How the Game Of Mates applies to ACT politics

Game Of Mates: How favours bleed the nation

by Cameron Murray and Paul Frijters

?

There is an unmistakeable series of similarities between this book and the way that politics is practiced in the Australian Capital Territory. Game of Mates was written by two economists, who revealed the workings of our political system along with truths about our economy. Truths that are inconvenient for elites, but essential truths for people to understand. Their simplified narrative has a small group of elite cronies (called James) who rig the legal/regulatory/market/financial systems in their favour, at the expense of the vast majority of people (called Bruce). Let’s take a look…

?

“The reason we must repeat history again now is that our societies don’t notice James at first, for that is his skill. While the rest of us are productive, James and his mates are organising our poverty by taking advantage of the opportunities we inadvertently leave them. We only become aware of his Game after decades; when his Game becomes so flagrant, entrenched and costly it can no longer be ignored.”

?

In the ACT context James represents influential insiders of the Labor Party and unions (including MLAs and union officials), the larger property developers, senior government appointments (eg public servants and board members), some of The Greens, and a small proportion of very well-connected suppliers/intermediaries/stakeholders (eg trusted advisors, lobbyists, and businesses with strategically important employment and investment). This is a tiny group, 1-2% of the population of 470k people. The exercise of their power has a direct impact onto tens of thousands of people/households. For example, union campaigning for pay and conditions will spill over to these teachers/public servants/builders/nurses. But these two groups of people are very distinct from each other. There is a big wealth gap between James and Bruce, with the latter having income comparable to the average whereas the former can command at least several times the average income.

?

There are four main elements that make up the Game of Mates:

?

“First are the flaws in our laws and regulations that leave highly valuable ‘grey gifts’ on the table that James can snatch for his Mates. Second is the group of allies, or Mates, that form to capitalise on grey gifts through a network of implicit favour-trades. The third ingredient is a way to signal loyalty to the group of Mates, creating a way for new members to join, and for the group to rid itself of traitors. And lastly, a crucial ingredient in the Game is to shield James and his Mates true actions from public scrutiny with plausible myths. These myths twist reality in a way to suggest that James’ dodgy dealings are in fact good for society!”

?

In the ACT context these myths include that: the specific brand of progressive politics of Labor and Greens is good for Canberra’s society; the narrow definitions of diversity and inclusion practiced by Labor and Greens are the right/only approaches; Canberra is a Labor town; public servants working in Canberra benefit from Labor governments; the Liberal Party is dominated by far-right conservatives; and that Labor and Green Ministers have pure motives.

?

“At its core, the underlying power that James co-opted when playing the Game of Mates in property and transportation was the discretion of the politicians and the bureaucrats to make rezoning decisions and determine the content of infrastructure contracts. James’ wealth in those sectors came from these discretionary decisions over the allocation of things that have large private value, but are not priced. They are ‘grey gifts’. And they are the currency of ‘grey corruption’.”

?

“The groups that have access to the political and legal structures of society, and the valuable grey gifts within, are the ones to be wary of, as the power given to them by society at large means that when they exercise their discretion to promote internal cohesion and cooperation, it often comes at an enormous cost to outsiders.”

?

“To properly hide the true nature of the Game to outsiders, James needs a plausible story that shows why it is good for society for him to control grey gifts, and how society benefits when he gives these gifts to his Mates. James hides behind these myths, using them like an umbrella to protect him from cleansing rains of serious public scrutiny… The fact that James and his Mates automatically corrupt the language in a society, turning the actual content of the best words into the worst practice, adds to the general confusion and cynicism, ultimately leading to culture wars. This also helps to explain why reforms come in cycles. A population must be so fed up with the current situation that they are willing to invest in a new language that comes from outside, and seek new sources of information and advice from their usual fare.”

?

Towards the end of the book, Murray and Frijters pose the question of what it takes for ordinary people to notice that they have been abused?

?

“The one thing they will notice is whether their life is getting worse. Marked reductions in wellbeing will not escape Bruce’s attention, no matter how absorbed he might be in his own daily life. As we saw, it took a depression in the 1890s to generate a wave of reforms in the early 1990s that shared Australia’s wealth more widely. The level of economic growth therefore limits what James and his Mates can steal. He and his Mates cannot easily steal large parts of the economic wealth that the rest of the population already has, for that would be noticed and strongly resisted.”

?

Consider the politics of inward immigration, to Australia and to the ACT:

?

“Who benefits the most from additional skilled workers? Other workers who would have to compete for jobs and already live here? Or James and his Mates, the bosses and owners in monopolised sectors of the economy, who benefit from selling new apartments, pharmaceuticals, superannuation funds, and new mortgages? Of course, it is James!... We believe it is James’ political support that has led to massive immigration to Australia in recent decades.”

?

The authors strongly argue that increased regulation and improved disclosure are not a panacea:

?

“We explain why we think that more regulation often exacerbates the situation, as James thrives on regulation and is highly adept at getting it to work for him. Simple-sounding solutions, like ‘more transparency’ are equally useless in most of the sectors we look at. To see why this is so, it is crucial to understand that James is not a solitary individual who finds a corruptible politician, but is a networker, able to forge coalitions with many individuals involved in different parts of the system, leading to a Mafia-type hold on individual sectors… One main reason why James thrives on complicated rules is that it makes the job harder for any would-be competitor; in the jargon of economics, ‘compliance is a natural monopoly’. There is a fixed cost in understanding any regulation and once James has paid that fixed cost, the cost of complying many times is minimal. Any newcomer would have to put in a lot of effort to be able to comply. So large compliance costs naturally lead to few competitors. The more complex the rules and the more the rules are subtly changed because of ‘consultation’ with the people who are still in the Game (i.e., the few left standing), the harder it is for anyone else to compete with James.”

?

The authors credit the ACT planning system for having lease variation charges (which clawback some of the value from zoning changes) as well as the rules for new land leases being developed within two years (to ensure that they are used for the intended purpose). However, the system in practice is far from perfect, with closely connected insiders benefiting at the expense of our broader society (ie James making loads of money from Bruce)… Consider the decision of the Planning Minister one fortnight ago, to use call-in powers for the approval of 1,000 new homes in Denman Prospect. Not only is this an enormous grey gift to the developer (Capital Estate Developments, part of Terry Snow's Capital Airport Group). But it is also an admission that both the current and the newly proposed planning laws are not fit-for-purpose.

?

“In short, Australia is becoming a class-society, with an elite that robs the rest who are scrambling to salvage some self-esteem by secretly hoping to join that elite. The pathetic kowtowing to wealth that is so typical of class-societies has replaced the proud culture Australia had just decades ago, where tall poppies were cut to size. The tall poppies have had their revenge.”

?

Game of Mates was first published in 2017, followed by Rigged in 2022. Check out the videos and other material at their website:

?

https://gameofmates.com/