Not much learned from Fong - he fizzed and was gone

The Premier’s “very big target” case at least suggests that my argument may be on the right track. Perhaps, the Premier read my piece (just joking) for I have it on good authority that there is a hard copy in his Office library (not joking). Let me just say here that the politics and psychology of celebrity are poison to democracy and even to the functioning of rational markets - despite McGinty’s foolish appeal to the role of markets in establishing executive pay packages. His appeal, I argue, is to malfunctioning and corrupted markets - corrupted, again, by the culture and social psychology of celebrity. You need to know the difference between functioning and corrupted markets, of course - or, at least, to allow for the latter. The neo liberal political imagination, holding Labor in its grip, cannot do either.

This neglected corner of the corporatising state has received insufficient critical attention. The contemporary democratic state has, for three decades, been modelling itself on the corporate sector. This also now involves a clumsy and destructive attempt to mimic a corporate management elite, fuelled by high octane image management and manufactured celebrity. It remains a more speculative argument, perhaps.

Sadly for McGinty, evidence in the private sector unequivocally reveals that performance hardly matters at all in determining executive pay level. The Fong folly confirms this point yet again. Huge rewards often attend, or herald, huge failures.

In Australia, private sector CEO salaries now reach into the tens of millions - $33 million in the case of Macquarie CEO, Alan Moss - while in the US, top salaries are calibrated in obscene hundreds of millions. And in both countries, the gap between average elite, has widened spectacularly. Thus, in 1970, CEO pay for the top 500 US corporations was 40 times the pay of the average US worker. By 2002 that 40 had become 500 times. In Australia’s case, even though numbers are fewer, inequality is galloping at more rapid rate. Moss has taken the differential to around 550 - up from the low 20s in 1992.

McGinty was Fong’s fan - and so apparently was the whole WA Cabinet.. Fong threw his footy jocks at them and they went wild. It’s an obscene and over-stated image but it captures the logic of misplaced celebrity well enough. It’s that primitive and that powerful. Corporate compensation committees, corporate boards and apparently government ministries can share in the excitement of this “surrender” to celebrity as it unleashes a chemistry that diminishes reason and endangers institutions that depend on it: not just democratic government but also markets that depend on the exercise of rational self-interest.

Of course, Fong’s pay was miniscule when compared with big time corporate executives and the damage the private sector does to the public sector is initially indirect. It establishes a false and destructive benchmark against which public sector remuneration is set and against which it constantly chafes. A permanent and unwarranted upward pressure, making quality public service harder for states to buy, is set in constant and corrosive motion.

That corrosion applies also in those vital human service mass professions like teaching and nursing. Why are we short of both? Because one third of the country’s million or so university students are enrolled in schools of business, commerce or marketing. Why are they there? They are heeding the siren calls of the celebrity manager disguised as market calculus.

In surrendering the state to this logic, our leaders set in motion forces that continually degrade the value of productive work and civic effort even in its last but weakening fortress - the public service. McGinty is not alone in this destructive undertaking but he has moved more boldly than many dared before.

Luckily civic culture, also under siege, survives and ambitious public servants remain under critical public scrutiny in democracies enjoying a relatively free press. Too bad that private sector ambition and performance are not as closely watched - but that’s another story. Fong has fallen victim to democracy - not to Beelzebub Burke or a Cabinet careless in exposing its tender young CEOs.

WA political scientist and Howard biographer, Peter van Onselen has noted that Cabinet talent is too thin for the WA Government to lose a McGinty. Sadly, he may be right. Even more sadly, talent is thin here for the same reason that we are short of teachers and nurses: too much human and institutional energy is given over to preparation for careers in management, commerce and advertising. That’s where the young people go, heeding the call of a market which too many of us have decided best determines the allocation of everything, the whole world over. Sound familiar?

Finally, the Fong experiment reveals the futility and counterproductive character of the neo-liberal state’s short term response to this longer term problem. Where thought and wisdom counsels the use of political authority to curb market excess, McGinty believes it better to throw taxpayers money into the competitive fray buying up good looking but dysfunctional Fongs at an ever higher price - not in a rational market but in the market become theatre of excess, unreason and abandon. This is nothing less than the subversion or the rot of democracy from within. Well done, Jim! Well done, Alan!