Public ideas

Trust, and the cost of its absence

Jesuit Julian Butler writes in Eureka Street about trust, or more specifically the price of mistrust. He looks at two policy issues, one global and the other local, from the perspective of the consequences for our economic and political relationships when trust is absent, or has been eroded.

He writes that much of the problem in global supply chains – manifest as the inconvenience of a little inflation and shortages in some countries and starvation in others – can be sheeted back to mistrust. “Dwindling trust means an unwillingness to invest in long term solutions to global problems. It means an added cost to every transaction because each party is ready for the other to pull out of the deal.” One may add that quite often those deals never happen at all. (That’s the deadweight loss of the “prisoners’ dilemma” in econospeak.)

He goes on to stress the importance of trust in sustaining our institutions of democracy, with reference to Morrison’s deceit in creating ministries for himself. “Representative democratic political systems, like liberal economic supply systems, require trust to operate effectively”. He warns that legislation has its limits: trust has to be built (or re-built) on sincere relationships.

How many “leaders” can you buy with $18 million?

In the Saturday Paper Karen Middleton uncovers the process by which former Prime Minister Morrison made a grant to fund the Australian Future Leaders Foundation: Inside Morrison’s $18m leadership grant.

Middleton’s article is about the lack of due process in making the grant, and the appropriateness or otherwise of the government funding a program promoted by the governor-general. These considerations have surely been behind the government’s decision to withdraw the allocation.

Another aspect of the grant that should receive public attention is the public purpose to be served by what would have been called the “Governor-General’s Australian Future Leaders Program”, with “the objective of building leadership capability in Australia and bringing future leaders together”. The Australian Future Leaders Foundation website is only a little more specific, expressing its purpose as “to advance education, with a focus on building the skills, experience and capability of Australia’s future leaders”.

The assumption in these statements, which is the assumption so often applied to discussion of “leadership”, is that just as there are engineers who practice engineering, and lawyers who practice law, there are “leaders” who practice “leadership”, the “leaders” being people occupying defined positions of authority – CEOs or chairs of companies, government ministers, heads of statutory authorities, and people down the line in delegated managerial positions.

Ron Heifetz of the Harvard School, who developed the theory of adaptive leadership, questions this assumption.[1] Central to his model is the distinction between “authority” and “leadership”.

The work of leadership is difficult, because it involves helping people mobilize their resources to cope with adaptive change, and adaptive change can be painful and often involves loss. Dealing with the disruptions associated with climate change provides a case of difficult adaptive change: communities and workforces centred on coal mining are having to make huge and costly transitions; households will have to endure a period of high energy prices; some long-established settlements on floodplains will have to shift; and almost everyone will have to make lifestyle changes.

Those in authority are dealing with the technical aspects of these changes. Insurance companies are writing climate risk into their business models, BHP is getting out of thermal coal, the Commonwealth government will build the transmission lines to connect our renewable energy hotspots.

But the work of dealing with the stress of adaptive change is much harder, particularly for those in positions of political authority. Over the last fifteen years we have seen two prime ministers (Rudd and Turnbull) politically assassinated by those who built their political bases on avoiding the hard work of adaptive change, and in 2019 the Morrison government was rewarded with re-election for its “work avoidance” (to borrow one of Heifetz’s terms). Exercising leadership from positions of political authority can be particularly difficult, because in a democracy no such positions are secure, and they often have the burden of heightened expectations as the case at present where the newly-elected government has displaced a notoriously corrupt and incompetent administration. The worse the outgoing government has been, the greater are the unrealistic expectations loaded on the incoming government.

This situation provides an opportunity, indeed an obligation, for those who have an established and trusted public voice, but do not hold positions of high authority, to exercise leadership by raising hard issues. Academics, retired politicians and senior public servants, and people in non-government-organizations, all have a role to play. John Hewson, freed of the constraints of office, provides a strong voice critical of public policy. Malcolm Turnbull has been free to make a statement on a First Nations Voice to Parliament – a statement he could never have made when he was prime minister.

