migration of peasants from the land into industrial cities created horrible living conditions in which people lived in filthy, over-crowded, disease-ridden slums.  The new industrial workforce was subjected to inhuman working conditions.  In this environment, as you can imagine, social unrest was rife.

The industrial revolution saw the rise of a new class of property owners, known as the bourgeoisie (or factory owners) in Marxist terminology, who appropriated the liberal political ideas of John Locke and Jean-Jacques Rousseau to challenge the old aristocratic elite for a share of political power.  At this time, liberal economic thought began to reflect the interests of the bourgeois industrialists.

In Britain, the political awakening of the industrial working class found expression in Chartism, a movement for political and social reform between 1838 and 1850.  Chartism had an influence of political thought in Australia.  Many leading members of the Chartist movement were punished by transportation to Australia as convicts, which led to the diffusion of Chartist ideas amongst the working classes of the Australian colonies.

During the summer of 1848, revolutions exploded across Europe as the socio-economic stresses of the industrial revolution drove the desperate lower classes to open revolt.  None was ultimately successful in altering the social order, but the lessons for property owners and liberal thinkers were to reverberate to the present day.

Many nineteenth century liberals were afraid that a democracy would not respect the property rights of employers.  They argued that people were short-sighted, especially ignorant hungry people, and it would be in their short-term interest to confiscate and redistribute the property of the rich.  With the French Revolution still in living memory, they interpreted the Chartist movement and the European revolutions of 1848 as a threat to their wealth and social position.

In the wake of 1848 and with the birth of the modern labour movement in the late-19th century, a “new” liberalism (sometimes referred to as “reform”, “social” or “welfare” liberalism) came to the conclusion that the best way to ward off revolution was to adopt a more generous attitude toward the lower classes.  The upper classes should make concessions to the lower classes gracefully and in good time, and not wait until the lower classes took to the streets in open revolt.

By yielding to the democratic impulses of the masses, liberals came to believe that social and class antagonisms could be managed to protect the property rights of the privileged while at the same time keeping a lid on any popular unrest that would threaten those rights.

The great liberal-democratic compromise stemming from the tumultuous upheaval of the industrial revolution revolves around the core idea that political stability is best ensured when all members of a society are politically enfranchised, which, for liberals, is the most effective way to preserve private property rights.  It is this compromise that set the scene for the later convergence of interests around property rights after World War II.

Both the liberal and democratic traditions share common ground with respect to the rule of law, respect for the legitimacy of institutions and due process, and commitment to fundamental liberties such as freedom of speech and association.  Indeed, it is these political rights as defined in liberal philosophy that make democratic participation possible.

Liberalism and democracy also provide moderating constraints on each other that contribute to the stability of Australia’s liberal democratic political system.  Liberalism places limits on the notion of majority rule, ensuring respect for the rights of individuals and avoiding the tyranny of the mob.  On the other hand, regular democratic elections give powerful legitimacy to the political order, demonstrating that the government of the day is legitimate because it has the support of people.

But what if the underlying assumptions of the liberal-democratic compromise have outlived their applicability in the wake of changing macro circumstances?  What if adherence to the norms of the liberal-democratic compromise proved to be a barrier to adapting to new challenges that political actors across the nineteenth and twentieth century’s could never have foreseen?

Environmentalism: Christine Milne

“Yes, there are investors in Whitehaven Coal who may be affected, but everyone is affected by accelerated global warming…Campaigners have been pointing out for some time that those investing in coal mines, those driving the expansion of coal exports, are actually accelerating global warming…So what we had is an activist… [who] came out and took a direct action in this regard. It’s a non-violent direct action.” Christine Milne on ABC News, 10th January 2013.

In defending the actions of Jonathan Moylan, Greens leader Senator Christine Milne made an explicit link between the coal industry and the threat posed by anthropogenic climate change, a position taken by former Greens leader Bob Brown and Dr James Hansen from the NASA Goddard Institute for Space Studies.  The crux of this argument is that the protection of the private wealth of carbon-intensive companies and their investors is unjustifiable in the face of the climate change threat, which is critically damaging not only the basis for economic wealth but also the biological processes upon which human societies depend.  In effect, by lionising cultural norms and values created during the industrial revolution, human civilisation and the natural world upon which it depends are being held to ransom.  How the rights of individuals and property ownership are reinterpreted in the face of climate change will be a pivotal point of debate in the coming years.

Karl Marx argued that capitalism would sow the seeds of its own destruction through class conflict over the means of production, however it is becoming increasingly clear that the real threat to the capitalist system lies in a by-product of industrialisation: greenhouse gas emissions generated by the burning of fossil fuels.

