The antithesis of the Japanese ‘win-win’ approach is to establish power-over structures which benefits minority stakeholders at the expense of the majority. This short-sighted approach can only lead to breakdowns in economic, political and social systems. The pending default crisis in the United States of America and moves to manipulate climate change policy in Australia in order to establish rent-seeking structures are reflective of dysfunctional public policy.

The following article by Dr. David Bennett in analysing the ebbs and flows of modern Japanese history will show how Japan has managed to arrive at and immensely benefit from having a Gestalt approach that values the individual and collective contributions to engendering a coherent society.

Analysis of other nations benefiting from adopting a Gestalt Approach is also undertaken.

David Bergamini’s Conspiracy: Using Facts to Distort Reality

Analysis of ambiguities concerning Japanese politics of the twentieth century often centred upon the institution of the Japanese monarchy. Since Emperor Hirohito’s death in January 1989, there has been a pendulum swing back by non-Japanese historians and commentators to support the contention that His Imperial Majesty was a war criminal who escaped justice following the Second World War. This ‘re-revisionism’ with regard to Emperor Hirohito can be traced back to the late David Bergamini’s brilliant but sinisterly dishonest 1971 book, Japan’s Imperial Conspiracy.

Bergamini had a comprehensive knowledge and understanding of post-Meiji power relationships. He therefore provided amazing insights into the relationship between the Japanese monarchy, the elite, the military and the role of institutional structures. This author correctly pointed out that Emperor Hirohito did not derive absolute power from the 1890 Constitution. The purpose of this constitution, as Bergamini accurately explained, was to provide a cover by which Japan’s Genro* elite exercised power by invoking the Emperor as a divine source of power. Considerable detail, (again, much of it accurate), is provided in Bergamini’s book that explains how Japan’s shadowy elite formulated and implemented foreign and domestic policies.

(*The Genro were descended from the advisers of Emperor Meiji who instigated the end of Shogun (warlord) rule in the nineteenth century to prevent probable European colonialization).

The ingenious but sinister dimension to Japan’s Imperial Conspiracy is Bergamini’s untrue assertion that Emperor Hirohito deviously co-ordinated an aggressive militarist strategy and foreign policy by forming a covert military camarilla from the time he was Crown Prince. Bergamini’s book reads as a detective novel and one can only marvel at the way in which Emperor Hirohito supposedly manipulated the military, the bureaucracy and the parliamentary parties to take Japan into war.

A riveting but fictional story throughout much of Bergamini’s book is the supposed power struggle between the last of the Meiji era Genro - the anti-militarist Prince Kinmochi Saionji - and Emperor Hirohito. The supposed Saionji / Hirohito struggle is an epic one with two brilliant protagonists subtly fighting it out without ever brining their differences openly to the fore.

According to the Bergamini version, Emperor Hirohito outmanoeuvred Prince Saionji to lead Japan into the Second World War. Bergamini makes the correct point that this prince’s death in November 1940 removed an important obstacle to Japan launching an aggressive military war against the United States. But this author goes a step further by inaccurately claiming that Prince Saionji’s prime opponent was the Emperor instead of the militarist factions.

Bergamini was accurate in refuting the incorrect post-war orthodoxy between the 1950s and 1980s that Emperor Hirohito was a completely powerless puppet of the Japanese militarists. But in repudiating this fallacy, Bergamini created a mythology that Emperor Hirohito was a covert dictator who masterminded Japan’s entry into the Second World War by controlling the nation’s war machine. This construct of Emperor Hirohito as an arch manipulator in Japan’s Imperial Conspiracy was not credible when Bergamini’s book was published in 1971 and therefore was understandably discredited.

The current disrepute into which Emperor Hirohito has fallen into is due to the impact of the late Edward Behr’s 1989 book (and a pre-arranged documentary narrated by Behr shortly after Emperor Hirohito’s death) Hirohito: Behind the Myth. The momentum for Behr’s‘re-revisionist’ book on Emperor Hirohito was derived from the impact of his biography of China’s ‘last emperor’ Pu Yi*. This biography provided Behr with international fame and credibility because it was used as the basis for Bernardo Bertolucci’s film 1987 The Last Emperor (sic).

(*Behr took liberties in his book biography of Pu Yi by claiming, without substantiation, that Emperor Hirohito personally vetoed the Chinese emperor’s intention in 1940 to divorce his wife Empress Wan Rong, ‘Elizabeth’).

The Behr biography of Emperor Hirohito, similar to Bergamini’s, gained a credence that was overall undeserved, by correcting popular misconceptions concerning Japan’s power structure. Behr was correct in that Emperor Hirohito was informed of the war’s progress and that His Imperial Majesty was not merely a passive figurehead. The damning aspect of Behr’s book on the Japanese Emperor is the claim that Hirohito was involved in military operational decisions and approved of war crimes such as biological experiments on humans in Manchuria by the notorious Unit 731.

Behr’s incrimination of Emperor Hirohito is derived from alleged excerpts from the Emperor’s Lord Keeper of the Privy Seal, the Marquis Koichi Kido (1889-1977). The Kido diaries were used as evidence at the Tokyo War Crimes Trials Tribunal (1946 to 1948). The excerpts of the Kido diaries that were cited at the Tokyo trials did not incriminate Emperor Hirohito in relation to exercising military or political power in relation to Japan waging an aggressive war. Behr never adequately explained how he obtained later entries of Kido’s diaries in which the Emperor is directly and supposedly quoted as approving of aggressive military policies, human rights abuses and instigating specific military operations.

The Crown Prince’s Regency

It is possible that the Emperor was aware of war crime abuses but the political context was such that His Imperial Majesty definitely did not have control over the military’s actions in China or subsequently in the Pacific during the Second World War. Indeed, Emperor Hirohito’s personality and background indicated that he would be a liberal orientated sovereign. The future emperor was born in April 1901 and became regent of Japan in November 1921 due to his father, Emperor Taisho’s mental illness*. Just prior to the Crown Prince becoming regent, His Imperial Highness visited Great Britain where he was impressed with the rapport that the British royal family had established with the public. The young Japanese prince was also impressed by the popularity of the then Prince of Wales, Prince Edward.

(*The fact that Emperor Taisho could be effectively removed from his duties as sovereign in 1921 reflected that the position of Japanese emperor was not inviolate as he was supposed to be under the 1890 Constitution).

Crown Prince Michi (his name before His Imperial Highness ascended the throne) lacked both the personal inclination and the capacity to become a popular and engaging royal, such as Britain’s Prince Edward. The young prince’s life was regulated by strict protocol and regulations set by the Imperial Household Ministry. The one area of personal freedom that His Imperial Highness established for himself was as a marine biologist in which he eventually became a leading world expert. It was as a marine biologist that the prince realized early in life that he and his family were not divine.

The Crown Prince later demonstrated a limited degree of personal independence by steadfastly refusing to take a concubine after his wife Empress Nagako failed to provide a male heir during the first nine and half years of their marriage. Although the Crown Prince’s marriage in early 1924 to Princess Nagako was arranged, it did eventually become a union based on love. (The birth of a son Prince Akihito in November 1933 ended anxiety about a male heir).

1924 ‘Taisho Democracy’: The False Dawn of Democratic Constitutional Monarchy

Hirohito’s regency years (1921 to 1926) were promising in that they seemed to establish the basis for a democratic constitutional monarchy for when His Imperial Highness formally ascended the throne in 1926. The passage of legislation granting full *male suffrage in 1924 seemed to consolidate a transition to democracy. This transition had seemingly commenced when a convention was established following the end of the First World War that the Emperor appoint cabinets based on the strength of the two major parties represented in the Diet. Between 1919 and 1932, bureaucrats and military officers connected to the post-Shogun-Genro elite were still appointed to cabinet positions but a party’s electoral strength was then the major determinant of a government’s formation.

(*The high water mark of Japanese democracy in the inter-war era was the holding of an international Suffragist’s Conference in Tokyo in 1930. The Japanese capital was chosen to highlight the fact that female suffrage had not yet being granted to Japanese women. This conference gained widespread publicity in Japan that belied the fact that civilian control over the military was not actually a reality. Despite a spirited campaign, legislation granting female suffrage was unfortunately blocked by the hereditary House of Peers in 1931).

The leading members of the two major political parties, the *Liberal Party and the Democratic Party*were predominantly drawn from a landowning and industrialist elite that had connections with the Zaibatsu*. Prefectural assemblies were elected but the positions of mayors and governors were appointed by the Home Minister who usually represented the Genro elite. There were differences of opinion between the two major parties but these tended to be too esoteric in relation to people’s everyday lives. A major point of distinction between parliamentarians which never gelled with the masses was the issue of extending civil rights to people living in Korea and Taiwan.

(*The Democratic and Liberal Parties went successively by different names between 1890 and 1940 and in the immediate post-war period. For simplicity’s sake, these two parties will be referred to by the aforementioned names).

(*There were four financial and business conglomerates, Mitsubishi, Mitsui, Sumitomo and Yasuada, that were formed by the Genro elite during the Meiji restoration in the nineteenth century, which constituted the Zaibatsu. The Zaibatsu dominated the domestic economy and the nation’s international trade policy as well as exercising a strong influence over the military and the established parliamentary parties).

Extension of voting suffrage to all males twenty five and over was tempered if not counteracted by the passage of a National Security Law in 1925 that made it illegal to denigrate the Emperor or threaten the nation’s security interests. A specialized section of Japan’s centralized police force was established that was actually called the ‘Thought Police’! This police agency (which came under the formal jurisdiction of the Home Minister) had a self-appointed right to censor newspapers and arrest anyone it deemed to be unpatriotic. Ominously, the ‘Thought Police’ moved against Japanese trade unions.

Hybrid Tensions: Militarism versus Democracy

Japan between 1926 and 1932 was a hybrid with a respectively emerging para-state and a nascent democracy fighting for supremacy. Emperor Hirohito was tentatively aligned to constitutional democracy. The struggle between these two opposing tendencies was to be resolved in relation to external military affairs. The issue of civilian control over the military (or lack of it) was focused on China. In June 1928, the then Prime Minister, General Tanaka Giichi was infuriated by the Kwangtung army ( the Japanese army garrison based in Manchuria) assassinating the Manchurian warlord Generalissimo Chang Tsu-lin as he fled to his Manchurian stronghold before Chiang Kia-shek’s advance on Peking.

General Tanaka was an avowed political liberal who alienated his military support base by denouncing the Kwangtung army’s assassination of Chang Tsu-lin. Ironically, as an army general, Tanaka also came under attack from civilian politicians who were suspicious of him as a militarist. Emperor Hirohito’s rebuke of his prime minister for failure to rein in the Kwangtung army precipitated Tanaka’s resignation in 1929. (The former prime minister died later that year of natural causes).

The Emperor’s criticism of General Tanaka (which was probably unwarranted) in causing the fall of the Tanaka cabinet placed the sovereign in the civilian constitutionalist camp. The issue of civilian control came to a head in September 1931 when the Kwangtung army under General Senjuro Hayashi’s leadership defied emissaries despatched by the Emperor to Manchuria and commenced an invasion of Manchuria.

Even prior to the Kwangtung army’s 1931 invasion of Manchuria, the Kodoha (Imperial Way) military faction, which at the time lacked a capacity to seize power outright in a military coup, carried out assassinations of civilian political party leaders. In November 1930, Prime Minister Osachi Hamaguchi (who had succeeded General Tanaka) was wounded in an assassination attempt. The injuries he received obliged Hamaguchi to resign in April 1931. Hamaguchi’s successor as prime minister, Wakatuki Reijir, was in turn compelled to resign his post in December 1931 due to his failure to stop the Kwangtung army invasion of the Manchurian region of China.

The assassination in May 1932 by an ultranationalist group of Prime Minister Inukai Tsuyoshi effectively ended direct civilian parliamentary rule. This assassination was carried out with the backing of the Kodoha army faction. The Kodoha strategy of assassinating civilian political leaders succeeded in intimidating the parliamentary leaders from assuming direct responsibility for government. The parliamentary leaders consented to Emperor Hirohito appointing non-parliamentary cabinets composed of party members, moderate armed forces officers and Genro backed bureaucrats to restrain the Kodoha military faction.

Shadowy Politics Undermines Democracy

Ironically, the radical Kodoha Faction’s origins were with the conservative Kakuhonsha (the National Foundation Society) which was founded in 1924 by Japan’s authoritarian Justice Minister, Kiichiro Hiranuma. The Kakuhonsha was a nationwide society composed of bureaucrats, aristocrats, parliamentarians and senior army and navy officers who were opposed to Japan becoming an authentic constitutional democracy. The passage of the Peace Preservation Law in 1925 reflected the political influence of the Kakuhonsha.

The Kakuhonsha increasingly came under the radical influence of Colonel Sadao Araki who utilized the society as an anti-Prince Saionji network. The canvassing of a military coup in March 1931 and the subsequent invasion of Manchuria in September that year represented the emergence of an aggressive military faction linked to the Kakuhonsha. To placate the military element within the Kakuhonsha, the new civilian constitutional government of Inukai Tsuyoshi appointed Colonel Araki War Minister in December 1931. This attempted co-option glaringly failed when Araki helped instigate Prime Minister Inukai’s assassination in May 1932! As previously mentioned, Inukai’s assassination effectively marked the end of civilian parliamentary rule in pre-war Japan.

The two succeeding non-party and non-parliamentary governments (which still received parliamentary consent) of Viscount Saito Makoto (1932-34) and Admiral Keisuke Okada (1934-1936) were appointed at the instigation of Prince Saionji to rein Araki in. The difficulty of achieving this objective was highlighted in September 1932 when Araki, who was still serving as War Minister, formally announced the formation of the Kodoha army based faction.

The Kodoha faction became radicalized by Araki’s alliance with the fascist ideologue Kita Ikki. Kita not only supported an aggressive militarist foreign policy but the establishment of a totalitarian state. This fascist ideologue envisaged a Japan in which there would be a state controlled economy in a nation ruled over by a mass- based, military-backed totalitarian party. In this fascist state, land was to be distributed to tenant farmers and the Zaibatsu disbanded. The Emperor would supposedly rule supreme (this was why Kita’s envisaged regime was to be called the ‘Showa Restoration’) but in reality Emperor Hirohito was to be a puppet of a fascist dictatorship.

The succeeding Makoto and Okada governments responded by helping create the rival Toseiha (‘Control’) faction which included nationalist army officers, such as General Hideki Tojo. This faction was similarly aggressively nationalist in foreign policy but, due to the Makoto and Okada governments’ roles in creating this faction, its members did not support the radical domestic fascist objectives of Kita. Prince Saionji supported the creation of the Toseiha faction as a counterweight to the Kodoha faction. Without the existence of the Toseiha faction, the anticipated Kodoha military coup of February 1936 might have succeeded.

The 1936 Revolt: The Abortive Coup that Ultimately Succeeded

The failed military coup was notable for the assassinations of Viscount Saito, former prime minister Korkiyo Takahashi and General Jotaro Wantanabe by the Kodoha military faction during the course of the abortive rebellion. The paradoxical upshot of the 1936 February coup attempt therefore was that, although the Kodoha faction was destroyed (with most of its surviving leaders subsequently court marshalled and shot) the murders of Emperor Hirohito’s* aforementioned key advisers created a void with regard to restraining members of the Toseiha military faction such as General Tojo.

(*The Emperor informed senior armed force commanders of his opposition to the 1936 coup and his preparedness to lead troops in battle against the rebels. This imperial resolution helped ensure the 1936 coup’s failure. However, the assassinations of the Emperor’s key advisors might have orientated His Imperial Majesty away from again openly opposing the military).

The assassination of Emperor Hirohito’s key advisers meant that the now dominant Toseiha faction could not be diverted away from pursuing aggressive military action if it so chose. The major positive dividend of the February 1936 coup attempt’s failure was that a civilian constitutional framework remained intact. Because leaders of the Toseiha faction (such as General Tojo and General Senjuro Hayashi) had not actually created this faction but now dominated it following the 1936 assassinations, this faction initially lacked a coherent strategic sense of direction. Consequently, leaders of the Toseiha faction refrained from attempting to directly assume power but instead undertook independent military action abroad.

As previously mentioned, most surviving Kodoha leaders of the abortive coup were court marshalled and shot. Kita was the major civilian who was executed. Leaders of the Toseiha faction and the aristocratic elite believed that Kita’s execution removed a domestic radical influence on Araki. To help assimilate former members of the Kodoha faction into supporting the Toseiha faction, Araki was later appointed education minister in 1937 in the first Konoe government. Although Araki did not exercise the political power that he previously had, his tenure as education minister helped orientate Japanese youth toward later supporting aggressive war.

To influence the Toseiha faction toward a relatively moderate direction, Emperor Hirohito, at the suggestion of Prince Saionji, appointed Prince Fuminaro Konoe prime minister in June 1937. The fact that the Emperor Hirohito followed Prince Saionji’s suggestion was indicative that His Imperial Majesty was aligned to the objective of maintaining a constitutional Japan.

The objectives of the Konoe government were twofold. The first objective was to steer the Japanese military away from undertaking aggressive military action abroad. The second government objective was to maintain a constitutional structure even if the first objective was not met. Prince Konoe was soon tested within a month of being appointed prime minister when the Kwantung army in effect instigated a war of conquest against China by staging the Marco Polo Bridge incident outside Peking in July 1937.

Instead of restraining the military in China, the suave Prince Konoe attempted to negotiate a treaty with Chiang Kia-shek’s government. The Chinese Generalissimo either had an insightful knowledge of Japanese domestic politics or a brilliant advisor in the field because he refused to negotiate with the Konoe government. Chiang’s fortitude was partly derived from his appreciation that Japanese foreign and defence policies at this time were uncoordinated. The Chinese leader knew that there was a strong possibility that elements of the Toseiha faction were inclined toward initiating a war with either the Soviet Union or the United States if he continued to hold out against Japan.

The Toseiha faction was essentially the same as the former Kodoha faction in socio-economic background. This was epitomized by General Tojo (who was descended from samurai warriors) being appointed by the Okada government as head of the secret police (Kempeitai) section in Manchukuo in 1935 to bring the surviving members of the Kodoha faction of the Kwantung army in the puppet state to heel.

The crushing of the February 1936 coup attempt led to the formal dissolution of the Kodoha faction but substantial remnants of it passed into Tojo’s sphere of influence with the blessing of the army High Command. Due to the failure of the 1936 coup, the Zaibatsu were allowed into Manchukuo and senior Zaibatsu employees assumed powerful positions in the puppet nation’s industrial and state structures.

The only area of ‘independence’ that the Kwantung army maintained in ruling Manchukuo from Tokyo was its advocacy of the ‘Strike North’ proposition that Japan utilize Manchuria as a base to invade the Soviet Union. An ‘incident’ was therefore instigated in August 1939 by the Kwantung army along the Soviet-‘Manchukuo’ border to provoke a Soviet-Japanese War. This 1939 incident was similar to the July 1937 Marco Polo Incident in that it was independently instigated by a Japanese military faction in China to provoke a war.

Due to General Georgy Zhukov’s brilliance, the Soviet-Mongolian forces under his command pulverized the invading Kwantung army forces. The Soviet-Mongolian victory in the Battle of Nomonhan, along with Stalin’s notorious Non-Aggression Pact with Nazi Germany in September 1939, undoubtedly averted a Soviet-Japanese War. As the Kwantung army’s chief of staff between 1937 and 1938, General Tojo had been open to instigating a Japanese war of aggression against the Soviet Union until the 1939 Battle of Nomonhan. The Soviet-Mongolian victory in this 1939 battle demonstrated how uncoordinated Japanese foreign and military policy could be.

Who is Using Who? Prince Konoe’s Double Game

Prince Konoe’s failure to negotiate with the Chinese led him to revamp Japan’s political structure so that the Genro elite and the Zaibatsu could be accommodated in a new political structure if the military took the nation to war. In keeping with this objective, a National Mobilization Law was passed by the Diet in March 1938. This law gave military backed agencies the capacity to regulate industry and employment in relation to war production and to exercise press strict censorship. While the industrial sector was being coerced toward going to war, it was still not clear against whom Japanese aggression would be directed. This was due to uncertainty within the Japanese military as to which country they should attack: the Soviet Union or the United States?

The pulverizing defeat that the Kwantung army suffered at the 1939 Battle of Nomonhan might have restrained the Toseiha faction from waging an aggressive war against the Soviet Union or the United States had it not been for the Fall of France to Nazi Germany in June 1940. This catastrophe emboldened the Toseiha faction and the Japanese Imperial General Headquarters to believe that an alliance with an apparently successful Nazi Germany provided Japan with the military capacity to successfully undertake a war of military conquest.

Acting on the advice of Prince Saionji (who later died in November 1940 of natural causes), Emperor Hirohito recalled Prince Konoe (who had previously resigned as prime minister in January 1939) as prime minister in July 1940 to again restrain the military. As with his previous time as prime minister, Konoe’s role was to placate the military from waging a war with either the Soviet Union or the United States. Failing this the fall back position of the second Konoe government was to accommodate the Zaibatsu and the aristocracy within a war-time power structure if war eventuated.

The fall of France created such momentum that Prince Konoe did not attempt to resist the Japanese military from occupying French ruled northern Vietnam in September 1940 in order to cut a vital supply route for China. The Japanese military initially refrained from occupying all of French ruled Indo-China to placate the United States. But, in July 1941, the Japanese military occupied all of Indochina to test Washington’s reaction.

The Roosevelt administration responded by impounding Japanese government assets in the United States and placing an oil and scrap metal embargo in August 1941. The American response stunned Japan’s civilian and military elites. The American reaction went to the jugular of Japanese anxieties because it entailed cutting off raw materials to a natural-resources starved nation. The resultant priority for the Konoe government became the rescinding of the American economic embargos. Such an outcome was inherently unviable because the United States insisted that Japan end its war of aggression against China. Such a concession could not be forthcoming from Japan because it would have entailed the demise of the Toseiha faction.

Indeed, it now still seems a mystery why the Japanese military was so determined to wage a war of aggression against a nation as powerful as the United States. Part of the answer to this riddle was that the military could not be restrained by Japan’s elite. The military’s power could be traced back to the fact that the abolition of the Shogunate in the mid nineteenth century had only been possible because the Samurai warrior class had been taken into the new armed forces.

Because the Japanese officer corps were inculcated with the aggressive Bushido mindset, they regarded military conflict as inherently worthwhile regardless of strategic realities. Downsizing the military was also not an option because gross mis-concentration of agricultural land ownership amongst the civilian political elite precluded accommodating discharged armed forces personnel in the agricultural sector.

If the Japanese military was orientated toward waging an aggressive war, the question arises as to why the United States was chosen instead of the Soviet Union, given the formers’ immense industrial and military capacity? The Japanese military’s decision to opt to go to war against the United States was reflective of a lack of co-ordination that then characterized Japanese government decision making which led to illogical policy decisions been made.

The military’s decision to attack the United States was reflected by Japan’s anti-Soviet foreign minister, Yosuke Matsuoka deceptively signing a Non-Aggression Treaty with the Soviet Union in April 1941! The fall of France in June 1940 led Japan to sign the Tripartite Pact with Nazi Germany and Fascist Italy that year in September 1940 as a prelude to these three nations invading the Soviet Union.

The over-riding reason why Japan did not later invade the Soviet Union was because the Japanese Imperial Navy was opposed to such a course of action. The navy supported the ‘Strike South’ option because this branch of the military would be more militarily relevant and powerful if a war was fought at sea in the Pacific. Furthermore, General Tojo (who had been appointed War Minister upon the formation of the second Konoe government in July 1940) was probably too wary of taking on the Soviet Union following the Battle of Nomonhan in 1939.

The apparent failure of Prime Minister Konoe to achieve a repeal of American sanctions led to his resignation and the ascension of General Tojo as prime minister in October 1941. Although Prince Konoe had failed to reach a rapprochement with the United States, he had seemingly succeeded in achieving his fall back objective of re-configuring a new power structure that accommodated the civilian land-owning political elite and the Zaibatsu.

Japan’s Post-Genro Elite Ostensibly Moves Toward Fascism

The major manifestation of Prince Konoe facilitating the civilian establishment’s accommodation within a new military orientated political structure was the formation in October 1940 of the Imperial Rule Assistance Association (IRAA). The IRAA was really a merger of the nation’s two established major parties, the Liberal and Democratic parties. They had previously overwhelmingly defeated the Toseiha faction-backed fascist Tohokai Party* (Society of the East) in the April 1937 parliamentary elections which only won eleven seats!

(*The Tohokai Party leader Nakano Seigo was inclined toward notionally left-wing Nazism which had been espoused by the late Ernest Roehm in Germany).

The 1937 electoral rebuff of the Tohokai Party caused General Senjuro Hayashi, who had been appointed prime minister in February of that year, to resign and make way for Prince Konoe as prime minister in June. Hayashi owed his appointment as prime minister to the important role that he had fulfilled in crushing the February 1936 coup. Had the then military-backed-Tohokai Party done better in the 1937 elections General Hayashi probably would have become Japan’s military dictator that year instead of General Tojo in 1941.

Prince Konoe, on resigning as prime minister in October 1941, ostensibly advised that His Imperial Majesty’s wife’s uncle Prince Higashikuni be appointed as his successor. The outgoing prime minister later disingenuously claimed that had Prince Higashikuni’s appointment occurred that there never would have been an attack on Pearl Harbour. Imperial and aristocratic officers (such as Prince Higashikuni) had helped establish the Toseiha faction but they did not control this faction because it was mainly composed of descendants of samurai clans to which these aristocrats did not belong.

The imposition of the American oil embargo-and the navy’s preparedness to go to war on the condition that the United States be attacked established the factors by which the Toseiha faction would have compelled a hypothetical 1941 Higashikuni government to attack Pearl Harbour. Had this occurred, the institution of the monarchy would have been fatally compromised because the prime minister was a relative of the Emperor.

In the improbable event that Prince Higashikuni refused to attack Pearl Harbour, the Toseiha faction would have staged a successful coup to establish an outright military dictatorship. Under an explicit Toseiha military dictatorship, the aristocratic component of the Japanese armed forces, the Zaibatsu, and the civilian establishment would have survived but the Diet probably would have been dispensed with. The power of the Japanese monarchy would have become so nominal that any capacity for the Emperor to later help salvage the nation from military defeat would have been extinguished.

Pre-Determined Defeat: Japan Enters the Second World War

The Emperor appointed General Tojo as prime minister in October 1941 on the advice of the Marquis Kido. The Lord Keeper of the Privy Seal would later pay for his role in instigating Tojo’s appointment by been sentenced to life imprisonment at the Tokyo War Crimes Tribunal in 1948. Marquis Kido’s overwhelming concern in 1941 was to ensure the survival of the Japanese monarchy and to protect the person of Emperor Hirohito. For Marquis Kido, it was better to allow Japan to enter a war that he knew Japan would probably lose than have the Emperor become a captive of the Toseiha faction. From Kido’s perspective, the Japanese elite could either ride the advantages that came from an improbable victory or be in a position to pick up the pieces in the event of a probable defeat.

The appointment of General Tojo as prime minister in effect placed Japan on course for war against the United States. President Roosevelt had a degree of insight into Japanese politics due to the brilliance of the then American ambassador to Japan, Joseph Grew, who had taken up his appointment in 1931. Grew (who forewarned the White House in January 1941 of the Japanese military’s intention to bomb Pearl Harbour by the year’s end) advised President Roosevelt that Tojo’s appointment as prime minister did not necessarily mean that Japan would attack the United States if American sanctions against Japan were not lifted.

Emperor Hirohito was informed of the attack on Pearl Harbour of December 1941 before it was undertaken. The Emperor’s approval was not required because the decision to attack the United States had already been made by the Imperial General Headquarters and subsequently approved by the cabinet. The Emperor was requested by the prime minister to convey a message to the cabinet regarding His Imperial Majesty’s attitude toward the impending attack.

The imperial response was encapsulated in a cryptic poem in which the Emperor alluded to the forbearance of the Japanese nation. This probably reflected His Imperial Majesty’s realization that Japan would probably lose the war if the United States was determined to fight back. Perhaps someone as intense but narrow minded as Tojo believed that a democracy such as the United States was too weak to fight a total war against Japan. The United States had (and still has) a tendency toward isolationism but this dissolves into determined resolution when American citizens (particularly if attacks are undertaken on American territory) are attacked by foreign powers.

The fact that Japan was going to lose the war became apparent with the American victories in the respective naval battles of the Coral Sea in May and Midway in June 1942. Senior army aristocratic officers (such as former prime minister, Admiral Keisuke Okada and the Emperor’s younger brother, Prince Mikasa) privately urged the Emperor to conclude the war following these reverses. However the Tojo regime was then too entrenched for the Emperor to then sue for peace.

Furthermore, the American insistence on unconditional surrender denied Japan the scope to sue for a negotiated settlement which elements of the Japanese military and elite had originally and erroneously envisaged. Indeed, there was a fundamental misconception outside Japan that this nation always intended to fight to the finish without negotiations. This was not the case. Instead, the post-Genro elite, aristocratic elements of the army and the leadership of the navy erroneously believed that the Allies would enter into negotiations to eventually allow Japan to hold some of the valuable territory it had gained.

There was also an incorrect belief on the part of the Japanese establishment that part of a negotiated settlement with the United States would secure a rescission of the American embargo. In the interim, Japan’s elite waited for the military situation to deteriorate to ease the Toseiha faction from power and/or initiate negotiations with the Allies for a peace settlement.

Democratic Processes Consolidate a Dictatorship

The Tojo regime was secure in the medium term partly due to the widespread belief amongst the public that Japan had to unite in a time of crisis. This was reflected in the 1942 parliamentary elections. The bizarre dynamics of these elections were such that the overwhelming victory of the relatively moderate IRAA (whose successful candidates predominately came from Japan’s two ostensibly superseded major parties) was interpreted as an endorsement of the Tojo government’s aggressive military war policy. The ruling party was considered to be moderate because the major opposition group that was allowed to run against it was the avowedly fascist Tohokai Party!

Ironically, the Tohokai Party leader Nakano Seigo was in favour of Japan quickly negotiating a treaty with the Allies while Japan’s military position was still relatively advantageous. Seigo’s party (whose candidates were compelled to run as independents) had the backing of the predominately anglophile navy.

The Tohokai openly campaigned during the 1942 elections against Tojo’s so-called ‘Asia Co-Prosperity Sphere’ (this concept had been formulated by then Foreign Minister Matsuoka) which maintained that Japan was fighting a war on behalf of the peoples of Asia to liberate them from European imperialism. The fascist opposition intimated that the war should be brought to a speedy conclusion by negotiating with the Allies! The April 1942* elections were a novelty in that there was an openly fascist party criticizing Tojo for not emulating Hitler’s regime by being totalitarian in domestic policy while calling for negations to end the war.

(*It is interesting to speculate if military defeat in the Battle of Midway in May 1942 had come a month or two earlier, if this would have influenced the election result).

The Diet members of the left of centre Social Mass Party, later the Japanese Socialist Party (JSP), had entered into the IRAA so they could informally continue under the ostensible aegis of a single party regime. But in contrast to MPs from the post- Liberal and Democratic parties, a substantial number of socialist parliamentarians were denied the right to stand as candidates under the IRAA. These parliamentarians either ran as independents or boycotted the 1942 elections.

The results of the national parliamentary elections in April 1942 seemingly confirmed the enduring survival of the pre-war elite because the two superseded traditional parties continued their electoral competition under the banner of the IRAA as they contested multi-member electorates. But appearances, particularly in Japanese contexts, can be deceiving.

The reality behind the relative pluralism of the 1942 elections was that it was a means by which the ‘Fleet faction’ of the navy attempted to advance its foreign and defence agendas via a constitutional means by supporting the Tohokai Party. Perhaps Fleet faction leaders such as Admiral Chuichi Nagumo believed that, because the British Royal Navy had a strong preponderance of aristocrats (as the Japanese Imperial Navy did), that an aristocratic elite existed in Britain that could manipulate the political system to arrive at a political settlement with Japan so that some, but not all, the valuable post 1941 territorial gains could be held.

The Japanese Imperial Navy leadership erroneously believed that the British* would mediate between Tokyo and the United States if Japan forewent militarily expanding too far into the Pacific Rim by not invading Australia, which the Tohokai Party specifically campaigned against in the 1942 election campaign! The navy was itself divided into the anti-war ‘Treaty faction’ (led by former prime minister, Admiral Keisuke Okada) and the militarist inclined ‘Fleet action’. This factional division was based on a disagreement amongst senior navy officers as to whether Japan should adhere to the 1930 London Naval Convention which placed limits on war-ship production.

(*Although a Japanese military attack had been speculated, the British establishment was generally astonished by Tokyo’s campaign in the Pacific because of the predominate anglophile orientation of the Japanese Imperial Navy).

The Fleet faction not only had an appalling misunderstanding of British domestic politics but also of Britain’s capacity to influence the United States. The High Command of the Japanese Imperial Navy, which was predominately aligned with the Fleet faction, knew that the Japanese military could not defeat the United States in a sustained war. Japan’s naval leaders were also correct in their assumption that President Franklin Roosevelt would give his priority to defeating Nazi Germany. But the Fleet faction did not realize that President Roosevelt would also insist on unconditional Japanese surrender and would continue to fight Japan until one was obtained.

The best that the Japanese military could therefore expect was to fight the Allies to a bloody stalemate so that they would negotiate a political settlement that allowed for the continuance of the Japanese Empire. This Japanese mindset did not realize that, for the United States, the Second World War was an ideological war in which victory entailed dismantling the undemocratic political structures of enemy nations.

General Tojo: From Pawn to Master

The impact of war controls transformed the political structure of the Tojo regime from being an archetypal authoritarian military bureaucratic regime (albeit one which operated in an ostensible constitutional framework) into a semi-totalitarian regime with the potential to become fully fledged totalitarian. Under the Tojo regime, armed forces officers were usually appointed by the Home Ministry to local government posts without any further reference to previously elected prefectural assemblies and municipal councils.

The passage of the Konoe government’s 1938 National Mobilization Law enabled the Home Ministry from 1942 onward to organise the nation into neighbourhood associations to monitor nearly everyone. The National Mobilization Law was also utilized by the Tojo regime to place most citizens in work units that regimented their everyday lives.

The regime became more personalized in 1943 when Tojo assumed the positions of education minister and commerce minister. Tojo’s growing personal power was reflected by the ruling party co-ordinating propaganda and media censorship so that a new cult of personality based around Tojo began to displace officially promoted reverence for the Emperor. This shift reflected a possible shift toward a totalitarian state as the war progressed.

The transition to a totalitarian state was apparent to Zaibatsu leaders. They had mistakenly believed that the apparent end of party democracy would enable them to completely dominate the emerging political system. This was not to be the case because, from 1943, the Commerce Ministry issued ordinances that subordinated big and small business to war planning requirements that effectively constituted near full state control over the economy.

The establishment of a regulating state bureaucracy had enabled the IRRA to become functionally separate from Diet members. This was because the main source of the military regime’s domestic power was its control of the Home Ministry. A central IRAA secretariat was established in Tokyo in 1942 which co-ordinated party branches throughout Japan in accordance with government directions and interests. Accordingly, in 1942, all youth and women’s groups were brought under the authority of the IRRA*.

(*An official parliamentary wing of the IRAA, the Imperial Rule Assistance Political Association, was formed by parliamentarians when the Diet convened in May 1942. This parliamentary association essentially represented the interests of the ostensibly superseded parties and as such was distinct from the IRAA secretariat that was directly subordinate to the Tojo regime).

The impact of the IRRA on people’s everyday lives became as pervasive as that of the Nazi Party in Germany but the Japanese ruling party was not distinct from the state bureaucracy as the Nazi Party was. As a result, Tojo’s position was not as secure as Hitler’s because the army and navy had a capacity to independently remove Tojo as prime minister if the military position deteriorated. As it was (and is) with Japanese power dynamics in relation to ‘saving face’, changing circumstances facilitate power shifts in accordance with changing realities.

1944 to 1945: Tojoism without Tojo, Japan Struggles to Avoid Total Defeat

The fall of Saipan in July 1944 on the Mariana Islands was the shift that caused Tojo’s resignation. The United States with Saipan in its possession was able to commence bombing mainland Japan. This caused most Japanese people to begin to realize that Tojo’s proposition that the nation could win the war in its own right was incorrect. The imperial princes, Konoe, Takamatsu and Naruhiko, exercised their influence on the Toseiha faction to persuade it to withdraw support for Tojo which ensured the succession of that army faction’s second most important figure, General Kuniaki Koiso.

The major political innovation of the Koiso government was the creation of the Supreme Council on the Conduct of the War (the Supreme War Council). This body was officially the link between the High Command and the cabinet. In reality, this new council was the collegiate depository of the political power of the military with regard to balancing the political and military interest between the army, navy and the military political factions following Tojo’s resignation. Consequently the military was in a position to maintain its overall political dominance within a coherent corporate context.

The Koiso government in reality was a continuation of the Tojo regime without Tojo. This new government essentially operated on the hope that Tojo’s departure as prime minister removed an obstacle to a negotiated settlement been arrived at. The major leverage that the military had with regard to the United States was a capacity to inflict such a high military and human price that the Allies would negotiate with Japan. In the interim, the military expected the Japanese people to endure incredible suffering so that unconditional surrender could be avoided.

The pain threshold that the Japanese people was expected to endure by the military was high. The impact of American submarines cutting off Japanese sea lanes and the very destructive American aerial bombings of Japanese cities in 1945 caused immense suffering. This reinforced the point that the Koiso government needed to come up with a more original political and diplomatic strategy to facilitate negotiations with the United States. The Koiso government’s forlorn strategy of fighting a war of attrition was exposed as such in the Battle of Iwa Jima that was fought between January and March 1945. Over 18,000 Japanese troops died fighting in Iwa Jima in pursuance of the Koiso government’s untenable objective of compelling the United States to negotiate.

The American insistence on unconditional surrender was derived from President Roosevelt’s determination that Japan not be allowed to lick its wounds as Germany did after the First World War to later wage war again. The president’s determination in this matter was reinforced by the American public’s determination that Japan be punished for its unprovoked surprise attack on Pearl Harbour in December 1941.

The need for the Japanese government to actually initiate negotiations with the Americans precipitated the formation of a new regime led by Admiral Kantaro Suzuki in April 1945. Th three imperial princes, Konoe, Takamatsu and Naruhiko again attempted to assert their power by intensely lobbying His Imperial Majesty to appoint Prince Higashikuni as the new prime minister so that he could quickly announce Japan’s intention to negotiate with the Allies.

Superficially, Emperor Hirohito could be condemned for not appointing Prince Higashikuni prime minister in April 1945. The subsequent tremendous loss of life (between April and August 1945) created further scope to criticise Emperor Hirohito for not appointing Prince Higashikuni prime minister in April 1945. However, the real prerogative with regard to appointing a government at that juncture in 1945 was with the Supreme War Council.

The appointment of Admiral Suzuki in April 1945 caused a shift in political power to the navy which erroneously believed that the Allies would be more inclined to negotiate with it rather than the Toseiha led army. Nonetheless, the navy was also adamantly opposed to unconditional surrender. The Emperor and the Marquis Kido therefore supported Prince Konoe as the Suzuki government’s emissary initiating contacts with the Soviet Union to persuade Moscow to be the go-between with the Americans to arrange a negotiated settlement. Prince Konoe’s scope to convince the armed forces to accept a negotiated surrender was commensurate with a deterioration in Japan’s military position.

The deterioration of Japan’s military position was reflected by the Battle for Okinawa* between April and June 1945 in which up to 150, 000 Japanese soldiers were either killed or wounded. News reels footage in Allied nations showing women and children mass suiciding as the Allies militarily prevailed reinforced the perception that the Japanese were a fanatical people. Within Japan, reports of the carnage unfortunately solidified a collective determination by most people to resist an Allied invasion thereby further undermining the scope for unconditional surrender.

(*Contemporary Okinawa is probably the only part of Japan that is overwhelmingly republican because of the resentment that the nation had not surrendered earlier. The fact that it was beyond Emperor Hirohito’s political capacity to unconditionally surrender Japan before the dropping of the atomic bombs on Hiroshima and Nagasaki has not been taken into account on this island. The continuance of American rule of Okinawa until 1972 and the contemporary presence of American bases, in which American service personnel are exempted from the application of Japanese law, are resented in this part of Japan).

Face Saving: More Than a Matter of Pride

The issue of why unconditional surrender was an anthema to the Japanese military and probably a majority of the people at the closing states of the Second World War require analysis so that inaccurate stereotypes of the Japanese people can be debunked. Prior to the mid-nineteenth century Meiji Restoration, Japan’s ruling Shoguns (warlords) had avoided plunging their country into internecine warfare via practicing ‘face saving’. Face-saving was more than a notion of honour but a practical way in which compromises could be arrived at according to the situation so that protagonists maintained their positions.

The power of the Shoguns had been underwritten by the samurai warrior caste whose later general acceptance of Meiji centralization of power was secured by their being reconfigured into a modern armed forces officer corps. The problem for Japan after the First World War was that its trading position was not strong enough to support the financial burden of maintaining a massive military.

Much of the non-aristocratic officer corps came from tenant peasant families that were descended from the samurai warrior caste. As previously mentioned, due to inequitable land ownership distribution (from which the civilian elite drew much of their political power), reducing the military’s size was not economically viable because demobilized men could not have been economically absorbed into the agricultural sector.

By the 1930s, the economic viability of maintaining an exorbitant Japanese armed forces military was unfortunately derived the economic gains that came from military aggression against China. The face saving that was practiced from the 1930s until Japan’s unconditional surrender in August 1945 by different factions within the military, civilian politicians, the aristocracy (which included the Zaibatsu) and the bureaucracy was inherently flawed. This was because face saving involved condoning the military initiating an un-winnable war against the United States on the mistaken premise that an advantageous negotiated settlement would later be arrived at.

For much of the officer corps, the prospect of unconditional surrender constituted a repudiation of ‘face saving’ because that would mean that their interests (contrary to prior practice) would not be accommodated in defeat. It was in this context that high sounding principles proclaimed by bellicose Japanese nationalists concerning national honour reflected long standing socio-economic anxieties.

The crux of a negotiated surrender being arrived at to avoid an Allied land invasion of Japan hinged on the Americans signalling preparedness to maintain the Japanese military and monarchy in a post-war context. It should be emphasised (as events were subsequently to show) that the Japanese elite’s insistence on the retention of the monarchy did not necessarily reflect loyalty to the person of Emperor Hirohito but rather an intention to continuing to exploit the imperial institution through which to exercise covert political power.

The Politics of Surrender

The scope for a de facto conditional surrender was undermined by American Secretary of State James Byrnes removing the policy objective of Japan becoming a democratic constitutional monarchy from the July 1945 Potsdam Declaration signed by the United States, Great Britain and China. This proposal had originally being drafted by the former American ambassador to Japan, Joseph Grew.

Grew knew that the Japanese military and elite would be more inclined toward accepting allied military occupation if they could continue to exploit the imperial institution as a cover to covertly maintain their power. Secretary of State Byrnes was probably aware of these intentions of the Japanese elite which was perhaps why he desired the imperial institution’s abolition. Grew (who maintained a deep affection for the Japanese people) in contrast to Byrnes appreciated that the monarchy could be successfully revamped into a democratic institution.

