Australia is a representative democracy in the sense that we have near universal suffrage and regular elections are held, this however does not invalidate the claim that there is a ruling class that wields disproportionate influence and power over societies culture, as well as economic and political decision-making. This is not merely a circle of ‘elites’ who have control of power, but a group whose source of power stems from their class position in society. The ruling class is not united on all issues, however as I will show the ruling class can mobilise politically to achieve their goals.
As previously stated Australia is a formal democracy and may in some way meet Abraham Lincon’s definition of Democracy as ‘government of the people, by the people, for the people’ (Lincon 1863). There are potentially varying degrees of democracy, however a government could be considered democratic if there is ‘a kind of equality among the participants at an essential stage of the collective decision making’ (Christiano 2006).
Therefore within a democracy there could be individuals or groups who wield disproportionate influence over decision-making; hence the concepts of a ruling class and democracy are not incompatible.
The presence of a ruling class greatly reduces the level of democracy that may be possible (i. e. the level of equality is reduced). For a class to be considered ruling, it must be shown that they;
For the purpose of this essay class will be understood in the Marxian sense, in that one’s class is derived from one’s relation to the means of production (Bullbeck 1993: 103). This is not to say that one’s position within the labour market is of no consequence; higher income jobs often convey more power (eg. managers), autonomy and statuse. However those who control the means of production (capital, hence capitalists) gain far greater power than someone who happens to earn a high income, as business has a ‘privileged’ position in capitalist society (Lindblom 1977: 172).
Therefore modern capitalists are those who own capital (people who derive a significant proportion of income from owning shares) and top managers (CEOs) (Jagtenberg & Alton 1995: 40). The separation of ownership from management of capital must be noted, however it ultimately makes little difference because managers essentially have the same interests as owners (Jagtenberg & Alton 1995: 43), because they receive bonuses or remuneration packages based on the performance of the company and often own large quantities of shares in the company itself (Murray 2006: 13).
High-income earners within firms may share many of the same interests as capitalists, as they are currently benefiting from the existing system relative to most people or may aspire to join the capitalist class, and could be supportive of capitalists in achieving their ends. Hence many rich or ‘upper class’ people act in the same way and have the same interests as capitalists without fitting the exact definition. It is the capitalist class that makes up the ruling class in Australia.
It could be argued that there is no longer a distinct capitalist class in Australia because ownership of capital (shares) is widely dispersed among the general population, as in 2000 54.7 percent of the adult population owned shares, leading to the claim that we are now a ‘nation of shareholders’ (ASX 2000). Despite the growing number of shareholders, small shareholders have ‘no organisational power’ (Connell 1977: 51) and wealth is highly concentrated in Australia.
In 2003 86 percent of shares were held by the wealthiest 10 percent of families, with the same families owning ’62 percent of rental, 62 percent of cash deposits and 50 percent of business assets’. The top 5 percent of Australian households owned ’59 percent of the country’s wealth’ (Murray 2006: 7). It is the leadership group of the capitalist class (CEOs and other business leaders) who mobilise capital and who could be seen as holding the most power within this class (Connell 1977: 52), therefore they are the main focus when speaking of a ruling class.
An important point in demonstrating that capitalists are a coherent ruling class is that they come from similar social backgrounds. An indicator of this is education, where 56. 1 percent of company directors went to elite private schools and 76.3 percent to elite universities, with younger directors twice as likely to have gone to an elite school than older ones (Murray 2006:78,79). In 2008 only four out of the top fifty schools in Victoria (based on VCE results) were public schools, two of which were select entry (BEV 2008).
This is then represented in elite university intake with ‘seven out of 10 Melbourne University students recruited from private or academically selective government schools’ (Rood & Morton 2007). Despite entry into universities being based on academic merit, the vast majority of high-ranking students attend high fee paying private schools, thus the education system further reinforces existing class differences (Furze et al 2008: 259, Murray 2006: 81).
Although Higley et al’s data is now old, Higley et all in their study of ‘elites’ in Australia found that 67 percent of business elites went to private schools, the vast majority non-catholic, with Liberal-National Country Party political elite the figure was also 67 percent with slightly more attending catholic schools, 62 percent in the case of media elites, 66 percent for voluntary associations and 73 percent for academics (Higley et al 1979: 86).
They also found that almost 80 percent of business and right wing voluntary association elites had had fathers in high status occupations, this was mirrored by other elites with most church, media, right wing political and public servant elites coming from high status households (Higley 1979: 81). Most importantly for the concept of a capitalist ruling class they found that ‘except for trade union leaders, elite persons are predominantly recruited from the upper echelons of the stratification system’ (Higley et al 1979: 79).
This suggests that there is continuity between capitalists from one generation to the next and that there is a definite class base for recruitment into other ‘elite’ positions in society. As Connell describes there are ‘common social origins of the native business, political and administrative elites’ (Connell 1977: 45). Because company directors (the leadership group of the ruling class) come from similar social backgrounds where they are able to form ‘networks that recruit them… into careers of privilege’ (Murray 2006: 80).
Formal and informal networks between business leaders and non-capitalist ‘elites’ also complement these common backgrounds. Higley et al found that despite networks being ‘more pronounced within elite categories than between them’ (Higley et al 1979: 262), there was a relatively high level of integration among the national elite and that was a ‘prominence’ of business elite (Higley et al 1979: 260, 161). Murray has also found evidence of formal networks of power as 68 percent of company directors sit on two or more boards (Murray 2006: 68).
This all suggests the potential for control however it does not demonstrate how or if it is used (Connell 1977: 45). However it does show that there is a ‘class’ of people who own or control the vast majority of capital and wealth in Australia, who have the have the potential to jointly exercise power and who may comprise no more than ‘2-3 percent of the Australian population’ (Murray 2006: 9) For a class to rule it does not have to rule in the sense that it exercises direct political control, although it may occasionally attempt to due so.
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