Let’s start with the inescapable truth that the Earth is a closed finite system.  This means there are limits to the amount of resources that can be extracted from the Earth and the amount of pollution it can absorb, beyond which the biological processes of the planet and the human societies that depend on them come under threat.

In the context of anthropogenic greenhouse gas emissions, thousands of peer-reviewed academic publications from scientists around the world, conducting independent research across numerous scientific disciplines, consistently point to the conclusion that these limits have been reached.  The evidence is so overwhelming for anthropogenic climate change that it takes a profound commitment to hubris and hyperbole, sociopathic denial or breathtaking stupidity to miss the point.

Nested systems.

Nested systems.

To put this another way, imagine Earth, society and economy as a set of Russian dolls.  Our economic systems are social constructions of human societies, which are themselves nested and inter-dependent components of the natural world.

This means there is no triple bottom line.  The ecological, economic and social pillars of our society are not equal.  In fact, the economy is a social construct of human societies, which are themselves dependent on the ecological systems in which they are located for sustenance, resources and waste disposal.  Wealth is created in human societies by the exploitation of resources from the natural environment.  If the natural environment is degraded such that those resources are poisoned or become unavailable, then no wealth can be created.  No viable paradigm for societal organisation for the twenty-first century can suggest that the individual and their property exist outside of the ecological systems upon which they depend.

A malevolent climate system characterised by more frequent and intense extreme events is the new baseline upon which human societies and our economies will operate.  This means we need to confront the fundamental question about our relationship with the natural world.

In our two-century long class battle over the means of economic production, we have assumed a limitless Earth, open for infinite resource exploitation and waste disposal.  From this perspective, the Earth is the external other, an unimportant footnote in the quest for material luxury, helped along by science, technology and the free market.  Clearly on a finite planet these assumptions are false.

Jonathan Moylan’s actions bring this ontological falsehood into sharp relief.  Human beings do not exist as atomised individuals, whose unimpeded collective rational choices add up to broader socio-economic good.  As individuals, we exist as components of vast, integrated and dynamic ecological, social and economic networks where every action (or in-action) we take has consequences that ripple out across this inter-connected web.

Being part of inter-connected systems means we all have a responsibility for maintaining them.  Anthropogenic climate change is a global commons problem because its causes—man-made greenhouse gas emissions—and it impacts on human societies are distributed across the boundaries and jurisdictions of individual states.  This also means that if one person, company or country damages the system then all its constituent parts are threatened.

Does this mean that liberal-democratic societies should abandon a commitment to individual freedoms, to property ownership, to market forces and the laws that underpin them?  Yes, if that freedom means the right to wasteful, thoughtless consumption and our abdication of responsibility as political actors in a liberal democratic society.  No, if it emphasises individual responsibility and public engagement; there are aspects of John Stuart Mill’s ethical reasoning on individuals as active agents in their own self-determination that resonate strongly with the climate activist.

However, as political theorist David West argues, it means that rights, property and the market need to be re-evaluated and refined to match the realities of a twenty-first century in which climate volatility is shaping all ecological, social and economic relations.  Sustainability—in its holistic and systemic sense—rather than efficiency is the new name of the game.  Freedom without responsibility, markets with externalities and property rights without just wealth distribution are the enemies of holistic sustainability.

The Inevitable Challenge to Recalcitrant Power

And here’s the rub: reshaping these ideological values means challenging the entrenched power structures that they legitimise.  Parliament and the ruling government that derives from it is by design a reactive institution.  Parliamentarians are elected to office to represent the desires of their electorates.  The problem is, however, that Australia’s parliament represents two different parallel constituencies that compete for the attention of elected officials.

Parallel constituencies competing for influence over the parliamentary system.

Parallel constituencies competing for influence over the parliamentary system.

There’s the official constituency—the general public—whose members attempt to influence policy formulation indirectly through their vote, and then there’s the unofficial constituency—the rent seekers—who purchase direct influence over the policy-making process through campaign contributions, media influence and the revolving door of employment between government bureaucracy and the corporate sector.

Guy Pearse, a former political adviser, lobbyist and speechwriter from the conservative side of politics, has documented the degree to which lobbying interests from these sectors have penetrated the policy-making apparatus under both Coalition and Labor governments.  The apparent power of these lobbyists is only matched by their disregard for the wider public interest.  As a former government minister, Mark Vaile’s chairmanship of Whitehaven Coal does not inspire confidence that Pearse’s analysis is incorrect.