President Truman’s call at the Potsdam Conference of mid July and early August 1945 for Japan to unconditionally surrender was the last chance for the government in Tokyo to do. The American president alluded to secret weapons inflicting massive destruction unless Japan unconditionally surrendered. At the Allied leaders’ conference, Stalin gave secret assurances that the Soviet Union would soon enter the war against Japan. Although Stalin intended to fulfil this undertaking, he was not going to do so until an American led force had invaded Japan.

The Soviets therefore never had any intention of acting as a broker between Japan and the western Allies. Stalin knew that the Japanese establishment (including Prince Konoe) was anti-communist. The Soviet tyrant therefore wanted to see the Japanese inflict as many causalities on the American led Allies as possible to strengthen his nation’s position when it entered the war against Japan. Stalin also appreciated that a bloody invasion of Japan would undermine that nation’s social structure making it easier to facilitate a later communist takeover.

By July 1945, the impact of American military action had clearly diminished Japan’s industrial and military capacities. American aerial bombing had disrupted Japan’s transport and communications systems. The Japanese navy was virtually inoperative and the Japanese army had been defeated in Asia and in the pacific islands with only pockets of stubborn resistance.

Considering Japan’s diminished capacity, the smart thing for the Suzuki government to have done would have been to have surrendered to the Americans before the Soviets entered the war. Consequently, Japanese resources could have been militarily focused on resisting the impending Soviet invasion of Manchuria and northern Korea until the arrival of Chinese Nationalist troops. Such a strategy would have immeasurably strengthened Generalissimo Chiang Kia-shek, who as post war events later illustrated, would have been a great post-ally to Japan.

The Suzuki government, instead of seeking a rapprochement with Chiang, engaged in military and political manoeuvres in 1945 to bring him down! This strategy of Prince Konoe was pursued on the flawed premise that Japan’s bargaining position would still be bolstered before an American led invasion of Japan occurred if the Chiang regime fell in China. Konoe’s flawed strategy was compounded by his attempt to use the Soviets as an intermediary to negotiate a post-war settlement with the Americans!

In fact the Soviets actually had a vested interest in ensuring that an American led invasion of Japan went ahead. Prince Konoe should have put aside his deep dislike of Chiang Kia-shek (which was based on the Chinese leader’s previous refusal to negotiate during the Sino-Japanese War) to utilize an American aligned Nationalist China as the diplomatic go-between with Washington.

To bolster Japan’s domestic military position to secure a negotiated settlement, the Toseiha and the Fleet factions which controlled the Suzuki government marshalled Japan’s depleted resources to establish a formidable home army. Putting aside traditional male chauvinist precepts, women and children were armed and trained in the home army. Extensive state propaganda hyped up most of the populace toward resisting the impending Allied military invasion.

The logic behind this strategy of domestic resistance was two-pronged in that it reflected divisions within the pro-war factions that constituted the Suzuki government. For Prime Minister Suzuki, resistance to an Allied invasion still held out the prospect of forcing the Americans to the negotiating table. If, in the event, the Allies still refused to negotiate, Suzuki believed that it was better that Japan go down fighting than have a post-war Japan in which the military would be abolished.

Had an American led invasion of Japan taken place, a minimum of one million Allied troops would have lost their lives. Even if the major cities were secured, a nationalist guerrilla war would have ensued so that, in contrast to post war Germany, the Allies would have been confronted with a hostile populace. The cost of such a societal breakdown in Japan would have created a millstone that would have weighed down the western alliance during the Cold War.

As history records, there was no American invasion of Japan due to the dropping of atomic bombs on Hiroshima (August 6th 1945) and Nagasaki (August 9th 1945). The use of this new technology stunned the world and, to put it mildly, raised the issue of accepting unconditional surrender as a matter of urgency for Japan’s leadership. It should be emphasised at this point that the decision to surrender or not did not initially lie with Emperor Hirohito.

Just-in-Time Management: The Dynamics of Japan’s Surrender

Political and military power was vested in Japan’s Supreme War Council which was composed of the prime minister, army and navy chiefs of staff, the army and navy ministers and the foreign minister. This council was nominally headed by the Emperor. A meeting (‘Imperial Conference’) of the Supreme War Council was convened on the night of the 10th of August/ the morning of 11th of August at the initiative of Foreign Minister Togo Shigenori who was the only civilian on the council.

The Supreme War Council was dominated by the Toseiha and the Fleet factions which respectively represented the army and navy interests on the council. Foreign Minister Togo Shigenori belonged to the Konoe led ‘Peace’ faction which represented the interests of the civilian elite and the aristocratic elements of the armed forces.

Prime Minister Suzuki was persuaded by Foreign Minister Shigenori to forward the motion that he (Shigenori) had submitted that Japan surrender on condition that the imperial institution be retained. Another naval representative, Admiral Togo Yonai, voted for the prime minister’s motion. A split resulted when Admiral Soemu Toyoda and the Toseiha Generals, Yoshijiro Umezu and Korechika voted for Japan to fight for the death. In essence the Toseiha faction remained committed to a now lost war, the Fleet faction split and the ‘Peace faction’ remained true to its name.

The split vote created the scope for Emperor Hirohito to cast the deciding vote in favour of peace by supporting the Suzuki motion. In essence, the Emperor was exercising a power which had previously never been his – choosing between war and peace. The decision to surrender must have been painful for His Imperial Majesty because it was going to force him to confront his previous acquiescence to Japan fighting a war which Marquis Kido had informed him from the start was unwinnable for Japan.

Following the Emperor’s decision to vote for the Foreign Minister’s motion to surrender, Shigenori moved with lighting speed to telegraph the Swiss Foreign Ministry in the hope that it would be quickly passed onto the American State Department in Washington. Incredibly, the Secretary of State James Brynes initially rejected the surrender on the basis that it was not unconditional due to the stipulation that the monarchy be retained.

Ambassador Grew Champions Japan’s Cause

Thankfully, Ambassador Grew* was present at the State Department when the telegraph arrived to strenuously argue that the Japanese surrender be immediately accepted. A stubborn Byrnes still refused to yield, thereby creating the possibility of nuclear annihilation for Japan. The quick witted Grew persuaded President Truman to accept the Japanese surrender on the basis that a surrender could not be logistically arranged unless the Emperor’s imprimatur was invoked. As a compromise between Ambassador Grew and Byrnes, the American response sent to Tokyo via Switzerland stated that the occupation authorities would exercise their authority through the Emperor.

(*Ambassador Grew had strenuously opposed the decision to drop atomic bombs on Japan. He had only very reluctantly acquiesced to the use of atomic bombs so that he would be in a position to influence American occupation policy in post-Japan).

To placate Byrnes, the State Department response declared that the issue of the imperial institution’s future would be decided by the popular will of the Japanese people. (Ambassador Grew readily conceded on this point because he was correctly confident that the Japanese people would support the monarchy’s retention).

Even this slight qualification concerning the monarchy’s future almost derailed Prime Minister Suzuki’s acceptance of the American response. The prime minister’s change of stance was more than personal devotion to Emperor Hirohito but a realization that, with the possibility of the Japanese monarchy’s abolition, associated institutions such as the armed forces could similarly be abolished. At the initiative of Prime Minister Suzuki, the Supreme War Council reconvened on the 14th of August at the air raid shelter of the Imperial Palace before Emperor Hirohito with the purpose of rescinding the surrender.

The Emperor held firm by informing the council that the acceptance of the surrender had already been communicated to the Allies that it must consequently proceed. (Acceptance of the surrender was conveyed to the Allies on the 14th of August, the day that the Emperor jousted with the Supreme War Council).

Even though Emperor Hirohito was determined that the surrender proceed, the major problem was how to enforce the surrender. The monarchy was an isolated institution and the prime power holders such as the army could still ignore the surrender by ensuring that it was not communicated to the people. Such a development would undoubtedly have facilitated the nuclear destruction of Japan.

The Emperor’s Champion: Maquis Kido Saves Japan and Emperor Hirohito

Maquis Kido saved the situation by devising the masterstroke of having Emperor Hirohito radio broadcast the acceptance of the surrender. Due to the reverence that the Emperor was held in, a direct radio transmission of His Imperial Majesty’s will, combined with the shock of the dropping of the atomic bombs, was the best guarantor of the surrender proceeding. At the very least, the radio broadcast would dissuade the United States from dropping any further atomic bombs on Japan.

The War Minister General Korechika Anami, who, as a member of the Supreme War Council, had voted against surrender, attempted a military coup on the morning of the 15th of August to thwart the radio broadcast. The failure of this mini-coup was due to a lack of co-ordination and the fast paced nature of events that came with the shock caused by the dropping of the two atomic bombs.

To thwart the national radio broadcast, elements of the Imperial Guard at General Anami’s initiative moved in the early hours of the 15th of August to take control of the Imperial Household Ministry compound within the grounds of the Imperial Palace to retrieve the Emperor’s tape! Although the traitors occupied the compound, they could not access its sealed underground bunker where Marquis Kido (who the rebels intended to kill) was holed up with the tape.

This coup failed due to the arrival of outside military reinforcements dispatched by Prime Minister Suzuki. (Suzuki may not have opposed the coup had the misinformed rebels not earlier tried to kill him on that eventful morning). To the rebels’ credit, they did not undertake further military action within the palace grounds so as to avoid threatening the Emperor’s life. General Anami consequently suicided for having dishonoured Emperor Hirohito by endangering His Imperial Majesty’s life.

The imperial national broadcast* of the 15th of August enabled Emperor Hirohito a unique opportunity to assert his will over the military to bring the war to an end by directly communicating to the people. Millions of Japanese bowed in the direction of the Imperial Palace as they listened to the broadcast.

(*Not only was the radio broadcast, ‘The Voice of the Crane’, the first time that the Emperor had addressed his people by radio but His Imperial Majesty spoke in an ancient and extinct court dialect that was unintelligible to almost everyone who listened. The people therefore had to wait until a follow up translation of the speech to know that Japan had surrendered).

In His Imperial Majesty’s broadcast, understatement was used that seemingly belied the gravity of the situation. Foreign criticism would later be made that the Emperor’s direction that there be ‘a cessation of hostilities’ rather than a ‘surrender’ was reflective of insincerity on the part of His Imperial Majesty’s part. The use of understatement and cryptic language was used by the Emperor to help the Japanese people and the armed forces save face. That the intention of the broadcast was to surrender was reflected by the Emperor’s call for the people to ‘bear the unbearable’ by submitting to foreign occupation.

The impact of the imperial broadcast was that not only did Japan surrender but that, as a result of acceptance of the Emperor’s decision, the nation’s social structure remained remarkably intact. Had Japan refused to surrender, the Americans probably would have dropped an atomic bomb on Tokyo. The use of nuclear weapons would have caused a societal breakdown and irreparable social chaos.

The Last Shogun: The Arrival of General Mac Arthur

The fact that Japan was still intact was the major positive dividend end of its surrender. But even with the imperial surrender broadcast, time was still of the essence to prevent disaster. In an act of incredible personal bravery, General Douglas MacArthur disembarked in Japan before the arrival of Allied occupation troops.

Despite the ferocity of the recent war, MacArthur was orientated toward seeking reconciliation with the Japanese people prior to his arrival in Japan. The general had been taken aback by the barbarism of the Japanese military in regard to their treatment of POWS and their overall seeming disdain for human life. Having previously been impressed by the warmth of the predominately Catholic Filipino people when he was commander of the Philippines army, General MacArthur believed that the Japanese people could be redeemed by converting them to Christianity.

MacArthur’s objective of converting Japan to Christianity was not achieved. However, the general’s positive (if condescending intentions) toward the Japanese people saved him from going through a stage where he would have to realize have had to come to that he could work with the Japanese people to achieve a win-win scenario. It was positive that this discovery stage was by-passed because timing would be critical if MacArthur was to make a success of the American led occupation of Japan.

The time critical nature of General MacArthur’s rule over Japan was reflected by his swift arrival in Tokyo to prevent the Soviet Union from moving into the vacuum by occupying more of Japan proper. The Soviets, having declared war on Japan on the 9th of August had subsequently overrun Manchuria, northern Korea and occupied parts of Japan proper by seizing Karafuto and the Kuril Islands in far northern Japan.

Had the Soviets seized further Japanese territory before the arrival of American troops, the Japanese armed forces would have resisted under General MacArthur’s command! In Indonesia and Indo-China, Japanese troops retained operational control until Allied troops arrived. Immediate American-Japanese co-operation demonstrated that the seeds of post-war reconciliation were already in place before Japan’s formal surrender on the USS Missouri on the 2nd of September 1945, which was the sixth anniversary of the outbreak of the Second World War.

The immediate political impact of the Japanese surrender is that it enabled the Konoe faction to promptly move against the Toseiha and Fleet factions. Prince Naruhiko was therefore appointed prime minister of Japan on the 16th of August. Historians have usually dismissed the Naruhiko government merely as a caretaker one to facilitate the logistics of surrender which did not have any political agenda or substance. This categorization of the Naruhiko government is inaccurate.

Thwarted Re-Adaptation: The Konoe Faction Fails to Re-Configure

The Naruhiko government represented the interests of the Konoe faction which had essentially been assembled by Prince Saionji in the 1930s. The impact of this aristocratic civilian faction from 1936 onward had been to restrain the military from establishing an outright nationalist military dictatorship which would have dispensed with the Japanese elite. The new ‘caretaker’ government therefore wasted no time in co-operating with the American occupation authorities in arresting the leaders of the Toseiha and Fleet factions along with other leading war criminals.

The efficiency with which the Naruhiko government co-operated with the American occupation authorities belied its intention of covering the tracks of the Kido faction’s collaboration with the Tojo, Koiso and Suzuki governments. Indeed, the Kido faction intended to rule Japan in collaboration with the United States occupation authorities by maintaining shadowy power structures. It was for this reason that the Naruhiko government adamantly refused the American demand that the Home Ministry be dissolved.

Part of the Konoe faction’s strategy for maintaining its aristocratic power was to secure Emperor Hirohito’s prompt abdication. This objective was then shared by the American occupation authorities. Secretary of State Byrnes desired that Emperor Hirohito abdicate in favour of his son, Crown Prince Akihito. Under the Byrnes scenario, the Japanese people would come to their senses as a result of ex-Emperor Hirohito been tried for war crimes. For Byrnes, the Japanese would then make an informed choice on whether Japan should become a republic in a referendum which would be held during the minority reign of an Emperor Akihito.

The Konoe faction’s strategy was disturbingly similar in methodology to the American republican strategy even though the outcome and underlying objective was the exact opposite. The Naruhiko government envisaged Emperor Hirohito abdicating in favour of a regency headed by the Emperor’s younger brother Prince Takamatsu during Akihito’s minority. Under the Takamatsu regency, the Konoe faction intended to use the institution of a monarchy to continue to conceal the power of the Japanese aristocracy which encompassed the landowning elite and the Zaibatsu.

The positioning of the Japanese elite for defeat had gone back to October 1941 when Prince Konoe disingenuously circulated the rumour that Prince Naruhiko was his preferred candidate for successor as prime minister so as to prevent the attack on Pearl Harbour. The three princes (Konoe, Naruhiko and Takamatsu) had prominently lobbied within elite circles for Japan to negotiate with the Americans following Japan’s defeat at the Battle of Midway in May 1942. But this was merely to position their faction’s future for the post-settlement period.

Even before the attack on Pearl Harbour, Konoe supporters such Admiral Kichisuburo Nomura and Saburo Kuruso had been despatched to Washington in November 1941 to ostensibly negotiate a settlement with the United States. The presence of this delegation in the American capital at the time of the Pearl Harbour bombings in December was probably undertaken to disassociate the Konoe faction from the Japanese attack on the United States.

The Japanese elite’s emerging disengagement from the Toseiha faction was evident following the fall of the Tojo government when the IRAA was officially revamped in March 1945 to become the Greater Japan Political Association (GJPA). This new party was in effect a separation of the traditional Democratic and Liberal parties from the military. The military bureaucratic component of the officially superseded IRAA continued to have agency under the GJPA by appointing and organising air raid wardens.

It was probably envisaged by the Japanese elite that their interests would be advanced by a resurrected Liberal Party. This party had been effectively led by Ichiro Hatoyama during the war successively as a component of the IRAA and the GJPA groupings. Representing the interests of the land owning elite and the Zaibatsu, the anti-Soviet Liberal Party probably envisaged forging a strategic partnership with the United States to maintain the elite power that had been covertly exercised since the passage of the Peace Preservation Law of 1925.

Supporting the maxim that enduring elites survive via adapting, cosmetic changes were attempted by the Naruhiko government to maintain the covert power of Japan’s civilian oligarchy. Even though the imperial radio broadcast of the 15th of August had saved Japan from annihilation, Prince Konoe desired Emperor Hirohito’s abdication so that his own culpability in acquiescencing to the attack on Pearl Harbour could be concealed.

Emperor Hirohito Co-Operates with the American Led Occupation

While the Emperor was probably still revered as a god by most Japanese, the majority of employees of the Imperial Household Ministry (with the notable exception of the Marquis Kido) and government officials generally treated their sovereign with great personal disrespect during the first months of the Allied occupation of Japan. This calculated disdain was undertaken to psychologically pressure the Emperor into abdicating so that the institution of the monarchy could be retained by dispensing with a seemingly discredited Emperor Hirohito.

‘Re-revisionist’ analysis of Emperor Hirohito as a war criminal who escaped justice usually refers to His Imperial Majesty’s September meeting on the 27th of September 1945 with General MacArthur as Supreme Commander of the Allied Powers (SCAP) at the American Embassy as the point at which the travesty of justice commenced. The narrative usually follows the line that the Japanese emperor met with the right wing American general to commence the process of historical revisionism.

This‘re-revisionist’ interpretation maintains that the Emperor offered to collaborate with the victorious Americans in return for their protecting him against prosecution. The benefit from the American perspective was that the symbolic and mystical power of the monarchy was such that it could make a shocked and uncritical people into accepting their nation’s defeat. In this context, a supposedly immature people could be recast by the American occupation authorities according to their prescriptions.

The above narrative is wrong. The initial American policy was to depose Emperor Hirohito and try His Imperial Majesty as a war criminal. This intention was derived from the hostility that most Americans felt toward the Japanese emperor. Indeed, even a staunch monarchist such as Sir Winston Churchill believed that Emperor Hirohito should have been tried as a war criminal! The only important supporters that the Emperor had when His Imperial Majesty met with General MacArthur were Generalissmo Chiang Kia-shek of China and former American Ambassador Joseph Grew.

The major issue that then confronted General MacArthur with regard to Emperor Hirohito was that of timing of when and how to depose His Imperial Majesty. The general’s meeting with the Emperor was only meant to be a preliminary one where the major value would be obtaining data from the Japanese sovereign as to what his interpretation was with regard to his culpability for the war.

It was therefore much to MacArthur’s surprise that Emperor Hirohito did not deny his prior knowledge of the bombing of Pearl Harbour. When pressed by the American general as to why His Imperial Majesty had not attempted to prevent Tojo from carrying out the attack, the Emperor did not provide an explanation. But again, to MacArthur’s astonishment, His Imperial Majesty offered then and there to be arrested for trial! (The positive impact of Emperor Hirohito’s meeting with General MacArthur probably contributed to MacArthur’s change in stance by recommending to Washington in November 1945 that Emperor Hirohito not be deposed and tried as a war criminal).

It was too difficult for the Emperor to explain that his regret that the attack on Pearl Harbour occurred was not only derived from it being an unprovoked act of war but that His Imperial Majesty knew that his nation would subsequently be plunged into a war Japan would inevitably lose if the United States applied requisite military strength. Any hope that the Emperor might have had that Japan had military successes was derived from his desire that his nation gain as advantageous a political settlement when negotiations took place.

From His Imperial Majesty’s time as regent from 1921, he had adhered to the ‘emperor-organ’ approach. This Japanese constitutional theory maintained that a monarch seem to could influence but would ultimately acquiesce to arrangements whatever components of Japan’s diffuse power structure arrived at. To Emperor Hirohito’s mind, this approach approximated to his being a constitutional monarch.

His Imperial Majesty knew that his supposed absolute power under the 1890 Constitution actually facilitated the power of shadowy elites. The Kwantung army’s 1931 invasion of Chinese Manchuria and the abortive 1936 coup had previously demonstrated to the civilian elite and Emperor Hirohito that it was practically impossible to restrain the military.

Had elements of the elite supported dispensing with or modifying the 1925 ‘Peace Preservation Law’, transparency might have followed that facilitated real democratic government and a civilized foreign policy. But the two major parties despite having mass voting bases were too beholden to the land owning elite and the Zaibatsu to support democratic reform which threatened their economic interests.

Under the circumstances, Prince Saionji as the scion of Japan’s post-shogun Genro elite did what he could to maintain Japan’s existing political and socio-economic structure in the context of the military’s aggressive orientation. The major dynamic in Japan’s elite restraining the nation’s military lay with international diplomacy and a realistic appreciation on the military’s part that an aggressive war should not be undertaken. Maybe it is unfair to condemn Prince Konoe for not finding a diplomatic solution. However, Prince Konoe still created the war time authoritarian political system to preserve the civilian elite’s power beyond military defeat.

The complexities of Japan’s political structure and the exact role of the Japanese monarchy were probably not then known to General MacArthur. But Emperor Hirohito had made a positive impression on MacArthur who subsequently referred to His Imperial Majesty in his diary as the ‘first gentleman of Japan’. For all the many and often hideous abuses that were committed in Emperor Hirohito’s name, His Imperial Majesty did what he could to make amends by offering himself up for judgement to the victorious Allies when he met General MacArthur.

His Imperial Majesty’s offer to surrender his prerogatives and personal freedom might have eventually been taken up by General MacArthur had the Naruhiko government not temporized in undertaking meaningful democratic reform, particularly in relation to abolition of the Home Ministry. The SCAP Commander accordingly ordered the Naruhiko government’s resignation in October 1945.

It would be Shigeru Yoshida, the continuing foreign minister in the successor government of Kijuro Shidehara, who would go on to be the saviour of the Japanese monarchy and the second most important person in modern Japanese history after Hayato Ikeda. The major qualification to serve in the Shidehara cabinet was to be able to speak fluent English to implement the orders issued by General MacArthur as commander of SCAP.

The orders issued by SCAP that- the Shidehara government promptly implemented- were the full disbarment of the Japanese armed forces, the dissolution of the Home Ministry, the release of political prisoners and the dismissal of nationalists from the civil service. The most profound political action that the Shidehara government undertook at American instigation during the immediate post-war period was the arrest of Prince Konoe in December 1945!

The Konoe arrest sent shockwaves through the Japanese elite because it destroyed their strategy of perpetuating their power and economic dominance by using the monarchy to collaborate with the American occupation authorities. This arrest of Prince Konoe (who suicided on being arrested and informed that he had been charged as a Class A war criminal) therefore bolstered the immediate position of Emperor Hirohito.

Victory from the Jaws of Defeat: The Onset of Japanese Democracy

Prince Konoe’s arrest single handidly destroyed his faction which was descended from Prince Saionji’s aristocratic network. Consequently, a shift began so that the monarchy could not continue to be exploited as a front for aristocratic/elite interests.

American determination that the Japanese sever any further association with the nation’s militarist and nationalist past was also manifested by SCAP authorities screening candidates for the April 1946 parliamentary elections. The major impact of the screening process was barring the Liberal Party leader Ichiro Hatoyama as a candidate in these elections. Ichiro had resigned as education minister in 1943 in the Tojo government after a falling out with the then prime minister but he was considered by the Americans to still be too tainted to participate in post-war politics.

The ban on Ichiro ensured that the leadership of the Liberal Party went to Foreign Minister Shigeru Yoshida. Yoshida had been a career diplomat who would have been appointed foreign minister following the 1936 abortive coup had it not been for an army veto. He was not a saintly pacifist, as in keeping with the Japanese establishment, he supported Japan maintaining its military presence in China to force the Chinese to trade on unfavourable terms. Even though Yoshida was associated with the Konoe faction, he had the paradoxical good luck to be arrested by the Toseiha faction in June 1945 for advocating surrender to avoid an American led invasion of Japan.

Yoshida was therefore the ideal choice to serve as Japan’s immediate post war foreign minister in the Naruhiko government. In this position, Yoshida gained the trust of the Americans by supporting important reforms such as the abolition of the Home Ministry. The men who served in the succeeding Shidehara government were mostly diplomats who were recommended by Yoshida to the Americans.

The Liberal Party that Yoshida led in the April 1946 elections predominately represented the interests of the landowning elite and the Zaibatsu. Although the Japan Socialist Party (JSP) and the Democratic Party (which was then going by the name, the ‘Progressive Party’) had won a majority, Yoshida’s Liberal Party formed a minority government due to the backing of General Mac Arthur.

Unambiguous Constitutional Democratic Monarchy: The 1947 Japanese Constitution

The specific task with which MacArthur charged the Yoshida government was drawing up and promulgating a new constitution for Japan. A moderate conservative such as Yoshida was considered by the Americans to be the safest choice to undertake such a task. The preceding Shidehara government, on coming to office in October 1945, appointed a committee chaired by Masumoto Joji to revise the 1890 Meiji constitution to the point of a major overhaul.

The American expectation that a Japanese legal committee would draw up a Jeffersonian type of constitution in which the overriding objective would be that of power for and by the people was practically impossible. The thrust of Japanese legal jurisprudence had previously been to facilitate the effective functioning of institutional frameworks which concealed who really exercised power. To have a constitution which clearly delineated who exercised power was the antithesis of the then purpose of Japanese constitutional law.

The SCAP authorities disregarded the changes that the Matsumoto committee proposed to the Meiji constitution as too superficial. The new constitution that the SCAP authorities subsequently presented to the Japanese government in 1946 was a shock to Prime Minister Yoshida. The major point of disputation between Yoshida and the American occupation authorities was the article one of the constitution that defined the Emperor as a ‘symbol of unity and sovereignty of the Japanese people in whom power resides’.

Prime Minister Yoshida was understandably aghast that the constitutional role of the Emperor was removed. The prime minister realized that, if the monarchy became purely symbolic, the institution of monarchy could disappear into the ether . This danger was all the more acute with someone as taciturn as Emperor Hirohito being sovereign.

Alternatively, Japanese conservatives still wanted to exploit the monarchy as an institution to covertly exercise their power. Right wing members of the Liberal Party and members of the hereditary House of Peers therefore insisted that the Emperor be categorized as a symbol that was ‘above’ the Japanese people.

The minority Yoshida government may have put up a fight against the proposed constitution had it not been for Emperor Hirohito. Under the soon to be abolished 1890 Constitution, the Emperor had a right to chair cabinet meetings. This prerogative had rarely been invoked by Japanese monarchs. But in a severe loss of face for Prime Minister Yoshida, His Imperial Majesty publicly overruled him at a cabinet meeting by announcing his preparedness to serve as a ‘symbol’ of state.

Although the Americans would not budge on the issue of substituting ‘symbol’ of state with ‘head’ of state, Yoshida still ensured the Japanese monarchy’s constitutional survival in section 8 of the 1947 Japanese Constitution. This section codifies the constitutional and ceremonial roles of the Japanese emperor. Under section 8 of the constitution, an emperor convokes the opening of the Diet, accepts the credentials of new cabinets and affixes the imperial seal to legislation and government by-laws. The granting of awards and ceremonial functions by the Emperor is also stipulated in section 8 of the constitution.

There is still an incorrect tendency by non-Japanese to categorize the Japanese monarchy as purely symbolic to the point that its actual constitutional existence is a moot point. It has even been incorrectly asserted that Japanese monarchs are not necessarily entitled to fulfil the diplomatic functions of chief of state, that the monarch only receives diplomats as a courtesy. In fact, the Emperor’s role as the chief diplomatic representative of the nation in relation to receiving diplomats and foreign heads and making official overseas visits is specifically recognized under section 8 of the Japanese constitution.

An official government commission into constitutional reform recommended in 1964 that the role of the Japanese monarchy be ‘regularized’ by the Emperor being recognized as ‘chief’ or head of ‘state’ as opposed to being a ‘symbol’ of state. Nothing however came of this recommendation. Seven months after his accession as emperor, His Imperial Majesty, Emperor Akihito with his wife Empress Michiko gave a press conference in August 1989. At this press conference, the Emperor was asked if His Imperial Majesty favoured a revision to his constitutional role. Emperor Akihito replied that he did not favour any constitutional revision to his role and, in doing so, His Imperial Majesty ended moves to ‘upgrade’ his constitutional role which had been canvassed at the time of His Imperial Majesty’s 1989 accession.

The important role that Emperor Hirohito fulfilled in supporting the constitution, which was promulgated in May 1947, was reflective of His Imperial Majesty’s support for constitutional democracy. Re-revisionist historians have falsely claimed that Emperor Hirohito covertly exercised power in collusion with General MacArthur and that His Imperial Majesty’s political power only terminated when the American occupation ended. This claim is nonsense!

Imperial Transformation: Emperor Hirohito Becomes a Semi-Public Figure

General MacArthur exercised political power throughout the occupation (until he was dismissed as SCAP commander in April 1951 by President Truman) without any input from Emperor Hirohito. In contrast to Prince Konoe-who attempted to exercise his aristocratic group’s power under the aegis of the American occupation-Emperor Hirohito always submitted to SCAP dictates.

The Emperor’s readiness to co-operate with the American occupation authorities’ objective of revamping the Japanese monarchy as a transparently constitutional one was reflected by His Imperial Majesty renouncing his supposed ‘divinity’ in the 1946 New Year radio broadcast. The Emperor joked with his wife *Empress Nagako by asking if he looked more human to her following the broadcast.

(*The Empress herself told the story of how, on approaching the Imperial Palace in a chauffer driven car in March 1946, Her Imperial Majesty was confronted by a rowdy communist-led demonstration calling for the establishment of a Japanese republic! The demonstrators, on seeing the car approach, respectfully parted and bowed deeply as Her Imperial Majesty’s car drove by. Once the car had passed through the palace gate, the hostile demonstration resumed).

General MacArthur by late 1945 sufficiently appreciated the workings of Japanese politics to understand that Emperor Hirohito was neither the instigator nor a culprit with regard to Japan’s entry into the Second World War. MacArthur also knew that Emperor Hirohito’s retention as sovereign would crucially help Japan make a transition to democracy. Perhaps the most important role that General MacArthur fulfilled in revamping the Japanese monarchy was insisting that Emperor Hirohito undertake personal tours (‘blessed visitations’) of his war ravaged nation. Emperor Hirohito dreaded these tours due to his inherent shyness and perhaps out of a sense of guilt for the suffering that the Japanese people had endured.

Crowds naturally gathered to see their Emperor and were taken aback by his diffident manner as His Imperial Majesty often lifted his hat and bowed to those he encountered. The Emperor usually dressed in a long coat and flop hat as His Imperial Majesty toured the nation. His Imperial Majesty’s main expression in reply to those he spoke with was that of ‘Ah so’. In spite of, or perhaps because of, the unpossessing figure that the Emperor projected, he endeared himself to his people.

The post war tours were such a success that SCAP briefly stopped them in 1948 on the recommendation of the republican-orientated Ashida government. This development paradoxically pleased the shy Emperor Hirohito but these tours were resumed in 1949 following the thankful return to power of the monarchist, Shigeru Yoshida.

The impact of Emperor Hirohito’s post-war tours in the 1940s and early 1950s during the occupation helped make the Japanese monarchy a beloved institution. When Emperor Hirohito fell into a coma in September 1988, there was an outpouring of grief by many Japanese of war time age. They remembered Emperor Hirohito as an empathetic (if awkward) figure in a time of great distress when all was seemingly lost. From this point on, the Japanese monarchy was an institution that represented hope and progress to most Japanese. As a result that its continuity has since been accepted as a matter of course.

During the occupation, the Emperor communicated a willingness to General MacArthur to abdicate. Each imperial canvassing of abdication was met with a polite but firm re-buff on General MacArthur’s part. After the occupation formally ended in April 1952, Emperor Hirohito privately informed the prime minister of his willingness to abdicate upon his son gaining his majority as Crown Prince in November 1952. Prime Minister Yoshida’s response to His Imperial Majesty was that he should remain as Emperor.

The occupation authorities also facilitated living adjustments for the Imperial Family. The Emperor was stripped of 90% of his wealth and the Imperial Household Ministry was massively scaled back to become the Imperial Household Agency. Ironically, the most loyal and traditionalist components of the old Imperial Household Ministry were retained which later militated against the imperial family opening up to the public after the occupation ended.

Further American attempts to change the imperial family were reflected by an American Quaker, Elizabeth Vining being assigned by the American *occupation authorities to be Crown Prince Akihito’s private tutor between 1946 and 1950. Miss Vining did help bring a warmth and happiness to the Imperial Family which contributed to enhanced American-Japanese goodwill. Nonetheless, Miss Vining did not facilitate a transformation in the imperial family becoming more publicly outgoing after the occupation or attempt to break the power of the Imperial Household Agency with regard to regulating the lives of the Imperial Family.

(*To save face, Miss Vining’s appointment was officially ascribed as Emperor Hirohito’s idea).

Emperor Hirohito’s Ambition is Fulfilled: The Routine of Constitutional Monarchy

Emperor Hirohito under section 8 of the constitution adhered to the civic and ceremonial functions that were accorded to him but little more than that. His Imperial Majesty preferred the quiet life in which he could indulge his passion for marine biology. The Emperor therefore willingly accepted being constitutionally deprived of any governmental role. Still, the reality of Emperor Hirohito’s role as mainstay of the Japanese nation was reinforced by His Imperial Majesty opening the 1964 Tokyo Olympic Games and the 1970 Osaka Expo.

Although His Imperial Majesty accepted the 1947 Constitution, he considered that the Americans had gone too far in abolishing aristocratic titles and depriving his daughters and future grand daughters of their titles on their marrying. This imperial law was instituted by the Americans as part of the abolition of the Japanese aristocracy. Ironically, female members of the Imperial Family have generally welcomed this law because it has enabled them to escape the pressure of court life. Therefore, when Emperor Akihito’s then thirty-six year old daughter married in November 2005, she gratefully accepted the government dowry and welcomed her change in status.

The four clans related to the Yamato dynasty retained their status under section 8 of the constitution, without titles, by being recognised as collateral branches of the Imperial Family. As such, these branches can be called upon to provide an heir if the male line of the Yamato dynasty were to die out*. Most members of the collateral branches have done well in private industry or in their fields of academic research. Members of the collateral branches still attend official functions at the palace and provide a backup network which is a stalwart support to the imperial institution.

(*The birth of Prince Hisahiro in September 2006-the son of the Emperor’s second son Prince Akishino ended-the concern that the male line of the dynasty would die out).

The Imperial Family received a further boost in its popularity when it was announced that Crown Prince Akihito had become engaged to a commoner -the then twenty three year old, Michiko Shoda - in August 1957. The imperial wedding was celebrated with great pomp and ceremony in April 1959 with heads of state and royalty from round the world attending. There was an expectation that the Imperial Family would gain a greater public profile and activist role in civil society similar to the British Royal Family. That this did not occur was primarily due to the taciturn nature of Emperor Hirohito and Empress Nagako.

Expectations that Crown Prince Akihito and Crown Princess Michiko would establish an alternative court did not come to fruition. It was rumoured that their lives were dominated by the traditionalists of the Imperial House Agency. Crown Princess Michiko reputedly suffered a nervous breakdowns due to the reported encroachness of the Imperial Household Agency. The imperial couple did manage to serve as ambassadors for Japan by undertaking official overseas visits in lieu of the Emperor and Empress. Photos of the children of the Crown Prince and Princess and the obvious affection on the part of their grandparents endowed the Imperial Family with a human quality that reinforced its popularity.

International acceptance for Emperor Hirohito was more challenging to achieve, due to adverse memories of the Second World War. The most controversial post-war undertaking that His Imperial Majesty was compelled to fulfil was a nine nation tour of Europe in September and October 1971. This European tour (which included a brief re-fuelling stop-over in Alaska where the Emperor and Empress were informally greeted by President Nixon) was a challenge for the Emperor because he was often greeted by hostile demonstrators. The best that His Imperial Majesty could expect from the previous Allied nations was the cool civility that His Imperial Majesty received in Britain.

Although it was gratifying to His Imperial Majesty to have the Knight of the Garter reinstated (which he had been granted on his 1921 visit), continued British reservation was manifested by the conspicuous absence of Lord Louis Mountbatten during the official visit to convey His Royal Highnesses’ solidarity with Prisoners of War (POWs) victims and survivors of the Japanese.

The most enjoyable foreign visit that His Imperial Majesty undertook was his official visit to the United States in October 1975. For Emperor Hirohito, the visit was important because His Imperial Majesty thought that he had gained an acceptance amongst the American people as he encountered them. The Emperor and Empress surprised their American hosts, as well as accompanying Japanese officials, by the outgoing warmth which they displayed during the tour.

Re-revisionists have referred to the Emperor’s 1975 visit to-Disneyland and His Imperial Majesty being photographed with Mickey Mouse and his acceptance of a Mickey Mouse watch-as reflective of a cynical ruse to project a false persona that belied his covert militarist past and concealment of an authoritarian personality.

In fact, the imperial trip to the United States had a very positive effect on Emperor Hirohito in that His Imperial Majesty subsequently became more at ease in fulfilling his domestic public functions. The Emperor became known to joke at official functions following his American visit. At one occasion-when no one turned up to a palace function due to a mix up in the scheduling arrangements-His Imperial Majesty joked that he wished all functions were run on such a basis.

The esteem that His Imperial Majesty had in Japan was reflected in 1986 when a special ‘Hirohito Coin’ was minted in his honour. The outpouring of grief when His Imperial Majesty fell gravely ill in 1988 and died in early January 1989 was testament to Japan being a successful constitutional monarchy and to the strength of monarchy in facilitating national unity.

‘Peace Achieved’: The Reign of Emperor Akihito, 1989-

Emperor Akihito has established the monarchy as an outgoing and engaging institution since ascending the throne in January 1989. The monarchy is now no longer a remote and mysterious institution to most Japanese. Amongst foreign royalty Emperor Akihito is regarded as an eminent monarch in his own right.

Empress Miciko has also come into her own right as an important figure and therefore lived up to the expectations of Her Imperial Majesty that were first anticipated when she married into the Imperial Family. Her Imperial Majesty has made an impact on foreign leaders.

Interestingly, in Margaret Thatcher’s prime ministerial memoirs a prominent reference to Empress Miciko is made by a picture of Miciko as Crown Princess at an official banquet in honour of the then British prime minister. In this photo, Mrs. Thatcher is seated with Emperor Hirohito and the then Crown Princess. Similarly, in Hillary Clinton’s memoirs, which detail her time as First Lady of the United States, there is a photo of the Empress Miciko with His Imperial Majesty being received at the White House. The caption in this Clinton biography describes Empress Miciko as one of the most outstanding people that Hillary Clinton had met. No explanation is provided by Mrs. Clinton in the text of her autobiography of why she was so impressed by the Japanese Empress.

The Emperor Akihito and Empress Miciko seem to be a couple who are at ease with themselves and with the Japanese people because they utilize the imperial institution as one which enhances people’s everyday lives. The imperial couple were undoubtedly subjected to profound personal challenges in their lives when they were Crown Prince and Crown Princess. This was because the Imperial Family had yet to fulfil a substantial public role in Japan’s civic life. The success that has been made in achieving this transition is reflective of the overall benefits that have accrued to Japan of retaining its monarchy after the Second World War.

Initial Chaos Leads to Stability: Post-War Japanese Occupation Politics

The potential for the Japanese monarchy not only to eventually become a successful constitutional monarchy let alone survive was still in question during the immediate post-war period. Ominously, there was a discernable republican sentiment during the post-war period. This was manifested by the formation of a coalition government between the JSP and the Democratic Party (this party then went by the name the ‘Progressive Party’) in May 1947 following national parliamentary elections in April that year.

In the 1947 elections, the Democratic and Socialist parties substantially increased their vote at the expense of the Liberal Party. Due to this discernable move to the left, General Mac Arthur was obliged to accept the formation of a left of centre coalition government. The new JSP/ Democratic Party coalition government was led by the leader of the social democratic wing of the JSP, Tetsu Katayama. Katayama was in effect a Japanese Fabian* who wished to achieve social reform gradually within the capitalist system.

(*Japanese Fabianism was very different from contemporary Australian Fabianism. The Japanese version was genuinely social democratic. By contrast, the Australian Fabian Society is now effectively controlled by former stalwarts of the defunct Communist Party of Australia, CPA. The post-communist objective of the Australian Fabians is to con the right of the Australian Labor Party (ALP) to support policies of the former CPA.

The major policy that the Fabians are supporting that is being foisted on the Gillard government is the old CPA policy of imposing a super profits tax on the mining sector. If such a tax is adopted Australia will eventually lose control of its mineral trade to the People’s Republic of China, PRC).

For all the Prime Minister Katayama’s good intentions, he was too impractical to be effective. Furthermore, the Katayama government’s avowedly left wing agenda did not sit well with a conservative such as General Mc Arthur. The SCAP commander accordingly ignored the Katayama government to rule Japan through pro-American civil servants.

The political impotence of the Katayama government so infuriated the left-wing of the nominally ruling JSP that this faction ironically supported the coalition being reconfigured with the leader of the Democratic Party’s left wing Hitoshi Ashida becoming prime minister in March 1948. This six month government was Japan’s most left-wing and its most republican. As previously mentioned, Ashida banned Emperor Hirohito’s public tours due to their impact in bolstering support for the monarchy. The new prime minister refused to meet with Emperor Hirohito and sought to prevent His Imperial Majesty from fulfilling any of his functions and duties as stipulated in section 8 of the 1947 Constitution!

The intention of then Prime Minister Ashida to effectively eliminate the monarchy was ill-advised. Japan is a nation that has often had a diffuse power structure that can cause confusion and disunity. Retention of the monarchy and the functions of the Japanese monarchy as stipulated in section 8 provide a focal point for national unity even if the imperial institution has no governmental power or role per se.

With regard to the exercise of power, the overriding objective of the Japanese constitution is to ensure that power is derived from the people by legislative and government processes being transparent. While the Japanese constitution is endowed with Jeffersonian principles of power for and by the people, the constitution does not facilitate a separation of powers because the executive, i.e. the prime minister and cabinet, are directly elected by the Diet, whose members serve four year terms unless an early election is called.

Members of the House of Councillors, the upper house of the Japanese parliament, are directly elected for six year terms. Although the House of Councillors fulfils an important review function, it does not have the power to block government budgets. This power has been *denied so that the exercise of financial powers is undertaken in an expeditious manner. Under the 1947 Constitution all governors of prefectures and mayors of cities and local government authorities are directly elected.

(*The power of the Australian Senate to deny supply should never be taken away from this house of parliament. As the events in 1975 demonstrated, an independent Senate is a vital protection against the excesses of an executive that acts in a non-transparent financial manner).

American liberals left their mark on Japan by helping ensure that progressive labour laws were introduced that guaranteed individual employment and union rights. There are also laudable normative social provisions within the constitution identifying full employment as an objective of state policy. The avowedly liberal components of the 1947 constitution did not necessarily accord with General Mac Arthur’s ideological orientation.

