‘It’s the Monopoly Game Stupid’

13 August 2022
In case you missed it, that is a misquote of Bill Clinton’s 1992 election mantra, ‘It’s the economy,
stupid’. (He beat George W Bush when the US economy turned down).
Other apposite quotes are Stalin’s ‘The only thing I believe in is the power of the human will’ and
Mao Tse Tung’s ‘Power comes out of the barrel of a gun’.
The Stalin and Mao quotes relate to the power of governments, Clinton’s the power of economic
forces. It seems that the economy is more powerful than governments, as it was responsible for the
collapse of the Soviet Union, and the current rise of China is partly because they have a new model
where they set the rules for the economy.
The other variable more powerful than governments is technological innovation as it totally changes
the way we live, but this is not a point I want to discuss now.
The two Wars last century were over access to markets, so at the Bretton Woods Conference in 1944
that set the rules for a post WW2 economic system the object was to eliminate trade barriers so that
countries that were doing well would rise, and those doing poorly would fall, all this happening
gradually and without wars. This has turned the whole world into a market, and because money
crosses borders so easily, big companies can take over smaller ones, and governments, being
restricted by their borders have their powers limited. The ability to move jobs offshore makes
workers compete globally.
As governments’ power has fallen relative to big companies and the best brains in the nation go into
companies rather than into government, many governments do not believe that they can defy big
corporations. The Australian governments following the interests of the mining lobby and the
Murdoch press are just a couple of examples. Another is the tax and (non-)royalty system, and yet
another the drive to privatise public utilities as Capital wanted the returns from performing certain
functions that had previously been done by the public service for no profit. The governments did
not have the courage to say ‘No’, particularly as the companies were generous donors to the
political parties.
As in a Monopoly game, the rich get richer and the poor get poorer unless there is government
intervention, and even this has limits.
As we struggle with rising inflation rates, falling relative wages, house prices supercharged by 40
years of negative gearing and manifestations of rising inequality, we need to look at the root causes
and to what extent they can be modified. Governments need to rattle their cages domestically and
cooperate more internationally. Is Albanese up to it?