When critics of a given protest action say there are better ways of making a point, they are really arguing for the status quo.  If other means of influencing the political process are really more effective, there would be no need for an escalation of successively more extreme protest actions.  That is not to say that Jonathan Moylan’s stunt has changed the status quo, but rather that unlike traditional forms of political protest undertaken by the powerless such as marches, boycotts, awareness campaigns etc, this act directly challenged entrenched power interests.

The fact that Jonathan Moylan even considered perpetrating his hoax is an indication that the political process in Australia may be becoming sclerotic and showing signs of unresponsiveness to critical feedback.  We can see signs of frustration with this on both the right and left, mirroring a growing polarisation of politics occurring for many similar reasons across the liberal-democratic world.

Political institutions and processes lose legitimacy when their rhetoric loses touch with reality.  Just because our political system has enjoyed over a century of relative stability, does not mean it will always remain that way.  Jonathan Moylan will be forgotten by the wider public in a few months time, but it is likely that we are only seeing the beginning of the challenge to entrenched power interests that his actions represent, in addition to the inevitable response of those power interests to this challenge.  In the background, we are likely to see other people increasingly lose interest in the political process and ignore or circumvent various legal norms.

While Moylan’s action achieved very little as a one-off event, it is significant as a sign-post of things to come in terms of extra-legal challenges to entrenched power interests.  It is a slippery slope when people start challenging a political and economic order that has enjoyed over a century of relative stability.  However whether one agrees with the action or not, a slide down that slippery slope appears increasingly likely because that once stable system is now incompatible with the converging climate, ecological, energy and economic crises of the twenty-first century.

This kind of conflict is what happens when the pace of political decision-making is too slow for the pace of events in the real world, which stems from the inadequacy of the ideas that underpin the decision making process.  If our political solutions do not match the well-documented seriousness of the climate change threat, we will all lose.

The ANZ Bank–Whitehaven Coal episode therefore invites all of us to consider this fundamental question:

What options are open to the concerned citizen when the most powerful interests in our society, the political process, and the law stand in the way of the survival of human civilisation in the face of climate change?

It is a troubling question for which, as yet, I do not have a definitive personal answer.


***I am indebted to my colleague at ANU, Colum Graham, for his insightful feedback on this piece.

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9 responses to “The Whitehaven Coal Hoax: Climate Change, Liberal Democracy and the Drawbacks of 19th Century Ideology

  1. Hi Ben,
    I found your final question for myself over this past few years. As i don’t have an answer to the question, I am taking the path of grieving the loss of “an attractive environment” for my children and grandchildren then finding a positive path and following that with hope.
    Terry

    • Thanks for your comment Terry. I suspect the answer to that question will be a very personal one for each individual.

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  3. Hi Ben, I thoroughly enjoyed your imperfect thought bubble as it gave words and a history to my own thoughts about whether we have outgrown our current model of liberal democracy and stand on the brink of a new environmental revolution (or as Nafeez Ahmed writes in The Guardian are we at the threshold of civilisational collapse if we fail to adapt http://www.theguardian.com/environment/earth-insight/2014/mar/14/nasa-civilisation-irreversible-collapse-study-scientists). I wondered whether the increasing engagement of civil society in issues of sustainability (including groups such as Get Up and Avaaz as well as socially responsible corporations- not just greenwashed ones) can effectively step into the breach left by government to become legitimate actors in a model of direct democracy? (Based on more postmodern views of distributed power) I’d love your thoughts on this 🙂

    • Hi Dawn,

      Thanks for your response to the posting. Your question is a pivotal one as governments increasingly withdraw from service provision. The experience of municipal and state governments in the US is instructive here.

      My feeling is that civil society groups will emerge because they have to, but they won’t be able to fully fill the gap left by government because they won’t have the resources to do so. We also should assume that this will be a contested space into which business interests and even criminal enterprises (in more extreme cases of governance failure) may also penetrate. Which entities fill this space depends on the degree to which people get organised to do so now and have working models of service provision ready to go.

      On groups like GetUp and Avaaz, they are great for advocacy but we shouldn’t be lured into the trap of “clicktivism”, thinking that online activism on its own will have any impact. These groups achieve the most when their online activities are accompanied by tangible action on the ground. I’ve done a couple of workshops on social media that touch on this…

      https://drbenjaminhabib.wordpress.com/2013/05/02/social-media-as-an-engagement-tool-for-community-groups/

      There is a lot to unpack in your question and I am going to devote a lot of time in future blog postings to fleshing out some of these issues. You’re welcome to get in touch via email (b.habib@latrobe.edu.au) if you’d like to discuss these issues in more depth.

      Cheers,

      Ben

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