The most famous (both domestically and internationally) provision of the 1947 constitution is section 9 in which Japan as a sovereign power renounces war and undertakes not to maintain armed forces. Section 9 reflected the then interests of the victorious Americans. Ironically, (as Shigeru Yoshida foresaw) the Americans later pressured Japanese governments to circumvent this constitutional requirement and an anti-American political left vigorously defended this section of an American drafted constitution.

The 1947 Constitution’s emphasis on sovereignty being derived from the people and on transparent governance helped address specific problems that had bedevilled the nation and might not have been addressed without foreign intervention terminating the power of the Japanese elite and military. In this context, the Japanese constitution is near unique in history in that it is an example of foreign intervention in another nation’s affairs being beneficial.

But as previously stated, appearances in a Japanese context can be deceiving. Acceptance of the 1947 Constitution was also derived from the Japanese talent for interpreting and implementing imported ideas according to domestic and cultural requirements. A secret to General MacArthur’s success as SCAP commander in Japan was that he worked with those Japanese with whom he was in ideological accord.

An irony of the American occupation of Japan was that due to there being a Democratic Party administration in Washington MacArthur often got along better with conservative Japanese than with American liberals who served in the occupation authority. MacArthur’s preference for Japanese conservatives was manifested during the Ashida government by the SCAP commander collaborating closely with Japanese bureaucrats to ensure that his policies were implemented.

The Japanese Communist Party Challenges A Nascent Democracy

The Ashida government’s ineffectiveness created a political vacuum on the left that the Stalinist Japanese Communist Party (JCP) moved to fill in 1948 by launching a series of strikes. The government’s cause was not helped when it became ensnared in a corruption scandal. At General MacArthur’s insistence, Ashida resigned in October 1948 and the Diet acquiesced to Yoshida’s return to power. General elections were called for January 1949 to confirm or reject Yoshida’s return to office.

Although the JCP vote increased, the Liberal Party won a clear plurality, just short of an absolute majority, at the expense of the discredited JSP and the Democratic Party. The increase in the Liberal Party vote was ironically due to the stupendous success of the American instigated land reform program implemented between 1947 and 1950 in which 90% of land ownership was transferred to former tenants!

The Japanese Liberal Party’s support for land reform was crucial to Japan’s economic revival. Land lord support was secured by Yoshida (the leadership of the Liberal Party was predominately drawn from large landowners) convincing his support base that a Soviet backed communist revolution would occur unless there was effective land reform.

The involvement and expertise of Japanese landowners in supporting land reform helped ensure that productive cultivation techniques were adopted after the land was re-distributed. The resultant boon in agricultural production was the first major economic advance facilitated by the American occupation of Japan. Not only did land reform eliminate a centuries old feudal social relationship but agricultural production* was significantly boosted and with it viable farmer incomes were created.

(*A noteworthy development in relation to Japanese agricultural policy was the post-war emergence of the Central Union of Agricultural Cooperatives (JA). JA is still the overwhelmingly pre-eminent Japanese agricultural lobby group. Following the end of the Second World War, a Japanese Cooperative Party emerged which advocated land reform. The need for this slightly left of centre party was negated by the emergence of JA as the chief representative of Japanese farming interests. JA not only acts as the chief buyer for agricultural products but this agricultural association also engineers the sale of agricultural inputs (such as fertiliser) at relatively cheap prices.

The political and economic power of JA is derived from its financial arm; the Narinchukin Bank which is the nation’s third largest bank. JA provides comprehensive insurance and other financial services to its members that has considerably enhanced their economic position. This agricultural association is also near unique in Japan because its economic and political power is not descended from the Zaibatsu elite. As a result, JA is not a part of the bureaucratic/business nexus that has determined Japanese economic policy. To the chagrin of the bureaucrats successively at MITI and MEITI, JA has blocked deals that might have opened Japanese agricultural goods competition from foreign imports.

Prior to the American directed land reform programme boosting Japanese agricultural production, the United States had shipped millions of tons of food to Japan to save the nation from mass starvation. Over US$ 2000,000,000 in food aid was provided to Japan between 1945 and 1951. Large grants of credit were also provided by the Americans during the occupation so that commodities could be imported, processed and re-exported. This American generosity facilitated Japan’s vital re-engagement in foreign trade).

Land Reform: The Japanese Elite Moves Away from Rent Seeking

The scope for the returned Liberals to undertake further beneficial economic reform was enhanced by Yoshida recruiting pro-American (or more to the point, pro-Mac Arthur) bureaucrats to run as Liberal Party candidates in the 1949 elections. The most prominent of there was Ikeda Hatoyama. With Ikeda serving in the Yoshida governments between 1948 and 1954, the groundwork was set for both spectacular economic recovery and the future foundation in November 1955 of the Liberal Democratic Party (LDP).

The electoral confirmation of Yoshida’s return to power set the scene for successful American–Japanese co-operation. There was a need for such co-operation because the JCP was emboldened by its 1949 electoral success (winning forty-nine seats) that a series of industrial strikes were launched that year*. The aim of this communist led destabilization campaign was to polarize society so as to render Japan ungovernable. The communists made this challenge to the American occupation at the instigation of the Soviet Union and due to the impending communist triumph on mainland China.

(* A series of strikes had also been initiated by the JCP in February 1947 but they lost their efficacy with the election of a JSP- Democratic Party government in April that year).

The communist challenge failed due to Prime Minister Yoshida’s middle class base remaining on side with him. Furthermore, the Japanese people under the American occupation were gaining social and political freedoms that they had never previously experienced. In this regard, the American ‘occupation’ was a paradox because, in contrast to most other foreign occupations, there was a net gain for the people concerning their civil liberties. Consequently, for most Japanese it did not make sense to regress to a radical but oppressive communist political system.

The communist disruption campaign might have been successful had socio-political chaos ensued from the vacuum that would have ensued had Emperor Hirohito been deposed or Japan made a republic. Alternatively, had the imperial institution been maintained as a front for the Japanese elite to covertly maintain its power, then the communist disruption campaign might have been successful. The Japanese elite’s acceptance of land reform and the dismantling of Zaibatsu oligopolies spurred needed socio and economic reform that made a communist revolution virtually impossible.

The outbreak of the Korean War in June 1950 precipitated a repressive American response to communist provocation. With the backing of the Yoshida government, communist leaders and left wing activists were interned by the American occupation authorities. This shift in policy alienated many Japanese from Mac Arthur as the country seemed to be regressing from its recent democratic development.

General MacArthur is Dismissed and Japan Regains Her Sovereignty

The dismissal of General MacArthur as SCAP commander in April 1951 by President Truman for challenging presidential authority in Korea was probably a relief to most Japanese because General MacArthur had overstayed his welcome. Be that as it may, there was still a massive outpouring of emotion for Mac Arthur on his departure en route to the airport as massive crowds turned out to bid him farewell. (Emperor Hirohito personally visited MacArthur’s headquarters to pay his respects before he departed and the General reciprocated by escorting the Emperor to his car).

The emotional outpouring precipitated by the General’s departure was reflective of MacArthur’s longer term impact of steadying the nation when it was imperilled rather than a reflection of more recent events. Indeed, had MacArthur not departed when he did, he might have lost his legendary status*.

(*This popular outpouring of emotion helped convince MacArthur to seek the Republican Party presidential nomination in 1952).

The major political ramification of Mac Arthur’s departure was that it cleared the way for the negotiation of a peace treaty by which Japan regained its full political sovereignty. Due to the Korean War being fought, the Americans dispensed with the adhering to the fiction that the Soviets were entitled to be a party to any negotiations as a supposed occupation authority. Since Japan’s 1945 surrender, SCAP’s authority was subject to the nominal jurisdiction of the Far East Commission (which eventually numbered 14 member nations). This commission was headquartered in Washington and as such exercised no real operational authority in Japan.

The Soviets exclusion from the treaty negotiations relieved the Yoshida government of having to acquiesce to their possession of the Kuril Islands and Karafuto Island. Still, it was amazing that there were non-communist left wing elements in Japan which opposed the treaty negotiations because the Soviet Union was not a party to them! This leftist opposition was manifested by the JSP first splitting into separate left and moderate wing parties in 1951.

As a former diplomat and someone who had brought many former diplomats into his government Yoshida was probably the best prime minister that Japan could have had at this time. Ironically, the head of the Japanese negotiating team was Finance Minister Ikeda who had no prior diplomatic background. The peace treaty negotiation was signed in September 1951 in San Francisco (The Treaty of San Francisco) and ratified by the American Congress in April 1952.

Post-Occupation Japanese Politics

The major post–occupation Japanese diplomatic activity was to negotiate treaties to normalize relations with former belligerents that had not signed the San Francisco Treaty. The most important regularization was achieved when diplomatic relations with the Soviet Union were restored in 1956 without Japan having to forgo its claims to the Kuril Islands and Karafuto. The Japanese-Soviet rapprochement of sorts helped facilitate Japan’s entry into the United Nations (UN) in 1956.

As a country that has constitutionally forsaken war as a sovereign power, Japan has utilized UN agencies to promote international harmony and good will. Although Japan was (and still is) a staunchly pro-western member of the UN, this nation has gained widespread as a peace inclined stalwart member of the world’s leading international body.

Japan’s impact on the world as a peace inclined nation was appreciated in 1974 when former Japanese prime minister, Eisako Sato (1964-1972), received the Nobel Peace Prize that year for previously lobbying for a nuclear test ban treaty. The pro-American and pro-Chinese Nationalist Sato did this without squandering American good will toward him. (Indeed, Sato had secured the return of Okinawa to Japanese sovereignty in 1972. Sato could not have achieved this outcome without the support of President Nixon).

Perhaps this long-standing pro-UN orientation on the part of Japan’s post-war leadership is partially reflective of the historical regret that the nation went to war in 1941 as opposed to utilizing diplomacy. At any rate, Japan has displayed a remarkable skill in international diplomacy that now benefits the world.

The end of the American occupation did not necessarily mean that all historical demons had gone. There was still a lingering authoritarianism on the part of Prime Minister Yoshida. The prime minister was a former member of Konoe’s elite ‘peace’ faction and as such moved with mixed success to reverse some of the liberal legacies of the American occupation. His major post-occupation reversal was to abolish municipal police branches to ensure that policing was again solely undertaken by a centralized agency.

The then prime minister also re-established a centralized education system by abolishing local school boards. As a result of this reversal the education ministry has published and distributed historical text books that have often ignored Japanese war crimes. This education trend has been the main cause of tension between Japan and the nations that had suffered under Japanese occupation.

The Yoshida post-war period bequeathed an ill-liberal legacy which has militated against the avowed objectives of the 1947 constitution being fully met. American juridical reforms created an independent and powerful Supreme Court in which there is extensive right of appeal to. However, not only has the death penalty been retained but someone convicted of a capital offence can be held for an indeterminate time before being executed. There is usually only a very brief (if not virtually non-existent) notification for him or her and his or her relatives as to when the execution will take place.

Even before the American occupation ended, Yoshida was resisting Allied objectives that grated with him. The provision that Japan renounce war in section 9 of the constitution was acceptable in the short term because Yoshida knew that the Americans would eventually have to support de facto Japanese re-armament in the context of the Cold War. This prime ministerial prediction came true following the outbreak of the Korean War in 1950.

Less than a month after the communist North Korean invasion of South Korea in June 1950, a Japanese military constabulary was authorized which constituted the commencement of Japan having an independent defence capability. Under the Mutual Assistance Pact of 1954, the United States helped arm Japan’s military constabulary to facilitate the establishment later that year of the Japan Self-Defence Forces.

Peace Through Strength: Japan Re-Arms For Self-Defence Purposes

The Self-Defence Forces are in effect Japan’s armed forces. Their operation is constitutionally permissible because their purpose is solely to defend Japan from external military aggression. Officers in these three services receive training in which they are encouraged not only to critically think how to defend Japan from external military aggression but also to uphold Japan’s democratic constitutional system.

Japan’s Self-Defence Forces are amongst the best armed and trained in the world. Due to their training, these forces are near psychologically incapable of initiating or sustaining aggressive external military action. However, if a nation such as North Korea was attack Japan it would definitely come off second best to say the least. This balance between domestic defence capacity and a near incapacity to undertake aggressive military action is reflective of how the Japanese have utilized the legacy of the American occupation to their maximum advantage.

Ironically the Japanese knack of configuring external impositions to their advantage has at times created strains between Japan and the United States. In 1960 ‘The Treaty of Mutual Cooperation and Security between the United States and Japan’ (the 1960 Defence Treaty) was signed. Under this treaty the United States continued to station its troops in Japan to defend the nation against foreign aggression.

Although defence arrangements were re-affirmed in 1970, tension between Japan and the United States emerged because of American resentment that Washington was essentially financially carrying Japan’s defence burden. Another irony in relation to American Japanese defence ties was that it was traditionally anti-American parties such as the old JSP and the JCP that invoked the American drafted article 9 of the 1947 constitution to oppose Japanese re-armament.

A point of possible departure between Yoshida and the Americans during the post occupation period was his desire that imprisoned war criminals, including those serving life sentences, be released. This disturbing prime ministerial objective (except in the case of Marquis Kido who should never have been tried in the first place) raised the ire of the Americans and many Japanese. Given the emergence of cold war tensions, the Americans acquiesced to the release of the remaining war criminals in 1955. This was done at the behest of Yoshida’s successor and arch-rival, Ichiro Hatoyama, who was even more nationalistic than his predecessor.

The Formation of a Dominant Ruling Party Paradoxically Consolidates Japanese Democracy

Indeed the end of the American occupation in 1952 created a grave political problem to Yoshida because Ichiro’s political and civic rights were restored to him. Due to there being a strong base of support for Ichiro within the Liberal Party, the prime minister was obliged to allow him to stand in early elections he called in October 1952. The Liberal Party’s 1952 election victory was also due to the split in the JSP caused by the rift over the 1951 San Francisco Treaty.

The 1952 elections should have been a triumph for Yoshida because the Liberals won an absolute majority and the JCP lost all their seats. Instead, the continuing rift within the Liberal Party between Yoshida’s and Ichiro’s respective supporters imperilled the ruling party’s continued viability. This was soon manifested when Ichiro’s wing of the Liberal Party split with Yoshida. Consequently new elections were held in April 1953 in which the Ichiro wing of the Liberal Party ran separately.

The pro-Yoshida Liberals won a clear plurality of the vote but due to their party split were denied a majority. Had the Japanese socialists not being similarly split they might have won the 1953 elections. The balance of power between the two rival Liberal parties and the socialist parties was held by the Democratic Party (which in 1954 was going by the name of the Reform Party). The Democratic Party/Reform Party was still led by former prime minister, Ashida Hitoshi.

Ashida probably could have led a reformed centre-left party government had it not been for the former JSP being split into two parties. Furthermore, the former prime minister was still under a cloud with regard to the Showa Electric scandal from his previous time in office. The inability of the Democrats and the Socialist to form a coalition government changed the course of Japanese political history by muddying the waters with regard to there being a coherent left-right ideological dichotomy.

Due to the inability of the centre-left to form a coalition government, Yoshida continued on in office after the April 1953 elections until December 1954. Yoshida’s fall was precipitated by right wing Liberals, such as Kishi Nobusuke and centre-left Liberals such as Ishibashi Tazan breaking with the prime minister to merge with the Ichiro Liberals and the Reform Party in November 1954 to form a new Democratic Party. A Democratic Party vote of no confidence that was supported by the divided socialists was passed in December 1954 which resulted in Yoshida being replaced by a new Democratic Party led minority government led by Ichiro Hatoyama!

New elections were held in February 1955 in which the Democratic Party and the Liberal Party between them won a majority of seats. The continuing split between the left and the moderate socialists enhanced the respective strengths of the Liberal and Democratic parties. Furthermore, the relative success of the left-wing socialists in winning more seats than their moderate rivals undermined the scope for a centre left coalition government being formed between the Democrats and a soon to be re-united JSP.

Indeed, the new Democratic Party had elements led within it led by Ichiro and Kishi that were more conservative than the Liberal Party. The ideological spectrum within the new Democratic Party was facilitated by Japan then having multi-member electorates which helped accommodate multi-faction parties running joint tickets. The question therefore emerged as to whether the Democratic Party would utilize Japan’s system of multi-member electorates to merge with the Liberal Party?

The Ichiro government continued on between March and November 1955 as a minority one. The re-unification of the Socialists in October 1955 provided the impetus for the Liberal and Democratic parties to formally merge in early November 1955 to form the LDP. This new ruling party’s formation was also due to conservative elements (most of whom had once been in the Liberal Party) ironically leading the previously liberal orientated Democratic Party as it merged with the Liberal Party.

The merger between the Liberal and Democratic parties was also facilitated by the departure of Yoshida from politics following his resignation as prime minister in December 1954. Yoshida’s successor as Liberal Party leader, Toketora Ogata, effectively committed his party to a merger in May 1955 by having Liberal Party members join a new Policy Committee and a New Structure Committee to thrash out amalgamation arrangements. Upon the formal foundation of the LDP in November 1955, Ichiro formed a new cabinet that took in former Liberal Party members.

To aid Liberal and Democratic unity within the LDP, Ichiro retired as prime minister in December 1956 in favour of Tanzan Ishibashi who, due to ill-health, resigned as prime minister in January 1957 to be succeeded by Nobusuke Kishi. Tanzan and Kishi were former anti-Yoshida Liberals who by going into the Democratic Party had moved this party to the right which in turn paved the way to form the LDP. Kishi resigned as prime minister due to controversy over the heavy handed way in which he had pushed the 1960 Defence Treaty with the United States through the Diet in July that year.

Japan’s Liberal Golden Age – 1960 to 1972: The Prime Ministerships of Sato and Ikeda

The resignation of Kishi in 1960 effectively represented the definitive end of the line of politicians directly linked with either the Genro elite or the previous militarist regimes. Kishi’s successor as prime minister (1960-1964) was Ikeda Hatoyama. Ikeda was a positive political figure in that he had no past links to the authoritarian political establishment but also because of his own outstanding leadership qualities which enabled him to lay the foundation for the economic success that is modern Japan. The new prime minister was also the effective founder of the LDP.

Ikeda was a career bureaucrat in the Finance Ministry who came into his own during the American occupation. As previously mentioned, General MacArthur bypassed the Ashida government in 1948 by ruling Japan through co-operative bureaucrats such as Ikeda. Pro-MacArthur bureaucrats such as Ikeda were brought into the Liberal Party by Yoshida with this technocrat being elected to the Diet in the 1949 elections. Following his 1949 parliamentary election, Ikeda was appointed Finance Minister.

A bureaucratic super-talent such as Ikeda was invaluable because the United States could not afford to pour financial resources into Japan due to financial commitments to post-war Western Europe. No other individual was more responsible for the emergence of the modern miracle that is post-war Japan. An overview of Ikeda’s political and administrative career is undertaken to provide an overview of how Japan became such a socio-economic success story.

Ikeda first made his mark on being appointed Finance Minister in 1949 by pursuing an anti-inflationary policy to lay the groundwork to bolster Japan’s international trading position to facilitate a future economic recovery. The first substantial post-war economic break that Japan received was the outbreak of the Korean War in 1950 because American war contracts were awarded to Japanese companies. This crucially helped provide a needed impetus for a domestic manufacturing base.

Foreign Trade: The Secret to Japan’s Success

The basis for a permanent Japanese economic recovery Ikeda, knew, lay in the nation’s trading position. The tentative economic recovery that had come Japan’s way due to productive land reform and the awarding of American war contracts was consolidated by the Yoshida government’s focus on establishing overseas trading links. The Yoshida government’s emphasis upon international trade was reflected by assembling a high powered trade orientated negotiating team (which, as previously mentioned was led by Ikeda) to negotiate the 1951 San Francisco Treaty.

The Japanese negotiating team to the 1951 San Francisco Treaty was surprisingly not averse to agreeing to pay reparations to former nations which Japan had damaged during the Second World War. Subsequent reparations agreements following the San Francisco Treaty with nations (such as the Philippines in 1956) were negotiated that seemingly reflected a generosity of spirit. In reality, post-war reparation agreements that were negotiated established Japanese aid programmes that often fostered trading relationships so that Japan gained access to needed raw materials. Japanese trading banks and the Japanese government through the Ministry for International Trade (MITI) co-ordinated aid policy into economic and trade policies that facilitated tremendous Japanese economic success.

The importance of international trade to Japan was reflected by Ikeda being appointed International Trade Minister in 1953. (Ikeda stepped down as Finance Minister in 1952 to serve as Liberal Party secretary for a year). The crucial interconnection between economic viability and Japan’s trading position was reflected by Ikeda alternatively serving as Trade Minister between 1953 and 1956 and Finance Minister from 1956 to 1957. Ikeda returned to the Trade Ministry in 1959 and held that position until becoming prime minister in 1960. In the interim (1958-1959), Ikeda continued in the cabinet as a Member without Portfolio (MOP).

Ikeda’s tenure in 1958 and 1959 as a Member without Portfolio enabled him to focus on establishing a political structure which was aligned to Japan’s economic needs. This alignment was commenced by Ikeda chairing the LDP’s Political Research Committee. It was as chairman of this committee that Ikeda established the LDP’s current political structure.

The LDP’s political structure is one in which there is a functional alignment between socio-economic groups in society, policy makers, bureaucrats/ politicians in correlation to LDP factions. These inner party factions were established in the 1950s under the guidance of this party’s Political Research Committee. Socio-economic groups such as farmers or white collar employees were invited by Ikeda to establish political factions within the LDP.

To expedite this process of factional formation, political organisers were recruited to establish and organise party factions. The LDP party factional organisers often had links to the corporate sector which helped secure the faction’s financial viability. Links between the party faction and the government bureaucracy were encouraged so that there was technical input from the party faction into government policy to underpin the economic and the social viability of the groups in society that the faction represented.

It was therefore not uncommon for party aligned government bureaucrats (as Ikeda previously had) to formally join the ruling party to run for election to the Diet. Consequently, government bureaucrats have often being party politicized but with an underlying focus on pursuing public policy that is concerned with securing Japan’s economic and trading position.

LDP Factionalism Advances Japanese Democracy

The LDP factional system that developed was complex and diffuse due to there also being a bewildering array of personalized sub-factions! However, party factional problems did not prevent the continued pooling of political, business and bureaucratic talent needed to maintain Japan’s socio-economic viability. The LDP’s grip on power was also reinforced by previous Liberal and Democratic Party factions at a local government level being successfully integrated into the new party. The surprising diverse functional/bureaucratic factional basis of the LDP prevented the prospect of there being a lingering Liberal/Democratic division.

Factional rivalry within the LDP was manifested by inter-party competition for Diet seats at election times because electorates were then multi-member. Consequently, competition for seats was often between LDP party factions. In the May 1958 general elections, inter-party competition for parliamentary seats paradoxically helped the LDP to win the election with 57% of the vote because there was a cumulative marshalling of bloc votes under the umbrella of the LDP. This cumulative capacity of the LDP was again manifested when this party garnered an approximately similar vote in the November 1960 general elections.

The ruling party’s hold on power was further enhanced when the JSP’s moderate pro-American wing again split away to form the Democratic Socialist Party (DSP) in 1960 due to its support for the 1960 Defence Treaty. This new party was led by the courageous Suehiro Nishio. Unfortunately the DSP did not supplant the JSP as the major opposition party. However the JSP’s 1960 split consolidated the hard left’s control of this party thereby virtually guaranteeing the LDP’s political dominance.

The JSP split helped the LDP make the transition from an umbrella party to what in political science terms is known as a Dominant Ruling Party (DRP). A DRP is one that has a virtually guaranteed hold on power by accommodating a nation’s major political factions. DPRs usually exist in authoritarian countries.*

(*Ironically, DRPs often commence as weak political parties because they are effectively auxiliaries to ruling military regimes or family dictatorships. These auxiliary parties are known in political science terms as governmental parties. The best that a governmental party can aspire is to become a DRP. The case of Mexico is one where its governmental party, the Institutional Revolutionary Party (PRI), became the epitome of a DRP, holding office between 1929 and 2000.

Former president Hosni Muburak of Egypt (1981-2011) seemed to have pulled off the feat of transforming his National Democratic Party (NDP) from a governmental party into a DRP. Unfortunately for Muburak, his narrowing of political pluralism due to the NDP becoming a DRP paradoxically undermined this party’s role as a safety valve. The former Egyptian president therefore became too reliant upon the armed forces and the police force to maintain his power. This over-reliance ultimately caused Muburak’s fall after the armed forces refused to undertake repressive measures to keep the long time Egyptian leader in power).

The LDP’s transition to being a DRP went against the usual pattern because it represented a consolidation for democracy. This was due to Ikeda’s success in previously harnessing an array of political talent into a grounded political framework.

The election of John Fitzgerald Kennedy (JFK) as president of the United States in November 1960 also bolstered Ikeda’s political position on becoming prime minister earlier that year because he clearly shared his nation’s admiration for JFK. American-Japanese relations were probably never more cordial than between 1960 and 1972 under the prime minister ships of Ikeda (1960-1964) and Eisako Sato (1964-1972). There seemed to be a Japanese appreciation that the American occupation had enabled the Japanese people to break free of shackles of militarism and inequitable land ownership which might never ever have been possible otherwise.

The liberal golden age of LDP rule came to an end in 1972 with the ascension of Kakuei Tanaka to the prime ministership. Tanaka, (who actually came from a very humble background) as prime minister was later embroiled in the Recruit scandal which led to his resignation in 1976. Tanaka’s leadership of Japan was unfortunate because it facilitated a regression to shadowy politics with regard to illicit corporate financing of LDP factions.

A Two Party System Guarantees Japanese Viability and Success

Due to a democratic constitution, independent media and impartial judiciary, political transparency usually prevails in Japanese politics on an uneven basis. Indeed, the LDP was first voted out in 1993. The former ruling party regained de facto power in 1994 by installing the pro-LDP aligned wing of the JSP led by Tomiichi Murayang, who served as prime minister between 1994 and 1996. However, the LDP was again voted out in 2009 and a coherent alternative party, the Democratic Party, has taken power.

There is no real ideological distinction between the LDP and the Democratic Party (which is not descended from the pre-1955 Democratic Party) as the latter is mainly composed of moderate elements that were formerly in the JSP, the DSP and disenchanted factions that once belonged to the LDP. The utility for Japan having two viable major parties is that it provides the people with the potential to curb the power of the corporate sector in party politics.

A more pronounced ideological division with a liberal/social democratic dichotomy might enhance the quality of Japanese democracy. However, the overriding aim of the Japanese party system is to help ensure a co-ordinated approach to policy making so that the Japan’s trading position underpins the nation’s economic viability and strength.

The absence of a discernable ideological dimension to Japan’s relatively new two party system is unfortunate*. This is because the end of LDP dominance is reflective of the economic downturn that has bedevilled Japan since the early 1990s with annual growth rates declining below 2%. This decline has coincided with a departure from the traditional post-war commitment-on the part of the nation’s bureaucratic and business elite-toward continuing to engineer full employment.

(*Japan’s contemporary third party the Social Democratic Party, is a continuation of the superseded JSP. The Social Democratic Party still has a while to go before becoming a viable competitor for power or to have an ideological impact on Japanese politics).

Japan Courts Disaster by Moving Away from Full Time Employment

Following the Second World War Facilitation of full employment was also precipitated by government policies supporting the growth of the domestic economy. A potential disadvantage that Japan had was the then low value of its currency, the yen. This low currency value was converted into a source of a trading advantage because it contributed to the relative cheapness of Japanese exports which made them more internationally competitive.

In the domestic post-war context, the low valued yen was counteracted by a strict anti-inflationary policy which increased its buying power. Consequently, internal domestic trade facilitated the growth of goods and services within the economy which crucially helped generate near full employment. Japan’s eventually internationally strong trading position helped underpin the domestic economy’s capacity to ward off high unemployment. This interconnection was also the result of deliberate policy on the part of politicians, the bureaucracy and the corporate business sector which persisted until the 1990s.

An aspect that is relevant to the shift away from engineering full employment was the floating of the Japanese yen in the 1990s. Whether a nation has a fixed or floating exchange rate should not necessarily be determined by ideological considerations*. The determinant of policy settings in relation to a currency’s value setting should be a nation’s human and natural resource capacity. In the case of Japan, the floating of the yen has been a mistake because it has facilitated the aforementioned shift away from engineering full employment.

(*The floating of the Australian dollar in December 1983 was initially driven by ideological considerations. However, the benefits of floating the Australian dollar eventually came to the fore due to excellent economic management by the Howard government’s federal Treasurer Peter Costello (1996-2007). Costello helped ensure that the Australian dollar’s value reflected the nation’s trading position. Consequently, Australia has since reaped the benefit of the current minerals boom. The challenge now for Australian politicians and policy makers is to ensure that economic fundamentals are sound to underpin a strong currency for when the mining boom ends).

In the case of China, retention of a fixed exchange rate enabled her to continue to facilitate employment, thereby avoiding massive social dislocation. International neo-liberal criticism that unproductive employment practices (such as the state compelling businesses to employ people in positions that are not inherently viable) should be ignored by the Chinese state for two reasons:

Firstly, China’s fixed exchange rate, by provided the state with inter-connected levers, greatly strengthen the nation’s trading position which has subsequently provided the Chinese state with the capacity to drive and sustain employment growth. The second reason why a fixed exchange rate is beneficial to China is because it is a policy lever that provides the central government with the capacity to maintain national unity by promoting coherent nationwide economic policy. If China is to make the transition to a two party system to guarantee future national unity, the lever of a fixed exchange rate should not be abandoned. Indeed, a fixed exchange rate will be a more important lever than current repressive political practices in guaranteeing continued Chinese national unity.

China’s maintenance of a fixed exchange rate will be the linchpin of its future socio-economic viability. The benefit of China retaining a fixed exchange rate would be enhanced by allowing the formation of independent trade unions so that employees have a meaningful role in contributing to the nation’s economic viability and reaping the benefits of economic success).

In the Japanese context, the equivalent linchpin was and will continue to be the nature of the relationship between the corporate sector and the bureaucracy. Since the 1990s, unfortunately, a determining component in this Japanese power relationship is being abandoned. This is in relation to the input of Japanese labour (both union and non-union) into operational and strategic management-decision-making to secure economic viability, if not a competitive/ comparative trading advantage.

The input of labour into decision making in the Japanese context had been necessitated by the absence of natural resources and the consequent need to harness human talent and ideas. The absence of a strong social democratic tradition in Japan has undermined the capacity to safeguard the needed socio-economic reforms that the American occupation ushered in and which the Japanese elite accepted but applied according to their interpretation.

Deciphering the Riddle of Japanese Success: A Recap on Japanese Elite Adaptation

The capacity of the Japanese elite to engineer its post-1945 socio-economic transformation was also derived from American induced reform of the Zaibatsu. Following the Meiji Restoration of 1868, the capital and planning strategic capacity of the Zaibatsu had enabled a natural resource poor nation to adapt to the extent that Japan was at least economically viable. The major problem for Japan that was derived from the Zaibatsu was that they promoted economic oligopoly and contributed to the retardation of a truly democratic Japan.

The Zaibatsu were oligarchic companies that had maintained power since the Meiji Restoration power through a complex and covert relationship to the state, the land owning aristocracy, the pre-war political parties and the military. As previously mentioned, the big four Zaibatsu companies dated back to the Meiji era were Mitsubishi, Mitsui, Sumito and Yasuda. These four companies were controlled by families associated with the Shogun elite who ostensibly ceded their power to a centralized state but in fact continued to exercise and expand their power as Japan ‘westernized’.

Following the First World War, Zaibatsu companies officially became publicly owned companies and new Zaibatsu companies emerged. The exact nature of the power of the Zaibatsu in relation to the two main parties, the bureaucracy and elements of the military was too difficult to gauge. Zaibatsu companies did economically benefit from Japanese military expansion in China following the First World War and intended to ride the natural resource benefits of Japan being allowed to hold the conquests that were made following the 1941 bombing of Pearl Harbour.

The major problem of the Zaibatsu’s economic and political power was that it undermined the emergence of small to medium business sectors due to their oligarchic power. The influence of the Zaibatsu probably retarded the two major pre-war parties from becoming authentic democratic parties. This in turn laid the groundwork for Japan’s shadowy elite (of which the Zaibatsu were a part) exploiting the 1925 ‘Peace Preservation Law’ (sic) to prevent a consolidation of Japanese democracy that might have come following the advent of male universal suffrage.

The only real domestic Japanese opposition to the Zaibatsu had come from the Kodoha faction which was radicalized due to the influence of the fascist ideologue Kita Ikki. Had the Kodoha military coup attempt of February 1936 succeeded, the Zaibatsu probably would have been abolished. Still, when military dominance later came, the Zaibatsu collaborated with the Tojo regime. But had this bureaucratic military regime endured, the central economic controls that it was acquiring might have broken the power of the Zaibatsu. The resignation of Ichiro Hatayama as education minister in 1943 may have reflected a Zaibatsu distancing from the Tojo regime.

The Zaibatsu companies had clearly distanced themselves from the succeeding Koiso and Suzuki governments. The immediate post-war Naruhiko government (August to October 1945) was under Zaibatsu influence. The American arrest in 1945 of Prince Konoe represented a direct challenge to the Zaibatsu which precipitated its later reformation as the Keiretsu. Indeed, with the formation of the Shidehara government, American occupation authorities requisitioned equipment and capital from Zaibatsu companies and began to intervene in their operations so as to end direct control by elite families.

American Democrat New Deal elements of the SCAP administration were very partial toward dismantling the Zaibatsu and promoting Japanese union rights. The problem with dismantling the Zaibatsu companies was that they had billions of yen stored away in domestic and foreign bank accounts. To have sequestered funds from Zaibatsu owned banks was not viable because it would have deprived Japan of valuable and existing financial capital needed for economic reconstruction.

Allowing former Zaibatsu companies to hold onto their financial capital (which probably could not have been requisitioned anyway) was a key detriment in Japan’s economic recovery. The retention of banks that were previously associated with Zaibatsu companies laid the ground work for the post-occupation re-emergence of the Zaibatsu as the Keiretsu. The Keiretsu are a conglomerate of business corporations that have established vertical and horizontal business arrangements so that they can be internationally competitive in their areas of industry.

The emergence of the Keiretsu led to charges that the power of the Zaibatsu families had not really been broken. This interpretation belies the fact that Japanese companies within the Keiretsu, such as Toyota, have shareholders and are subject to accountable corporate governance. The power of former Zaibatsu families is derived from their stake holdings in banks that finance Keiretsu companies. The exact nature of the power relationship between private banks, company shareholders and management is difficult to decipher.

The power of Japanese banks has been the key driver behind Japan’s incredible economic growth and power. The central bank, The Bank of Japan, and state owned banks such as the Japan Development Bank and the Export-Import Bank, have established close strategic links with commercial banks and private industry to ensure that business operations are viable, have inherent credit worthiness and are supportive of Japan’s trading position.

The co-ordinated approach between the banking sector and private industry is crucially reinforced, if not facilitated, by the Ministry of Economy, Trade and Industry, (MEITI) which superseded the venerable MITI in 2001. MEITI monitors foreign trade and subsequently provides data and advice to corporations and relevant lending banks as to how to best undertake commercial activities.

Official advice from MEITI is not a form of statist intervention because it is provided to maximize profit and its inherent correctness is accepted or rejected by the relevant companies and banks based on their critical assessment. Furthermore, there is a national consensus that a co-ordinated economic approach is required if Japan is to remain internationally competitive and therefore viable, which transcends ideological debates concerning the role of the state.

Continuous Improvement: Respecting Labour is an Important Source of Japanese Economic and Social Success

A substantial distinction between the Zaibatsu and the Keiretsu companies is the difference between how company employees are treated. The generally positive approach the Keiretsu corporations and Japanese employers have adopted in relation to their employees was a beneficial legacy of the American occupation. The American (originally Austrian) business guru Peter Drucker (1909-2005) provided post-war advice to Japanese government and industry among which he emphasised the importance of employees as the main source of competitive advantage.

Drucker’s ideas resonated in post-war occupied Japan due to the nation’s lack of natural resources. As a result, Japanese management was open to Drucker’s ideas because they emphasised human talent as the key in relation to business success. There was also a practical capacity for Japanese management to implement Drucker’s precepts because he had previously written and analysed the role of the business corporation.

According to Drucker, employee input was to be respected as a guide to a company’s strategy and to help facilitate change if a new business direction was required. For Drucker, customer reactions were also to be taken into account by management when assessing the viability of a strategy. The strategic approach to management (which Drucker devised, partly based upon his Japanese experience) is not paternalistic because management is encouraged to value employee ideas and inputs as opposed to imposing pre-determined strategies and work processes.

A business corporation for Drucker was a social institution in which employees were to be well treated so that they would be forthcoming with ideas and inputs that could not be duplicated by rivals, thereby providing a competitive business advantage. Former Zaibatsu companies such as Toyota utilized their employees’ ideas and feedback to improve production output and customer satisfaction to establish a competitive trading advantage. The shift in Japanese management being more respectful of their employees has often contributed to management acceptance of trade unions and their role in representing their members’ rights.

Another important legacy of the American occupation was that labour rights were bequeathed via legislation and constitutional protection. These rights probably would never have been formulated and applied to Japan without external foreign intervention due to the authoritarian nature of Japanese politics. Labour rights would not have been respected in the main by Japanese employers had it not been for the strategic need to keep employees onside due to the vital importance of Japan remaining internationally competitive.

In Australia there has been a tendency on the part of the neo-liberal right to decry a supposed lack of employee motivation and work ethic that is allegedly detrimental to the nation being internationally competitive. Industrial powerhouses such as Japan have often been portrayed by Australian neo-liberals as the epitome of having a productive work force because it is claimed that there is no ‘encroachment’ from trade unions. This has not been the case in the Japanese context!

Indeed, Australian employers should consider emulating Japanese employer practice in connection to labour relations. Emulation could take the form of employers utilizing enterprise bargaining to gain employee ideas and support to achieve productivity increases. Smart employers could utilize trade unions participation to parlay employee ideas into productive enterprise bargaining outcomes.

When workplace ideas reflect employee interests by having an engaged union rank and file involvement at a workplace level, there should be a role for union officials providing technical input to create the scope for productivity advances to be converted into employee dividends such as conversion of casual and part-time employment into full-time employment. Achieving this nexus between employee participation and productivity via official union involvement in enterprise bargaining (in the Australian context) would benefit semi-skilled and non-skilled labour to achieve employment security.

The major union body in Japan is Rengo, the Japanese Trade Union Confederation. Rengo affiliates are mainly craft unions that are enterprise based. The role of unions in Japan broadly approximates with the role of Japanese banks. This comparison may seem heretical but there is similarity to the extent that unions have a vested interest in ensuring that the businesses of the companies where their members are employed are viable.

Japanese unions did not oppose the formulation and development of what by the 1980s has been known as Human Resource Management (HRM). The ideology underpinning HRM is unitarist which pre-supposes that there is no separation of interests between employers and employees, and as such third parties such as unions are redundant to the employer-employee relationship. In Japan, employers in the main did not (and do not) seek to eliminate unions when applying HRM strategies due to the importance of cultivating employee support to gain and sustain a competitive trading advantage that is crucial to Japan’s survival and prosperity.

Ironically, one of the pioneers who helped lay the groundwork for HRM in a Japanese context was the American statistician Edwards Deming (1900-1993). Deming’s contribution to Japanese production and management techniques was ironic because his technical advice was crucial to the Americans rapidly re-building their naval fleet following the 1941 Pearl Harbour bombing. This success derailed projected Japanese military calculations of how long the United States would be out of military action so as to compel the Americans to acquiesce to Japan’s post 1941 gains.

Deming’s ideas were very relevant to Japan. This is because Deming maintained that a nation’s wealth was more dependant upon its people, government and management than on natural resources. As a consultant to Japanese industry during the occupation, Deming helped lay the groundwork for statistical quality control and of Kaizen. The concept of Kaizen, which Toyota utilized to become one of the world’s leading car manufacturers, is that of continuous improvement.

The Kaizen system is where there is continuous feedback from employees so that there is consistent and on-going improvement in production techniques to maximize efficiency. Deming envisaged (which Japanese industry subsequently achieved) production systems in which the amount of inputs were decreased while production output was maximized. For Deming, 95% of errors in production (in which production objectives were not met) was reflective of misassumptions in the systems that were devised as opposed to human error.

Japanese ingenuity in regard to production and management techniques was manifested by the formulation of Just in Time Management (JTM). Under JTM, Japanese companies have converted raw materials into manufactured goods and expeditiously prepared them for export by aligning production techniques to time critical targets.

Criticism has been made of Japanese production techniques that they are exploitative of employees by insisting upon continuous improvements. This has generally not been the case in the Japanese context. This is because Japanese industrial and production practices have generally refrained from paying employees based on output or coercing them to meet pre-determined production schedules. Instead, mutual collaboration between Japanese management and employees/unions has been the basis upon which work production systems have been devised and maintained.

The formation of quality circles is a prime example of Japanese employers and employees forming work production systems on a mutually beneficial basis that has often helped achieve a competitive/comparative trading advantage. Quality small circles usually consist of employees, supervisors and production specialists which focused on how to achieve high quality production techniques which gave Japanese industry a competitive edge.

The labour and economic systems that a nation develops are reflective of its history and cultural orientation. Therefore, transferability of Japanese production techniques and assumptions to an Australian context must be treated with caution. However, the underlying assumption that employees are a source of competitive advantage in which employee and union rights are respected has crucially helped Japan maintain its position as one of the world’s leading economies.

Japan still has an impressively co-ordinated system based on analysis of data between the bureaucracy and corporations that drives Japan’s very strong trading position which facilitates the nation’s economic viability. Unfortunately, there is an evident departure-by the bureaucracy and Keiretsu in public policy-from continuing to support the small business sector as the major generator of productive employment growth in a natural resource deprived nation such as Japan.

Australia Jettisons Employment Security for Rent Seeking

By contrast, the major ‘problem’ for Australia being endowed with an abundance of natural resources is that there is a current tendency on management’s part to neglect employee input and to be hostile toward trade unions. This neglect of labour has been manifested since the 1980s by high levels of casual and part time employment which has led to an underutilization of labour. This anti-labour trend goes against Australian socio-political history where Australia once led the world in industrial relations by introducing arbitration in the early 1900s. Centralized wage setting via arbitration remained in place until the introduction of enterprise bargaining in the 1980s.

The onset of enterprise bargaining in the 1980s endowed the Australian industrial relations system with increased flexibility. The main problem since this industrial relations reform is insufficient employee/union member input into enterprise bargaining. The upshot of this shortfall in employee participation in enterprise bargaining has been contemporary high levels of precarious employment and continuingly low levels of Australian union membership.

Australia is different to Japan in that a strategically co-ordinated approach to economic management is not required due to an abundance of natural resources. The major challenge for Australia since the 1850s gold rushes led to massive immigration has been to achieve a balance in the generation of satisfactory employment levels between the primary resource sector and secondary/service industries.