What people in authority can do is to nurture and support those who can exercise leadership from the sidelines, or from positions of lesser authority, as President Lyndon Johnson did for Martin Luther King in relation to civil rights. In our country, the Hawke government delegated the painful work of industry adjustment to the modest John Button, who in turn mobilized the resources of unions and business lobbies. There was no grand “leader” taking us out of an era of tariff protection. Last week’s summit needs to be seen in this context, and it is notable that the government gave a forum to people respected in the community who hold little positional authority, such as Danielle Wood and Ross Garnaut.

It is also notable that the government is not budging so far on the stage 3 tax cuts. Apart from a few diehard followers of Hayek and the Chicago School, every economist in Australia knows that we have to raise more public revenue. Their work is to exercise leadership by keeping the issue alive; the government’s will be the mechanical work of incorporating a repeal of the cuts in budget legislation.

In this regard a most important institution of democracy is a strong and independent media. Hewson’s article – Buzzwords, bullshit and mockery – in the same edition of the Saturday Paper as Middleton’s article, illustrates the point in both content and context.

To return to the $18 million about which Karen Middleton writes, perhaps the government should not have repealed it. Rather its best use could have been to cut it two ways: $9 million for university business schools where they teach the skills of exercising executive authority (directing, planning, organizing, controlling) and $9 million for university schools of public policy where they can teach students about the hard work of adaptive leadership. That would get across the message that there is a difference between authority and leadership.

1. Heifetz’s model of adaptive leadership is described in a review of his three books in a 2020 review in the Journal of Behavioural Economics and Social Systems..

How contempt is eroding democracy

Many observers of democracies talk and write about political polarization. In the latest Quarterly EssayUncivil wars: how contempt is eroding democracy – Waleed Aly and Scott Stephens consider political polarization resulting from the corrosive influence of “contempt”. They delve into philosophers’ ideas of contempt – like “love” or “disgust” the word has many shades of meaning – and focus on the most destructive form, in which one dismisses the other as having no moral worth, in contravention of the Augustinian dictum that one should hate the sin but have love and respect for the sinner.

In a political context contempt is perhaps best illustrated in Hilary Clinton’s classification of Trump’s supporters “a basket of deplorables”. In Australia that same notion of moral deficiency is inferred in the term “dole bludger”, and there is a strong hint of contempt when those on the right refer to anyone with a tertiary education as a member of the “elites”.


Aly and Stephens draw heavily on US examples and polling research to show how contempt, expressed in both red and blue camps, is pulling that country apart, and they warn about its presence in Australian political dialogue, particularly in social media. Unlike some commentators on political polarization, they don’t simply say “both sides are doing it”, or imply some “left-right” equivalence in offending. It would be hard to argue for a moral equivalence between trying to institute a murderous coup and driving right-wing speakers out of universities. But both sides have in common contempt for the other side.

One may ask if Aly and Stephens have made too many assumptions about the similarity of US and Australian political cultures. Morrison didn’t incite a mob of Coalition followers to storm Parliament House, and even Dutton and Joyce seem to accept that they lost the election. On the left we haven’t had anything as loony as a campaign to “defund the police”, and it’s a small minority who believe that every social institution exists to sustain “white” male privilege. America’s geography, with its deep regional inequities, isn’t replicated in Australia: we don’t have a Louisiana, Alabama or a Wyoming, and even Queensland comes across as a state of liberal enlightenment in comparison with Texas. Nor do America’s fraught racial tensions translate easily to Australia. We both have our terrible transgressions involving disrespect for and contempt towards people classified to different “races”, but slavery is not the same as invasion, murder and land theft. We each have to deal with our own sins in our own ways.

Aly and Stevens conclude with a prescription for what a robust democracy should look like. They list the basic institutions – elections, the rule of law, free speech, universal suffrage and so on – but they don’t stop there. They add the requirement that democracy should be representative, but they don’t stop there either. A healthy democracy is one where everyone is engaged in the public life, seeking to understand others’ circumstances and the reasons for their political opinions, and seeking to solve problems in the public sphere.