The end of the national interest

AAP/Eric Sands

Politicians are fond of talking about ‘the national interest’. It’s not hard to see why. There’s nothing quite like a vigorous defence of Australian interests to unite a disaffected and disengaged electorate. Political opponents risk looking disloyal, even traitorous if they object. There’s only one problem with all this, though: it’s not obvious what the national interest actually is anymore.

The idea that we may have a distinct, readily-identifiable national interest has received an extensive workout in the wake of Holden’s decision to pull out of Australia. It’s worth remembering that this ‘Aussie icon’ is, of course, no such thing. It’s an American multinational and a rather badly run one at that. Were it not for the Obama administration bailing it out in the wake of the financial crisis the end for its small Australian operation might have come even sooner.

The key point to make here is that, whatever the merits of having a car industry in Australia may be, the decision about whether there actually is one will be made far from here. This is not a xenophobic point, simply a reminder that some of the most important elements of economic activity in Australia are not controlled by local people.

This is not necessarily a bad thing. If foreigners are better at organising complex economic activities than we are and their efforts generate jobs for locals, what’s the problem? Put differently, why should we be more supportive of incompetent local capitalists than their more competitive international counterparts? There is something in this argument, but it is made even more complex by the nature of international production structures.

The reality is that 500 large corporations control something like 70% of global trade. While this may generate important gains in scale and ‘efficiency’ it means that a relatively limited number of economic actors dominate many of the world’s key industries. The logic of production is increasingly global. The borders of individual national economic spaces are increasingly porous and seen as part of a larger mosaic of transnational production.

These kinds of questions were central, if not actually articulated in quite those terms, to the debate about Archer Daniels Midland’s (ADM) proposed investment in ‘Australia’s’ agricultural sector. As my colleague Jeffrey Wilson has pointed out, the rejection of this bid sent a powerful signal that ‘community attitudes’ were – in the agricultural sector, at least – part of a new and decidedly non-liberal calculation of national public policy.

In this case, the ‘community’ in question was a relatively small, albeit politically-influential, group of small-scale agricultural producers. Given this precedent, though, might we expect a similarly robust and protectionist attitude to investment in the resource sector, which has become such an economically and politically powerful influence over the course of national development? After all, the resource sector is overwhelmingly foreign-owned, so similar ‘community attitudes’ might be expected to come into play.

AAP/Stefan Postles

In reality, of course, public policy in this arena has long since been decided in favour of the increasingly powerful mining majors. Again, what is at issue here is not the merits of the policy, but that in all these cases there is no unambiguous ‘we’ in all this, much less any expression of ‘Australian’ community values. True, Australian workers are going to be laid off when Holden closes, but should the taxes of other working class Australians be used to underwrite the share price and profitability of a foreign-owned company?

The argument that countries without a viable manufacturing sector will lose a major source of employment, wealth creation, skill-generation and productivity increases looks more compelling, but it is not obvious that it should be the car industry that should be the recipient of government largesse. ‘Industry policy’ is rather unfashionable these days and an anathema as for as the Coalition is concerned. In any case Australia’s frequently dysfunctional, archaic federal system means that resource-rich states invariably have different policy preferences than their manufacturing-based counterparts.

The suggestion that the defence could take up some of the slack as the car industry contracts looks practically implausible, not to say normatively and strategically questionable. Retraining car production-line workers to build submarines will not be easy. Even more importantly, would this be a useful investment of scarce resources?

This raises an even more counter-intuitive point: even in the realm of defence policy, the nature of the national interest is far from self-evident. Not only is it uncertain whether Australia has the indigenous capacity to actually build a new submarine fleet, but it is not even clear that the country actually needs one.

Australia is in the very fortunate position that it enjoys the most benign strategic environment in the world, has no obvious enemies, and little need to defend itself from conventional state-based threats. With the exception of World War Two, the surprisingly large number of conflicts Australia has fought in have been essentially wars of choice, not necessity. In such circumstances, even defence policy is not the sort of life or death issue it is in many other parts of the world and much more contentious as a consequence.

While politicians are never going to stop invoking it, the national interest is an increasingly illusory idea in an era characterised by greater integration, interdependence and cross-cutting economic, political and national loyalties. Little wonder mainstream political parties are in such trouble as voters no longer identify with or have confidence in a political discourse from another era.