The long standing success that Australia had in striking a balance between the primary and secondary sectors was challenged by the ‘economic rationalism’ of the Hawke/Keating era (1983 to 1996). The tariff cuts, financial deregulation and micro-economic reform of this period generated high levels of public foreign debt, unemployment and a subsequent shift to casual and part time employment and to trade deficits. Furthermore, the policy of union amalgamation of the Hawke-Keating era destroyed a swag of worthwhile smaller trade unions that, by using arbitral supports, effectively represented their members’ interests.

Very unfortunately, the union amalgamation policy allowed the Australian Workers’ Union (AWU) to swallow up a string of craft based unions. Although the AWU has fulfilled an important role in providing a critical mass of moderate ALP operatives and parliamentarians, this union at times has been a conduit that has enabled big business to detrimentally determine the policy direction of ALP governments. This is currently exemplified by the AWU backed federal Treasurer Wayne Swan advocating a Mining Resources Rent Tax (MRRT).

An MRRT is intended to facilitate a triopoly for Australia’s three main mining companies BHP Billiton, Rio-Tinto and Xstrata with regard to mining iron ore and coal. Smaller mining companies such as Fortescue Metals will be unable to compete under an MRRT because they do not have the economies of scale or connections to the PRC to enter into tax minimization measures when it comes to formulating the declaration of profits.

With regard to the Australian coal mining industry, those companies that do not have links to the PRC will struggle to survive the imposition of a carbon price (tax). The SOE, China Power International Development Limited signed a twenty year sixty billion dollars agreement in 2010 in which to supply thirty million tonnes of Queensland coal annually to mainland China for the next twenty years. Therefore, debates over whether the destruction of Australia’s coal mining industry is worthwhile in a global environmental context are puerile.

If Australia is to pay the socio-economic cost of the imposition of a carbon price (tax) destroying Australian jobs and fatally undermining the nation’s trading position, then the ostensible purpose of such a tax to help the global environment should at the very least be achievable. The Australian coal industry will continue to have a future under a carbon price (tax) as an uncompetitive resource supply to a mercantile PRC instead of continuing as a relatively cheap and efficient source of domestic energy.

Similarly, the mooted closure of the coal powered Hazelwood electricity power station in Victoria’s La Trobe Valley is very dangerous. The Australian Greens have made no secret of their intention to close Hazelwood. The federal government has fudged the issue of Hazelwood’s continuance. ALP ministers have intimated that the Hazelwood plant will remain open due to the introduction of new carbon reducing technology. Details of when and how such technology will be applied have been brushed aside by ALP leaders by claiming that they cannot provide more detail because a tendering process is under way.

The Hazelwood power plant supplies over twenty-five percent of the south -eastern Australian state of Victoria’s electricity needs! Not only will there be massive job losses in the La Trobe Valley due to a multiplier effect of the plant’s closure (not to mention the 900 Hazelwood employees who will lose their jobs) but the state’s manufacturing capacity will be detrimentally effected, which in the context of Australia’s fragile secondary sector will be catastrophic for the Victorian economy.

The mooted closure of the Hazelwood power station (among other coal powered mines in the La Trobe Valley) is emblematic of the underlying rent seeking ramifications that the Gillard government’s recent released carbon plan will have on Australia. These ramifications will be diminishing the Australian economy’s secondary sector’s capacity thereby creating an over-reliance on the minerals sector for the benefit of those who will develop political power links to that sector. ALP rent seeking elements who know that their party will be electorally pulverized by a carbon price (tax) anticipate later retaking lost ground and acquiring more concentrated power by a future Abbott government introducing ‘regionalization’ (sic).

The economic, political and trading transformations that an overdependence on the mining sector will precipitate will be facilitated by a super profits tax regime engineering a mining triopoly and uncompetitive trading relations with a mercantile PRC. The subsequent utilization of Sovereign Wealth Funds (SWFs) will facilitate the economic/political power of political interests that will be represented on the management committees of such funds. These political interests will encompass the corporate sector linked to the Abbott Liberals, left wing industry unions, elements of the ALP/ union movement linked to the corporate sector via the AWU and a left wing social political movement associated with the Australian Greens.

The Current Carbon Plan is Really a Plan for Rent Seeking

The overall danger concerning the emerging debate over a carbon price (tax) is that assumptions (or misassumptions) which the avowed protagonists are adopting will obscure the actual advancement of the underlying rent seeking objectives. These objectives are what are really driving this impending destructive overhaul of the Australian economy.

An important mis-assumption that is afflicting the current political debate is that of time urgency. The time imperatives driving the introduction of a carbon price (tax) are not environmental. Rather the time imperatives are to re-configure Australia’s financial, political and social settings to engineer a transition to rent seeking before the end of the China boom, wich will probably be in 2015-2016.

When rent seeking was not a danger to Australia, the Emissions Trading Scheme (ETS) advocated by Malcolm Turnbull as Environment Minister in the Howard government was then a viable prospect. If a reputable government agency/ statutory authority had been established by the Howard government, then an effective ETS could have operated. Such an agency would needed to have achieved a balance between prompting businesses to lower carbon emissions by a tax - and creating incentives for other businesses to lower carbon emissions for there to be useful carbon trading.

Even if large emitters lacked the immediate capacity to lower their carbon emissions in the short to long term, an effective trading scheme could still have facilitated the necessary net reductions in carbon emissions. Great care would still have been needed to ensure that a carbon price (tax) did not threaten financial viability and employment generation.

Potential success in carbon trading under the Howard government would have then been (as now) essentially reliant upon incentives to small to medium businesses to genuinely lower carbon emissions so that they could legitimately sell carbon credits to large businesses/industrial operations that needed more time to develop the capacity to lower carbon emissions. As economically delicate an undertaking as an ETS would have been for the Howard government, this reform was probably viable. This was because Australia’s public foreign debt was paid off, the budget was in surplus and the subsequent general business environment was such that the secondary sector of the economy had the potential capacity to adapt to an ETS.

The Rudd government would have been in a position to establish an economically non-threatening and environmentally effective ETS before the squandering of money wrought by the post 2008 Global Financial Crisis (GFC) stimulus packages. The intentions of these stimulus packages were to in-debt Australia to undermine the nation’s fiscal settings so that a transition to a rent seeking regime could be made.

Australia’s avoidance of high unemployment following the 2008 GFC was reflective of the strength of financial institutions due to the prudential controls that the former Treasurer Peter Costello had put in place. Whatever valid criticisms can be made of the Howard-Costello government, it achieved and bequeathed sterling economic success by strengthening the secondary sector of the Australian economy.

Due to the former coalition government engineering a balance between the primary and secondary sectors of the Australian economy, high employment levels and low inflation would have continued after the 2008 GFC without the stimulus packages. It is the fallacy of the supposed effectiveness of the stimulus packages that is deceiving ALP stalwarts and much of the public that the compensation packages included in the carbon plan will effectively counteract the disastrous ramifications of the carbon price (tax) on business and consumer demand.

The real achievement of the post GFC stimulus packages was that the increased consumer spending did not lead to an inflationary spiral. This was due to the Reserve Bank (RBA) setting high interest rates to sufficiently deflate inflationary pressures. Possible unemployment from high interest rates was in turn off-set by the stimulus spending itself!!

To reiterate, for the sake of contextual clarity, Australian Treasury through careful planning used high interest rates to avoid the threat of inflation posed by the stimulus packages- and the consumer demand that was consequently generated in turn helped ensure that high interest rates did not cause high unemployment. The Rudd government through the post 2008 stimulus packages wasted money to ostensibly address economic threats that were not there and in doing so avoided its own self-generated threats.

The Rent Seeking Merry Go Round

The reason why the above merry go round of fiscal policy was undertaken will become apparent when the ill-effects of the carbon price (tax) transition Australia to rent seeking by dislocating the secondary sector of the economy. The current detrimental legacy of the 2008 GFC stimulus packages has resulted in Australia now having amongst the developed world’s highest interest rates. The Australian dollar’s high value due to the demand for mineral exports has strengthened the currency’s purchasing power so that inflation is low and employment levels are still high.

The impact of high interest rates has been a slowing of economic activity which, due to the former stimulus spending, has not yet precipitated unemployment but now means that Australia’s economic fundamentals are weak. This was reflected by the recent fall in Australia’s Gross Domestic Product (GDP) of 1.2% for the March quarter of 2011. This fall was the equivalent of the GFC hitting a developed nation that did not have effective prudential safeguards.

Australia was insulated from the adverse effects of this massive GDP fall due to the mining boom. It is true that the adverse effects of recent weather disturbances contributed to the recent GDP fall. However, this GDP fall is also revealingly reflective of the post-GFC economic policies in undermining the secondary sector of the Australian economy. This outcome is now becoming apparent as the impact of the stimulus packages in previously boosting the economy.

The carbon price (tax) is the second stage in the strategy of engineering a transition to rent seeking (the first stage was the post 2008 stimulus packages). The high level of interest rates and the effects of the stimulus packages petering out combined with the impost of the carbon price (tax) to be imposed on the five hundred selected carbon emitters are a grave threat to Australia’s secondary economic sector. It is difficult to predict if the economic vandalism of the carbon price (tax) will affect the Australian economy before 2012-2013, in that aforementioned time period or after.

What is certain is that, as with the stimulus packages, diabolically clever economic planning/modelling has been devised so that the economic effects of the carbon price (tax) will correlate with the political time of reconfiguring taxation and constitutional arrangement to achieve a rent seeking nation. An important political strategy of the rent seeking elements within the ALP and the Greens will be to play the game of re-assuring people that they will ultimately be better off while actually undermining their position.

The above stratagem is being manifested by the Greens announcing the establishment of a Climate Change Authority (CCA) and a Clean Energy Fund (CEF). These bodies will provide funding and support for new businesses that will create a supposed new vibrant economic future to allegedly fill the void as carbon emitting industries go out of business. This scenario is dubious at best as it is probable that only those with political links to the Greens and the rent seeking elements within the ALP will be given money to fund their initiatives to lower carbon emissions. Whether these initiatives work and money grants will be re-couped is a complete unknown.

What is near certain is that the carbon price (tax) will destroy many small to medium businesses and possibly large businesses that do not have links to Australia’s newly emerging rent seeking elite. It will also be interesting to see if corporations that were involved with the mutli-party climate change committee will be better positioned in making industry re-adjustments in the wake of the carbon tax.

There is nothing notionally wrong with a statutory authority such as the CCA being established. But if the current climate change policy makers were really sincere, a CCA type organisation would have been established well in advance of the announcement of a carbon price (tax). This would have provided the scope to assemble a really effective statutory institution that could have recruited the best scientific and laterally minded people to establish the framework for a genuine and effective ETS.

More time in establishing an effective climate change authority would have provided sufficient warning to industry as to what to expect from a future ETS, to help formulate a real ETS and for wider stakeholder input (which is potentially everyone in Australia) into setting a carbon price (tax). Instead, a business hostile and employment threatening carbon price (tax) at a hefty $23 a ton will be in place next year with Australia to be part of an international ETS by 2015.

RIP Genuine Climate Change Policy?: The 2010 Rudd/ Turnbull CPRS

Had the Rudd government’s Carbon Pollution Reduction Scheme (CPRS) been passed as legislation in early 2010, then there would have been greater scope to establish a reputable and effective ETS. Despite the then latent dislocating effects of the stimulus packages, Australia would have been in a stronger economic position in 2010 to have made transitionary arrangements to having a carbon price (tax) and an ETS.

The Greens criticized the previously proposed 2009 Rudd-Turnbull CPRS for not providing a means to make a transition to utilizing renewable energy sources in substitution of carbon. But time is needed for such a transition to be made. What really mattered in 2010 (and matters now) is that a legal and environmental framework be in place so that there can be sufficient knowledge and subsequent capacity for industry and businesses to make a non-threatening transition to renewable energy sources.

An important dimension of a real ETS is that, through carbon trading, smaller businesses can make the necessary net carbon emissions reductions if larger companies cannot due to operational, technical and business constraints. Under the current carbon plan, there is insufficient latitude for there to be a viable transition to a low carbon economy. The sequence of implementation is such that the carbon price (tax) will destroy too many small to medium businesses and there will be insufficient time for a genuine ETS to be put in place.

For the Greens, the benefit of a narrow transitionary time frame is that established businesses could well be destroyed while those operations receiving grants will be in a possible position to move into the economic void. In the improbable event that a transition to renewable energy is made, the destruction of established businesses will still result in Australia having an over dependence on mining.

For all the hype about the proposed carbon price (tax) helping the Australian environment, the nation will become even more dependent upon mineral exports and it will only be a matter of time before economic imperatives will threaten the Australian economy and national parks such as Kakadu threatened. Furthermore, the future will have their operation of a super profits tax regime will mean that only mining companies with the economies of scale and international trading connections will be able to undertake substantial mining. The lack of diversity in the mining sector, combined with a super profits taxation regime shifting profit overseas, will result in unequal trading relations counteracting any potential economic dividend from mineral exports.

Rent-Seeking Coordination: The Conspiracy Against The Genuine National Interest

The sinister aspect of the above scenario is that there will need to be a critical mass of intelligent and unscrupulous people in the public service, the corporate sector, academia and elements of the union movement to coordinate rent seeking. The creation of SWFs will be a vital facilitator (and reflection) of the coordination that will be required by the emerging elite to achieved their goal of turning Australia into a rent seeking nation.

Current indicators of who will have power in a future rent seeking Australia can be gauged by who is now receiving special government measures to adapt to a carbon price (tax) and who will have the capacity to withstand this new tax. The government’s special measures to support the steel industry are more indicative of the political and economic power of BHP-Billiton than of the genuine national interest.

There are also big corporations such as Woolworths that are not receiving special government assistance but have the economies of scale to adapt to the carbon price (tax). Unfortunately, there are too many small to medium businesses that will not have the capacity to adapt to the impending new tax. Such economic and political power imbalances are reflective of a key attribute of rent seeking – the deliberate shrinking of the economic pie so that an elite can maximize their existing share.

Capacity to be part of the new rent seeking elite will be determined not only by the carbon price (tax) but the passage of legislation for a super profits taxation regime. Legislation for either an MRRT or an RSPT can be expected in October this year after the August sitting of parliament has passed the carbon price (tax). Super profits taxation for the mining sector will be crucial to ensuring revenue can come to help the economy withstand the imposition of a carbon price (tax).

For a short to medium time period, a super profits mining tax could create a revenue bonanza. The revenue windfall could help fund the government’s compensation package, the prospect of which is dampening potential popular unrest and may allow the ALP to win the next federal election after payments are made in May 2012.

However, the nature of a the super profits regime will be such that, due to links that the big three mining companies have with Chinese SOEs, subsequent tax minimization will profit transfers to the PRC. Australia’s ‘China mining boom’ is predicted to end by 2014-2015 as the PRC by then will have consolidated trading arrangements with mining rivals such as Brazil and South Africa.

It is therefore imperative for those engineering the transition to rent seeking that the fiscal, taxation and trading arrangements be in place before the ‘China boom’ ends to reap the benefit of a minerals dependant economy. By then, possible short term benefits of the government’s compensation package will have expired and a valid case will be made by the Liberals that the ALP Gillard government destroyed Australia’s status as a developed economy.

The difficult question is whether the severe economic and social costs of the carbon price (tax) will hit by next year (if not in 2011) due to Australia becoming a sovereign investment risk or after 2012 and 2013. It is possible, if there is plausible spin and cynically adroit distribution of patronage, that the ALP will win the next federal election. But if the ALP does win the next federal election, it will be impossible for this party to win the subsequent election or even to remain one of Australia’s two major parties due to the economic pulverization that a carbon price (tax) will have wrought. Many in the ALP believe that an effective spin campaign can be waged to win the next federal election because Tony Abbott is such a polarizing figure.

Advancing by Retreating: Tony Abbott Wins Either Way

If Abbott were to lose the next federal election, he would probably stay on as leader due to his iconic status with stalwart Liberals. Abbott, who was a Rhodes scholar in economics, is very intelligent, if not brilliant. A unique and powerful aspect of Abbott’s personality is that he has the social confidence to conceal his high powered intelligence for tactical and strategic reasons which is perfect for someone who wants to pursue the strategy of ‘advancing by retreating’.

For the above reason, Abbott can therefore adopt apparently illogical and contradictory policy directions that really advance his cause. For those in the ALP who are prepared to collude with Abbott to secure rent seeking outcomes via both a carbon price (tax) and a super profits mining tax, they should appreciate that Abbott’s unique strengths will become liabilities when the attainment of his objectives is challenged by changed circumstances or unanticipated events.

At present, Abbott is working to an agenda that is on track because the ALP is going to introduce a destructive carbon price (tax) and a super profits tax mining regime. (Abbott supported the introduction of a carbon tax in 2009 even though he was then an avowed climate change sceptic). Abbott’s strategy of ‘advancing by retreating’ was manifest when he discredited his idea of holding a plebiscite on a carbon price (tax) by declaring that he would still disregard a vote in favour of such a tax. His recent speculation that the prime minister’s leadership is under pressure from within the ALP caucus was designed to ensure that Julia Gillard became more reliant upon rent seeking elements within her party so that she would proceed with a carbon price (tax).

Abbott knows that, even if he was to lose the next election, he would still be on track to win a mega landslide by 2016 which will enable him to remould a rent seeking Australia to his specifications. By such a time, the ALP will have created a rent seeking Australia for the ultimate benefit of the corporate sector. To consolidate the ALP’s acceptance as a future non-contender for national power, ‘regionalization’ (sic) will be introduced by an Abbott government so that left-wing industry unions will be competitive only at a lower tier of government.

Back to the Future IR with Peter Reith: The Nexus between Rent-Seeking and a Work Choices Agenda

Not only is the opposition leader an astute strategist- who realistically predicts probable outcomes based on current trends- he also takes actions that can help shape future trends. An important future paradigm shift that Abbott is now laying the groundwork for is the return to a hard line anti-union and anti-employee rights agenda. This was evident at the recent Liberal Party federal council meeting on the June 25th 2011. Abbott made a point of showing his ballot to the current Liberal Party federal party president Alan Stockdale who was standing for re-election. Stockdale (who is a former Victorian state treasurer) won the federal party presidency by a one-vote margin (56 votes to 57) against fellow Victorian Peter Reith whom Abbott had initially encouraged to stand.

The real winner of this close election contest was still Abbott. By revealing his vote to Alan Stockdale, Abbott kept the Kennett faction (which Stockdale belongs to) onside along with non-Victorian Liberals who are pro-state rights. The ‘failed’ candidacy of Peter Reith is intended to return an anti-employee/ anti-union rights industrial relations (‘IR’) to the forefront of Australian politics.

Another potential ramification of the closeness of the recent vote for federal Liberal Party president (which was possibly engineered) was that it could lay the groundwork for the formal factionalization of the Liberal Party. The formation of institutionalized Liberal Party factions will constitute an erosion of party democracy that will make it easier to impose rent seeking agendas that are not in the genuine national interest.

Retiring Liberal Party Senator Nick Minchin (who crucially helped engineer Abbott’s ascension as opposition leader in late 2009) has advocated that formal Liberal Party factions be introduced. This would be a retrograde step for the Liberal Party and for democracy in Australia. The formation of institutionalized Liberal Party factions will constitute an erosion of party democracy that will make it easier to impose rent seeking reconfiguring of Australia.

The Liberal Party flourishes when it has a strong branch structure in which a cross section of society participates in politics because they can protect and advance cross sectional interests. Peter Reith advocates his party having American style primaries to preselect candidates which will ultimately help those with shadowy interests foist their self-serving economic, industrial or political agendas on a Liberal Party because it has a disengaged membership due to the undermining of branch democracy – a classic vicious circle.

Branch democracy is a potential source of competitive advantage for the Liberal Party over the ALP. However, the centralization of Liberal Party pre-selections and the diminution of branches meaningfully participating in formulating party policy will make it easier for shadowy elites to impose rent seeking agendas. (There are several Liberal Party branches in federal seats such as Bradfield in Sydney that have maintained their autonomy and subsequent operational effectiveness).

The return to a Work Choices approach to industrial relations (‘IR’) is a possible manifestation of special interest groups utilizing the Liberal Party to re-impose their destructive agendas on the nation. As unpopular as Reith’s industrial relations agenda is with the broader community, his return to public life probably means that he will engineer the re-entry of a swag of anti-IR operatives to Australian politics.

The nexus between an anti-employee/ anti-union industrial relations agenda and rent –seeking is reflected by the pre-eminence of the Australian Mines and Metal(s) Association (AMMA) as a peak employer association. The AMMA is pursuing a strong anti-union agenda which is a threat to the pluralist nature of FWA. An undermining of the Australian industrial relations system will be conducive to facilitating further precarious employment that will accelerate a decline in the secondary sector of the Australian economy. In one way or another, the AMMA will be at the forefront of seeking to ensure that the interests of pro-rent seeking corporations will predominate Australian employment relations.

Reith is a granite hardliner within the Liberal Party with regard to industrial relations. As the Minister for Workplace Relations in the Howard government between 1996 and 2000, Reith pursued a relentless anti-union agenda helping engineer the passage of the Workplace Relations Act 1996 (the 1996 Act) which introduced private contracts called Australian Workplace Agreements (AWAs) and award simplification aimed at undermining industrial safety net award coverage. As Workplace Relations Minister, Reith utilized the issue of the pay and entitlements of maritime workers as a means of crushing the Maritime Union of Australia (MUA) as part of a broader agenda of fatally undermining employee entitlements.

The overt re-entry of Peter Reith into political life by standing for Liberal Party federal president is in itself significant because it constitutes a re-activation of stridently anti-union forces within the Liberal Party. Even if a future Abbott government cannot rescind the FWA legislation, the emergence of a rent seeking economy due to high levels of precarious employment will be a fundamental challenge to a pluralist industrial relations system and to Australian unionism.

True Australian Liberalism: Why Deakin is Superior to Reith

Reith previously had the impact of fostering an anti-union (or more to the point anti-arbitration) ethos within the Victorian Liberals which went against historical trends. A major architect of Australian arbitration was the Victorian, Sir Alfred Deakin (1856 to 1919), who was one of Australia’s founding fathers. Industrial arbitration became a mainstay of Australia’s economic, political and social makeup. Support for industrial arbitration by national statesmen from Victoria such as Sir Robert Menzies and Victorian Premier Sir Henry Bolte helped ensure de facto bi-partisan acceptance of a pluralist industrial relations system.

A return of Peter Reith to public policy formation is a betrayal of the traditions of Australian liberalism that will ultimately rebound on the Liberal Party. It is too much to expect for the Liberal Party be pro-union. But Liberal Party acceptance of a balanced industrial relations system would help Australia maintain a viable secondary economic sector vital to social stability.

The most recent example of the Liberal Party’s broad acceptance of arbitration was the political career of Ian Macphee. He was a prominent Victorian Liberal who served in the Fraser led coalition federal government as Minister for Employment and Youth Affairs and was noted for his support for and expertise in industrial arbitration. Macphee strongly supported Andrew Peacock in his titanic leadership struggle against John Howard, who was an uncompromising foe of arbitration.

Despite Macphee’s support for Peacock against Howard, he never entered into an alliance with Jeff Kennett who was Peacock’s main support at a Victorian parliamentary level. No Macphee-Kennett alliance ever materialized even though they were both intense enemies of Liberal Party power broker Michael Kroger. This was probably because Kennett was anti-arbitration. This was manifested when, in a shock move, the Kennett government effectively abolished Victoria’s venerable system of industrial relations in 1993! This reprehensible action by Kennett was counteracted by the Keating ALP federal government providing federal protection for the industrial rights and entitlements of Victorian state employees.

For all the economic successes of the Kennett government (1992 to 1999), his government’s vendetta against trade unions, employee rights and people associated with the former ALP state governments between 1982 and 1992 contributed to public reservations that helped precipitate Kennett’s stunning demise as premier. Although current Liberal Party Victorian Premier Ted Baillieu is a loyal friend of Jeff Kennett, he does not seem to inherently share the former premier’s hard-line anti-industrial relations stance*.

(*There are however disturbing signs that the Baillieu government is adopting an anti-union agenda as is the state government of Colin Barnett in Western Australia. Both these premiers unfortunately voted for Reith against Stockdale even though a critical component of Abbott’s rent seeking agenda is the ultimate dismemberment of Australian states).

State Rights Protect Against Rent-Seeking

The Victorian Liberals should be wary of pursuing an anti-employee/anti-union agenda because it will ultimately be part of a rent seeking agenda that will be particularly detrimental to Victoria. This south eastern state is not endowed with natural resources except for gold which spurred the gold rushes of the 1850s. The 1850s gold rushes in precipitating a population boom generated a secondary goods and services sector which helped make Victoria an economic powerhouse in Australia. Due to the emergence of a strong manufacturing sector in Australia, Victorian Liberals tended to be supportive of protection and industrial arbitration.

Victoria was hit hard by the tariff cuts in the 1980s and the economic wreckage wrought by the Cain and Kirner ALP state governments indebting the state by pursuing quasi social credit policies. The Kennett government’s success in restoring fiscal discipline, paying off public state debt, adopting a ‘pay as you go’ policy in relation to infrastructure and attracting business investment led to a remarkable economic recovery. There were socially regressive aspects of the Kennett era but the economic success of the Victorian coalition government helped engineer a revival in secondary goods and services sectors which generated needed employment.

An extensive and coercive carbon price (tax) will hit Victoria hard due to the manufacturing, agricultural and services bases of its economy. Consequently, there are now Victorian Liberals who are positioning themselves for a shift toward a rent seeking paradigm by trying to downgrade the value of labour by pursuing anti-employee/ anti-union agendas. These elements of the Victorian Liberals envisage that a super profits mining tax will provide revenue for SWFs so that they can continue to exercise their economic power despite a consolidation of the mining sector as the pre-eminent driver of Australia’s future economic capacity.

The economic dislocation that rent seeking will wrought on non-mining states such as Victoria will constitute a major legacy of the ALP’s return to power at a federal level in 2007- the emergence of a two speed economy. This two tier economy (’the two speed economy’) is reflective of the ultimately detrimental ramifications of the post 2008 stimulus packages in undermining the secondary sectors of the Australian economy and in laying the ground work for a future over-dependency on the PRC in relation to mineral exports.

State governments (particularly in non-mining states) such as the Baillieu Victorian state government should protect their continued economic and constitutional viability so that Australia’s current two speed economy does not facilitate the transition to rent seeking. This will be a difficult ask for the Baillieu government due to its narrow two seat majority. It will be similarly difficult for the Gillard government to throw off the rent seeking course that is being foisted upon it. This difficulty is manifested by the two federal independents, Rob Oakeshott and Tony Windsor, stridently supporting both an extensive carbon price (tax) and a super profits mining tax regime.

Because the Abbott Liberals actually want the federal government to introduce the above mentioned taxes, Prime Minister Gillard’s room to manoeuvre is limited to say the least. The possible threat of Oakeshott and Windsor withdrawing their support from the federal government for not supporting a rent seeking pathway will hopefully be counteracted by pro-state Liberals providing the crucial leeway to enable the Gillard government to survive for the purpose of fending off rent seeking.

The current situation is such in Victoria that there are Liberals in the state parliaments who are prepared to cross the floor if the Baillieu government adopts anti-state and anti-employee/anti-union measures. Should the Baillieu government be threatened by would be defectors supporting a no-confidence vote pro-states Liberals in federal parliament could counter by threatening to support the Gillard government. Such a scenario could also apply if the independent MPs Rob Oakeshott and Tony Windsor similarly threaten to withdraw their support for the federal government.

The Gillard government deserves support from federal Liberal MPs to the extent to which the government is prepared to oppose rent seeking. A manifestation of the Gillard government opposing rent seeking would be to adopt Abbott’s (insincere) advocacy of a plebiscite on a carbon price (tax). A vote against the proposed rent seeking carbon price (tax) if acted on would greatly benefit the nation, but ultimately save the ALP by disrupting Abbott’s rent seeking agenda.

Why the Abbott Liberals will Ulimately Win if the Carbon Tax is Introduced

That Tony Abbott’s rent seeking agenda is on track to success is reflected by the campaign that he is waging. The opposition leader is utilizing an excellent communication and feedback system from small to medium business and (incredibly enough) union rank and file members who are legitimately hostile to the government’s carbon price (tax) paradox.

The ironic aspects of Abbott’s anti-carbon campaign is that it will have garnered formidable opposition to a tax that he covertly supports and which he will gain great prestige for rescinding when he is in power. By that time the ramifications of the carbon price’s (tax) imposition will have so facilitated a reconfiguration of Australia’s economic and political settings that a new rent seeking elite will be entrenched.

The Abbott Liberals are beginning to foster a potential populist social movement (which includes the purported Democratic Labor Party, DLP) that will become a reality if the ALP proceeds with their proposed carbon price (tax). The ultimate success of such a movement will be the extent to which it taps into community sentiment to siphon votes away from the ALP on a permanent basis. An accurate narrative of how the carbon price (tax) will destroy businesses and Australia’s international trading position is now being advanced by the coalition.

Although Abbott has a covert rent seeking agenda, his criticisms of the government’s carbon reduction plan are valid and it will only be a matter of time before they come true. With a degree of bravado that will later be remembered as courage, Abbott is accurately articulating the long term negative ramifications of the proposed compensation measures that will be paid in May 2012. The proposed compensation package in effect is ‘robbing Peter to pay Paul’. Millions of lower income Australians may receive substantial sums of money but the ill-effects on Australia’s secondary sector will be severe to the point of fatal. The revenue raised for these payments will be the imposts from the selected five hundred carbon emitters unless they have gone out of business thereby cancelling out the effects of compensation to consumers.

There will be public disgust as CEF grants go to applicants with connections to the Greens and rent seeking elements within ALP. Anomalies will be picked up by a sharp Liberal Party machine and communicated to the public. Too many Australians already consider ALP governments to be profligate spenders of public money due to the fiascos of the Building the Education Revolution (BER) and the pink bats program.

Popular hostility toward wasteful public spending will also intensify because CEF grants will be made in the context of business failure and subsequent unemployment. Declarations by ALP leaders heralding the courage, confidence and creativity of the Australian people forging to a lower carbon emitting future will ring hollow in the context of the reality of widespread feeling of hopelessness caused by economic decline and social dislocation as a result of the carbon price (tax). Negative sentiments toward the ALP federal government will be intensified due to the Prime Minister’s 2010 pre-election campaign commitment that a re-elected government that she led would not introduce a carbon price (tax).

Indeed, had the federal government included petrol in its community price (tax) the negative social and economic consequences would have been so much more immediately apparent over the 2012-2013 period that the ALP would have no chance of being re-elected. The consoling effect of the 2012 compensation package combined with a slick tax payer funded advertising campaign is what ALP leaders are hoping will win the Gillard government re-election. The more plausible impact of these measures will be such that the Gillard government will be defeated in a landslide.

An intensive campaign in support of the carbon price (tax) undertaken by a Greens backed left wing social movement will solidify the ALP’s resolution to introduce this new tax. But the future reality will be that the ALP will permanently lose Australia’s political middle ground with the Greens acquiring an expanded political base at the expense of the Labor Party.

While the introduction of a carbon price (tax) will cost the ALP the middle ground, new challenges from the far right will consequently emerge. The recent candidacy of Peter Reith for the Liberal Party federal presidency is a manifestation of the new IR environment that is on the way for the ALP and the Australian union movement if the Gillard government proceeds with the current carbon reduction price (tax). Anticipated hostility by wage earners and unionised employees toward the ALP for introducing this carbon price (tax) has encouraged IR hardliners associated with the coalition parties to pursue an anti-employee and anti-union agenda*.

(*Already the Abbott Liberals are communicating that union leaderships are not being responsive to rank and file members’ concerns regarding the carbon tax proposal).

The Rent Seeking Threat to Australian Industrial Relations

Reith will evaluate the success of his latest anti-IR campaign on whether or not it destroys the viability of the Australian union movement. The irony of the situation is that the ALP would still be in a position to win the next federal election (providing there is no carbon tax or super profits mining tax) by legitimately warning of a return to a Work Choices type of industrial regime. Anti IR Liberals (who tend to be rent seeking inclined) have presumptuously anticipated that the extent of public hostility toward the carbon price (tax) will be such that they can re-launch an anti-employee industrial agenda.

The return of an employee relations agenda demonstrates how the current carbon price (tax) proposal already threatens one of Julia Gillard’s major achievements since the ALP returned to office in 2007, was the substitution of Work Choices with the pluralist Fair Work Australia (FWA). A future Abbott led government will one way or another ensure a return to a Work Choices type of industrial relations regime.

Forfeiting Trust in the Sincere: The Tragedy of Julia Gillard?

If there is widespread hostility toward the carbon price (tax) due to its destructive ramifications, then any reservations toward hard-line anti-unionism will be counteracted. Although the Abbott Liberals cannot be trusted with regard to IR, they are currently winning the battle with regard to the issue of trust against Julia Gillard who is sincere with regard to IR and has the nation’s genuine national interest at heart.

By reneging on her 2010 polling day promise that there would be no carbon tax, Prime Minister Gillard will soon be (or is) perceived as a tall poppy who cannot be trusted. Subsequent promises and assurances that the prime minister has provided will not resonate with the electorate. Consequently, Abbott’s claims that the ALP government’s assertion that a carbon price (tax) will not rise above $23 a tonne will have credence with the electorate.

Even without predicting future ALP breaches of promise, Abbott will be able to point to the ill-effects of the government’s disastrous carbon reducing polices such as ending fuel rebates for diesel in the mining sector and for rail. Terminating diesel fuel in the mining sector will strengthen the position of the three big mining companies to help them obtain a triopoly in which to exploit a future super profits mining tax regime. Increased rail costs will also help facilitate a mining triopoly because smaller mining companies and would be investors will be discouraged from investing in Australia.

Related to the vital issue of fuel costs, charging airplane fuel does not make sense. The government has claimed that this charge will be incremental. But if this is the case, then why apply such a charge if it will not alter consumer behaviour to lower carbon emissions? The Australian airline industry is already in a fragile position that even a small charge is too much.

Australia’s wide geographical distance has created challenges that the nation has turned to its advantage to help sustain a viable secondary economic sector. The imposition of a carbon price (tax) on heavy vehicles in 2015 is another ludicrous attack on the transport sector that will challenge people’s veracity to believe that there will be no future tax on petrol. The adoption of such terrible policies can only be rationally explained in the context of creating a rent seeking nation.

Most Australians do not know what rent seeking is but they will soon know that the ‘winners’ will be those receiving CEF grants as and after everyday jobs are destroyed. If Australia becomes an economic basket case due to the inadequacies of the federal government’s current carbon reduction plan, the public will eventually realize that those who engineered the rent seeking transition will have profited at the expense of the common good.

The Greens and rent seeking elements within the ALP are now effectively playing the spin game of conning people that their interests are being advanced at the same time as they are actually being undermined. Some of the best Australian political con artists are those who understand and manipulate the tall poppy syndrome by projecting themselves as the people’s champions while having alternative agendas. The origins of the tall poppy syndrome go back to the socio-political legacy of Governor *Lachlan Macquarie who served as colonial Governor of New South Wales from 1810 to 1821.

(* Governor Macquarie - by treating former convicts with equity and justice - utilized their skills to help create a remarkably successful colonial society which did not stand on ceremony and class distinctions. The New South Wales Governor was also noted for his attempts to protect and advance the interests of the colony’s Aborigine population).

The Long Term Consequences of the Tall Poppy Syndrome

The ‘tall poppy syndrome’ is an essentially egalitarian ethos that disdains snobbery. Australian egalitarianism is defined by the concept of ‘mateship’. ‘Mateship’ in essence refers to recognizing a favour or common interest that creates a social bond that more often than not is life long. Friendship is often an important but not a necessary component of Australian mateship. The bonds of mateship can be economic, family, political, social, sporting, general common interest or appreciating a favour.

Even though social and political similarities can be a source of mateship, a powerful aspect of Australian mateship is that it is often transcends socio-political differences. People will often even subordinate their egos or social interests for the sake of mateship. Second generations of migrants often feel that they are ‘Aussies’ without forgoing their cultural heritage because they have forged mateship bonds.

The power of mateship is such in Australia that it is often socially fatal to betray someone who is recognized to be a mate. Many Australians will break off with a mate, close personal friend and even a family member if they believe that the person concerned has betrayed a mate of theirs. Mateship ties (which have helped underpin social stability in Australia) can be ruptured by lying or generally betraying a trust upon which a mateship bond is based.

An Australian political leader who established a mateship bond (no matter how intangible) with much of his electorate was Sir Johannes (‘Joh’) Bjelke- Petersen who was premier of Queensland from 1968 to 1987. Sir Joh was considered a mate by many of his state compatriots*. The Queensland premier gained the stalwart support of the many non-Queenslanders (‘southerners’) whom he enticed to migrate to his state with initiatives such as abolishing stamp duty.

(*There were also many Queenslanders who cordially hated Sir Joh).

Later allegations of corruption against Sir Joh were considered such a betrayal by many of his former stalwart supporters that they voted for the ALP in the 1989 state election which returned the ALP to power in Queensland after thirty two years in opposition. At the same time the Queensland branch of the National Party lost thousands of members and supporters (many of them former ‘southerners’) for their deposing Sir Joh as premier in 1987.

The capacity of Peter Beattie as ALP premier of Queensland from1998 to 2007 to win state elections was enhanced because of his success in utilizing the voting demographic that became known as the ‘Beattie Liberals’. This bloc vote referred to former Liberal Party voters who had crossed over to the National Party out of loyalty to Sir Joh but ultimately went to the ALP because they were successfully wooed by Beattie. Part of Beattie’s success in capturing this demographic was his professed public reverence for Sir Joh. Sir Joh’s later expression of personal gratitude to his former bitter political foe resulted in many voters in the National Party heartland territory of regional Queensland voting ALP for the first time!

Shrewd Australian politicians realize (as Sir Joh did) the interconnection between mateship and the tally poppy syndrome. Consequently, Australian politicians have often taken great care not to be seen to explicitly break election campaign promises. The power of the tall poppy syndrome is such that it does not matter how long a period of time has elapsed, voters will often vote against popular and competent politicians if it is believed that they need cutting down to size.

The Sally Anne Atkinson Tall Poppy Precedent

An example of an Australian politician falling victim to the tall poppy syndrome was Sally Anne Atkinson who was Lord Mayor of Brisbane (the Queensland capital) from 1985 to 1991. Mrs. Atkinson was a respected journalist who had a well regarded reputation as an expert concerning Brisbane’s local history, geography and infrastructure. Sally-Anne Atkinson’s personal popularity was therefore a crucial factor that enabled her to be the first Liberal elected as lord mayor of Brisbane.

During her 1985 campaign, the articulate Liberal candidate promised in a television advertisement that she would freeze *Brisbane’s municipal rates if elected. Subsequent to her election victory, many Brisbanites discussed whether their new lord mayor would keep this election promise. Due to cynicism that Australians often have toward politicians as part of the tall poppy syndrome, it came as no surprise when Sally-Anne Atkinson broke her rate freeze promise. While it may not have been Sally Anne Atkinson’s fault, her cause was also not helped when the Brisbane City Council voted itself a pay rise.

(*Brisbane is Australia’s third biggest city in geographical size and population but it is the nation’s largest municipality).

Sally-Anne Atkinson seemed to have overcome any difficulties concerning her broken election promise when she was easily re-elected in 1988. The Brisbane Lord Mayor was considered by much of the city to be a decided asset as she won widespread admiration for her determined efforts to win Brisbane the nomination to host the 1992 Olympics. There was speculation that Sally-Anne Atkinson would enter federal politics but she actually forewent an opportunity to stand as a candidate in the 1990 federal elections. Nonetheless, (to the surprise to many Liberal Party heavy-weights) it was Sally-Anne Atkinson who was the ‘master of ceremonies’ who hosted the Liberal Party’s federal election policy launch in Melbourne in 1990.

It therefore came as surprise to many Brisbanites when Sally-Anne Atkinson was defeated in her bid for re-election in 1991. This upset election result was generally attributed to the effectiveness of ALP attack ads which portrayed Mrs. Atkinson as an overpaid international jetsetter. These attack ads would not have been successful had they not fed into the tall poppy syndrome.

ALP strategists involved in the 1991 Brisbane City Council election campaign appreciated that too many Brisbane residents still had latent ill-feelings toward Mrs. Atkinson over her broken election that was made six years before. This was even though Mrs. Atkinson was still widely considered to be a very effective lord mayor. By tapping into the tall poppy syndrome, the ALP campaign generated an anti-Atkinson sentiment. Therefore, while most Brisbane voters probably desired that Sally-Anne Atkinson remain on as lord mayor, many decided to send her a message to be less cosmopolitan by voting against her. The Brisbane lord mayor received more than a message because she was voted out of office!

Widespread disbelief in Brisbane that Sally-Anne had failed to win re-election was still tempered with a tall poppy syndrome induced attitude that she still deserved to be put in her place for breaking her 1985 election promise. Consequently, Mrs. Atkinson failed to win election to federal parliament in 1993* and lost Liberal Party preselection for a seat that she probably would have won in the 1996 federal election because the electorate had turned on ALP Prime Minister Paul Keating who by then was a loathed tall poppy. Sally-Anne Atkinson did later fulfil an important role in helping Sydney win the honour of hosting the 2000 Olympics but such was (and is) the potency of the tall poppy syndrome that she could never again have successfully run for national political office*.

(*This was also probably due to widespread hostility toward the1993 Liberal Party election manifesto ‘Fightback’ which Tony Abbott had helped devise)

(*Sally-Anne Atkinson was elected in 1999 to the Constitutional Convention as a candidate of the Australian Republican Movement, ARM. In this election sitting, members of state and federal members of parliament were banned from standing so that the former lord mayor was not considered to be a political candidate).

Prime Minister Julia Gillard is now at her own cross-roads of whether she will fall victim to the tall poppy syndrome. The scope for her to do so is considerable with potentially very negative ramifications not only for the ALP but more importantly for the nation. If the secondary sector of the Australian economy is undermined in pursuit of creating a rent seeking nation, there will be a steep fall in living standards. Millions of Australians will eventually, if not retrospectively, blame Julia Gillard and the ALP due to the adverse ramifications of the current carbon plan and of a super profits mining tax regime for the mining sector.

The ironic dimension of the above scenario is that Tony Abbott will be misperceived as the people’s ‘mate’ for championing opposition to the current carbon plan and to a super profit mining tax regime. This will happen even though the Abbott Liberals in government will consolidate the transition to a rent seeking nation, the groundwork for which will have been established by the ALP and the Greens. The potential to assess this scenario is restricted by the relatively narrow focus of media commentary concerning the carbon price (tax).

Purported Climate Change Policy and the Rent Seeking Reality

Contemporary press commentary is focusing on the ‘fine tuning’ of the current carbon plan as devised by ALP and Greens on the Multi Party Climate Change Committee (the rent seeking facilitation committee). The work of this committee was really to devise a carbon price (tax), compensation package and credit/ loan arrangements so that a transition to a rent seeking nation could be facilitated. Advisors and consultants to the rent seeking committee ensured that powerful industry concerns were represented so that it was unnecessary for the Abbott Liberals to serve on this committee.

