Adaptive Organisation

Outside of the arguments of political parties, ideologies, policies etc; government is predominantly an administrative structure. We would expect government to be relatively fluid as it changes in size, shape, boundaries and structures in order to remain at maximum administrative efficiency. However, government has a monopoly in many areas and civil order doesn’t always respond positively to a government darwining itself. So we use technologies such as constitutionalism, representation and liberal democracy to provide fluency and stability.

The two fluid levels of government in Australia have been federal and local government. The federal government has over-taken many responsibilities of the states as well as establish itself as the dominant taxing entity. The federal government does nearly 80% of all taxation and the state governments tend to be reliant upon the federal government for 50% of their expenditures.

Local government has their structures dictated by State legislation or constitutions, however, they have scaled through amalgamations. Brisbane City Council is the example most people trot out though it was created in 1925 through collapsing twenty different councils into one. A more recent example is Penrith City Council which amalgamated five councils in 1949.

Fluidity in Australia has been one way – effectively a vector for centralisation.

Administrative organisation must be fluid in order to respond to external and internal pressures. For a nation-state these pressures are numerous. They can be diplomatic, political, economic, martial etc. These pressures aren’t static either. No-one would argue that Billy Hughes in 1919 faced the same pressures, internal and external, that John Howard does in 2006. Technology, society, economy, basically everything moves fast and government has to organise itself to take advantage of those changes lest it darwin itself.

The best recent example of a government darwining itself was the Soviet Union. They bet on the wrong horse big time. They chose an inefficient political organisation, an inefficient economic organisation and to top it off – they took an aggressive international stance.

These types of decisions are only possible with massive amounts of external inputs to prop up the inefficiencies. The Soviet Union ended up collapsing because it ran out of money to maintain its inefficient structures. Iran is currently taking an internationally aggressive stance but they can get away with it due to the demand for their high-priced oil. Same with an increasingly despotic Russia. Without its dominance of European gas supply, Russia would have to compete economically which would mean a different governmental organisation in order to maximise its economic efficiency.

There is a lesson here for Australia. We have already had the “Sheep’s back” economy where we got blas© about efficient economic organisation – preferring instead to live off over-priced agricultural commodities. Currently Australia is under-going a resources boom. China, India, Japan and South Korea have an insatiable desire for the dirt we dig up. This boom will likely continue as other nations ‘do a China’ – such as Indonesia.

This puts Australia in the same position as Saudi Arabia, Iran and Russia. We can get away with inefficient organisational structures simply because we subsidise those inefficiencies with disproportionate revenues from a single source. Despite the current fashion for a ‘three cheers’ history of Australia, we are not immune to bad decisions – especially not from government, who have made destructively bad choices in the past.

Globalisation is the current dominant pressure on government – both internally and externally. The sheer speed, scope, reach and democratised nature of modern communications is something new. The governments that adapt to maximise the advantage from globalisation will set their constituents up for continuing achievement.

Globalisation is normally described as having the properties:

• economic interdependence
• transnational communications
• homogenisation of differences
• collapse of chronological time and geographic space (ie world is getting smaller)
• transnational social and political movements
• local action for global causes
• transfer of allegiance away from the state

We are already seeing that the main form of competition between nation-states is economic rather than military. This is not because of US military hegemony but due to the destructive economic nature of warfare. When India and Pakistan were on the brink of war several years ago Indian business leaders went to the Indian government and told them to stop it. The sabre rattling was costing them revenue. American companies that contracted services with them were getting nervous over the stability of India and were taking their business to more stable environs.

Another aspect is the transnational nature of positive and negative political movements. This appears to be the greatest pressure on internal government organisation. Especially heavily centralised ones – which Australia is.

The government supplies a lot of services to keep a modern society and economy humming. Roads, transport, energy, health, education, police, etc etc. Basically all the capital intensive stuff where the government has a constitutional monopoly or market solutions are less than optimal. With munitions being a commodity and the existence of cheap delivery systems, such as strapping a bomb to the chest of a terrorist, the authority of government to provide those services can be challenged easily.

Islamic groups find distinct advantage in an environment where the government has been delegitimised as their organisation is greater than religious unity. It also carries social and judicial services. Where a government leaves a vacuum of authority, well organised Islamic groups can quickly step in to provide security, services and judicial certainty. This is one of the problems the Lebanese government faces, Hezbollah is the second largest employer in the country.

A heavily centralised structure is easy to delegitimise as it carries singular points of weakness. Unfortunately when a government, or large powerful bureaucratic organisation, is faced with decentralised pressures its first instinct is to centralise more. Which is the wrong strategic response.

Australia has issues as it is already heavily centralised and any fluidity the system does contain flow toward centralisation. For instance the national government and High Court have aided the dominance of Canberra over the states while the states have denied Local Government the chance to write their own charters.

Centralisation does have advantages, it makes for unitary bureaucratic and regulatory regimes. It is also useful in a capital intensive environment – or when faced with a heavy centralised competitor. If we look at the current capital intensive services Australia government provides we can split them up by their national, state and local character:

• National: Diplomatic, Judicial, Defence, Currency, Transport
• State: Police, Judicial, Health, Education, Transport, Water, Sewerage
• Local: Wheelie Bins, Transport, Libraries

By that measure we would expect the States to raise about 60% of all taxation revenues but they don’t. Rod Beckstrom described the technology of federalism as a “sweet spot” between centralisation and decentralisation. Bob Carr commented in July last year that Australia is now the most centralised of any federal system. The States are not above criticism, they have restricted local government, while dumping responsibilities on the federal government for political and fiscal reasons.

Yet there are few mechanisms for decentralisation. There has been a successful secessionist referendum in Western Australia, which ended up going nowhere, and an unsuccessful one in NSW to establish the State of New England. There are small secessionist movements around Australia such as in North Queensland. Most plans for the re-ordering of sub-national government and administrative boundaries involve the abolition of the States and the establishment of large regional bodies. A cursory glance at services provided by the levels of government suggests that the federal government should get slashed down to bare metal rather than the States.

Another means to provide local response and shared interest is by recognizing citizen organisations. Australia has a great history in this area with groups such as the Bush Fire Brigade, State Emergency Services and even militia. Those groups draw on the services and knowledge of the citizenry in times of emergency and crisis. Citizens become active, involved and capable of accurately judging and responding immediately to local issues. The government would provide subsidies to the capital intensive components such as training and equipment.

What would a decentralised Australian federal system look like?

It would have a minimal national government, limited to international issues rather the intra-state ones. The main advantage of the national government being that it enforces a mini free-trade zone between the states. The national government’s taxation abilities would be limited to financing itself.

The States would become the main form of government in Australia – faced with perpetual competition between each other politically and economically. Local Government would remain the authority on Wheelie Bins which is an under-rated responsibility. There would also be increasing autonomy and recognition of citizen organisations which would probably have to come from the national and state levels of government. These citizen organisations would go a long way to replacing many state based institutions.

Australia has no fluid vector for decentralisation. The methods to achieve decentralisation are generally catastrophic or disruptive which goes against a doctrine of fluent and stable government. This is a weakness in our system.