A sinister dimension of the rent seeking committee is that brilliant economic modelling will probably ensure that particular economic and political interests are advanced at the expense of the genuine national interest. Due to clever economic modelling, there may be a lag between the very adverse effects of the currently proposed climate price (tax) and the transition to a rent seeking nation. Eventually time will catch up with the ALP but not with the Abbott Liberals.

Under the aegis of the rent seeking facilitation committee the Gillard government will have established the rent seeking fundamentals for corporate Australia to dominate commerce and industry because the current carbon price (tax) will decimate Australia’s secondary economic sector. This decimation will lead to a loss of tax revenue which will necessitate an over-reliance upon mining which, due to a super profits tax regime, will be dominated by the big three mining companies. Rent seeking elements within the ALP, Greens and the Abbott Liberals will be accommodated by the subsequent establishment of SWFs.

The socio-economic dislocation that the current carbon price (tax) will facilitate will mean that the ALP will eventually be blamed and the model of a two party system broadly based on a division between capital and labour will probably end. The ironic aspect of this grim scenario is the Australian environment will suffer because there will be a voracious demand for mineral exports which will eventually inflict massive ecological damage.

This above scenario would not distress the Greens leader Senator Bob Brown whose agenda has always been more political / economic than environmental. Indeed, by helping facilitate a shift to a rent seeking nation, Senator Brown will have succeeded in what most far left wing leaders aspire to – to change the fundamental economic and social settings of a country. Corporate Australia will probably get the last laugh because subsequent widespread impoverishment will generate a hatred toward the Greens (not to mention the ALP) that is in keeping with a Lasch political strategy.

At a recent address to the Canberra Press Club (29th of June 2011) Senator Brown did not conceal his glee at the prospect of a carbon price (tax) and a super profits tax mining regime been imposed on Australia. Indeed, he called for the introduction of an extensive Resource Super Profits Tax (RSPT) so that SWFs could be established and utilized. He spoke of SWFs as the means by which increased mining revenue could be directly returned to the Australian economy and people.

The systemic problem for Australia will be that, if a super profits mining tax regime is applied at too high a rate, it will discourage diversified investment in the mining sector that will lead to a mining triopoly and PRC mercantile dominance. Nonetheless, the Greens leader shrewdly sought to allay fears that an RSPT would be a means of ceding de facto control of Australia’s resource sector to a neo-mercantile PRC by means of profit transfer by declaring the need for more mining profits to remain within Australia.

Undermining Those You Purport to Support

This approach of cynically re-assuring those who would be sold out by the two new taxes was manifested by Senator Brown denouncing Chinese SOEs moving to buy Australian farmland. The benefits of this denunciation for Senator Brown were to provide credence for his avowed stance that he is opposed to the PRC gaining control of Australia’s mining sector by feigning support for Australian farmers. The adoption of a super profits mining tax regime will give the mining sector dominance over the agricultural sector that is in keeping with a rent-seeking nation. Australian farmers and associated regional communities therefore have the most to lose from a super profit mining tax regime which Senator Brown so ardently advocates.

Similar to Senator Brown, the bona fides of federal independent MPs Tony Windsor and Rob Oakeshott (who both represent regional electorates) in supporting rural Australia should not be taken at face value. This is because they both support the current carbon price (tax) proposal and a super profits tax for the Australian mining sector which are conducive to rent-seeking.

Tony Windsor has expressed concerns that the PRC SOE, Shenhua Watermark Coal Pty Ltd is moving to gain control of prime agricultural land in the Liverpool Plains of north-western New South Wales. This federal MP has claimed that New South Wales state laws are inadequate to protect the interests of farmers and is canvassing introducing federal legislation that will give the Commonwealth the right to intervene in relation to mining exploration which is a state jurisdiction.

Considering the New England MP’s support for the current carbon price (tax) proposal, the NBN and most ominously, a super profits mining tax regime, legislation that Mr. Windsor may introduce in parliament providing for Commonwealth intervention powers in the mining sector could lead to rent-seeking outcomes as opposed to protecting the interests of Australian farmers. There is no more vivid a manifestation of rent-seeking than prime agricultural land making way for foreign mining companies that are essentially controlled by a foreign mercantile power.

Mr. Oakeshott and Mr. Windsor are also prominent supporters of the NBN which has rent-seeking potential. The National Broadband Network (NBN) corporation-by being given exclusive control by the federal government of the fibre to node cables- will have an effective monopoly in charging internet providers. Due to the current rent-seeking threats to the secondary sector of the Australian economy, government control over internet pricing could lead to the consolidation of power by a corporatist type elite. Nonetheless, carefully constructed spin will be put out by advocates of the NBN monopoly that this disastrously expensive, potentially state-controlling Leviathan will benefit all Australians when the opposite will be the case.

The pattern of presenting detrimental policies as positives for those who will be adversely affected is being used by the Greens in their advocacy of SWFs. The carbon tax can potentially destroy rural communities, notwithstanding assurances that any damage or destruction will be off-set (if not improved) by SWFs acting as the means of creating new industries and employment opportunities. The only certainties arising from the application of a carbon price (tax) and of a super profits mining tax will be an over-reliance upon the mineral sector and facilitation of those political interests that are represented by the boards of management of SWFs.

If Senator Brown had been sincere about reducing human induced climate change, the Greens would have supported the Rudd/Turnbull CPRS in 2010 as the basis for a non-economically destructive ETS. It was the prospect of a genuine ETS that precipitated Malcolm Turnbull’s deposition as opposition leader in late 2009 so that the Abbott Liberals could pursue a rent-seeking agenda.

A Gestalt Approach will Facilitate Genuine Climate Change Policy

All the political turmoil that the nation has endured over adopting an ETS is really reflective of inter party rent-seeking politicians trying to determine a future political and economic setting to their own advantage. In this context, contrary to Prime Minister Gillard’s analysis, the merits of a carbon price (tax) have not been sufficiently debated because the real issues at stake have not been addressed.

The mis-assumptions concerning the carbon price (tax) are reflected by the insufficient input that went into the current proposed carbon plan via the rent-seeking facilitation committee. The tight time frame that the rent-seeking facilitation committee established for applying a carbon price (tax) will deny the scope to eventually put a genuine and non-economically threatening ETS in place. The narrow transitionary time line will also allow selfish rent-seeking interests to escape adequate scrutiny as they benefit from CED loans to take advantage of the destruction of regular businesses.

Strategic analysis in the Australian banking and finance sector (which includes foreign owned financial institutions that are in Australia) might project that any disruption to the secondary sector caused by the current carbon price (tax) proposal will be more than off-set by their involvement in SWFs. Anticipated benefits for banks/ financial institutions could include payments of commissions to commercial wings of retail banks/ merchant banks for serving on management boards of SWFs. The banking/ finance sector could potentially expand its power via involvement in SWFs as the driver of economic activity in a minerals dominated rent-seeking Australia.

Economic regression to rent-seeking would not benefit the banking/finance sector because the contraction in economic diversity would eventually undermine the capacity to have a viable lending market. Short-term benefits that might accrue to merchant and retail banks by involvement in SWFs will not last because Australia’s mining sector will be too immersed with Chinese SOEs which will ultimately be uncompetitive due to the mercantile nature of the PRC.

Indeed, if minerals rich nations such as Australia are to avoid rent-seeking then economic fundamentals which support a viable economic secondary sector must not to be tampered with. Therefore the formulation and implementation of an ETS is a very delicate task that requires careful balancing of environmental, economic and social considerations. This is particularly the case for Australia which has a secondary economic sector, the viability of which must not be threatened if socio-economic viability is to be maintained. Australia is probably at one of the most important junctures in its history because there is a political class that is attempting to subvert the balance between the primary and secondary sectors of the Australian economy so that a transition to a rent -seeking economy can be engineered

Genuine Aussie Politicians Oppose Rent-Seeking

Whatever criticisms may be made of Peter Costello as Australian Treasurer (1996 to 2007), he managed to bequeath a balance between the two sectors of the Australian economy that ensured widespread prosperity. It was for this reason that rent seeking elements within the Liberals were determined to ensure that Peter Costello never became leader. These same elements also brought down Malcolm Turnbull as Liberal leader in late 2009.

Kevin Rudd and Julia Gillard in coming to office in 2007 respectively as prime minister and deputy prime minister inherited a strong economic foundation from Peter Costello. Julia Gillard did come through in her period as deputy prime minister by spectacularly improving upon the ALP government’s industrial relations inheritance via FWA and by fighting for the interests of students in government schools.

Former Prime Minster Kevin Rudd, through the first stimulus package courageously helped the Australian nation when the 2008 GFC hit. However, the subsequent stimulus packages that the then prime minister acquiesced to were a deliberate waste of money that were intended to in-debt the nation to establish the necessary settings for a rent seeking nation. Mr. Rudd demonstrated a degree of courage by initially resisting further rent seeking objectives such as the dismemberment of Australian states via GST clawback. But his failed attempt to put in place a non-rent seeking ETS was a crucial factor that undermined Kevin Rudd’s position as prime minister.

Prime Minister Julia Gillard is now at the cross-roads of having to defend her industrial relations legacy and having to secure Australia’s future economic well-being. Unfortunately, the prime minister has been placed in a position by elements within her party (who are working in collusion with the Abbott Liberals and the Greens) to foist a rent seeking agenda on the nation via the proposed carbon price (tax) and a super profits tax mining tax regime.

The danger for the nation is that the prime minister is now leading the nation to a rent seeking carbon intensive future. This scenario is in keeping with the concept of tragedy where the protagonist destroys everything he or she seeks to build. The tragedy that confronts Julia Gillard is that she will be misperceived as a tall poppy who betrayed her people’s trust and interests.

Give The Australian Economy the Benefit of the Doubt by Avoiding Rent Seeking

The concept of human induced climate change is probably true and in Rupert Murdoch’s words the environment ‘should be given the benefit of the doubt’. There is ample time and opportunity to devise a genuine EST by Australia’s scientific Research and Development (R & D) to be devised and implemented. To help meet the objective of carbon reduction, the particular threat to Australia of unscrupulous politicians utilizing the issue of human induced climate change to engineer rent seeking must be removed.

The above objective can be facilitated by the government holding a binding plebiscite on the government’s draft carbon reduction plan. If there is a negative vote on this specific plan, then the need for a super profits mining tax regime would go because Australia’s economic fundamentals would essentially remain in place because the balance between the primary and secondary sectors of the Australian economy would be maintained.

The carbon price as it is will be economically and socially destructive. If the prime minister (who specifically promised that there would be no carbon price (tax) before the last election) is to maintain faith with the Australian people who she is genuinely trying to serve, then she must respect the right of the people to be consulted by referendum / plebiscite.

Australia is still in a strong economic position due to the Chinese demand for Australian minerals but moves are afoot to ensure that a transition to rent seeking occurs by changing Australia’s taxation arrangements*. Paradoxically, the Gillard government can ensure Australia’s continued economic well-being by exploiting the ‘China boom’ to pay off Australia’s public debt and restore fiscal discipline. This approach, which Peter Costello masterfully applied as federal treasurer, maintained the balance between the primary and secondary sectors of the Australian economy that was conducive to employment growth.

(*In short there can be no transition to a rent seeking state in Australia if there is no super profits taxation regime).

Before The Clock Strikes Twelve: The Urgent Need for a Gestalt Approach

If the Gillard government forgoes a carbon price (tax) and a super profits mining tax regime, Australia will have avoided socio-economic disaster as opposed to having secured economic security. The clock will strike midnight after the China booms ends in 2015/2016 so that it will be vital (as mentioned above) that a focus is placed on paying off, or addressing, Australia’s public foreign debt and budget deficit before the boom ends.

The capacity to raise the revenue to pay off Australia’s public foreign debt and budget deficit will be conditional upon retention of current transparent taxation arrangements in relation to the mining sector. The paradox could arise in which Australia helps orientate the PRC toward a Gestalt approach to political and economic leadership.

The modern approach to Gestalt management that many companies now apply to achieve diversity was formulated by the American political scientist Mary Parker Follet (1868 to 1933). Follet’s ideas were derived from the German philosopher Johan Fichte (1762 to 1814) in which differences in opinions and interests were integrated by broadly analysing the overall context instead of the specific situation. An important theoretical innovation of Follet’s in relation to the Gestalt approach was her conceptualization of ‘the law of the situation’.

Under the law of the situation, authority is derived from knowledge that comes from a reciprocal process in which the confronting parties interact on a creative basis to facilitate a ‘power - with’ outcome. This outcome is one in which ‘integrative unity’ is achieved between different parties - a solution is found that recognizes the truth of a situation so that different ideas can be synthesized to produce a high powered solution or one at the very least that actually addresses the problem.

If ever a Gestalt approach should be considered, it is in relation to the issue of Australian climate change policy. The prime minister will hopefully gain the scope to engineer a power–with (‘win-win’) scenario by utilizing her abandonment of the carbon reduction plan to obtain people’s ideas rather than impose (‘power-over’) the proposal as a fait accompli. If the prime minister adopts a power over approach–which she is currently doing- Abbott will be able to successfully portray Julia Gillard as being a leader who is addicted to spin and out of touch with the people’s interests.

An abandonment of a power-over approach with regard to Australian climate change policy will disrupt the predictability that a mercantile PRC needs when calculating the resource flow from Australia. Such a development would challenge the Leninist inspired power-over approach to economic and political leadership arrangements and authority in the PRC.

The PRC: Two Parties, One Country

Mainland China is currently at the cross roads with regard to continuing to maintain a Leninist power over-approach or eventually moving to a two party system to organically preserve national unity. The strategy that the Chinese Communist Party (CCP)’s senior leadership eventually adopts will hopefully be based on a Gestalt approach that the Japanese establishment has already successfully utilized. A Gestalt approach is one in which the total situation is taken into account so that there can be a synthesis of different ideas and beliefs to achieve an enhanced outcome.

That is not to say that the CCP and the People’s Liberation Army (PLA) has not had its successes since 1949. The major success of these two interconnected institutions has been to maintain Chinese national unity. The CCP now coherently exercises its power on a nationwide basis which is a formidable achievement because China has a quarter of the world’s population!

There are predictions in the west based on the Soviet precedent that CCP rule will eventually come to an end. However, such a prediction may be premature because the raisin d’etere of the CCP was (and is) different to that of the now defunct Communist Party of the Soviet Union (CPSU).

In contrast to the CCP, the senior leadership of CPSU really believed in the efficacy of Marxism and as such thought that their ideological correctness would help them prevail over the west. Indeed, one of the major reasons why Mikhail Gorbachev embarked upon Glasnost (Openness) and Perestroika (Restructuring) between 1985 and 1991 was because he actually believed that popular domestic support for Marxism would be secured to enhance the quality of its application. Instead, Glasnost and Perestroika exposed the fallacy of Marxism-Leninist power-over approach to the peoples of the Soviet Union so that by the time of the attempted hardliner coup in August 1991, the CPSU was a bureaucratic apparatus divorced from civil society.

By contrast to what became of the Soviet Union, the CCP has utilized a Leninist power-over approach component of Marxist-Leninism to maintain national unity and strength instead of imposing Marxist ideology on the world. The Chinese people have however suffered from Marxist inspired policies. The lunacy of Marxism became apparent to many Chinese with the disaster of the so-called ‘Great Leap Forward’ (1958 to 1961). The hideous impact of the Cultural Revolution (1966 to 1976) discredited the Maoist version of Marxism for most Chinese. But it was probably the impact of Deng’s post 1979 ‘Four Modernisations’ reviving the market as the main driver of economic activity that most Chinese on the mainland realized the fallacy of Marxism per se.

The CCP’s senior leadership realization by the mid 1990s that Marxism was a flawed theory did not mean that they were going to end the Leninist model of government. Far from it. Since 1991, the CCP’s Central Organization Department (COD – no pun intended) was utilized by the next generation of party hardliners such as Chen Yuan, to maintain the party and to extend the party’s reach into society via market reform.

The COD had initially been used by the CCP in the 1930s to thwart possible Kuomintang Party infiltration and as an agency to maintain party rank and file discipline after the communists came to power in 1949. This party agency fell into disuse during the Cultural Revolution but was revived in the 1970s as the CCP regained a sense of organisational cohesion in the immediate post-Mao period. Under the administration of CCP General Secretary Zhou Ziyang (1986 to 1989) the COD again declined due to deliberate neglect resulting from Zhou’s relatively liberal political orientation.

In 1991, the COD was re-activated as a core party agency as part of a deal that Deng did with party hardliners so that market reform could be re-initiated. The COD has since successfully co-ordinated and perpetuated CCP rule through the strategic despatch of cadres to SOEs, to foreign owned companies based in China, to Chinese banks and financial institutions and to a myriad of state institutions and civic groups so as to extend the party’s reach into civil society which has also helped maintain national unity.

The effective operation of the COD has ensured that the orders of the CCP’s nine man Standing Committee of the Politburo are actually implemented at local and provincial government levels. In an international context, the COD has provided China with a comparative international trading advantage. Due to input from specialist departments of the COD, Chinese SOEs have gained a comparative advantage in trade over Japanese corporations because their Chinese rivals have the full-weight of back up national support of the Chinese state with regard to finance and research.

There is nothing inherently wrong in the short to medium term with national institutions strengthening a nation’s trading position to generate employment growth and higher living standards. Problems will eventually emerge in the longer term for mainland China because such a statist approach via the operation of the COD ultimately perpetuates power for the sake of power which is a formula for corruption.

The current comparative trade advantages that the PRC is gaining due to the COD are perpetuating a power over approach that could eventually be counterproductive. It is clear that steel from Australian ore and ore is being utilized as a predictable supply source so that the PRC can ensure the construction of new infrastructures to accommodate the shift of millions of people from the countryside to the cites. But after (or if) a population transfer has been successfully engineered, how will it be possible for stable and organic commercial relations to be established if the CCP’s COD is still exercising a power-over approach which cannot be sustained in the long term due to China’s large geographic size and population ?

Why a Win-Win Approach is Conducive to Effective Trade Policy

The power-with approach that Japan has facilitated in its trading relationships via METI has led to ‘win-win’ scenarios that have immeasurably helped the domestic Japanese economy. As a naturally resource-deprived nation, the Japanese state (in the form of its national bureaucracy, government and corporate sector) has sought to ensure that Japanese investment precipitates domestic goods and services and employment in the countries concerned so that they can trade with Japan.

Toyota established a plant outside the Thai capital Bangkok which generated employment that probably otherwise would not exist. This in turn has contributed to Thailand’s GDP that has bolstered that nation’s trading capacity with Japan. Japanese trade policy ultimately serves national interests but paradoxically there has to be an underlying mutuality of interests. Consequently Toyota would be loathe to move to close its Thai operation due to the impact that this would ultimately have on Japan’s domestic economy.

The ultimate interests of the PRC will be served if ‘win-win’ arrangements are facilitated in relation to important trading partners such as Australia. At present, the role of the CCP’s COD in co-ordinating is providing the PRC with a comparative trading advantage but a power-over approach is being facilitated. What will happen to the PRC’s long term trade prospects if primary resource rich nations such as Australia diminish their trading capacity due to an over-reliance on the minerals sector because of unequal trading arrangements being entered into?

The response of a Chinese bureaucrat to the above question could well be that the PRC will be advantaged by having sufficient natural resource supply to undertake infrastructure building as China successfully urbanizes. This outcome might not actually occur because of CCP involvement in the economy distorting the fundamentals of China’s domestic and international trading foundations. The CCP’s economics department is fulfilling an important and successful role in coordinating SOEs and private businesses to precipitate high economic growth rates that are helping to circumvent mass unemployment.

Why One Party Democracy is a Vital Step to Two Party National Unity

But the CCP as a party has no internal mechanisms to resolve inner party disputes on a ‘win-win’ basis or subsequently formulate grounded public policy that take into account unforseen changing social and economic dynamics. The lack of internal democratic party processes has also deprived the CCP of access to a broader range of human talent and ideas that will be needed for the PRC’s transition to a viable market economy to be sustained as the nature of trade, industry and employment becomes more diffuse and complicated.

Internal differences within the CCP are probably only thrashed out at an elite level within the Politburo Standing Committee of the CCP on a compromise basis. Elements of a Gestalt approach are probably applied at this level but a top down Leninist approach will not be viable in the longer term once high economic growth rates cannot be sustained.

From what can be ascertained from Peking watching, there are two broad camps within the CCP: the so-called ‘Shanghai Clique’ (the Shanghai faction) and the so-called ‘Populist Clique’ (the Populist faction). The Shanghai Faction emerged during Chiang Tse-min’s (Jiang Zemin) leadership of the CCP from 1989 to 2002. Deng supported Chiang as the new party general secretary after the Tiananmen Square Massacre in 1989 so as to maintain his position as China’s paramount leader. Chiang utilized his substantial Shanghai base to establish his own party faction. His power base was enhanced by shrewdly supporting the relaunch of Deng’s market reforms in 1992 which helped avert a return to Soviet style central planning.

The alternate Populist faction is essentially derived from the network established in the Communist Youth League (CYL) by former CCP General Secretary Hu Yao pang (Hu Yao bang). Hu served as CCP General Secretary from 1981 to 1986 during which time he established himself as the leading political liberal within the context of China’s ruling communist nomenklatura.

Ascertaining the respective strengths of these two factions is difficult to determine because both incumbent President Hu Jintao and incumbent Premier Wen Chia –pao (Wen Jiabao) had connections to Hu Yao pang’s CYL network. President Hu undoubtedly came to power due to the support of Chiang’s Shanghai faction. But President Hu is similar to other leading non-Shanghai members of that city named faction in that he has links to the Populist faction due to previous family connections with the CYL. To complicate matters there are signs that President Hu is moving away from the Shanghai faction to re-connect with the Populist faction.

Premier Wen was a protégé of Hu Yao pang and a strong supporter of his successor as CCP General Secretary Zhao Ziyang (1986 to 1989). The premier essentially survived the respective falls of Hu Yao-pang and Zhao due to his continuing loyalty to Deng Xiaoping who reciprocated by protecting Wen and ensuring that he continued to advance.

The continuing potency of the Shanghai faction and the Populist faction seems to have a geographical dimension in that the first named faction is well entrenched in China’s coastal provinces while the later is ensconced in the nation’s interior. Analysis of factional divisions is further complicated by the existence of personalized sub-factions. Care has also been taken through the agency of the COD to ensure that both factions have a nationwide reach even if both factions respectively prevail in different geographical parts of the country. Patronage and corruption are factors which also sustain the viability of the two factions.

But corruption is a major dis-inhibitor against political liberalization/reform for fear that a move to a two party democracy will necessarily end privileged advantages and possible retribution for past misdeeds. Therefore, seeming political liberals within the PRC’s leadership cannot, or will not engineer a transition to a viable two party system because they are either corrupt themselves or out of necessity must ensure that their supporters within the CPP/bureaucracy have access to a spoils system.

The PRC’s transition to a power-with Gestalt approach is also mitigated by the cancer of corruption. The CCP’s two factions maintain an equilibrium by the COD ensuring that there is factional balance at a local government and a provincial level. Because there is no discernible ideological dimension between the two factions, patronage (which more often than not leads to corruption) is the means by which the CCP’s senior leadership maintains their power bases on a national level.

Corruption has also undermined the CCP’s capacity to effectively handle social problems that will eventually challenge China’s long term stability. One such major problem is that of the vast flow of migrants from the countryside to the cities. There are now in Chinese cities millions of people from the countryside who are precariously employed. The children of these workers often do not receive education as their presence in the cities is not officially recognized.

Reform from Above can Lead to ‘Win-Win’ Outcomes

The main ‘benefit’ of having millions of unrecognized workers in China’s main cities is that they are a source of comparative trade advantage as cheap labour. But the demographic changes wrought by internal migration are creating the dilemma of an unskilled precarious workforce stifling the emergence of a sufficient goods and services sector that can support a viable commercial sector conducive to social stability. The fundamental challenge of converting precarious employment into secure employment will entail fostering the growth of an educated middle class that would endow the PRC with a diverse and coherently functioning civil society capable of running a viable market economy without overriding power-over central direction.

A major barrier to achieving a transition to a coherent civil society is middle class opposition/ in-difference toward extending industrial and political rights to the economically disadvantaged! The current ‘strength’ of China’s growing middle class is substantially derived from the high levels of precarious employment and low wages that help keep China internationally trade ‘competitive’. This is ironic because the ruling CCP is notionally a Marxist party. In reality, the PRC is ruled by a Leninist party which has perfected a power over approach that has worked well to date.

The regime’s current successes derived from a power over-approach are: engineering high economic growth, controlling inflation, staving off mass unemployment and regulating migration from the countryside. These are impressive achievements but are tenable so long as high growth rates of eight to ten percent per annum can always be achieved. The regime will undoubtedly resort to more vigorous political repression when economic growth rates inevitably stagnate. But political repression will eventually feed into greater social unrest after inflation and unemployment spiral out of control.

Shrewd and calculated reform from above will be needed for the PRC to develop a political system that facilitates a civil society that can support a Gestalt approach that will be necessary meet to the complex socio-economic changes that are confronting China. When there is a critical recognition for the need for political and economic reform, there is often a focus on the state granting political rights as part of a transition process to the ultimate good. In the case of the PRC, this might not be a viable approach because too many grievances may come to the fore to generate disruptive social unrest, the avoidance of which is of itself an objective of the reform process.

Reform from above would entail the CCP being the initial agency for socio-economic and political change. An important reform that needs to be addressed is labour relations. Labour reform is required in the PRC because the needs of millions of internal migrant workers need to be met by granting general bargaining rights and achieving improved living standards of the urban poor so that long term national social stability can be secured.

An important manifestation of labour reform would be the CCP helping engineer the development of independent trade unionism coupled with the development of a pluralist industrial relations system. Instead of moving to immediately implement such laudable reforms, the CCP could initially have the one hundred and thirty million strong state sanctioned union confederation, the All-China Federation of Trade Unions (ACFTU) become an independent force within party counsels.

Having genuine ideological debate within the CCP would help the party genuinely represent different social classes within society for an intermediate period while needed and considered socio-economic reform is undertaken under the aegis of one-party rule. A ramification of inner party factional development would be the CCP developing the basis to provide China with a two party system that would guarantee perpetual Chinese national unity.

Hopefully, a future Chinese two party system would be based on a broad division between labour and capital interspersed with an American ideological type of dichotomy between liberal and liberal/conservative. If future Chinese labour reform is to have the positive dividend of creating a viable nation-wide social democratic force, then business/finance reform would correspondingly facilitate a liberal and or conservative political force/tradition.

For a viable liberal and/or conservative political tradition in the PRC to emerge, COD cadres and CCP interests that are immersed in SOEs, domestic business and foreign owned companies will eventually need to strategically withdraw. CCP power over-input into business interests is currently endowing China with a short to medium term comparative advantage in foreign trade and in macro economic policy that is staving off high inflation and high unemployment (although under-employment is too high). But CCP interference in business is also precipitating corruption and stifling the scope for the eventual emergence of a civil society that is strong enough to guarantee permanent Chinese national unity.

The establishment of CCP sanctioned business institute(s) would help provide the intellectual scope for liberal orientated inner-party faction. The vibrancy of both a social democratic and a liberal faction would also depend upon them having respective institutes/ think tanks with their own publications (which would also be available on-line) in which ideas can be debated and formulated. The utility of inner ideological CCP factions would help facilitate the parlaying of quality ideas into public policy.

The development of two broadly ideological inner party factions would not threaten the power of members of the Politburo Standing Committee because they would be closely involved in establishing and initially guiding the two factions. Factional rivalry could manifest itself with regard to formulating different ideas which could be adopted on a Gestalt basis within an intermediate semi-Leninist power-over framework. Ultimate power would still reside with the inner politburo as the two party factions developed ideas that addressed national problems such as corruption and the continuance of slave labour through Laogai detention camps.

Long term and serious challenges such as corruption, slave labour and the maintenance of national unity will require a power-over approach to be maintained for the intermediate future. The development of ideological factions would create the scope for the application of a Gestalt framework before a transition to a two party system could be granted.

The Contemporary Relevance of Dr. Sun Yat-sen

The evolutionary approach to Chinese democracy is the one that the founder of the Chinese republic *Dr. Sun Yat-sen advocated. Sun believed that because it would be so difficult to overthrow the Ching dynasty that a period of dictatorship would have to follow to re-unite China. As it turned out, the Ching dynasty patriotically made way for a republic to avoid a protracted civil war.

(Sun’s arch-rival in émigré politics between 1898 and 1908 was the constitutional monarchist Kang You wei, 1858-1927. Kang had esoteric ideas but insightfully realized that Confucianist ideals could be adapted to address China’s then problems by creating a Chinese constitutional monarchy that would precipitate a national revival. As a neo-Confucian, Kang appreciated that an impartially honest state bureaucracy and a professional patriotic army were the keys to obtaining and maintaining Chinese national unity).

China might have avoided nearly two years of bloody conflict and temporary break up (in the form of warlordism) had ‘President’ Yuan Shi –kai (who had betrayed the Chinese monarchy) abided by the 1913 elections which were won by Sun’s KMT. A national division between the KMT and the Progressive Party (which commenced as a configuration of non-KMT parties following the 1913 elections and which was tentatively aligned with Yuan) could have established a viable Chinese republican state.

Had a democratic republic been in place after 1913, China would have had the requisite strength due to the maintenance of national unity to have thrown off the unequal treaties. As it was, Yuan’s treachery set the groundwork for two generations of national division and civil war on the mainland. Out of necessity, Sun reconstituted the KMT on a Leninist democratic centralist basis under the guidance of the Comintern agent, Michael Borodin. The KMT from its southern coastal base in Canton later gained the capacity to re-unite China in the 1920s due to the aid that was received from the Soviet Union.

The potency of the maxim* that no-one receives something for nothing was illustrated by Sun providing the Soviets with the pay back of allowing the Borodin organised CCP to operate within the KMT as a powerful inner party faction. Consequently, when Chiang Kia-shek, Sun’s eventual successor as KMT leader, substantially re-united China in 1928, the scene was set for a titanic civil war between two Leninist power-over type parties.

(* The scope for this utilitarian maxim to apply is reduced when people have broader loyalties that extend beyond their immediate personal interests and egos).

Chiang under utilized the KMT as a means of mobilizing popular support to enable him to successfully confront the formidable challenges that faced him when he ruled most of China between 1928 and 1949. In keeping with Sun’s strategic approach (and due to prompting from his wife, Meiling Soong) Chiang did eventually move to bring in constitutional democracy following the Second World War.

But too much of the middle class distrusted Chiang due to his toleration of corruption and authoritarianism. As a result, the so-called ‘patriotic bourgeoisie’ was a crucial support that enabled the Mao led CCP to win the Chinese civil war in 1949. (The patriotic bourgeoisie’ were effectively eliminated in a government re-organisation in 1954 which centralized control with the CCP.)

It would be Chiang Kia-shek’s son, Chiang Ching–kuo, as later president of the Republic of China (ROC) on Taiwan in the 1980s, who brilliantly fulfilled Sun’s objective of moving from authoritarianism to democracy. The way in which the younger Chiang achieved the transition to democracy was different to what Sun would have envisaged due to the uniqueness of the Taiwanese context. Ironically, but still very appropriately, Sun’s ideas are pertinent to the contemporary PRC.

Sun advocated the creation of yuans (or branches of the state) so that Confucian precepts could be applied to a republican China. The four yuan (branches) that exist are provided for under the ROC’s 1946 Constitution: the executive yuan, the legislative yuan, the judicial yuan and the examination yuan. The issue of the past and contemporary operations of these yuans’ application on the ROC on Taiwan does not warrant analysis because the drivers of post 1949 Chinese republican democracy were particular to Taiwan.

It was envisaged by Sun that each of these yuan would facilitate the existence of an independent and ethically focused bureaucracy which would maintain national unity by not being attached to external political forces so that there would be incorruptible continuity to guarantee Chinese national unity. The role of the examination yuan was to ensure that a professional civil service based on merit and dedicated to service could be established.

Sun’s conceptualization of an examination yuan was directly derived from Confucius’s idea that an emperor administers his empire through a meritous bureaucracy. The entry point into such a bureaucracy was by examination instead of by military conquest or family connections. ( Confucius emphasised the importance of family to maintain societal harmony).

For Sun, the important and relevant purpose of having an examination yuan was to ensure that civil service exams were conducive to facilitating an adaptable and grounded civil service/bureaucracy. The rigorous imperial examination of the Ching dynasty had not changed in over a thousand years and had contributed (to say the least) to the perpetuation of outmoded ideas and subsequent stasis on the part of the imperial bureaucracy. (The Dowager Empress Tzu His had belatedly attempted to overhaul the imperial examination system in the 1900s before Her Imperial Majesty died in 1908).

The judicial yuan, similar to the examination yuan, was envisaged by Sun as a branch of state by which the Confucian ideals of honesty and integrity could be applied in a contemporary republican context. The judicial yuan, besides having responsibility for ensuring an independent judiciary, also was to be an independent agency that rooted out corruption and ensured transparent probity within a nationwide bureaucracy.

The Military and the Chinese National Interest: Neo-Confucianism and a Possible PRC Democracy

The contemporary equivalents of an examination yuan and a judicial yuan are needed to assure the continuance of the PRC as the complexities of an inter-connected modern world challenge the viability of a perpetual power-over approach to governance. The PRC in contrast to the defunct Soviet Union has the capacity to establish an independent and patriotic civil service.

For millions of Chinese, the establishment of the PRC in 1949 represented not so much the commencement of CCP rule but the unification and national independence of China. The impact of Deng’s Four Modernizations since 1979 has meant that there is a critical mass of Chinese that can be recruited to capably and honestly administer the PRC as opposed to inflicting Marxist ideology on the nation.

It may be impractical to establish PRC equivalents of an examination yuan and a judicial yuan but there is a sufficiently educated and technocratic pool from which to draw to establish an impartial and critically engaged bureaucracy. For this to occur there would need to be a considered separation of CCP organs from the bureaucracy.

The drawing of party functionaries and cadres into formalised CCP ideological factions eventually metamorphosing into two nationwide successor parties would be crucial to facilitating the process of bureaucratic reformation. As with the Japanese context, the recruitment of specialist bureaucrats into a future competitive party political arena could still be of continuing national benefit.

Another important Sun principle with regard to applying Confucianism to a republican context-which is transferable to the PRC- is that of having a professional army dedicated to maintaining national unity. Sun’s vision of a democratic republic was thwarted by General Yuan’s treachery (which also thwarted China’s distinct prospects of having a democratic constitutional monarchy).

The rank form of militarism that Sun most abhorred and feared was warlordism, the prerequisites for which were bequeathed by Yuan on his death in 1916. Generalissmo Chiang Kia-shek never really gained legitimacy among the Chinese people as Sun’s avowed successor due to his being an army general and a military dictator. Even while most Chinese on the ROC on Taiwan revered Chiang as an important historical figure who happened to be ruling them, they did not recognize the KMT as a genuine ruling party due to the reality of military rule.

It was under the rule (1975 to 1988) of the Generalissimo’s son Chiang Ching-kuo, (who had the rank of army general but rarely wore his military uniform) that the army became a professional institution and the KMT transformed into a real political party that actually ruled. This was an impressive achievement on Chiang Ching-kuo’s part because the leading figures within the KMT were senior officers and there was a covert para-state which really ruled the ROC on Taiwan.

An essential difference between the KMT’s National Revolutionary Army (NRA) and the CCP’s People’s Liberation Army (PLA), which had previously been known as the Red Army, was that the latter always consciously subordinated itself to its party. Through indoctrination of Maoist doctrines, PLA soldiers and officers equated the ‘people’ with the CCP. This subordination was one of the few positive ideas and legacies of Mao Tse-tung. By following Mao’s dictum that they remain close to the people, the Red Army won the support of most of the nation’s peasantry which was crucial to winning the 1946 to 1949 stage of China’s civil war.

The gratitude and misplaced respect that the PLA had for Mao was such that the officer corps*generally supported Mao in 1966 when he attempted to dispense with the CCP by launching the Great Cultural Revolution so as to establish a personalist absolute dictatorship (similar to the type Stalin established in the 1930s with his purges). Mao’s Cultural Revolution/ purge was too chaotic for him to fill the void that power by default passed to PLA commanders who maintained a sense of unity by supporting the Defence Minister Marshal Lin Piao.

(*The existence of a PLA officer corps became a difficult aspect of analysis in the 1960s when Mao officially abolished army ranks).

The seeming political dominance of the PLA was manifested by the Ninth Congress of the CCP in April 1969 confirming Marshal Piao as Mao’s successor. The only force that off-set the power of the PLA at the party congress were the Red Guards which had seemingly displaced the CCP as the nation’s Marxist vanguard. Marshal Lin may have succeeded Mao or even displaced him from power following the CCP Ninth Congress had it not been for border clashes in March that year in Xinjiang Province along the Ussuri River with Soviet troops in which the PLA came off second best.

Marshal Lin apparently desired a rapprochement with the Soviet Union but most army commanders considered any reconciliation as tantamount to capitulation to Soviet arrogance. Mao and Premier Chou En-lai therefore had the support of most PLA commanders to establish links with the United States as a counterweight against the Soviet Union. Without their moves to establish links with the United States, Mao and Chou might have succumbed to the coup that Lin tried to launch in 1971. Lin’s failure to launch a coup led to him dying in an aeroplane crash when he attempted to flee to the Soviet Union in July 1971.

It was due to national security concerns that PLA commanders supported Mao’s designated successor Hua Guo-feng in 1976 that enabled him to prevail against the Gang of Four. Hua probably would have consolidated his position in power had senior PLA commanders not shifted their support in 1978 to Deng on the basis that he was better able to advance the national security interests against the Soviet Union. Ironically the PRC’s defeat in the Sino-Vietnamese War of 1979 discredited Maoist military doctrines which enabled Deng to consolidate his power at Hua’s expense to commence the pursuit of market reform via his ‘Four Modernizations’.

For all the political importance of the PLA in Chinese politics, the armed forces have consciously refrained from taking direct power. This aversion to assuming direct power is probably derived from the PLA’s fear of China regressing to warlordism which was a scourge that this army had historically fought against. It was out of a desire to maintain national unity that the PLA forced Deng to acquiesce to the Tiananmen Square massacre of June 1989.

Since gaining the status as mainland China’s armed forces in 1949 - with the final defeat on the mainland of the NRA and warlord armies - the PLA has understandably conceptualized itself as the instrument of the nation’s defence and guardian of the national interest. It was on the basis of national security interests that the armed forces supported Deng regaining his status as paramount leader in late 1991 to enable him to relaunch market reforms so that, with the Soviet Union’s impending demise, the United States would not be the world’s uncontested super power.

The PLA, as well as the navy and air force is politically subordinate to the CCP under the aegis of the Central Military Commission (CMC). The political subordination of the military to the CCP is probably self-willed on their part so that national unity can be maintained. If the military have particular inputs into public policy, they are probably undertaken in the CMC which is usually chaired by the current CCP General Secretary.

The military’s collective and corporate desire to discreetly but professionally exercise its political power was probably manifested when former CCP General Secretary and former president, Chiang Tse-min, resigned as MCA chairman in 2004 in favour of President Hu. Chiang Tse-min had probably tried to use the position of MCA Chairman (as Deng had once done) to exercise de facto power as the PRC’s paramount leader. President Hu’s succession as MCA Chairman was a probable indication that the armed forces desire that political power be exercised within institutional parameters as opposed to a personalized basis through military connections.

This desire and determination by the senior leadership of the armed forces that the CCP be an institutionalized ruling party is based on its desire to maintain national unity and strength as opposed to an ideological belief in Marxism per se. It is axiomatic that, if there is to be an eventual transition to a two-party system which guarantees the perpetual unity and well being of the PRC, that the armed forces give its support to such a model.

The alternative scenario of the armed forces continuing to give long term support to the current one party system is that of adverse national security ramifications for the PRC. Current factional dynamics within the CCP are based on patronage as opposed to ideology. The scope for corruption is therefore considerable. Because the PRC’s economic well-being is integrally connected to the global economy an eventual untenable tension between centrally directing an economy, and harmoniously conducting international trade will emerge.

Due to the inter connection between being a one party system and being an international mercantile trading nation, the PRC could well become embroiled in international tensions. Whatever the truth is concerning human induced global warming, it is clear that demand for natural resources is now at a premium. Adopting a power-over approach in relation to obtaining natural resources via mercantile international trade could well lead to international armed conflict.

Russia: The Benefits of Breaking with the Soviet Legacy

Russia and China have been arch-rivals which, due to their adoption of Marxist-Leninism, have uncanny similarities between them with regard to the desirability to move to two party systems which consolidate their break from the rigid power over-approach that ‘Democratic Centralism’ (sic) had facilitated. Due to similarities between these two important countries, Russia’s prospects for adopting a Gestalt power with approach to politics are assessed at this juncture to help provide a comparative analysis of the PRC’s.

The importance of having natural resources in the contemporary world has been demonstrated with regard to Russia. For all the travails concerned with its break with the Soviet Union and communism, Russia is throwing off its status as a failed nation state. This is due to the abundance of oil and the trading opportunities that have come from Russia breaking with central planning. The major challenge for Russia is to diversify its economic resources. An associated challenge with regard to Russian economic diversification is to move away from its mercantile approach to international trade which is manifested by an over-dependence upon oil.

A dangerous scenario is that the PRC and Russia, as bordering mercantile trading nations, will eventually be embroiled in armed conflict to obtain natural resources. The outbreak of the First World War in 1914 demonstrated that it is a recipe for disaster when authoritarian nationalist regimes whose ultimate survival is dependent upon obtaining military supremacy actually border each other.

It should however be said that both the PRC and Russia made huge strides by moving away from Marxist –Leninism. Russia’s de facto succession from the Soviet Union in 1991 made the new nation a world power while the PRC’s resumption of market economic reform toward the end of that era facilitated its current status as a super power. Transitions by the PRC and Russia to having genuine multi-party systems, an independent business corporate sector and independent actors in society such as real trade unions are the best guarantee for enhanced national strength in a co-operative international environment.

Russia is probably more advanced than the PRC toward achieving the above scenario. This is because Russia in overthrowing its communist past notionally embraced a democratic system. The Russian president, Boris Yeltsin, was the statesman who cut the Gordian Knot of Marxist-Leninism by leading Russia out of the Soviet Union following the failure to a CPSU coup attempt in August 1991which had helped galvanize popular opposition to in Moscow.

The failure of the 1991 coup was also due to divisions within the corrupt Soviet communist nomenklatura. The component of the elite that had opposed the 1991 coup attempt dominated the Russian parliament and in October 1993 at the instigation of parliamentary speaker Ruslan Khasbulatov Vice-President Alexander Rutskoy was launched against President Yeltsin. President Yeltsin narrowly survived due to the support of Defence Minister General Pavel Grachev.

(*President Yeltsin later dismissed General Grachev when he attempted to become Russia’s military strongman).

With the crushing of the revolt, the most democratic elections since 1912 were held in December 1993 under a new constitution that was modelled on the French Fifth Republic’s 1958 constitution. Due to the absence of a strong party system and the socio-economic malaise that the nation was in, extremist parties prevailed in the 1993 poll. This electoral reverse was not fatal to President Yeltsin because of the strong executive powers that the 1993 constitution vested in the Russian presidency. The major political challenge that confronted President Yeltsin was to win re-election in July 1996 which he did by waging a vigorous election campaign which almost cost him his life.

Due to the absence of a viable political movement and/or party, President Yeltsin’s rule was underwritten by the crony/tycoon class of businessmen that were known as ‘robber barons’. This class of rubber baron was created by businessmen with Kremlin connections buying state assets at ridiculously low prices in the 1990s in the biggest mass sell off/ privatization in history. Widespread public bitterness was understandably engendered as a result of this fire sale but, without the elimination of the state owned leviathan, Russia could not have broken with its Soviet past.

President Yeltsin was also confronted by the challenge of maintaining Russian national unity. Up until Russia succeeded from the Soviet Union at the end of 1991, the nation had been a federation within a federation as the Russian Republic was (and is) composed of its fifteen constituent republics. Under the leadership of a retired Soviet Air Force General, Dzhokhar Dudayev, Chechnya a Russian constituent republic in the Caucasus region-formally succeeded from the Russian Federation in November 1991.

The aim of Dudayev’s (who had supported the August 1991 coup attempt) action was to precipitate the destruction of a democratic state to facilitate the emergence of a new militaristic authoritarian (but not necessary communist) Russian federation based on a Soviet military ethos. Dudayev spurned offers between 1991 and 1994 from the Russian president for a favourable division of revenues between Chechnya and the Russian Federation which had been arrived at with other Russian constituent republics.

Consequently, President Yeltsin had no choice but to invade Chechnya in 1994. The Russian military campaign in Chechnya was brutal and inept but the political objective was met in that a warning was sent to other constituent members of the Russian Federation. The maintenance of Russian national unity was a formidable accomplishment of President Yeltsin’s.

Due to a hostile bureaucracy, the absence of a critical support base to fill the vacuum caused the abrupt disintegration of the Soviet system and President Yeltsin’s severe health problems. Russia at the time of Yeltsin’s surprise resignation in January 2000 was essentially a failed state. However, a base to construct a strong and democratic Russia had still been bequeathed by President Yeltsin. Due to the short term objective of having a successor who would safeguard his family, President Yeltsin resigned in favour of his recently appointed prime minister, Vladimir Putin, who as acting president was elected to a four year presidential term in March 2000.

Because Putin is an interesting historical figure who will leave his mark on history a brief biographical overview of his life is undertaken. The great historical test that will confront Putin is whether he can be politically daring in a way that Deng Xiao-ping was while pulling off the feat of maintaining and bequeathing social stability.

Prime Minister Putin is a former KGB agent who entered Russian politics when his former law lecturer, Anatoly Sobchak, as mayor of St. Petersburg, appointed him to senior positions that he held in the city council between 1994 and 1997. His ascent to power paradoxically continued after Sobchak failed to win re-election in 1996 as mayor of St. Petersburg. Following Sobchak’s initial recommendation to President Yeltsin, Putin* was appointed to a series of senior positions at the Kremlin (including director of the successor to the KGB, the Federal Security Service, FSB) before making way for him as president at the end of 1999.

(*When Putin was ribbed for not taking up an offer to stay on with the administration of Sobchak’s successor, he reputedly replied; ‘It is better to suffer for loyalty than to be rewarded for disloyalty’).

As president of Russia between 2000 and 2008, Putin utilized his political and leadership skills to restore law and order, break the power of the robber barons, uphold the power of Moscow in relation to the regions and bring a sense of positive direction to governance. This last achievement was manifested by the central government returning order to tax collection and subsequent funding of government services which included the payment of government employees.

The above achievements were due to a heavy handed reassertion of government authority. There seems to have been a general public acceptance of Putin’s authoritarianism because it ended the sense of malaise that Russia had endured since the Gorbachev era. The economic revival (which is manifested by the state having sufficient revenue to meet national needs) that Putin’s government has engineered has been disproportionately derived from high oil prices and shrewd investments through the Russian equivalent of SWFs.

Russia under Putin has successfully established cordial relations with most nations but problems emerge if a natural resource supply to Russia is threatened. There were concerns, that when Russia militarily intervened in Georgia in 2008, this independent republic in the Caucasus region would be conquered and absorbed into the Russian Federation. But this thankfully was not to be because the specific Russian objective in Georgia was to secure a strategic oil pipeline. Similarly, Russia’s interference in Ukrainian domestic politics is specifically concerned with securing natural resource supply to, through and between Russia and the Ukraine.

The Andropov Lesson: A Perpetual ‘Power-Over’ Approach Leads to Reform Failure

The stabilizing achievements of Putin make him the political successor to the former Soviet leader Yuri Andropov (1914 to 1984) who ruled the Soviet Union as General Secretary of the CPSU between 1982 and 1984. The paradox of Andropov’s political career was that, as Chairman of the KGB between 1967 and 1982, he was aware of the Soviet Union’s weaknesses and determined to remedy them.

The major problem with Andropov was that, due to his critical awareness of the Soviet Union’s inherent weaknesses, he was determined to achieve international domination over the United States. The Cold War was never hotter than in the 1980s as Andropov maintained an unremitting hostile stance toward the United States while waging a brazenly hypocritical ‘peace campaign’ to prevent the deployment of American nuclear missiles in Europe. Another peculiar aspect of Andropov’s leadership was that he encouraged Warsaw Pact leaders such as Poland’s General Wojciech Jaruzelski and Hungary’s Janos Kadar ( a former protégé of Andropov’s) to undertake political and economic reform while still insisting upon their unconditional subservience to Moscow.

The ultimate paradox of Andropov’s rule was that he deliberately paved the way for Mikhail Gorbachev’s ascension to power in March 1985. Andropov correctly assessed that Gorbachev was a sincere Marxist-Leninist. But what the late Soviet leader did not realize was that his protégé would later, in trying to reform an inherently corrupt power-over system by seeking popular support and critical input, would precipitate the system’s collapse.

Had Andropov lived longer, through ruthless discipline he probably would have fine tuned the operation of the bureaucracy and engendered efficiency into the general Soviet system. The value of sustaining a Marxist-Leninist regime however would have been problematic because ultimate success could only have been achieved by a Soviet victory over the American led anti-communist world.

Contemporary Russia now finds itself in the equivalent of being in an envisaged semi-Andropov success scenario. This nation is now coherently functioning and as such is a force to be reckoned with in the world due its geographical and population size, natural resources, military might and high levels of education. Putin has effectively used security agencies such as the FSB for intelligence gathering and applied collected data to help provide Russian companies with trading advantages. The appointment of former security personnel to influential positions in the bureaucracy has also endowed Russian administration with enviable efficiency.

But Russia cannot sustain the above advantages without eventually causing friction with foreign nations and generating internal discord by maintaining the quasi-authoritarian domestic status quo. Why should Russia remount the merry-go-round of diverting domestic resources for purposes associated with sustaining puerile external conflict? Why should the energies of the Russian people be diverted from continuing to consolidate upon the post-*Yeltsin achievements of forging a coherent nation state?

(*Reference to ‘post - Yeltsin achievements’ does not denote any overall criticism of the late Russian president without whom Russia could not have broken with its Soviet past).

Continued political liberalization would endow the federation with the wherewithal to develop a civil society that would sustain Russia as an effective nation and as a non-coercive world power. The essence of Russia transitioning to being a successful democracy essentially hinges upon the development of a viable party system. In the case of Russia, the challenges are less daunting then what they are for the PRC and positive dividends could be harnessed at an earlier stage.

The Relevance of Anwar Sadat to Russia’s Future

Anwar Sadat’s astute post 1977 political liberalization can serve as a model for Russia in that viable parties can be engineered by calculated elite division. Russia is currently ruled by a ‘tandem’ between President Dmitry Medvedev and Prime Minister Putin. Medvedev succeeded Putin as president in 2008 when he was elected to that post in a shoe-in due to Kremlin support. There was little doubt that Putin continued to ‘pull the strings’ on succeeding to the prime ministership upon Medvedev becoming president.

Either by design or happenstance, Russia’s tandem leadership has facilitated a degree of inner government diversity that is potentially conducive to a Gestalt approach to statecraft. Prime Minister Putin has provided President Medvedev with sufficient latitude to undertake economic reform within a semi-authoritarian political framework. President Medvedev is orientated toward reducing the state’s control of GDP back from 40%.

The Russian president has advocated corporate law reform so that the power of Kremlin aligned oligarchs can eventually be placed within a transparent shareholder constrained institutional framework. (This reform is only in its embryonic stages but it is still vitally important and therefore very promising). Privatization initiatives, such as converting state owned corporations into joint-stock companies, are also in train as is agricultural reform.

The president has brought in honest technocrats to pursue an economic reform agenda and even appointed human rights advocates to official human rights agencies. This is a remarkable achievement because Russia is bedevilled by pervasive corruption, has a powerful secret police in the FSB and is inconsistent with regard to the application of the due process of law. It would seem that a minority of Russian liberals are inclined toward Medvedev while authoritarian orientated nationalists (many of whom are not ethnic Russians) are overwhelming supportive of Putin.

The cause of Russian pluralism and democratically engendered reform would be considerably enhanced to say the least if Medvedev and Putin were to run against each other for president in March 2012. They are reputed to be friends so it is almost certain that no retribution would be taken against the losing candidate. It is probably too much to expect that Putin would allow himself to lose the presidential election but would have been set in Russian history- an incumbent national leader being voted out of office.

The benefit of an unsuccessful Medvedev candidacy is that it would facilitate the entry of liberals into the Russian political mainstream. A very important ramification of an unsuccessful Medvedev candidacy would be the establishment of a viable nationwide liberal political party that could become a contender for future national power. Election fever would also help facilitate a free press and the channelling of the many Russian Federation citizens who are discontented into a cogent political system. It would therefore be very important that a victorious Putin not take any reprisals against those who opposed his election to the presidency in 2012.

A viable presidential race in 2012 would also help convert the governmental United Russia ‘Party’ into a real political party instead of a patronage conduit. Recent political history (such as the ROC on Taiwan’s KMT) has demonstrated that parties associated with authoritarian regimes-when opposing liberal parties-can themselves become conservative parties with a social democratic orientation. The one really formidable attribute of United Russia is that it has a nationwide youth wing which, instead of being a regimented vanguard, could be become a critical forum for new ideas and political engagement.

If Putin were to return to power in 2012, the establishment of a viable post election liberal nationwide political party would exponentially expand the parameters for political freedom. Putin could forgo re-election in 2016 and covertly support Medvedev’s election to the presidency as an opposition candidate. *The transfer of power from one party to another would be a crucial step in Russia establishing a viable two party system. Legislation could be passed after 2016 stipulating primaries for local and national positions (including presidential candidacies) so that a two party system would not be pulverized by powerful and corrupt interests undermining Russian party democracy by establishing self-serving personalized ‘parties’.

A viable political party system (particularly if it is two party) would generate national unity because partisan party rivalry would generate common bonds of allegiance that transcend ethnicity, although this is not to say that ethnically based/regional parties would not fulfil an important role in politics. A transition to the reality of a party based democracy would also help Russia to join the European Union (EU) and even the North Atlantic Treaty Organization (NATO) thereby ensuring that this military alliance would never be anti-Russian.

Russia clearly has a civil society that could be utilized to underpin a non-coercive but still formidable world power if there was a transition to a genuine party democracy. The 1993 Russian *Constitution has established a viable framework for a democracy and its utility has been demonstrated to date by establishing a coherent federal system.

(*It would be marvellous if Russia became a democratic constitutional monarchy under the Romanovs. This is an option that Putin and/or Medvedev could have the peoples of the Russian Federation consider. A constitutional democratic monarchy could provide a socio-political system that organically guarantees national unity and promotes social harmony. Furthermore, Grand Duchess Maria and her son Grand Duke George have excellent links to the EU and at the very least their Imperial Highnesses could help serve as a bridge for Russia to the west. For Russian royalty to fulfil its potential to make a positive contribution to Russia, even if is a republic, the current claimant and her son should be allowed to permanently reside in their country).

Russia is a nation that has suffered greatly throughout its history but much of the suffering of the twentieth century has been tragically avoidable. Russia, since the rise to power of Yeltsin to power in 1990 (first as titular head of the Russian Republic), has had leaders who have made progress to positive nation building. But Russia in a world as complex as the twenty first century needs more than capable leaders, it needs its leaders to devise and bequeath a viable and popularly responsive form of government. This is also true of the PRC and possible transitions to a mainland Chinese two party/multi-party system warrant analysis.

Can A Chinese Leadership Tandem Lead to Gestalt Outcomes?

The previously mentioned Shanghai and Populist factions (which have interpersonal ties) could potentially serve as the basis for a future PRC two party system. Following the CCP’s eighteenth party congress which is scheduled for October 2012, it is probable that Vice-President Xi Jinping and Vice-Premier Li Keqiang* will respectively become president and prime minister. Both gentlemen are respective protégés of the incumbent president and premier.

(Bo Xilai, the party chief of the inland municipality Chungking (Chonqing) also has a strong prospect to be the next premier, at any rate he will probably fulfil an important national role following the October 2012 CCP Congress).

Both Xi and Li are essentially contemporary Dengists (or neo-Dengists) who will probably lead the PRC from 2012 to 2022. Their leadership could serve as the Chinese equivalent of a Putin-Medvedev Tandem that takes China to a two party electoral democracy. Xi and Li are both clearly politically skilled and probably have that Dengist trait of achieving miracles by focusing on what practically can be done.

A practical course of action that Xi and Li could undertake over the next ten years (2012 to 2022) would be to utilize the offices of the COD to engineer the withdrawal of CCP operatives from SOEs, the AFCTU and business-social concerns so that a viable Chinese civil society can emerge to underpin national unity. Commensurate with the strategic development of a Chinese civil society capable of underpinning national unity would be the development of a purposeful civil service.

The ideal of a meritous civil service is still needed as much it was even when Confucius devised the concept. Fortunately in the current context, China has never had a greater capacity for a non-political but patriotic civil service due to the high levels of education achieved in higher university education as attested by the formidable technocracy that the CCP currently utilizes. Dare it be advocated but a return to a competitive examination system and other civil service recruitment mechanisms should be utilized so that utilization and deployment of talent is undertaken on an objective basis.

In keeping with Sun’s*idea of an examination yuan, a special agency should be established for the specific purpose of conducting civil service exams and generally maintaining an excellent civil service that would be crucial in maintaining Chinese national unity. Furthermore, Sun’s idea of a judicial yuan could be applied in a contemporary context via the establishment of an anti-corruption agency. Such a development would solidify patriotic sentiment toward the PRC by helping ensure that the state really exists to serve the people as a whole as opposed to the current ruling nomenklatura.

(*The Chinese constitutional monarchist Kang You wei also had brilliant ideas-as to how to apply-Confucian principles to a contemporary setting to secure a national renaissance which were at the very least as good, if not better, than Sun’s).

The stupendous successes of the provide scope for reconfiguration of political and economic structures. The major success of the current regime has been the maintenance of high employment levels, low inflation and the brilliant utilization of a fixed exchange mechanism to both help engineer these aforementioned outcomes and secure the PRC’s strong international trading position. But these outstanding achievements have been achieved by the predomination of a power over-approach which will be unsustainable in the long term when unforseen circumstances arise.

The creation of a MEITI type ministry would help the PRC state (as opposed to the CCP regime) sustain the above mentioned achievements. In the Japanese context MEITI secures the co-ordination between state, capital and labour needed for a natural resource deprived nation to be as prosperous and economically powerful as it is. This ministry has one way or another engineered a nexus between Japan’s strong trading position (which this ministry helps facilitate) and domestic prosperity and the achievement of high employment levels.

The PRC’s challenges in sustaining high employment levels, low inflation and a strong international credit and trading position are not derived from a lack of natural resources but a massive population that is spread over a wide geographical area. A Chinese equivalent of MEITI would provide the lateral scope for a power-with approach to maintain the co-ordination needed between state, capital and labour to maintain social stability.

For labour to be an important dynamic in future securing of social and economic harmony, trade union rights must eventually be granted. There is scope for the ACFTU to transform into a genuine union movement. By the ACFTU undertaking government backed industrial action this state controlled union confederation has already been used by the CCP to compel foreign owned companies in China to toe the government line.

Allowing the democratic (or at least competitive) election of union workplace delegates would be a start in relation to the ACFTU eventually becoming a genuine union movement. Japan has made tremendous socio-economic gains from having an independent and effective union movement that has contributed to the nation’s economic viability and ultimate success. A ten year period (2012 to 2022) of evolutionary labour reform could be aligned to integrate with general socio-economic and political reform to secure the Dengist reforms that commenced in 1979.

The political benefit of an independent Chinese trade unionism would be to vitally assist in the construction of a social democratic political party with nationwide reach to help guarantee long term national unity. Such a political party could come from within the CCP and have links to a genuinely independent ACFTU. The emergence of Chinese social democracy over the next ten years would assist in ultimately ending social injustices such as Laogai slave labour and the widespread underpayment of wages to unskilled labour.

The development of a nationwide social democratic party could provide political representation to millions of unregistered immigrant workers and their families whose needs for adequate housing, education and basic social rights are not being attended to, let alone recognised. The process of engineering the formation of a social democratic party could be intertwined with that of actually undertaking needed social and economic reform crucial to the PRC’s long term viability.

The practicalities and dynamics of engineering an amicably engineered ‘divorce*’ within the CCP to form two nationwide parties would be premised upon the formation of a coherent Xi/Li tandem after the 2012 CCP Congress. This tandem could, to coin Indonesia’s national motto, facilitate ‘unity through diversity’. Xi ad Li could convert COD cadres into paid factional organisers who lay the groundwork for future party formation from above.

(*The most successful example of a political umbrella group laying the foundation for a party democracy was Czechoslovakia. In 1989, dissidents from the Charter 77 group established a mass based Civic Forum party to ensure that a reformist communist party leadership did not succeed to power. The ideologically diverse Civic Forum won a landslide elections in national elections in June 1990 due to its initial popularity.

Then, between 1990 and 1992, the various conservative, liberal and social democratic tendencies within Civic Forum organised into coherent factions so that they could run as independent parties in the 1992 national elections. As a result of this strategy, an anti-communist Social Democratic Party that was not descended from a electorally strong Czechoslovak Communist Party emerged in the Czech Republic as one of the nation’s two major parties).

By consciously deciding which faction (out of the Shanghai faction and the Populist faction) will adopt a social democratic and a liberal/conservative (generally pro-capital) orientation, the prerequisites for a two party system could be established in the PRC within a ten to fifteen year time frame. As previously mentioned, the establishment of think tanks and publications within respective labour and capital orientations would assist in the process of factional formation within the CCP.

Sufficient political controls could be maintained for an intermediate period so that CCP faction sanctioned criticism would focus on implementation of government policy and an honest highlighting of real social problems. Challenges to governmental authority via media criticism could and would be commensurate with expanding parameters of pluralism. The transition to a two party system would correspond to the point of free press being arrived at.

A Chinese transition to press freedom would have to learn from the pitfalls of Gorbachev’ ‘Glasnost’ (Openness) policy. Glasnost ended in abject failure because there was no real corresponding Perestroika (Reconstruction) on Gorbachev’s part. The then Soviet leader never sufficiently attempted to orientate the ruling CPSU into being a responsive *political party. This was a near impossible task because the CPSU remained a power party whose abuses were more often than not an object of public criticism.

(*Promisingly, and very interestingly, an explicit social democratic faction was formed with Gorbachev’s discreet support within the CPSU just prior to the 1991 coup attempt. Unfortunately for Gorbachev he had, as usual, left his run too late).

The Power of Gestalt: Tito and Franco Compared

The only communist ruler (besides Deng Xiao-ping) who ever seemed to take pubic opinion into account to form policies was Marshal Joseph Bronz Tito of Yugoslavia. Marshal Tito had been an archetypical Stalinist ruler until a pathologically suspicious but unusually naïve Stalin expelled Yugoslavia from the Soviet bloc in 1948 on the misassumption that this would precipitate Marshal Tito’s overthrow. The genuinely popular support that Marshal Tito garnered from Stalin’s action was shrewdly harnessed by him to win support from many non-Marxist Yugoslavs.

The Yugoslav Communist Party was transformed in 1953 into the League of Yugoslav Communists (YLC) to operate on a more decentralist basis. Marshal Tito also encouraged non-Marxist inclined Yugoslavs to participate in the Socialist Alliance of the Working People so that they had a capacity to help formulate public policy. Appreciating the benefits of garnering popular support to bolster his position, Marshal Tito granted specific rights to communities based on their ethnicity. Today, even amongst most anti- communist Macedonians, Marshal Tito is still a revered figure for granting Macedonia genuine autonomy and recognising the Macedonian ethnic identity.

Marshal Tito also utilized the opportunity that his break with Stalin offered to make an ideological contribution to Marxism that was taken seriously in the development of Marxist theory. In the 1950s, work councils were created in which inputs into central planning goals and profit sharing were devised and even implemented. Limited property rights were also granted. Yugoslavia subsequently achieved the highest standard of living in the Balkans and, to his credit, Marshal Tito consciously tried to use central planning controls to address social and economic imbalances between different Yugoslav republics.

The relative success of ‘Yugoslav Socialism’ was really derived from generous western loans, remittances from Yugoslav guest workers in Europe and a very successful tourist industry. These successes effectively plugged the gaps to allow Yugoslavia’s ‘socialist market economy’ to viably operate. For many Marxist intellectuals and too many avowedly social democratic academics ‘Yugoslav Socialism’ was a phenomenon that warranted serious study. (A specific London based academic journal on Yugoslav Socialism was even founded).

For all Marshal Tito’s political successes, he perhaps died before his time in 1980. Had Tito lived another ten of fifteen years, he would have been confronted by the ramifications of the collapse of communism in Eastern Europe and the disintegration of the Soviet Union. In such a scenario, would Tito have undertaken the necessary economic and political reforms to have saved Yugoslavia?

It is interesting to compare the contrast in the international media commentary between Tito’s death in May 1980 and Generalissimo Franco of Spain’s death in November 1975. When Marshal Tito, died most newspaper and magazine obituaries in the west paid tribute to him not only the last important leader from the Second World War but as genius whose maverick ideas had maintained Yugoslav unity.

By contrast, Franco was denounced by the international media as a fascist who had maintained an antiquated system of government. Media commentary at the time made reference to the often overlooked fact that Spain is ethnically diverse. This point was made to provide credence to the scenario that the ramifications of Franco’s supposed mis-rule would possibly lead to the break up of Spain.

In fact, the opposite was to be the case because Franco did all he could to ensure that his political legacy was conducive to the maintenance of Spanish national unity. As a naval family, the Francos were distressed at Spain’s defeat in the American-Hispanic War of 1898 in which the nation’s remaining colonies were lost. This defeat in marking the end of the Spanish empire raised questions concerning the continued viability of Spain as a nation. From the time of his youth, Franco (who was born in 1894) was determined to preserve Spanish unity as opposed to restoring a lost empire.

Franco was fortunate in that his patriotic objectives were encapsulated in the brilliant ideas of the writer and politician, Leopoldo Calvo Sotelo. Calvo’s rival within the nationalist right during the Second Spanish Republic (1931 to 1939) was the quasi –fascist Jose Antonio Primo de Rivero, who was leader of the Falangist Party. Calvo’s monarchist Espanol Accion party joined with the Falangist Party in the 1936 elections to form the National Bloc. This electoral alliance only won a handful of parliamentary seats but Calvo’s success in winning a seat placed him in a stronger position than Primo who had failed to win election.

The 1936 election victory of the Spanish Popular Front over the centre right CEDA configuration so discredited the political centre that Calvo became the de facto opposition leader. It was Calvo’s assassination in June 1936 by government security forces (the Civil Guard) that precipitated the outbreak of the Spanish Civil War. Franco could not have won the Spanish Civil War without the help of Hitler and Mussolini. But Franco had a broader sense of ideological formation which made him resistant to the blandishments of the two fascist dictators that Spain enter the Second World War against the Allies.

Due to Franco’s utilization of the late Calvo’s theoretical framework as an intellectual guide, the Spanish leader had the lateral capacity to flexibly change and constantly adapt his regime throughout his years in power. Each adaptation that Franco made drew him closer to achieving Calvo’s objective of bequeathing a juridical Spanish state that guaranteed national unity. Therefore, when Franco died, power did not devolve to the military or an authoritarian ruling party. Instead, the locus of state power passed in 1975 to the Spanish Crown in the person of Juan Carlos I, Spain’s first reining king in forty-four years! His Majesty helped ensure that democratic elections were held in 1977 and that a democratic constitution was adopted in late 1978.

The Spanish armed forces are Castilian dominated but this is of no social or political consequence whatsoever because Spain is a democratic constitutional monarchy with an effective balance between national authority and regional autonomy. There is also a thriving party system which has endowed Spain with the requisite sense of national unity and purpose to successfully meet whatever challenges may confront the nation. Had Marshal Tito had a sense of ideological formation that was more detached from his ego, a democratic Yugoslavia might now exist, even with a Serb dominated army.

The tragedy is that the scope had been there for Marshal Tito’s LCY successors to have further adapted. Continued market reform could have helped transform the LCY into a social democratic party possessing the capacity to legitimately win multi-party elections at republican and federal levels. This potential was borne out when socialist/ social democratic successor parties to the LCY legitimately either won elections in Yugoslav republics* or having the status as a (or the) major opposition party. Yugoslavia’s adoption of a multi-party system in 1990 was only accepted by the Yugoslav People’s Army (JNA) to help precipitate their support for Milosevic’s war of aggression against the Yugoslav successor republics when new republican governments were elected.

(*The only post-Yugoslav republic where the LCY descended party fell by the wayside was in Bosnia-Herzegovina. It later transpired that the JNA intelligence deliberately undermined the two LCY successor parties and supported the three ethnically based parties in the 1990 elections to prepare the way for Milosevic’s war of aggression against Bosnia- Herzegovina which was launched in 1992).

The most probable indication that Tito would not have granted a multi-party system essential to maintain Yugoslav unity was his absolutely incorrect belief that one party rule would actually ensure that the complex federal structures enshrined in the 1974 constitution (which took full effect upon Tito’s death) would not precipitate the break up of Yugoslavia. Indeed, the opposite (i.e. the break up of Yugoslavia) occurred because there was no transition to a multi-party system. Such a transition might have occurred had the JNA, -two thirds of whose officer corps were Serbian- not supported the corrupt Milosevic faction of the Serbian Socialist Party (the successor to the Serbian League of Communists).

The Milosevic regime deliberately engineered the bloody break up of Yugoslavia so that it could generate misplaced nationalist support in Serbia to hold onto power. This strategy was successful for an intermediate period but an end point had to be arrived at when the regime’s corruption and lack of economic capacity eventually caught up with it. This end point eventually came when a popular revolution removed the Milosevic regime from power in October 2000.

In contrast to the Spanish scenario-where the armed forces exercised latent power to ensure national unity and paradoxically complemented this by supporting a return to competitive electoral politics-the JNA effectively endorsed the inverse approach. As a result, there is now no JNA because there is now no Yugoslavia. The JNA’s lack of vision in not strategically moving away from an avowedly ruling Marxist party to support national unity is hopefully a mistake that the PLA will not make.

The Importance of Maintaining National Unity

The transition from an authoritarian (or totalitarian) system to a democracy in which there are issues of national unity often necessitate the involvement of the armed forces. In the case of the Soviet armed forces, most of the predominately Russian officer corps supported the Soviet Union’s break up in 1991 so that they could be part of a more agile Russian armed forces. The Soviet Union therefore set an historical precedent in 1991 in which the ethnically dominant component (Russia) of an empire led the charge by seceding from it. Nonetheless, the Russian armed forces have, with strong public backing, drawn a ‘red line’ (as Chechnya demonstrated in the 1990s and again in 2000 demonstrated ) of not allowing constituent ethnic republics to secede from the Russian Federation.

Due to relatively equitable resource sharing arrangements between constituent Russian republics and Moscow, secessionist tendencies seemed to have been short circuited within the Russian Federation. Relative political freedom with regard to citizens electing regional and local government elections has also curbed secessionist tendencies. However, an important qualification should be made in that election tickets backed by the Kremlin usually win due to strategic patronage distribution from Moscow. In short, Russian territorial integrity has been secured by the Kremlin shrewdly co-opting local elites. (This process of co-option could later be positively consolidated by helping engineer a transition to a viable Russian party system).

In the PRC context, the PLA will never allow Xinjiang Province and Tibet in the north west to secede. This is because China as a nation has previously undergone such terrible times when the nation has descended into warlordism that it is deemed too dangerous to allow any region of the PRC to secede. That being said, the Chinese approach to local co-option has woefully lagged in contrast to the successes of the Russian Federation. Furthermore, the current failure to co-opt local elite support (a vital prerequisite for later gaining broader local support) for the regions of Xinjiang and Tibet could also serve to inhibit a strategic transition to a multi-party state conducive to national unity.

Xinjiang Province is a vivid case in point where a failure to co-opt local ethnic support at an elite level is obstructing the scope for broader national political reform.

The Uyghur people of Xinjiang are ethnically different from the Han Chinese as well as culturally distinct as Muslims. Most Uyghurs in Xinjiang probably felt that their province’s joining the PRC in 1950 was a conquest because it entailed the PLA overrunning the secessionist republic of East Turkestan (1944 to 1950).

The widespread suffering caused by the Cultural Revolution in Xinjiang Province paradoxically created the scope for many Uyghurs to be reconciled to the PRC in the late 1970s and early 1980s as Deng’s ‘Four Modernizations’ began to rectify the terrible social legacies of that atrocious period. The missed opportunities on Peking’ s part to engender a sense of PRC patriotism in Xinjiang was typified by the mistreatment of the world’s leading Uyghur dissident, Rebiiya Kadeer.

The Kadeer family were persecuted during the Cultural Revolution but, as a ramification of the ‘Four Modernizations’ inspired policies that were launched in the late 1970s, Rebiiya Kadeer by the 1980s had become one of the PRC’s wealthiest people. The national government’s respect for Kadeer’s entrepreneurial talent was also reflected by her being appointed in 1993 to the National People’s Congress (NPC) , the PRC’s appointed National Assembly and the Chinese People’s Political Consultative Conference (CPPCC).

Kadeer’s appointment to the CPPCC was noteworthy because it was (and perhaps still is) a quasi independent forum in which non-CCP representatives could have input into national policy making. It is too often forgotten that a major reason why Chiang Kia-shek so rapidly lost the Chinese Civil War (1946 to 1949) between 1948 and 1949 was due to Mao’s astute cultivation of the middle class, which became known as the ‘patriotic bourgeoisie’.

The importance of the ‘patriotic bourgeoisie’ in founding the PRC was evident when the CPPCC was convened in September 1949 to designate the inauguration of the PRC on the first of October 1949. Between 1949 and 1954, the CPPCC served as the PRC’s official legislature and garnered a degree of legitimacy as representative of public concerns that was rare for a single party state. The role of the CPPCC as a national policy making institution substantially declined when the NPC was established in 1954 as the CCP moved toward a central planning model.

The CPPCC still fulfilled an important role in representing non-CCP concerns, such as national ethnic minorities until the ill-effects of the Cultural Revolution precipitated this body’s virtual closure in 1967. In the early 1980s the CPPCC was re-activated by Deng. The PRC’s paramount leader underutilized the opportunity that the CPPCC’s reactivation afforded to utilize CCP ‘satellite’ parties such the ‘KMT Revolutionary Circle’ (which was represented in the CPPCC) to broaden the scope for greater diversity that was needed to support social, political and economic reform.

Kadeer’s denunciation in the NPC in 1997 of security force repression of Uyghur demonstrators resulted in her removal from both that legislature and the CPPCC that year. These removals commenced the persecution process against Kadeer which culminated with her imprisonment between 1999 and 2005. With Kadeer’s decline in status came a corresponding contraction in the previously promising progress that had been made in Xinjiang Province of bringing her Uyghur supporters into the official provincial administration.

Due to international pressure, Kadeer was released in 2005 and allowed to go into international exile. As an émigré, Kadeer through the World Uyghur Congress has since drawn international attention to the plight of Uyghurs in Xinjiang Province. The violent suppression of riots in Xinjiang Province in 1999 is reflective of widespread discontent in this region of the PRC. The tragedy of this repression was that it had been avoidable had Kadeer and her supporters been co-opted into supporting Xinjiang Province becoming a part of the PRC.

The question of why the unnecessary cycle of repression in Xinjiang Province has occurred by deliberately alienating Kadeer is an interesting question. The answer to this riddle is rent seeking. Xinjiang Province has extensive deposits of natural gas. Corrupt patrimonial elements within the CCP want to exploit these natural gas reserves not only for probable personal enrichment but also to sustain a central co-ordinated approach to economic policy. It easier to maintain a self-interested power over (win-lose) approach in regard to the nation’s political settings if natural resources can be exploited by the state on a centralized basis. This negates the need for the PRC to have viable and organic commercial relations that are conducive to a viable civil society.

Understanding Tibet: Going Beyond Manichean Stereotypes

The most internationally prominent example of a disgruntled predominately non-Han region of China is Tibet. Indeed, the plight of Tibet under Chinese rule is often cited as a prime contemporary example of an oppressed people desiring and deserving independence. The ultimate truth with regard to Tibet is that the degree of independence or lack thereof from China has traditionally been commensurate with
the strength of the Chinese nation state. Tibet therefore gained virtual independence when the ramifications of the founding of the Republic of China in *1912 weakened the capacity of the Chinese state to rule this region.

(*The Dowager Empress Tzu Hsi reasserted Chinese central authority over Tibet before she died in 1908. This re-assertion was achieved despite China’s then weak position in relation to the foreign powers).

Had Chiang Kia-shek won the Chinese Civil War, it is almost certain that he would have re-asserted actual Chinese control over Tibet as a manifestation of China actually being a united (or re-united) nation. There probably would have been no international outcry as Tibetans would have enjoyed the capacity to partake in broader Chinese politics through the political framework established by the Republic of China’s 1946 Constitution.

Therefore, the Chinese occupation of Tibet in 1950 was not an unusual occurrence in Tibetan history as it was part of pattern in which a new Chinese regime capped off its re-unification of the nation by going into Tibet. In the first nine years of Tibet’s incorporation into the PRC (1950 to 1959), there was latitude to gain Tibetan acceptance of Chinese rule. This prospect correlated with the scope for Mao to reach a modus operandi between Tenzin Gyatso (1935 - ) the fourteenth Dalai Lama and Mao.

During the first five year period of (1949 to 1954) of the PRC’s existence, when the ‘patriotic bourgeoisie’ had a meaningful role in ruling the country, there was scope for the Dalai Lama’s regime to share authority with the CCP in Tibet. This became a more difficult proposition after the CCP centralized its rule. It was ironic that a contributing factor in relation to the later outbreak of the Sino-Soviet dispute in the early 1960s that was the comparatively liberal *Khrushchev transmitted his unease to Mao that there was a non-communist party power alternative within a region of China.

(* Khrushchev was comparatively liberal in relation to Mao as the CCP’s senior leadership were alienated by the Soviet repudiation of Stalin in the mid 1950s).

There was scope for Sino-Tibetan accommodation in the 1950s because the commanding officers of the occupying PLA units sincerely believed that they were helping the Tibetan people break from the cruelty of feudal structures. A consequently condescending attitude toward the Dalai Lama was also adopted by the occupying Chinese that he could improve his outlook in addressing the concerns of Tibet’s peasantry. The PLA/CPP could have converted their professed concern for the Tibetan people (instead of hectoring officials in the Dalai Lama’s administration) by recruiting and eventually devolving power to local Tibetans.

The lack of Chinese effectiveness in obtaining the support of the Tibetan majority was manifested in March 1959. There was a popular uprising in the capital Lhasa when there was a plausible rumour that the Dalai Lama was to be deported to China proper. The Dalai Lama’s subsequent flight to Dharamsala in India removed the complication of Mao working out how to accommodate or eliminate him. The PRC’s determination to integrate Tibet was reinforced by national security concerns following border clashes with India in 1962.

The Chinese objective of integrating Tibet was manifested by building roads, schools and hospitals. These improvements did not win Tibetan acceptance of direct Chinese rule due to the legitimate concern that Tibet’s cultural identity would eventually be irredeemably lost. Tibet had previously been under Chinese suzerainty but there had always been sufficient autonomy to guarantee the nation’s cultural identity. The migration of Han Chinese into Tibet commenced in the 1960s and which still continues, thereby threatening to make Tibetans a minority in their country.

Tibet probably reached the nadir of existence in the 1960s during the Cultural Revolution when temples and monasteries was shut down and vandalised. Paradoxically there was scope for Sino-Tibetan reconciliation in the late 1970s as Deng’s Four Modernizations moved the PRC away from Maoism. The potential for reconciliation was vividly highlighted by the visit to Tibet in 1980 of senior politburo member Hu Yao-pang (who became CCP General Secretary in 1981).

Hu conveyed a determination on his 1980 visit to Lhasa to make amends to the Tibetan people for the excesses of the Cultural Revolution. For a subsequent period of time, living conditions and the quality of government in Tibet did improve. But the region’s ultimate prospects for an improved situation remained dependent upon broader national developments in the PRC. The fall of Hu Yao-pang in 1986 jeopardized the prospect for further national political liberalization that could have been beneficial to Tibet.

Although a political liberal, Hu’s successor as CCP General Secretary, Zhou Ziyang vocally supported the suppression of nationalist demonstrations in Lhasa in 1987 to placate the PLA. CCP liberals and/or pragmatists publicly acquiesced to military repression in Tibet so that they could maintain the PLA’s support against advocates of a return to central planning and a re-assertion of tighter political controls*.

(*Demonstrations in Lhasa were also crushed in March 1989 prior to the Tiananmen Square massacre in June that year).

It was this need for political balancing that stifled a pragmatist such as Deng Xiao-ping from attempting to reach a political accommodation with the Dalai Lama. PRC President Hu Jintao was able to survive the successive falls of Hu Yao-pang and Zhou Ziyang by supporting a hardline rule in Tibet. Indeed Hu was Tibet CCP chief between 1988 and 1990. This was reflective of the political paradox that potential political CCP reformers are hesitant to take the next reformist step because many of them have been previously involved in ruling Tibet to demonstrate their patriotic bona fides to the PLA.

The Dalai Lama did appeal publicly in 1987 to Deng to reach an accommodation with him on Tibet. But His Holiness’s relentless international denunciation of the PRC as the oppressor in his homeland has substantially served to bolster the PLA’s opposition to negotiating with him because he is perceived as a ‘splitist’. The overriding objective of the PLA is the maintenance of national unity at all costs. If the Dalai Lama or other genuine representatives of the Tibetan people are to reach an accommodation with the PRC, it will have to be on the basis of Tibet remaining within the rubicon of PRC suzerainty.

The real hopes for Xinjiang and Tibet for a future satisfactory future are therefore dependent upon the PRC ultimately moving to a multi-party future with two nationwide parties guaranteeing future national unity. Presently, the particular prospects in Xinjiang and Tibet are not promising because CCP regional branches there are dominated by Han Chinese who rule the two regions as colonial outposts. This is not only disconcerting for these two regions but for the PRC as a whole.

There are too many Han Chinese CCP apparatchiks assuming office in Xinjiang and Tibet in which they gain repressive political skills before going onto other party positions in the PRC to apply a power-over approach to governance. The recruitment of Tibetans and Uyghurs into local CCP branches to administer their home regions in lieu of Han Chinese from outside these regions would therefore have broader benefit to all PRC citizens.

Participation of Tibetans and Uyghurs in local CCP leadership positions would be of ultimate benefit if there was to be an eventual shift by the CCP toward formulating ideological factions as a forerunner to nationwide political parties being established. The involvement of local Han Chinese in Xinjiang and Tibet working in collaboration with ethnic Uyghurs and Tibetans in subsequent factional and party formation would also help ease ethnic tensions to help guarantee national unity.

The Sadat Legacy Can Save Egypt

The importance of the PRC having a future Gestalt capacity to secure everlasting national unity and having a ‘win-win’ approach to international trade and business for the sake of future global economic viability will depend upon the ramifications of the CCP’s eighteenth congress in 2012. Egypt is a nation whose recent political history serves as an example of how a power-with approach from above can be engineered by initiating reform from above. Had former president, Hosni Mubarak not deviated from the reforms initiated by his predecessor Anwar Sadat, then the recent 2011 revolution could have been avoided. As it is, the positive legacy of Sadat’s bold domestic reforms may still be a legacy that holds Egypt in good stead.

Under the rule of Gamal Nasser (1952 to 1970), Egypt was essentially a military dictatorship that had a notional ruling single party, the Arab Socialist Union (ASU). When Anwar Sadat succeeded to the presidency on Nasser’s death in 1970, he was essentially the puppet of a pro-Soviet military clique. Utilizing his connections as a retired army officer, President Sadat harnessed the support of professional army officers to carry out his own coup in May 1971 which he later dubbed the ‘Corrective Revolution’.

The armed forces remained the mainstay of President Sadat’s rule but the new caste of the Free Officer’s Movement (FOM) were professionally inclined. This was manifested by the FOM’s determination not to lose their independence to Sadat to the extent of allowing him to establish a near absolute dictatorship similar to Nasser’s. President Sadat was at the very least more pluralistically inclined than his predecessor. This was demonstrated when he shrewdly arranged for the ASU to divide into three factions (or ‘platforms’) for the 1976 parliamentary elections. This form of one-party pluralism notionally broadened the scope for competitive democracy while neither threatening Sadat’s presidency nor the rule of the ASU.

Even though the parameters were notionally broadened, there was still public disappointment because the regime-backed Centre Platform utilized government support to ‘win’ the lion’s share of votes against the respective Right and Left platforms of the ASU in the 1976 parliamentary elections. The need for greater political reform was demonstrated when widespread riots broke out in January 1977 after bread subsidies were removed.

To President Sadat’s astonishment, the army chief of staff invoked the section of Egypt’s 1971 constitution that the role of the armed forces was to protect the people to respectfully but firmly refuse the presidential order to repress the 1977 riots. President Sadat rescinded the cancellation of the bread subsidy by securing increased American aid following his historic visit to Jerusalem in 1977. The Sadat visit to Jerusalem laid the groundwork for the Camp David Accords peace treaty of 1979 where Egypt and Israel recognized each other.

The 1979 Camp David Accords peace treaty was a great historical event but the multi-party elections that were held that same year (the first multi-party elections in Egypt since 1950 under King Farouk) were less than earth shattering. The year before (1978) the three ASU platforms officially converted into political parties: the Socialist Labour Party (the previous Left Platform), the Socialist Liberal Party (the previous Right Platform) and Sadat’s National Democratic Party, NDP, (the previous Centre Platform). The maintenance of repressive controls (such as press censorship) and widespread public apathy ensured an NDP landslide.

It should be admitted, that while most Egyptians probably welcomed the end of conflict with Israel, this did not mean that they then really accept Israel’s right to exist. They were probably ambivalent about the 1979 peace treaty and their president. To show the Egyptian people that he was more committed to solving domestic problems than being a respected international statesman, Sadat assumed the premiership in May 1980 the head of a new cabinet that was ostensibly more domestically focused.

The relative lack of success in the Sadat cabinet effectively addressing Egypt’s domestic concerns became apparent with growing social unrest which led to the imposition of a state of emergency in September 1981 and the arrest of Egyptian opposition leaders. The widespread social unrest set the scene for extremists to assassinate the president at a military parade on October 6th, 1981 which ironically enough commemorated the Egyptian attack against Israel in 1973. It was rumoured that the army high command allowed the assassination to take place to detach from an increasingly dictatorial president and so that Egypt could reconcile with the Arab world.

In fairness to President Sadat, it should be pointed out that his confidants claimed that it was his intention to release most political prisoners and lift the state of emergency in April 1982 to celebrate the return by Israel of the Sinai Desert Peninsula to Egypt. It was later claimed by Sadat confidants that he planned to call early parliamentary elections later that year (1982) with safeguards against possible vote rigging to encourage opposition participation and popular acceptance of the elections. President Sadat was confident that the NDP would legitimately win the elections due to rural support for the regime resulting from the past success of Nasser’s land reform program.

Having legitimately won parliamentary elections, President Sadat intended to voluntarily retire when his presidential term expired in 1983 and back the election (probably by plebiscite) of his vice-president, Air Marshall Hosni Mubarak as his successor. As it was, Mubarak assumed the presidency following Sadat’s 1981 assassination. For all the opprobrium that is now attached to Mubarak, it is forgotten that he once seemed on track to gain national acceptance as leader by initially undertaking democratic reforms.

President Mubarak released most political prisoners shortly after becoming president, eased censorship to the extent of allowing the press to criticize and even ridicule him* and convened a congress of the NDP in January 1982 to activate it as an actual functioning political party. Although the official ban on the Muslim Brotherhood was maintained, persecution of its members was ended and the regime helped arrange for the venerable Wafd Party to run Brotherhood candidates under its banner in the 1984 parliamentary elections.

(*Press censorship was maintained in that newspapers were not allowed to attack other Arab rulers or report on the activities of Mubarak’s children who were then non-political).

The May 1984 parliamentary elections were a masterstroke on Mubarak’s part in that they precipitated political liberalization that not only did not endanger his power but endowed his rule with a degree of political legitimacy. Muslim Brotherhood participation under the banner of the Wafd Party circumvented the issue of Mubarak having to officially rescind the ban on the brotherhood. The participation of the Wafd Party also solidified support for the NDP in rural areas because this opposition party during the time of the monarchy was essentially an alliance between the landowning elite and the middle class.

There was still lingering middle class support for the Wafd Party that President Mubarak made a subtle point in a speech in 1984 that, had voter turn out been higher in Cairo, the NDP might not have won a two-thirds majority in the National Assembly (People’s Assembly). Due to the Muslim Brotherhood supporting a middle class ‘Young Turks’ faction against the venerable ‘Pashas’ faction in the Wafd Party in a 1986 party factional struggle, the regime helped arrange for the Brotherhood to enter into an alliance with the Nasserite National Progressive Unionist Party (NPUP).

The support of the Muslim Brotherhood for the NPUP in the April 1987 parliamentary elections enabled this party to supplant the Socialist Labour Party as the party representing the left and to displace the Wafd Party as the major opposition party. Most political commentators agreed the 1987 elections were the fairest since 1950 elections under King Farouk and that the NDP had legitimately garnered two-thirds of the vote.

All might have been well for the NDP had President Mubarak not used his political skills to establish a de facto life-long one-man presidential rule. By 1990, President Mubarak was in a position similar to his predecessor, that of not being able to service the nation’s foreign debt without having to slash state subsidies. It is probable that President Mubarak manipulated the Iraqi dictator Saddam Hussein into invading Kuwait (which Iraq owed billions of dollars to in debt) in August 1990 by assuring him that the United States would not respond militarily to the invasion.

In fact, the administration of President George H Bush quickly and resolutely resolved to oust Iraq from Kuwait out of a legitimate concern that Saddam would subsequently attack Saudi Arabia. The United States needed Egyptian military support to evict Iraq from Kuwait but this support was not immediately forthcoming from Mubarak. The Egyptian president demanded and obtained from the United States the cancellation of billions of dollars in debt that Egypt owed for armaments purchases from Washington and the provision of financial aid so that the nation’s debt burden could be substantially eased.

Moving Back to Dictatorship: Mubarak Strays from the Sadat Objective

After President Mubarak committed to the international task force of liberating Kuwait, Saddam expelled thousands of Egyptian guest workers. This action alienated most Egyptians from the Iraqi dictator. Brilliantly reading the public mood, Mubarak called early parliamentary elections in November 1990. The opposition parties and press then had the latitude to criticize Egypt’s support for the impending military action to liberate Kuwait (which commenced in January 1991).

Western media commentators and foreign affairs analysts (who more often than not were opposed to military action to liberate Kuwait) predicted that military action against Iraq would precipitate massive uprisings against pro-western Arab regimes such as Mubarak’s*. No mass outpouring of social unrest against Mubarak ensued and his NDP overwhelming won the November 1990 parliamentary elections. Undoubted semi-official support enhanced the NDP’s massive electoral majority but the Egyptian president had gained overwhelming support for Iraq stance to enable him to effectively dispense with a pluralist framework that could have laid the groundwork for a genuine democracy.

(*It is often overlooked that there was keen public interest in the PRC during the Iraq 1991 crisis and Chinese citizens actually made enquiries about volunteering to fight with the American led alliance to liberate Kuwait. This sentimental support was probably then reflective of contempt for the perpetrators of the June 1989 Tiananmen Square massacre who seemed to be in the mould of Saddam Hussein).

Following the 1991 liberation of Kuwait, President Mubarak’s rule began to resemble that of Saddam Hussein or Hafez Assad of Syria. Rigorous press censorship was imposed in which Mubarak became notorious for his red line’ in which any public criticism of him was forbidden. Academics who once had the right to criticize government policy in the not unreasonable hope of affecting public policy more often than not found themselves under house arrest if it was deemed that they had insulted the president.

With Mubarak’s personal consolidation of his power, the NDP essentially became a personal vehicle of the president’s. In keeping with other ‘republican’ Arab rulers, Mubarak began to groom his second son Gamal as his successor. The Mubarak family, which had once seemingly lived modestly, after 1991 became conspicuously wealthy, buying palatial villas in Germany and London. The first family also increasingly became the centre of an emerging financial empire.

An *independent judiciary still remained in place under Mubarak such that if a political prisoner’s case actually made it to court he or she stood a good chance of acquittal. The problem was those who were detained by the police were more often than not held without being charged. The Mubarak regime became notorious among Egyptians for maintaining covert detention centres. The resort to illegal detention by the police was symptomatic of Mubarak’s reliance upon the police as his source of personal power.

(*An independent judiciary under Mubarak was a legacy of Sadat’s who always appreciated the rule of law. The future president was acquitted and released by an Egyptian court in 1949 even though Sadat later admitted he was actually guilty of plotting a coup against King Farouk)

President Mubarak’s dictatorship was not as powerful as the absolute power of the Baathist dictatorships in Iraq and in Syria or the personalized regime of Colonel Qaddafi in Libya. This was because Mubarak because was never in a position to stack out the officer corps with fellow clansmen. Mubarak really came to power in 1981 when he inherited the leadership of the professionally inclined FOM from Anwar Sadat.

The FOM was re-configured following Sadat’s May 1971‘Corrective Revolution’. A younger generation of FOM leaders (the October Generation) assumed leadership between 1974 and 1975 of the military association based on their professional performance during the 1973 Yom Kipper War. As air force commander in the Yom Kipper War Mubarak was considered to have acquitted himself so brilliantly that this paved the way for his appointment as vice-president in April 1975.

Under President Sadat, the FOM functioned on an ad hoc and informal basis although the president was careful to always consult with senior armed forces officers. Following Sadat’s 1981 assassination, the FOM essentially took the form of the Supreme Council of the Armed Forces of Egypt (the Supreme Council). The Supreme Council met on a regular basis under the chairmanship of Hosni Mubarak.

The major overt manifestation of political influence of the Egyptian armed forces is (or was) the appointment of retired or serving officers as provincial governors and to local government positions as mayors, although civilian NDP leaders often took up positions in local government. It is not known as to what degree the twenty member Supreme Council was involved itself in the day to day governance of Egypt under Mubarak. This council probably concerned itself with national security matters, and with the armed forces direct role in the economy and was probably consulted with regard to local government appointments.

What is clear is that the Supreme Council was sufficiently detached from directly ruling the country that it could pursue the post 1971 strategy of ‘ruling without governing’. The efficacy of this strategy was clearly demonstrated when the armed forces refused to crush an incipient rebellion in 1977 and most notably in February 2011 when the army refused to crush the demonstrators who had occupied Tahir Square on the 25th of January 2011.

Egyptian Democracy: A Posthumous Sadat Vindication?

The ignominious fall of Hosni Mubarak was tragically avoidable. The corruption of Mubarak’s increasingly personalized post-1990 regime began to catch up with him with the onset of economic stagnation by 2004/2005. Mubarak probably believed that he could ride out any social unrest due to his firm control over the national police which was usually under the control of civilian NDP operatives.

Mubarak probably would have survived the outbreak of a revolution in January 2011 if the armed forces had supported his political repression. But this was not to be because it would have violated the armed forces’ cardinal principle of ‘ruling without governing’, i.e. surrendering its power to a personalized dictatorship. As a consequence, Mubarak and his family have been arrested and are now facing trial.

Mubarak inherited a political legacy from Sadat of limited pluralism which he could have built upon to secure genuine popular legitimacy and an honoured place in Egyptian domestic history. Even after Mubarak cleverly achieved a political ascendancy following the November 1990 parliamentary elections comparable to Gamal Nasser’s, his honoured place in history would have been assured had he retired as president upon completion of his second term in October 1993. Another senior armed forces officer could have been selected to succeed Mubarak who in turn could have left his mark on history by paving the way for a civilian successor.

As it is, Mubarak’s positive legacy was that he not only maintained the essence and spirit of the Camp David Accords but built on them to help facilitate the current Middle East peace process. Mubarak achieved this while still engineering Egypt’s return as a leading member of the Arab world by re-joining the Arab League in 1989. Mubarak’s domestic legacy is, however, more problematic to say the least,

Ironically Anwar Sadat (who will always be revered in the west for initiating the current Middle East process) may still bequeath a positive posthumous domestic legacy. By court order, the NDP has been dissolved. But under the leadership of Sadat’s courageously loyal nephew Talaat, the NDP has been relaunched as the New Democratic National Party, (NDNP) although the name, the ‘New National Party’ is also being used.

Talaat Sadat was previously imprisoned at the instigation of the military for suggesting military culpability for his uncle’s 1981 assassination. He also took part in demonstrations in the 2011 Tahir Square demonstrations against Hosni Mubarak. The NDNP is arguably an artificial political party as the successor to the former apparatus of the Mubarak regime but this new party stands to gain a genuine voting base in rural Egypt as the custodian of the Sadat and Mubarak’s regimes safeguarding Nasser’s very beneficial land reform legacy*.

(*Furthermore, due to the Egyptian armed forces extensive resources and substantial network, a military backed NDNP as well as other discreetly supported parties under an electoral system of proportional representation could ensure that the Muslim Brotherhood does not win a majority of seats in a free election).

A post-Mubarak Egypt will probably be a hybrid of contemporary Turkey and Indonesia. The Turkish precedent will probably be adhered to with a staunchly secular and pro-western military, paradoxically interfering in politics with middle class support to curb potential authoritarian tendencies of Islamist parties should they share power or win government in their own right in national elections.

An Indonesian context could possibly apply in a similar context to Egypt in that the party of the fallen regime (with the NDNP being the Egyptian equivalent of Indonesia’s former ruling Golkar political group) at the very least remaining an influential factor in politics by representing the political interests of the military. The potential for an Indonesian model in post-Mubarak Egypt is also there with regard to the leaders of Islamic socio-political groups forming political parties or establishing bases within new political parties to be part of a pluralist political framework.

Syria: A Damascus Road to Democracy?

Egypt’s potential to move to democracy so as to have a civil society that has a capacity to confront its challenges would if realised bolster the Middle East peace process. As important as Egypt has been to the peace process, Syria has arguably been as important in undermining peace in the Middle East. It is no coincidence that Syria has had, until recently, one of the most entrenched dictatorships in the Arab world. A transition to democracy in Syria would not only be of benefit to its people but to finding a lasting peace in the Middle East. The politics, history and prospects of Syria becoming a democracy therefore warrant analysis.

Syria had experienced to constitutional democracy as a French mandate between 1920 and 1944. Formal independence was gained in 1944 but not considered a reality by most Syrians until the final withdrawal of French troops in 1946. The first years of independence were confusing in terms of Syrian national identity which was subordinate to a strong sense of a pan-Arab identity.

Political discord centred upon which Arab nation (or nations) Syria should unite with. The Syrian Nationalist Party’s base of support was in Damascus and this party was orientated towards uniting with Lebanon, Trans Jordan (contemporary Jordan) and Palestine (which is now Israel and the Palestinian Authority). The rival Syrian Peoples Party had a strong base of support in the city of Aleppo and was orientated toward uniting with Iraq even though that country was then a monarchy.

The Syrian situation was confused by the unnecessary trauma that the nation subjected itself to when Israel won its war of independence in 1949. This coup inaugurated a period of political chaos which was characterised by coups, counter-coups and alternations between democracy and dictatorship between 1949 and 1954. Unambiguous civilian constitutional rule was re-established between 1954 and 1955.

Between 1955 and 1958, Syria was ruled by the Nationalist Party government of Shukri Al Quwatli who favoured a union with Lebanon and, if possible, with Jordan instead of with Iraq. The opposition Syrian People’s Party by contrast favoured a union with Iraq.

The internal complications of who Syria should unite with took a complicating turn when the Iraqi statesman Nuri as- Said engineered the Baghdad Pact in 1955 which created the Central Treaty Organization (CENTO). This anti-Soviet alliance was composed of Iraq, Iran, Turkey and Britain. The ramifications of the Baghdad Pact were profound for domestic Syrian politics. The ruling Nationalist Party which was anti-Iraqi consequently became distinctly pro-Soviet and this new orientation was reinforced by Nasser’s successful nationalization of the Suez Canal in 1956 and the ensuing abortive Anglo-French invasion of Egypt that year.

The growing pro-Nasser sentiment in Syria paradoxically undermined the ruling Nationalist Party because its base was subsequently appropriated by the Baath (Renaissance) Party. The Baath Party was founded in 1942 by Michael Aflaq*. This party advocates the establishment of a secular Pan-Arab state.

(*It should be pointed out that, even though Aflaq organised Baath Party branches across the Middle East along Leninist ‘democratic’ centralist lines and supported military coups across the region, he claimed that he wanted to see a future Pan-Arab state eventually ruled as a multi-party democracy).

Syrian antipathy toward the Baghdad Pact was ultimately manifested in February 1958 by Syria uniting with Egypt to form the United Arab Republic (UAR). The foundation of the UAR was perhaps the first and only instance in history of a democracy, albeit a fragile one, voluntarily uniting with an authoritarian nation which had the potential to become totalitarian.

Even though Nasser had gained control of Syria with majority support the Egyptian president soon fell out with the supporters of former president Shukri Al Quwatli and the Baath Party (who had compelled Al Quwatli to enter Syria into a union with Egypt) by imposing a one party state on the UAR. Had Nasser established a modus operandi with the Baath Party, Syria probably would have remained within the UAR while giving the UAR president a grass roots network throughout the Arab world.

Although Syria seceded from the UAR in 1961, a long term legacy of Nasser’s rule was to contribute to the durability of later Baathist rule in Syria and Iraq. In both these nations, Baathists (who usually came from minority groups of society) were able to impose themselves on the majority while focusing on trying to engineer unions with other Arab nations. Nasser had bequeathed a legacy to the Baathists of where the economic and political interests of poorer groups in society could be advanced at the expense of the middle class (without a nation becoming Marxist) to provide a solid support base for a sustained one party dictatorship.

Aflaq’s support for Syria’s secession from the UAR was an initial embarrassment to him (because it violated the principle of Arab unity) that the Baathist leader later disingenuously claimed that he had opposed the 1961 revolt. Nasser to his credit refused to crush the 1961 revolt because he did not want to become ensnared in a bloody conflict. The 1961 revolt could not have succeeded without Nazim Al-Kudsi re-activating his dormant People’s Party to support the revolt. It was something of a seeming triumph for democracy when the People’s Party came first in the December 1961 parliamentary elections followed by the revived Nationalist Party, with the Baathist Party coming third.

In reality, the prospects for a post 1961 Syrian democracy were precarious because the supporters of the Nationalist and Baath parties were prepared to support a future military dictatorship if an accommodation could again be reached with Nasser in regard to achieving pan-Arab Arab unity. With the benefit of hindsight, the supporters of the ruling Syrian Peoples Party and even the rival Nationalist Party (that was then aligned with the Baath Party which would eventually swallow up their former ally) should have resisted the March 1963 coup with all of their strength. The overthrow of the impeccably democratic but now forgotten Nazim Al-Kudsi was one of the key turning points in modern Arab history because it was such a blow to the prospects for democracy in the Middle East.

The post 1963 coup military dictatorship in Syria was originally led by General Loay Atassi who later gave way that year to the real military strongman, General Amin Al-Hafez. Syria’s military dictatorship was strange in that, while it denied its citizens democracy, internal ideological differences within the regime were vented within Baath Party branches and other party structures, Consequently, the military garnered a substantial support base (albeit a minority one) with which to indefinitely rule Syria.

Furthermore, domestic developments within the Syrian Baath Party often had ramifications that affected politics in other Arab countries, the principal manifestation of this phenomenon being Iraq. This capacity was often reflective of Aflaq’s prestige and actual power in Syrian politics. The major gauge of Aflaq’s domestic Syrian power was whether his chief supporter Silah Al-Bitar was either serving or resigning as prime minister of Syria.

The major division within the Syrian Baath Party was whether to focus on destroying Israel or trying to unite with other Arab nations such as Iraq. The leader of the party’s left wing was General Nurreddin Al- Attassi while the ‘right wing’ was led by Aflaq who relied upon party allies within the military to maintain his power. A major ally of Aflaq’s was Air Force General Hafez Assad.

General Assad was probably born in the late 1920s to an Alawite family. The Alawites are Shiite minority who are considered to be apostates by both Shiite and Sunni Muslims. As a result, Alawites were traditionally disadvantaged (until Assad seized power in 1970) in Syria. As a young air force officer, Assad opposed Syria’s secession from the UAR and was consequently forced to retire following the success of the 1961 revolt. Assad used his Baath Party connections not only to re-enter the Syrian Air Force in 1963 but to become its commander in 1964.

Assad’s superlative political skills were demonstrated in February 1966 when he defected from Aflaq’s camp to support General Nurreddin Al- Attassi’s successful left-wing Baathist coup. The dividend for Assad supporting the 1966 coup was that it gave him control of his party’s right wing. During the next four and a half years (1966 to 1970), Syrian politics was a tense stand off between the respective Attassi and Assad wings of the Baathist Party with winning the allegiance of the officer corps to be the ultimate determinant of success.

Due to General Attassi’s anti-Israel obsession, he launched an invasion of Jordan in September 1970 to support the Palestine Liberation Organization’s (PLO) attempt to overthrow King Hussein. This invasion was a fiasco due to the professional skill of Jordanian troops and because Assad as defence minister withheld crucial military support. The pummelling, that General Attassi’s troops (who were disguised as Palestinian guerrillas) received, tipped the balance of power within the army in Assad’s favour thereby allowing him to seize power in a military coup in November 1970.

Assad formally assumed the presidency in March 1971 following a plebiscite in which he received the customary 99% of the vote that Arab dictators usually engineer for themselves. The new regime was more personalized and constitutionally formal in contrast to the ad hoc approach to governance of the Attassi era. This more formalized approach to government was also apparently more pluralistic in that an assortment of Marxist and Nasserist parties entered into an alliance with the Baath Party in April 1972 called the National Progressive Front (NPF)*. The satellite/ semi-independent parties within the NPF have genuinely supported the Syrian Baath Party’s foreign policy objectives and enabled the Assad family regimes to extend their popular base of support within Syrian society.

(*The absorption of the People’s Party into the NPF helped snare effective Baathist control of a party whose base it had previously electorally competed for during democratic interregnums).

Reconciling Oxymoron’s: Syria’s Moderate Hard-Line Foreign Policy

In foreign policy terms, the Assad regime was a ‘moderate’ hard-line Arab state. This oxymoronic categorization reflected the regime’s uncompromising hostility toward Israel and preference toward the Soviet Union being tempered by preparedness to rationally engage with the United States to avoid international isolation. President Assad therefore hospitably received President Richard Nixon and his wife Pat in June 1974 on their visit to Damascus to mark the re-establishment of diplomatic relations*.

(*Syria had severed diplomatic relations with the United States in 1967 following the Six Day War. Diplomatic relations between the United States and Iraq were not restored until 1984. In the interim, Iraq maintained relatively cordial relations with the West due to its close diplomatic links to France).

The American presidential couple were very taken by Assad’s cerebral intelligence and personal charm. Although Assad was a military dictator, he more often than not appeared in civilian suits, and statues and official portraits of him projected a learned persona. The president also cultivated an image of modesty and approachability and he became known for a self-deprecating sense of humour as well as a tendency to be candid when the circumstances called for it.

The seeming moderation of the Assad regime was apparent as it cultivated ties with Nasser’s successor, Anwar Sadat. Sadat’s succession to the Egyptian presidency in 1970 and consolidation of power in 1971 was a relief to Assad (and Saddam Hussein of Iraq) by ending the pressure to unite with Egypt. A cosmetic declaration of a united Arab state between Egypt, Syria and Libya was still made in September 1971 but the real ramification of this ‘union’ was to practically signal that the post 1956 desire of Egypt to unite with other Arab states had ended*.

(* Libya’s Colonel Mummar Qaddafi was probably sincere in his desire to see that the 1971 ‘Tripoli Declaration’ facilitate the unification of the three nation states which signed this declaration).

While the canny Assad cultivated links with the Sadat regime in Egypt, he was still quick to re-assure the Soviets that he would never act precipitously as the Egyptian president had done by expelling Soviet advisers in July 1972. This re-assurance helped Syria secure a reliable weapons supply from the Soviet Union. Egyptian/Syrian co-operation was still apparent when Syria supported Egypt during the Yom Kipper War against Israel in October 1973 in which the Syrian army temporarily and partially regained part of the Golan Heights that Israel had gained in the Six Day War of 1967.

Syria’s status as a ‘moderate’ hard-line state was seemingly apparent when the Assad regime agreed to a 1973 cease fire that the American Secretary of State Dr. Henry Kissinger had negotiated between Egypt and Israel as a go between during his famous ‘shuttle diplomacy’. The ambiguity of Syrian foreign policy was seemingly apparent when the Assad regime intervened in Lebanon in 1976 to prevent the pro-Soviet PLO from taking over that entire nation. This action did not lose Soviet support because Moscow knew that the Assad regime would always remain its major ally in the Middle East.

The Syrian intervention in Lebanon also helped re-assure the Gulf monarchies which were wary of a PLO takeover of all of Lebanon. Strangely enough, particularly in the light of future events, the Syrian intervention then had the support of Lebanon’s Maronite Christian community which constitute a plurality of the country’s population.

The hard-line aspect of Syrian foreign policy actually remained in kilter with nearly all Arab states (with the exception of The Sudan and Oman) with regard to opposing President Sadat’s surprise visit to Jerusalem in November 1977. The subsequent concluding of the Camp David Treaty of March 1979 between Egypt and Israel created a vacuum in the Arab world which raised the question as to which Arab nation would fill the void. The two competing aspirants were Iraq and Syria which only intensified the rivalry between regimes which were supposedly so similar in avowed ideologies.

The intensity of the conflict between Assad and Saddam Hussein was also compounded in 1979 by a proposed unification of Iraq and Syria under the leadership of President Bakr of Iraq. Although President Bakr since the 1968 coup had been less powerful than Saddam he, was then a figure of considerable prestige in Iraq and in Syria. The Iraqi president had visited Damascus in 1976 and the issue of unification had been discussed with President Assad. At the time of the 1976 visit, Iraqi-Syrian discussion of unification was really just a means for the two regimes to emphasize their avowedly similar pan-Arab ideologies.

President Bakr’s canvassing of Iraqi-Syrian unification was a threat to Saddam’s power because the Iraqi president was then considered to be the second most powerful man in Iraq. There were elements within the Baath Party and the armed forces that, although accepting of Saddam’s greater political power, were predominately loyal to President Bakr. A unification with Syria offered pro-Bakr elements the scope to both block Saddam’s ascent to power and to transfer their allegiance to Assad after he succeeded Bakr to lead a united state.

It is fascinating to speculate what sort of united Baathist state might have emerged had unification between Iraq and Syria occurred under Bakr. This speculation is interesting because the similarities between both nations paradoxically reflected their differences. Baathist Iraq was ruled by an Arab Sunni minority over a Shiite majority while Syria was (and still is) a nation essentially ruled by an avowedly Shia minority (the Alawites) over a Sunni majority. Both nations also had, and have, substantial Kurdish and Christian minorities. Power dynamics within such a united Baathist state potentially could have resolved inter community differences or exacerbated them.

Despite the distinct prospect that he might succeed Bakr as president of a new united Arab state, Assad himself was too wary of risking even a temporary surrender of his near absolute power in Syria on a transitional basis to Bakr. The Syrian president feared that Saddam could outmanoeuvre him in the interim to ultimately take control of a united state. Temporizing on Assad’s part enabled Saddam (who was similarly concerned that he might lose his power in Iraq) to formally become Iraqi president by compelling *Bakr to resign in July 1979.

(*Bakr was confined to house arrest following his resignation and died in 1982 of unknown causes).

Why Hafez Assad the Lion of Damascus was Really a Fox

Applying the dictum that ‘my enemy’s enemy is my friend’, Assad entered into an alliance-the Iranian Islamic Republic-following Iraq’s invasion of Iran in September 1980. The utility of this alliance to Syria was seen when Iranian backed militia in Beirut blow up an American army barracks in October 1983 thereby ending the Reagan administration’s attempt to help establish a Lebanon that was free of Soviet backed influence via Syrian domination. The 1983/ 1984 American retreat from Lebanon was the Soviet Union’s last major victory in the Cold War. Had the Reagan administration not given up on Lebanon, the ‘Vietnam syndrome’ may have virulently re-asserted itself to disrupt American domestic politics to the extent of undermining the United States capacity to ultimately win the Cold War.

Nevertheless, Assad shrewdly adjusted to the later decline in Soviet power. This was manifested by Syria signing the Taif Accord under Saudi auspices in 1990 when new power sharing arrangements in Lebanon were arrived at which ended over fifteen years of warfare in that nation. The subsequent re-establishment of a commercially prosperous Lebanon helped the Syrian regime to avoid domestic economic and political reforms. The presence of an estimated million guest workers (who are some of the regime’s strongest supporters) in Lebanon has also helped ease domestic economic pressures for the regime.

All the Assad regime’s shrewd domestic and international policies could not negate the fact that it had supported the ‘wrong horse’ by aligning itself so closely with the Soviet Union during the Cold War. The negative ramifications of this major error for the Assad regime were avoidable had it moved to liberalize following the ascension of Bashar Assad to the presidency after his father’s death in June 2000. Instead of liberalizing or reaching an accommodation with Israel, the regime of Bashir Assad has remained closely aligned to the Iranian Islamic Republic. This alliance has enabled Syria to continue to dominate Lebanon and help thwart potential Israeli-Palestinian reconciliation by Syria supporting the Iranian backed Hamas in the Palestinian territories.

Bashar Assad: The Dauphin Who Had Too Many Chances

The refusal of the Bashar Assad regime to take the opportunities to reform were conveyed by its probable complicity in the assassination of former Lebanese prime minister Rafik Hariri in early 2005. The subsequent ‘Cedar Revolution’ has not yet lead to an overthrow in Lebanon of pro-Damascus regimes but it has precipitated a lasting inter-community movement calling for an end of Syrian domination of Lebanon. (The inter communal civil resistance movement that the ‘Cedar Revolution’ has precipitated is similar to the nationwide peaceful resistance to the continuation of French rule in the 1940s).

A paradoxically promising aspect of Lebanese politics is that the polarizing issue of concern is that of Syria’s covert domination of the country. It is testament to the shrewdness of Syrian security agencies secretly operating in Lebanon that they have managed to co-opt Christian Maronite politicians and their parties into the pro-Syrian camp. This is a remarkable achievement when the Christian community was once a bulwark of opposition to the Syrian presence in Lebanon in the 1980s and 1990s. It is also notable that Syrian domination of Lebanon has been partly facilitated by a politically sophisticated approach of manipulating the dynamics of what is essentially a democracy.

Had the Assad regime refrained from instigating the 2005 assassination of Rafik Hariri (or at least credibly demonstrating that it was not culpable), then Syria could have avoided precipitating the ‘Cedar Revolution’ in Lebanon. But then again the Bashar Assad’s regime’s missed opportunities in Lebanon are reflective of its domestic failures to liberalize. Unusually for an *hereditary heir to an authoritarian republican regime, Bashar’s 2000 ascension to power was relatively popular. This was because Bashar’s unassuming personality was then endearing to most Syrians who believed that their new president was sufficiently open minded to undertake political reform.

(*An important reason why most Syrians were initially inclined toward Bashar was because his taciturn personality stood in marked contrast to Basil, his older brother and regime heir. Basil’s death in a car crash in 1994 resulted in the succession passing to Bashar).

There was scope for Bashar to have liberalized the regime for it to have gained sufficient political legitimacy. Syria in political science terms is a single party state as opposed to a one party state. The distinction in the Syrian context is not semantic. A one party regime is one where all power is effectively concentrated in one party so that if there are any sanctioned alternate parties their existence is at best contrived. By contrast, in a single party state, sanctioned alternate parties have a degree of autonomy that can extend to having input into public policy that actually expands the parameters of political pluralism.

There was sufficient good will toward Bashar Assad on coming to power that he could have paradoxically enhanced his prestige and personal power by having the constituent parties of the NPF electorally compete against each other. Such a development would have allowed the regime to gauge its level of support without then having to necessarily cede power. Such a political development could have put in train the emergence of new political parties that consequently accepted the legitimacy of the regime, that in the event of eventually assuming power, would not have persecuted members of the former regime.

The Bashar Assad regime’s failure to engineer a transition from a single party regime to a multi-party democracy was a missed opportunity because such a development could have revived the Syrian Peoples Party. This party was (and is) a Pan-Arab party that had inter-communal support. A revived Syrian Peoples Party, which is a dormant constituent member of the NPF, could have protected and even advanced the interests of Baathist supporters in a genuinely democratic post - Assad Syria.

As it is, the Bashar Assad regime in forfeiting the potential for democratic development has essentially bound its destiny to the Iranian republic. If the Assad regime does survive the current revolutionary upheaval due to political repression, then it will be at the expense of Syria becoming an Iranian satellite. The main utility that a Baathist Syria will be to republican Iran will be as its agent in the Arab world to disrupt the Middle East process. This will be a most unfortunate development because a Syrian democracy could be a real catalyst for a lasting peace in the Middle East.

During periodic periods of Syrian democracy, the party system was based upon regional rivalry between the capital Damascus and the nation’s largest city, Aleppo. This regional rivalry transcended ethnic and religious divisions and all might have been well had not the competing Nationalist and Peoples parties not sought to gain ascendancy over the other by having Syria unite with Arab countries that they were respectively orientated toward. Perversely, the Baath Party (which projects itself as a Pan- Arab champion) is now seeking to perpetuate its power by subordinating Syria to republican Iran.

If Syria does transition to multi-party democracy, the post-Assad party dichotomy will probably and ironically be between those who supported the Baathist regime (including constituent members of the NPF) and those who now calling for democracy. The Syrian Baathist regime by shrewdly operating a single party regime has (unless continuing repression continues to alienate residual support) established a basis of support for former regime operatives to have a power base in a future democratic Syria.

An analysis of the dynamics of contemporary Iraq would indicate, that due to the horrendous oppression of the Saddam Hussein regime ( a regime which for all its brutality had until the second Gulf War of 1991 once garnered a substantial degree of inter-communal support), that continuing Baathist support in Iraq is now only confined to Saddam’s home region of Tikrit. A similar scenario in Syria will occur if existing Sunni Muslim support for the Baathist regime is lost.

It would be incorrect to assume that support for the Assad regime is only confined to the Alawite minority. During Syria’s intermediate periods of democratic rule, the Baath Party garnered strong electoral support in the Aleppo region which included Sunni Muslim votes. Consequently, Hafez Assad in power needed the support of Sunni Muslim army officers to remain in power.

To solidify his power, Hafez Assad devised an elaborate set of procedures that virtually made it impossible to launch a military coup. The late president’s diabolical mind devised a bewildering array of security agencies and financial concerns that placed him in a position of indispensability. Bashar Assad’s major achievement since assuming office has been to ensure the continuing operation of this elaborate system of power.

Can Family Clan Conflict Lead to Democracy?

The riddle of how Bashar Assad has remained in power is probably related to the grudging support that he receives from his exiled uncle, General Rifaat Assad. The president’s uncle maintains the Alawite component of the regime. Under the rule of Hafez Assad, Alawite-dominated security forces called ‘Defence Companies’ were established and commanded by Rifaat. Their brutality was chillingly manifested when they crushed a revolt in the predominately Sunni city of Hama in February 1982. It was estimated that between 5000 and 20,000 Hama resident were massacred!

The crushing of the Hama revolt did not precipitate a coup by Sunni Muslim officers because the procedures for troop movements that were in place safeguarded against such an occurrence. But when Hafez Assad apparently had a heart attack in late 1983, Sunni army officers galvanized to block Rifaat’s succession to the presidency. Had these officers launched a coup, Syria probably would have been plunged into civil war due to the logistical strength of Rifaat’s Defence Companies. As a compromise, Rifaat was obliged in 1984 to go into exile in Europe from where he has since maintained his influence.

The overall contemporary situation in Syria is essentially one of a regime based on diverse self-interests galvanizing to crush internal dissent. It would only take one of the major self-interested factions to withdraw its support for the regime to fall. But, for this to happen, there would have to be assurances of post political accommodation in a democratic Syria.

The Rifaat faction would be the most obvious candidate to withdraw its support for the Bashar Assad regime. Rifaat has considerable financial interests in Syria, links to the security forces and his own internal Baath Party faction whose support now extends to non-Alawites. This Baathist faction could continue on in a post-Bashar Syria as a political party. Most importantly, Rifaat has strategic links to King Abdullah of Jordan that could help Syria to remain an influential (but potentially positive) dynamic in relation to the Middle East process instead of a satellite of republican Iran.

Due to his notoriety, it is improbable that Rifaat could permanently return to a democratic Syria. However, Rifaat is vicariously maintaining his influence from abroad and has the requisite political skill to potentially continue to do so in a future democratic Syria. This could occur if Rifaat supports a military coup that produces a credible successor provisional government that enables his supporters (encompassing supporters of his ousted nephew) to participate in democratic elections in which they would probably garner a substantial vote. Unless Rifaat supports a military coup, his nephew will paradoxically consolidate his power in further subordination to republican Iran.

The current domestic situation in Syria is fluid and dangerous. The international community is acting appropriately by strongly denouncing the Bashar Assad regime and imposing sanctions. International military intervention would probably precipitate Iranian military intervention in Syria and such a development would have broader implications for the Middle East. Nevertheless, the international community must, in the context of the current Syrian crisis, look to supporting Turkey, Jordan and a now democratic Iraq in collectively opposing Iranian designs on Syria.

Afghanistan: He Who Exits Well, Wins

The major foreign policy challenge that confronts the Obama administration is a bellicose Iran. President Obama has previously said that, if the United States is going to commit to military intervention, this would be done in pursuit of defined political and military objectives that are clearly in the American national interest. The president has therefore been prudent in relation to Afghanistan. Although American military chiefs were probably keen to launch a military surge operation in Afghanistan similar to that which was successfully undertaken in Iraq, the president has refused to do so. This is probably wise because the major challenge in Afghanistan is political rather than military.

With regard to Afghanistan, it is often forgotten that the Soviets adroitly disengaged from the county. The Soviet objective of militarily subduing Afghanistan failed after nearly ten years (1979 to 1989) of military occupation. But when the Soviets did withdraw, they had devised and implemented military supply arrangements that allowed the regime of the brilliant but cruel Mohammad Najibullah to survive. Even with the collapse of Soviet power in Eastern Europe in 1989, the Najibullah regime (which fell in February 1992) probably would have survived had the Soviet Union not broken up at the end of 1991.

For Najibullah’s sake, it was a pity that during his period of unexpected political ascendancy, he did not reconcile with Afghanistan’s revered exiled king, His Majesty Mohammed Zahir Shah. The return of King Zahir Shah between 1989 and 1991 to lead a provisional government would have provided Afghanistan with the best opportunity to avoid further war and have democratic elections in which the former communist *National People’s Democratic Party (NPDP) or Homeland Party as it was later known, participated in democratic elections. It was particularly disappointing that Najibullah did not make way for His Majesty because the monarchist National Salvation Society that was formed to administer a provisional government represented the best and brightest of Afghan society.

(*For all the excesses of the communist regime, its senior ministers demonstrated courage for refusing the opportunity to flee abroad prior to Kabul’s liberation in February 1992).

It is also a tragedy that, following the American led liberation of Afghanistan in 2001, that the provisional government that was installed did not allow the Afghan people to decide if they desired a reinstatement of a constitutional monarchy. The provisional government was based on the so-called ‘Rome Group’ which was made up of exiled Afghans who remained loyal to His Majesty Zahir Shah who was domiciled in Rome following his treacherous deposition in 1973 by his cousin Mohammed Daoud who declared an Afghan republic! It was as the nominee of the Rome Group that the Americans installed Hamid Karzai as provisional president of Afghanistan in 2001.

The Karzai government did represent the interests of the Rome Group in that it forewent the opportunity (that popular opinion) afforded to establish a constitutional democratic monarchy by instead engineering the establishment of an executive presidential republic! This was done so that members of the Rome Group (including members of the Afghan royal family) could enrich themselves while the going was good. To ‘hedge its bets’, the Karzai government has maintained covert links with the Taliban in case they should prevail following the final withdrawal of NATO troops in 2012.

The key to maintaining a viable potentially free Afghanistan will (as it did with regard to the Soviet support for Najibullah) depend on American support for the Kabul government following the final NATO military withdrawal from that nation. The recent nomination of General David Petraeus as CIA Director augurs well not only for the future of Afghanistan but for democratic interests across the world. General Petraeus’s 2007 military ‘surge campaign’ in Iraq undoubtedly broke the back of the Al-Qaeda terrorist insurgency.

Although General Petraeus wanted to undertake a ‘military surge’ operation in Afghanistan, contemporary American domestic political and economic factors were probably not conducive to such a military campaign. The success or otherwise of such a campaign would have ultimately been dependent upon the Afghan domestic political situation which under Karzai is unpromising to say the least.

If General Petraeus is confirmed as CIA Director, he will hopefully apply his skills to helping support a bolstering of democratic interests in Afghanistan. History has shown (such as in El Salvador in the 1980s with regard to Jose Napoleon Duarte) that when the CIA supports intelligent democrats that political regimes are established which can withstand undemocratic subversion. This political aspect of political struggle in relation to the CIA helping facilitate and maintain democratic governments around the world, particularly in the Middle East, will determine global well-being.

Iran: Abusing ‘Power-With’ to Achieve ‘Power-Over’

The Obama administration is demonstrating intelligent prudence in the conduct of its foreign policy. As previously mentioned, the major challenge that confronts the United States is that of republican Iran. The genuine ideological dimension of the Iranian regime is its anti-Americanism. This is because the Iranian regime is a rent- seeking one whose dictatorial power is sustained by an over-dependence on oil. Through state revenue raised from oil sales, republican Iran has allocated resources to its military and less well off Iranians to maintain their support.

It is due to the support of the armed forces, security forces (in the form of the Revolutionary Guards) and from poorer Iranians that the regime of Mahmoud Ahmadinejad withstood the 2009 ‘Green Revolution’. Normally when regimes withstand popular uprisings, there is diminished capacity so that when the next revolutionary outburst occurs, regime change is precipitated. This will probably not be the case in Iran because the abortive ‘Green Revolution’ has solidified an alliance between the military and poorer Iranians that support the Ahmadinejad regime which probably has a committed support base of 30% of the population.

A major problem that the United States has had with regard to engaging with Iran has been to misread actual power dynamics. An important reason why the Ayatollah Khomeini came to power in February 1979 was because he successfully assembled a broad coalition based on respect for him as a religious leader. This support was reflected in the governments that he initially appointed which helped Khomeini maintain a distance from the formal exercise of executive power.

The above stratagem of Khomeini’s was illustrated when Iranian university students seized the American embassy in November 1979. The Iranian prime minister at the time, Mehdi Bazargan, genuinely opposed the embassy seizure but was incapable of controlling the situation and thereby obliged to resign. But, due to apparent diversity within the Iranian regime, foreign governments often negotiated with supposedly ‘moderate’ elements only to find that they had no real power or were not really moderate.

The most notorious example of misunderstanding Iranian domestic power relations was the Reagan administration’s foolish attempt to engage Iran in 1986 which led to the Iran-Contra affair. Not only have foreigners been gulled but so too have Iranians. Mohammad Khatami served as president from 1997 to 2005 but there was no power shift to the Iranian people. Even had Khatami’s supporter, Mir Hossein Mousavi, not had the election rigged against him in 2009 in favour of ‘President’ Ahmadinejad, it is unclear has to how much power he (Mousavi) really would have exercised. It is not too fanciful to speculate that former national leaders, such as Khatami, Mousavi and Hashemi Rafsanjani, are still covertly aligned to the regime, despite their declared allegiance to the Green movement.

Due to the close links between the military/ security forces and the Ahmadinejad faction, there can be no realistic prospect for a ‘win-win’ scenario between the Iranian republic and United States. There is no dividend for the Iranian republic to arrive at an agreement concerning its probable nuclear weapons program due to the domestic political power of the Iranian military. The Iranian republic has forged close relations with Hugo Chavez’s rent-seeking regime in Venezuela and is cultivating links with hard-line elements within the PRC and to Russian politicians who oppose further political reform. These international links are bounded by anti-Americanism so that the scope for economic diversity and potential political liberalization can be minimized.

The Real Paper Tigers are Dictators

On a visit to Iran in May 2001, then Cuban dictator Fidel Castro denounced the United States as a ‘paper tiger’ and heralded an alliance between Iran, Cuba and Venezuela as the way of the future. However, it is regimes, such as communist Cuba, that are the real ‘paper tigers’. If there were free elections in Cuba and Iran, the present incumbents in those countries would undoubtedly be voted out of office. Indeed, if it was not for the effectiveness of the secret police in Cuba and Iran, the regimes in those countries would fall. Due to the weakness of these regimes, the weakening of American power and influence in the world is an important foreign policy objective so as to retain their own viability.

With regard to Venezuela, the regime of Hugo Chavez is semi-authoritarian as opposed to it being a full dictatorship. But the Chavez regime is uncannily similar to the Ahmadinejad regime in Iran in that its domestic viability is based on control of oil revenue. Venezuela’s 1958 revolution did bring about socio-economic change in that the nation’s oil revenue was more equitably distributed. The only problem was that the nation’s middle class benefited from oil generated revenue at the expense of the peasantry and workers.

Discontent with inequitable wealth distribution precipitated the then Colonel Chavez’s attempted coup in 1992. Although this coup failed, Chavez became a folk hero to millions of poor Venezuelans such that (with campaign advice from Fidel Castro) he was elected president of Venezuela in November 1998. Through cynically manipulating a theatrical coup attempt in 2002 which resulted in hundreds of thousands of Venezuelans rallying for his release, Chavez came to a cynical arrangement with the nation’s elite concerning the division of oil production. As a result of this deal (and with Cuban technical assistance), Chavez has gained exclusive control over part of the nation’s oil production.

Using the post -2002 acquired-oil-revenue, Chavez has been able to distribute patronage to consolidate a grassroots political network that has helped him maintain majority support. But the opportunities for real socio-economic change such as land reform have been neglected as Chavez’s major energies have been devoted to securing oil sales. The fact that part of the nation’s oil revenue is controlled by the traditional elite has probably helped Venezuela maintain access to international buyers and prevented a coup. In the mean time, a viable middle class is being squeezed and the long term position of the working class is being undermined due to the contraction of the non-oil sector.

Chavez oil revenue is currently financing the election of avowedly left wing governments across South America. But these regimes are following a pattern of manipulating class conflict to entrench themselves in power. The support bases that these regimes have such-as Daniel Ortega’s in Nicaragua-are too dependent upon oil revenue from Venezuela. Ortega (who has already removed the constitutional restriction on seeking re –election) is utilizing aid from Chavez to entrench his support base amongst a substantial section of Nicaragua’s poor and to potentially expand it.

In keeping with past practice, Ortega is also operating in covert alliance with an elite- that was once aligned to the corrupt Somoza family-to economically and politically dominate his nation. The established Ortega approach (which goes back to before Chavez first came to power) is now being used in other South American countries, such as Bolivia, by avowedly left wing governments. Utilizing oil aid from Venezuela, Cuban/ Chavez backed regimes in South America are distributing aid to deepen class divisions to remain in power to perpetuate a power-over approach.

It is interesting to observe and analyse PRC SOEs in Chavez backed South American regimes gaining access to natural resources through unequal trading arrangements. As in the Australian context, trading relations in South American countries are being organised to configure new domestic elites whose strength and viability is secured by foreign trade relations with the PRC that are conducive to rent-seeking.

The American Debt Crisis

What is truly alarming about a neo-mercantile PRC moving in on countries such as Australia is that this is occurring against the backdrop of the American debt crisis. There is a widespread belief (which may be reflective more of wishful thinking) that the impending urgency of the August the 2nd deadline will avert a financial catastrophe. That this may not be the case can be borne out by reference to recent shifts in American politics.

The most recent shift in American politics has been the emergence of the so-called Tea Party following the 2008 presidential elections. The election of Barack Obama as the first African American president was historic but so was Sarah Palin’s vice-presidential candidacy as John Cain’s running mate. Palin’s candidacy was not only historic because of her gender*but because it laid the necessary groundwork for the subsequent emergence of the so-called ‘Tea Party’.

(* The first female vice-presidential candidacy on a major party presidential ticket was that of Geraldine Ferraro as Walter Mondale’s running mate in the 1984 elections. Ms. Ferraro’s vice-presidential candidacy was historic but the Mondale-Ferraro Democratic Party presidential ticket, despite initial excitement, never had a realistic chance of defeating Ronald Reagan’s re-election.).

Since the 2008 presidential election, the ‘Tea Party’ has gained considerable if not determining power within the Republican Party. It is possible that Republican congressmen and senators associated with the so-called Tea Party or susceptible to the influence of this populist network will not agree to raise the borrowing /debt ceiling by the August 2nd deadline. The motivation for such a terrible policy direction is probably derived from a determination to destroy the American welfare system and, in doing so permanently re-shape American politics to the extent of extinguishing the ‘American Dream’.

Defaulting on the American Dream?

The United States is probably the most amazing nation in history because the American Dream has endowed its people with a patriotic belief that they are privileged to belong to a great nation. The American Dream was arguably embodied most vividly in one of the nation’s founding fathers, Benjamin Franklin (1705 to 1790). Mr. Franklin was a scientific, philosophical, political and diplomatic genius. Many of his ideas still affect contemporary life around the world, e.g. the public library was Benjamin Franklin’s idea. Benjamin Franklin’s life was testament to the power of the American concept of voluntarism in which people apply their ideas to make incredible positive change.

The ethos of voluntarism helped open the United States’ West up to European settlement in the nineteenth century and underpinned the magic of the Hollywood movie studios since the early twentieth century. A potential gap with regard to voluntarism has been that the role of the state has sometimes being missing in action in relation to helping those who are less well off.

An incredible legacy of the American New Deal of President Franklin Delano Roosevelt (1933 to 1945) was that he basically invoked the power of the American Dream to galvanize a cross section of society to help the American state (i.e. American federal bureaucracy) to alleviate the poverty and hopelessness of the Great Depression. This public spiritedness carried through to the United States’ entry into the Second World War in 1941 to ensure victory over the Axis forces.

With the onset of the Cold War following the Second World War, American public commitment did at times waver with regard to resisting the Soviet Union due to the onset of the neo-isolationist Vietnam Syndrome. However, by confronting Soviet expansionism in the 1980s by a nuclear armaments drive, aiding anti-communist guerrillas in the Third World (‘the Reagan Doctrine’) and supporting democracy around the world, the United States helped lead the struggle to fatally undermine the Soviet system. Ironically, it was the Russian people themselves who took the lead in August 1991 of taking their country out of the Soviet Union by the end of that year.

Therefore, in times of crisis or uncertainty, Americans look toward leaders to inspire them with the ‘American Dream’. It was for that reason that, when members of the Roosevelt family met with President Reagan in the 1980s, he was truly incredulous when they accused him of betraying President Roosevelt’s (FDR) New Deal legacy. For Ronald Reagan, FDR was still an inspirational figure and, to his way of thinking, he was following in the late president’s footsteps by reinvigorating the American Dream but in a way that he considered appropriate to changed times.

For all the mystique of the American Dream, this ethos works its miracles when the United States’ economic and social systems are aligned to reality. This cannot be said to be the current context. In the 1980s and into the 1990s, Republicans and Democrats clashed over the related issues of the budget deficit and taxation policies. To Democrats, the deficit was so high that it was a threat to the United States economic viability while, for the Republicans, tax cuts had spurred massive non-inflationary growth by bolstering the power of the market.

It is counter-productive to evaluate which interpretation was correct because bi-partisan co-operation between Democrat president, Bill Clinton and Republican House Speaker Newton (‘Newt’) Gingrich between 1994 and 1998 reined in the budget deficit and generated high economic growth rates conducive to high employment. Opinions may differ as to whether it was the Republican Congress led by Speaker Gingrich or President Clinton who engineered the economic recovery. But the fact is, that without bi-partisan co-operation in the 1990s, there could have been no amazing American economic recovery or vastly improved fiscal settings as manifested by the United States’ paying off its budget deficit.

To help ensure that the gains of higher economic growth were extended to those who well less well off, the Clinton administration liberalized lending of mortgage borrowing to recipients who would later be challenged to finance their home loans if they were called in. This inherent structural weakness within the finance sector was not addressed during the Presidency of George Herbert Walker Bush ( 2001 to 2009) until the Global Financial Crisis (GFC) hit the world in September 2008.

Although it is useless ‘crying over spilt milk’, a successful John Mc Cain / Newt Gingrich presidential ticket in 2000 would have done the United States and world wonders. Mc Cain would have ensured that the United States advanced the cause of freedom and democracy around the world while a Vice-President Gingrich could have attended to important technical economic aspects of ensuring the credit worthiness of American banks and their lending practices. A Democrat controlled House of Representatives with Nancy Pelosi as Speaker during a hypothetical Mc Cain/Gingrich era would have helped protect the interests of the economically vulnerable.

President Obama’s Government of Rivals: ‘Power-With’ and ‘Power Over’ To Achieve A ‘Win-Win’ Outcomes

Due to the discontent and uncertainty that was apparent in American society, Barack Obama’s presidential candidacy in 2008 hit the correct chord by virtually invoking the American Dream by offering ‘change we can believe in’ The administration that President Obama assembled is very competent. Similar to President Abraham Lincoln in the 1860s, President Obama has appointed a government of rivals in which different ideological perspectives are adroitly synthesized to achieve power with outcomes while the president has judiciously invoked a power-over approach when necessary to enforce his authority.

For all his sterling rhetoric, President Obama has been relentlessly practical in achieving most of his policies by having a ‘government of rivals’. This was evidenced in foreign affairs and defence when Defence Secretary Robert Gates from the Bush administration was retained to provide the necessary continuity that was needed to meet the formidable challenges in Afghanistan and Iraq. The recent appointment of Leon Panetta, a noted liberal Democrat, as Defence Secretary upon Robert Gates’ retirement will placate President Obama’s base while ensuring that continued progress will be made by having the Afghanis and Iraqis assume overall responsibility for their security interests.

Secretary of Defence Panetta will probably achieve the tasks that he has set in relation to substantially scaling back in Afghanistan and Iraq out due to his recent term as Central Intelligence Agency (CIA) Director expanding his power base within the defence and national security establishment. The previously cited nomination of General Petraeus as the next CIA Director provides the potential to utilize intelligence capacity to support a political approach (such as instigating regime change) to solving international problems as opposed to a military one because the American public is probably now too weary of overseas military commitments.

President Obama’s appointment of Hillary Clinton as Secretary of State is probably the most glaring example of the ‘Lincolnesque’ government-of-rivals approach. Despite their intense battle for the 2008 Democratic Party nomination, the president and secretary of state seem to work well together. Secretary of State Clinton has supported the United States scaling back on American overseas military commitments while striving to ensure the promotion of human rights and democracy around the world.

Libya: Victory is Achieved When There is a Transition to Democracy

The above policy balance that the secretary of state is pursuing has clearly been manifested in Libya where the United States is giving necessary support to France and Great Britain in providing air cover and military aid to the Libyan freedom fighters. The recent recognition of the rebel Transitional Executive as Libya’s government by the United State probably reflects Mrs. Clinton’s determination that success in Libya be measured by the achievement of Libyan democracy.

That the Libyan rebel freedom fighters have not made more military progress is disappointing. However, if political dynamics are in place for the formation of a reputable future provisional government being backed up by an international force (preferably an African Union contingent led by South Africa), then why should more blood be unnecessarily shed? The overriding purpose of a future provisional government should ‘to hold the fort’ so that democratic elections can be held with power subsequently been passed to an elected government.

The National Transitional Council of Libya should disband if the Qaddafi regime makes way for a provisional government. The transitional council had no right to unilaterally declare Libya a republic. It should not be forgotten that King Idris dedicated his life to bringing independence to his people. Instead of clinging to power (as Colonel Qaddafi has done), His Majesty in attempting to abdicate unwittingly created the necessary power vacuum for Qaddafi to stage his 1969 coup. For the sake of the legitimacy of a future democracy, the Libyan people should have the right to decide on whether or not to reinstate a constitutional monarchy (which at the time of the 1969 coup was then the most democratic in the Arab world).

If the Libyan people were to consent to the re-establishment of a constitutional monarchy, this could serve as a model for Gulf monarchies such as Bahrain’s to make the transition from being oil based family rent-seeking dictatorships to democratic monarchies that safeguard the national good. Furthermore, due to Libya’s geographic location, a transition to democracy would not only benefit the Arab world but have the most important positive political development for the African continent since the end of Apartheid in South Africa in 1994.

(South Africa’s consolidation as a democracy was probably due to the inspirational leadership of Nelson Mandela as president between 1994 to 1999. President Mandela actually defied the pattern of leadership failure that comes when liberation fighters finally achieve power by utilizing his personal integrity to engineer national unity).

Iran: Abusing ‘Power With’ to Achieve ‘Power-Over’

The importance of gaining international support to achieve positive outcomes (as is hopefully occurring in Libya) will have to be undertaken in stopping the Iranian republic’s nuclear armament ambitions. The United States in eventually confronting the republican regime’s covert nuclear armament programme will not necessarily have to engineer regime change. But a ‘red line’ approach will be needed in which the United States plausibly threatens concerted military action unless the Tehran regime’s nuclear programme is verifiably abandoned*.

(*International military action against the Iranian regime should be undertaken to stop its nuclear armament capacity and as such regime change should not be a specific pre-existing stated American policy objective. However, it should not be forgotten that the Tehran regime’s durability is due to it having the stalwart support of 30% of the population and the support of the military.

By distributing patronage derived from oil revenue, the regime has gained the strong support of many of Iran’s less well off. As a result, the military backed Ahmadinejad government (which has strong, if misplaced, working class support) can instigate extensive counter demonstrations against the ‘Green movement’ to maintain the repressive status-quo that is based upon a disproportionate reliance upon oil revenue.

The emergence of a genuinely democratic Iran would benefit the world greatly. Iran has a highly educated middle class as well as a commercially minded merchant class that is constrained by the regime’s oil dependence and diversion of resources (which includes outstanding scientific talent) to bolstering military capacity. The only really positive achievement of the republican regime has been that it engendered a sense of working class consciousness that could be parlayed in a future democratic Iran into supporting a social democratic party that could utilize Iran’s oil wealth to facilitate economic diversification, a genuine welfare state and a pluralist industrial relations system).

The United States in confronting republican Iran will need a wide array of international allies. Therefore, the conveying by the Obama administration of the conditions upon which the United States will resort to military action against republican Iran’s nuclear armament program will have to be clear and unequivocal. The enunciation of clear guidelines and expectations in advance to republican Iran by the United States offers the best prospects of assembling an international coalition that will, if need be, take concerted military action to stop Iran’s nuclear armament programme.

If nations are to join an international military coalition against republican Iran’s nuclear programme, they will need to know on what basis they would be committing to such an alliance. Furthermore, the transmission of clear objectives by Washington will give the Tehran regime every chance to comply with international expectations and possible deadlines. Going by previous experience, it is improbable that the Tehran regime will not be inclined toward a win-win scenario in relation to negotiating a verifiable international nuclear compliance agreement.

The respective experiences that the Carter and Reagan administrations suffered from trying to engage republican Iran should serve as a warning to any White House administration that trusts in the Tehran regime’s good faith. Similar to North Vietnam during the Vietnam War, the Iranian regime carefully monitors Washington domestic politics to engineer internal discord that incapacitates the exercise of American power. An American bi-partisan commitment to ensuring that republican Iran dismantles its nuclear armaments program will undermine one of the Tehran regime’s assumptions that it can ignore international norms – e.g. that it could engineer an incapacitation of American power. .

Fiscal Reform We Can Believe In?

If any American president could garner the domestic and international unity needed to ensure that republican Iran complies with an internationally verified abandonment of its nuclear weapons programme, it is President Barrack Obama. But the major problem that confronts the president is that of lifting the debt ceiling limit by the August 2nd 2011. As articulate as President Obama is, he will unfortunately probably not be able to persuade Republican congressmen to lift the debt limit ceiling by the August 2nd 2011 deadline. This is because, as previously mentioned, there is an agenda on the part of the big business corporate backers of the ‘Tea Party’ to overturn the United States’ social welfare system.

The colossal economic and social dislocation that will be caused by a failure to raise the debt limit ceiling will not only destroy the American social security system and imperil America’s financial system but that of the world ! Already, American Republican Congressmen are positioning to ensure that there will be no shutdown of government which was previously happened due to gridlock between the executive and legislative branches of government. But the very dangerous dimension which confronts the United States and the world is that the American government will default on its Treasury bonds.

A default on American Treasury bonds will fatally disrupt the global financial system if debts are called in which the American government cannot pay. The United States government does not have the PRC capacity to write off the debts of Chinese provincial governments. The PRC’s economic fundamentals will be challenged by a default because too much Chinese regime money is in American Treasury bonds. If an American default occurs, then the *PRC will continue with its mercantile economic and trade policies but with a more coercive approach to acquiring natural resources from its trading partners by political means through exploiting domestic structural weaknesses.

(*For Australia, an end to the ‘China mining boom’ will have catastrophic socio-economic consequences).

An important ramification of an American default on PRC domestic policies would be to discourage a re-configuration of political and economic structures away from a Leninist power-over approach. The dangerous limitations of the power-over approach are such that a nation’s eggs are too often placed in one basket so that there is an insufficient fall back position.

The immediacy of the default crisis is such that the focus should now be on the dynamics of American domestic policy. With the benefit of hindsight, President Obama should not have pursued his possibly laudable health care reform agenda when he did because doing so galvanized a voting base that precipitated the rise of the ‘Tea Party’ and enabled the Republican to win the November 2010 congressional elections. Republican congressional majorities are not inherently detrimental developments but, in the context of the American ‘Tea Party,*’ the consequences for the United States and for the world are now potentially catastrophic.

(*The ‘American Tea Party’ is illustrative of the dangers of how, in a globalized economic environment, extremist political forces can potentially overturn an economic system. In the United States, the extremist political force is from the far right in the form of the ‘Tea Party’ while in Australia the threat comes from the far left in the form of the rent-seeking Greens).

With the benefit of hindsight, President Obama should have refrained from pursuing health care reform until the underlying factors that had caused the GFC had been addressed. The appointment of a ‘Gingrich Republican’ as Treasury Secretary would have been a brilliant exercise in a ‘government of rivals’ /power-with approach that President Obama is so adept at.

The paradoxical problem with Timothy Geithner’s appointment as Treasury Secretary was that it had more or less bi-partisan support! Political dynamics have so fundamentally changed due to the recent success of the ‘Tea Party’ that the eminently sensible policy positions of Secretary Geithner are untenable. Had a ‘Gingrich Republican’ been appointed as Treasury Secretary, the scope could have been there to reform the banking and Savings and Loans sectors of the American economy in a way that transcended the traditional Democrat and Republican divide concerning the tax and spend debate. Such a development could have circumvented the emergence of the ‘Tea Party’.

A House which Defaults Against Itself Cannot Stand

Had Nancy Pelosi still been serving as House of Representatives Speaker, banking/ finance reform devised by a ‘Gingrich Republican’ Treasury Secretary could have been passed by Congress without violating core Democratic Party principles. Instead, Congresswoman Pelosi is now defending the rights of American employees and unions against a bellicose American Congress that is pursuing a Lasch strategy that seeks to engender working class hostility toward organised union labour.

Strategists associated with the Tea Party’ may think that they can successfully apply a Lasch strategy of impoverishing millions of Americans, unfairly blame the Democrats and subsequently gain the support of those that they had previously harmed. The more probable scenario will be that millions of disadvantaged, if not destitute, Americans will give their support to a destructive left wing social movement. The United States now awaits the emergence of a far left version of the ‘Tea Party’.

President Richard Nixon said in relation to the Vietnam War, that the United States of America was the only country that could defeat the United States in that war. Now, the situation is that the United Stated is in a position that the Soviet Union was never able to achieve during the Cold War – destroying the international capitalist system! For Marxists who might revel in the impending collapse of the capitalist system, they should realize that their ideological perspective cannot economically redeem the world but rather offer an approach of creating power-over structures derived from adverse social change which will ultimately generate more misery.

The really frustrating dimension to the current debt ceiling default/crisis is that it is imperilling the capitalist economic system which is inherently viable. In times of crisis, synthesis between a power-over and a power with-approach can validate the maxim that problems can give rise to ideas that lead to enhanced beneficial outcomes. At this critical juncture, it is not necessary to canvass potentially brilliant ideas. Rather, now is the time to adopt a Japanese Gestalt approach of discerning from the different ‘stakeholders’ what the actual issues at stake are to consequently expeditiously move to a short term power-over approach that takes the world out the immediate fatal danger zone that it is in.

A practical application of the above scenario would be for moderate congressional and Senate Republicans (such as East Coast Republicans) to ‘bite the bullet’ to pass taxation increases which are needed for the United States to honour its Treasury bonds and lift the debt borrowing limit ceiling to ensure the short to medium term viability of the international banking system.

The partisan Republican perspective that the high unemployment rate (which is currently over 10%) can be addressed by taxation cuts can be countered by understanding that, unless tax increases are granted to underpin the American government’s credit worthiness, unemployment could soon soar to levels of between 20 % and 30 %! The social and political polarization that will ensue will potentially fatally weaken the unique American capacity to overcome seemingly intractable problems.

There is no worse a crisis than a self-inflicted one that is avoidable. This is because such crises are usually engineered by a party that has a vested interest in engineering a win-lose/ power–over scenario which invariably leads to a ‘lose-lose’ scenario for all concerned. The powers backing the ‘Tea Party’ in the United States should take this probable scenario into account.

When (it is too terrible to contemplate writing ‘if’) the United States saves itself and the world from the financial catastrophe of an international financial meltdown by the American Congress lifting the debt limit ceiling and applying necessary taxes, the Democrats and Republicans can resume their tax and spend debate. The Republicans, with their congressional majority can later pursue a future tax cut agenda if the United States’ credit worthiness is secured. Indeed, congressional Republicans should use the power to secure national credit worthiness as an end in itself so that the United States will the continue to the have capacity to determine its future economic destiny.

The crisis that the United States now faces validates the point that powerful countries secure their viability when their internal regimes (‘regimes’ in this context does not refer to a government) are sound. This maxim can also be applied in relation to American foreign policy promoting democracy by highlighting the potential benefits to those who are in power.

Why a Spat over the Spratlys Should be Avoided At All Costs

American foreign policy would be well served if the United States was to avoid going into supporting any military alliances against the PRC. Currently there is tension between the PRC and Vietnam, the Philippines and Malaysia concerning sovereignty over the probably island rich Spratly Islands (which are really reefs) which could result in the United States supporting an anti-PRC military alliance.

United States support for an anti-PRC military alliance would ultimately serve to bolster Leninist power-over political structures that will, among a number of varied consequences, serve to retard PRC SOEs becoming respected businesses that are vital to the effective operation of the global economy. As indicated by the success of the PRC’s subsequent adoption of the ‘Four Modernizations’-following the 1979 Sino-Soviet War and re-launch of market reforms in early 1992 following the 1991 implosion of the Soviet Union-the possession of economic power and internal cohesion is the determinant of Chinese world power.

In relation to the Spratly Islands, the PRC made one of its worst foreign policy mistakes when PLA troops expelled a South Vietnamese garrison from the islands in January 1974. This was a strategic blunder because a military desperate South Vietnam was prepared to enter an alliance with Peking to stop an impending North Vietnamese conquest. Instead, Hanoi’s over-running of South Vietnam in 1975 allowed the Vietnamese communist regime to enter into alliance with Moscow which, if it was not for internal Soviet weaknesses, might still have the PRC at a strategic disadvantage today.

If the United States was to enter into a military invasion against the PRC that included communist Vietnam, this would only serve to reinforce the power of the Le Duc Tho faction (named after the last Hanoi strategist who masterminded war time strategy following Ho Chi Minh’s death in 1969) of the ruling Vietnamese Communist Party. This faction from the time of the Democratic Republic’s (DRV) proclamation in 1945 has always exploited (even if it concealed its) traditional Vietnamese wariness toward China to perpetuate its power which includes a reliance upon a powerful military.

A Warning from History: The Tragedy of Klemens Metternich and the Metternich System

Probably the most tragic figure in history who destroyed everything he sought to build by pursing a strategic balancing of power interests was Prince Klemens Metternich (1773 to 1859). Prince Metternich was a very intelligent man. Having served as Austrian ambassador to Prussia, he realized that an alliance with a militarized state would threaten the long term viability of the Hapsburg empire.

After Austria was irredeemably reduced to a second rate military power following its defeat by Napoleonic France in 1809, Prince Metternich, who had previously served as Austrian ambassador to the Court of Napoleon I, subsequently arranged the 1810 marriage of Emperor Francis’s daughter Archduchess Marie Louise to Napoleon I. When Napoleon I was defeated in 1814 by a coalition composed of Russia, Prussia and Austria (which was reluctant participant), Prince Metternich very reluctantly acquiesced to the reinstatement of the Bourbon dynasty in France. The Bourbons owed their return due to the insistence of Prussia and Russia whom Prince Metternich loathed.

Prince Metternich had preferred France be ruled by Archduchess Marie Louise as Regent Empress for her son Napoleon II. Such a development would have constituted a virtual substitution of the Bourbon dynasty by the Hapsburg dynasty which, until the French Revolutionary wars, were arch-rivals. A successful Marie Louise *regency would have given Austria a powerful ally in Europe. Hapsburg acceptance of a Bonapartist France would have helped ensure peace in Europe. The benefit of a Bonapartist/ Hapsburg France was that it would have helped provide Metternich with a capacity to undertake political reform in the Austrian Empire that was needed to secure its survival.

(* A successful Marie Louise regency was a distinct possibility because Her Imperial Majesty could have retained her husband’s capable advisors with whom she worked well when she ruled France during Napoleon I’s absences at the battlefield. The only really strong policy that Empress Marie Louise advocated and worked toward was cordial relations between France and Austria).

The promise of Bonapartism was that if offered a way of synthesising the liberal ideals of the French Revolution with the legitimatist principles of hereditary monarchy to facilitate what is now regarded as constitutional monarchy. Prince Metternich’s attempts to foster Bonapartist liberalism in Europe led him to support the admission of France at the Congress of Vienna (September 1814 to June 1815) as an equal power with Prussia, Russia and Great Britain.

Prince Metternich’s paradoxical advocacy of France’s participation at the Congress of Vienna led to the further irony that the chief French diplomat at the Congress, Charles Talleyrand, supported Prussia and Russia against liberal reform that would have been conducive to lasting constitutional monarchy in Europe. To Prince Metternich’s credit, he saved the German kingdom of Saxony from Prussian annexation.

Prussian hostility toward Saxony went back to this kingdom’s alliance with Poland. Similar to the Nazi German/ Soviet Partition of Poland of 1939, the ‘final’ partition’ of Poland in 1795 was precipitated by Austro, Prussian and Russian hostility toward the Polish kingdom. This combined hostility toward Poland was due to Poland’s adoption of the world’s second written constitution in 1791 that secured a *Saxon hereditary constitutional monarchy. The adoption of the 1791 Constitution ended the inherent weakness of the ‘Polish Royal Republic’ that was dominated by selfish nobles while consolidating Poland’s alliance with Saxony to counter the Prussian threat.

(*The Saxon Embassy in Warsaw, as a matter of principle, initially refused to close so as to denote Saxony’s continued recognition of Polish independence).

In a further historic irony, Austro-Hungarian, German and Russian control of portions of Poland by the twentieth century prevented these empires from fully democratizing, thereby contributing to the outbreak of the First World War in 1914. Ironically, had these three empires not all been destroyed by 1918, then Poland could not have regained her independence that year.

Prince Metternich advocated at the Congress of Vienna the creation of German and Italian confederations but the respective leagues that were founded were only nominal in contributing to national unity. If fact, as Prince Metternich feared, the Austrian Empire found itself in a position of propping up unpopular Hapsburg rulers in artificially created kingdoms.

Although the Austrian Emperor Francis helped Talleyrand, along with the Prussians and Russians to thwart Prince Metternich’s political agenda, His Imperial Majesty and the foreign powers were determined that the prince remain as Foreign Minster*. They appreciated Prince Metternich’s diplomatic and political skills in maintaining a balance of power approach in Europe. Indeed, between 1815 and 1848, the European powers refrained from going to war against each other due to Prince Metternich’s success in balancing power interests between European states and empires.

(*Prince Metternich was foreign minister from 1809 to 1848 and chancellor from 1821 to 1848. In the latter position Prince Metternich exercised little power as His Highness was consistently thwarted by the minister for state (i.e. interior minister) Franz Anton, Graf von Kolowrat).

The superficial European security that Prince Metternich engineered for Europe between 1815 and 1848 was known as the ‘Metternich System’. But, as Metternich himself knew, the system that was named after him was ultimately unviable because peace between monarchs and their subjects had not been achieved due to the maintenance of archaic political structures. Therefore, and very ironically, Prince Metternich found himself in a position in which there were revolutions against the so-called ‘Metternich System’, a system which he himself abhorred.

The revolutions of 1848 in Europe were tragic (as an exiled London-based Prince Metternich observed in the 1850s) because they did not lead to constitutional parliamentary monarchy. Instead a *hybrid system of constitutional non-responsible constitutional monarchy ensued in most European states. Under this system, male suffrage was granted in conceding the establishment of new national parliaments with legislative and taxation rights but without the prerogative of electing a government.

(*A hybrid approach is reflective of Mary Parker Follet’s criticism of compromise. Miss Parker maintained that compromise only temporarily reconciles different perspectives that were inherently contradictory, thereby contributing to a lose-lose scenario).

An examination of contemporary European monarchies shows that those kingdoms -(such as Denmark) which granted parliamentary rule (in which governments are elected by the parliament) in the wake of the 1848 revolutions-are still in existence today. While powers such as Prussia, (the forerunner of a future German empire) that effectively operated a system of non-responsible constitutional monarchy into the twentieth century, eventually fell because success in statecraft was measured by balance of power approaches in international relations.

The Metternich Failure Becomes the Hapsburg Tragedy

The limited success of the 1848 Revolutions led to the ouster of a statesman (Prince Metternich) who was sympathetic to these revolutions and to the ascension of an emperor who was hostile to them, Emperor Franz Joseph (1830 to 1916). When Emperor Franz Joseph died in 1916, he was Europe’s longest reining monarch and within his domains truly beloved. The love that his people had Emperor France Joseph was misplaced. This was because Emperor Franz Joseph conspicuously adapt to changing circumstances to prevent the transition to a constitutional parliamentary monarchy.

The absence of a constitutional parliamentary monarchy deprived the Austrian Empire of the necessary scope to accommodate the interests and aspirations of the different ethnic groups within such a multi-racial conglomeration. The paradox of Emperor Franz Joseph acquiescing to changed circumstances to hold off against a transition for full democracy was evident in the ‘Hungarian Compromise of 1867.

After the Austrian Empire was defeated by Prussia in the ‘Ten Weeks War of 1866’, the Emperor’s advisors negotiated a deal (‘The Historic Compromise of 1867’) with the Hungarian elite in which Hungary was given the status of a kingdom with Franz Joseph being crowned King of Hungary in 1867. By the time of his death in 1916, many Hungarians had developed such a strong sense of personal loyalty to Emperor Franz Joseph that the unity of the Austro-Hungarian Empire was substantially weakened by His Imperial Majesty’s death.

Emperor Franz Joseph’s close relations such as his wife (Empress Elizabeth) and Crown Prince Rudolph (who later apparently suicided) and his brother *Archduke Maximilian were intelligent people who realized that the Austrian Empire’s survival ultimately depended upon popular democratic internal constitutional structures being developed as opposed to relying upon military strength and external military alliances.

(*Archduke Maximilian was a political liberal to the point of being a radical. His older brother, Emperor Franz Joseph, believed that the archduke was really his half-brother as the biological son of Napoleon II. The Austrian Emperor therefore encouraged his younger and more intelligent brother to accept the newly created (or reinstated) Mexican throne in 1864. Emperor Maximilian (Maximiliano) was effectively installed as ruler of Mexico by Napoleon III. The French emperor did this not only to expand French influence in what became known as ‘Latin America’ while the United States was pre-occupied by the American Civil War but also to remove his probable cousin from Europe.

Contrary to popular belief, Emperor Maximiliano initially had a viable domestic Mexican support base in the form of the Mexican Conservative Party, which was really a league of powerful landowners, that were closely aligned to the hierarchy of the Catholic Church. The only problem was that Emperor Maximiliano was, despite being a devout Catholic, he was a radical political liberal. Mexico’s Imperial Constitution (which was never enacted as no elections were ever held under it) was then the world’s most avowedly radical. This constitution outlawed labour exploitation and proscribed the establishment of economic oligopolies.

Emperor Maximiliano immediately alienated the powerful Mexican Conservatives and the Catholic Church by refusing to return nationalized land that the Juarez government had expropriated from the Church. The Liberal Benito Juarez (Mussolini was given the Christian name of ‘Benito’ upon his birth in 1883 by his father in honour of this Mexican political leader) established a government in exile in the border town El Paso del Notre along the American-Mexican border.

Following the Union victory in the American Civil War in 1865, French troops were withdrawn from Mexico in 1867. Benito Juarez had previously spurned a proposal that Emperor Maximiliano made through the republican general, Porfirio Diaz acting as an intermediary, that he serve as prime minister under a democratic constitutional monarchy. Had Juarez taken up His Imperial Majesty’s offer, then he might have achieved the radical land reform that he espoused and full rights for indigenous Mexicans of whom he was one.

Instead, due to a deal that Juarez did with the Mexican land owning elite through Porfirio Diaz as the intermediary, Mexican Conservatives ostensibly defected to the Liberal camp-Mexican Conservatives-thereby compelling the emperor to flee to Queretaro in the south. The defection of the Conservative landowners to the Liberal camp allowed them to reconcile with their former archenemy (Juarez) so that they could dominate virtually all of Mexico’s agricultural properties.

In Queretaro, the Emperor held out for two months with the help of an Indian peasant militia before surrendering in May 1867. The following month, the Emperor was executed along with two loyal generals: Thomas Mejia, a full blooded Indian of peasant origins and Miguel Miramon, an aristocratic reactionary, who supported Emperor Maximiliano to the end due to his deep hatred of Juarez.

It is not true that the Mexican Conservatives’ collaboration with the French occupation from 1863 to 1867 destroyed them because the Mexican Conservative Party lived on in the Liberal Party of a restored President Juarez. Although Juarez and Porfirio Diaz were intense political enemies at the time of the former’s death in 1872, the groundwork was established (due to the mis-concentration of land ownership) for Porfirio Diaz to take power in 1876.

Diaz’s ‘liberal’ regime (which was really a continuation of the conservative elite that betrayed Emperor Maximiliano) had its positive achievements in relation to industrialization. However, the gross inequality of landownership and the near slavery conditions in which most indigenous Mexican peasants lived precipitated the Mexican Revolution of 1910 in which over a million people died in the following ten years of bloody political conflict with substantial but still incomplete land reform having been undertaken).

The reactionary orientation of Emperor Franz Joseph was attributed to his mother’s (Archduchess Sophie) influence. Her Imperial Highness was the leading court conservative and, as such, hated Prince Metternich whom she unfairly blamed for the death of her probable lover, Napoleon II. It was widely believed at the Imperial Court in Vienna that Napoleon II died (in 1832) from gradual arsenic poisoning as his father might have on St. Helena in 1821).

The Austro-Hungarian Emperor however believed that liberal concessions such as elected parliaments were to be endured as part of maintaining a divinely arranged ruling order. The Austro-Hungarian Empire’s fatal failure to adapt resulted in the ramifications of his estranged nephew Crown Prince Ferdinand’s regicide in Sarajevo in June 1914 precipitating the outbreak of the First World War. It is a real tragedy that Crown Prince Ferdinand was assassinated because he was a determined and far sighted man.

It was Crown Prince Ferdinand’s intention on ascending the throne to create a tripartite monarchy (a dual monarchy had been created in 1867 when Hungary was raised to the status of a kingdom) by reaching a political settlement with Slavic peoples of the empire. The creation of a tripartite Hapsburg monarchy that Crown Prince Ferdinand envisaged was to have been known as the ‘United States of Europe’ and it would have had a democratically elected federal government. The assassinations of Crown Prince Ferdinand and his wife Countess Sophie were not only a disaster in precipitating the outbreak of the First World War in 1914 but in the lost opportunity to create a federal democratic constitutional Hapsburg monarchy.

Emperor Karl and Empress Zita: Good Intentions Failed to Surmount Destructive Power-Over Structures

During the latter half of the First World War, Emperor Karl (who succeeded his great grand uncle Emperor Franz Joseph in 1916) and his wife Empress Zita attempted to make peace with the Entente. The overtures to the Allies were made by Empress Zita’s brother, Prince Sixtus of Bourbon-Parma. When these peace making attempts were revealed in 1918, the imperial couple lost any capacity to influence Austrian government policy were placed under virtual palace arrest by the army high command and estranged from their German ‘ally’.

Attempting to regain the initiative following the issuing of President Wilson’s ‘Fourteen Points’ in January 1918 calling for the recognition of national rights to self-determination in Europe-and with the faltering military position of the Central Powers- Emperor Karl moved to grant autonomy to the Slavic parts (in October) of the empire but this only provided an opportunity that was taken by them to break away to form the successor states of Poland, Czechoslovakia and the Kingdom of Yugoslavia (which adopted that formal name in 1929). Hungary declared itself an independent republic in October 1918 as did Austria the following month as a prelude to uniting with a new republican Germany. (The Allies subsequently forbade any union or ‘Anschluss’ between Austria and Germany).

Crown Prince Otto Hapsburg: A Successful Prince Metternich

Emperor Karl’s immediate family made their way to Switzerland in 1919 and, in 1921, Emperor Karl and Empress Zita returned for the second time to Hungary that year since the monarchy had formally been restored to that country in 1920 to reassume their positions as king and queen of Hungary. On the second visit to Hungary, the royal couple unsuccessfully attempted to regain their throne by resort to arms. Had their attempted reinstatement not being thwarted by the traitorous Regent Admiral Nicholas Horthy* prevailing over the Hapsburgs, Hungary probably would have been ruled by the Smallholders Party which represented the interests of small farmers.

(*Admiral Horthy died in exile in Portugal in February 1957. The former regent asked the visiting Empress Zita for forgiveness for his betrayal of her husband. Empress Zita forgave Horthy and he died later that night).

The Horthy regime (1920 to 1944) was essentially a military dictatorship that had a civilian constitutional parliamentary veneer due to the collaboration of a land owning elite whose ascendancy by that time should have passed. Not only did Hungary lose out domestically because the Hapsburgs were not reinstated but also externally. As a nation, Hungary was all but dismembered by the Treaty of Trianon of June 1920 in which two thirds of her territory and over half of its people were ceded to the successor states, with even the truncated Austrian republic receiving a province from Hungary.

Had the Hapsburgs been reinstated in Hungary in 1921, as popular opinion then demanded, ethnic minorities in the successor states would possibly have looked to uniting with an Hungarian kingdom. Such a development offered Hungary the best opportunity to throw off the 1920 Trianon Treaty. As it was Horthy,* would align Hungary with Nazi Germany to regain lost Hungarian territories. Even though this strategy was partially and briefly successful, the price was too high because Hungary in effect became a German satellite during the Second World War.

(It was suspected that Horthy, who had the Hapsburgs officially deposed in 1921, really wanted to establish his own royal dynasty after the lost territories had been recovered by him).

Horthy’s continuing hostility towards the Hapsburgs was manifested in 1935 when he rebuffed an offer from visiting Austrian Chancellor Kurt Schuschnigg to re-unite in a federation headed by the Hapsburg claimant, Crown Prince Otto. His Imperial Highness succeeded to his father’s claims upon his death in 1922 in Portugal.

Chancellor Schuschnigg would later be criticised for not displaying the firm resolution in opposing the Nazi takeover of Austria in 1938 that he had in 1934. In 1934, Schuschnigg as justice minister thwarted a Nazi coup attempt during which his friend, Chancellor Engelbert Dolfuss, was murdered. Schuschnigg succeeded Dolfuss as Austrian Chancellor.

Schuschnigg had been previously criticised for his role as Justice Minister in drafting an authoritarian corporatist constitution that was promulgated just prior to Dolfuss’s murder by the Nazis. In fact, Schuschnigg was really a political moderate who supported the transition to an authoritarian system only to gain support from Mussolini to prevent a Nazi takeover of Austria. As Austrian Chancellor, Schuschnigg foolishly attempted in 1936 to co-opt ‘moderate’ Nazis to operate within the authoritarian Fatherland Front that Dollfuss had created following his break with the Social Christian Party.

Schuschnigg’s real agenda as Chancellor had always been by hook or crook to reinstate the Hapsburg monarchy. The Austrian chancellor later admitted that his course of action was usually guided by the advice that he received in secret correspondence with Prince Otto Hapsburg. (In their correspondence, Schuschnigg always addressed the Crown Prince as ‘Your Majesty’). Contrary to the popular historical misperception of Schuschnigg, he kept his nerve after Mussolini signalled in early March 1938 that he would not oppose a German Nazi takeover of Austria.

Mussolini’s betrayal of Austrian independence paradoxically offered Schuschnigg the opportunity to proceed with his fall back position of resigning as chancellor so that Otto Hapsburg could head a government of national unity between the Social Christian Party and the Austrian Social Democrats. Such an anti-Nazi government would have been viable in defending Austrian independence had a misguided Czechoslovak president, Eduard Benes, not declared that is was better to have Hitler in Vienna than a Hapsburg! Due to Benes’ incredible short-sightedness, Hitler was not only in Vienna in March 1938 but in Prague in March 1939!

During most of the Second World War, Otto Hapsburg was in the United States lobbying for Austria to be classified as an occupied country. The only statesman who showed Otto Hapsburg due respect was the British Prime Minster Winston Churchill. Prime Minister Churchill supported Otto Hapsburg’s concept of a ‘Danube Union’ between Austria and Hungary, with the possibility of other former Hapsburg domains joining. Churchill hoped that the Danube Union would pave the way for future Hapsburg reinstatement(s).

The Danube Union did not eventuate because of the Soviet advance into Central and Eastern Europe. Nonetheless, the Churchill-Otto Hapsburg collaboration still had a major impact on European history. It is too often forgotten that the Soviets actually took Vienna at the closing stages of the Second World War in April 1945. Austria in terms of the presence of Soviet troops was in an even worse position than Czechoslovakia*. Austria’s situation was not helped when the Soviets installed former Social Democrat president, Karl Renner, as President of Austria in 1945. (Renner had supported the Anschluss in 1938 due to his misplaced hatred for Schuschnigg).

(*President Benes’ later ineptitude would also help fritter away any advantages that Czechoslovakia might have had in maintaining its independence from the Soviet Union. The communist coup in February 1948 would give Benes the dubious distinction of effectively throwing away his country’s independence twice in less than ten years).

The provisional Austria government of Karl Renner government would only have been a stop gap for an eventual Soviet backed communist takeover had it not been for Otto Hapsburg. Utilizing his contact with Winston Churchill (who was soon to be voted out of office in July 1945 by an incredibly ungrateful British public), Otto Hapsburg’s idea that Austria be expeditiously divided into four zones was taken up. Stalin agreed to the four zone military division of Austria with the Renner government still in place because he believed that a neutralized Austria could lead to a possible neutral Germany. A neutral Germany, Stalin believed, would clear the way for Soviet continental dominance because an effective American presence in Europe could not be maintained without a military presence in western Germany.

Otto Hapsburg’s idea saved Austria from a Soviet takeover and, as such, His Imperial Highness was the real founder of the Second Austrian Republic! This republic gained full sovereignty in 1955 under the Treaty of Vienna. This treaty not only stipulated Austrian neutrality but expressly forbade the reinstatement of the Hapsburgs. Someone as politically minded as Otto Hapsburg staunchly thereafter refused to entertain any thoughts or actions pertinent to pursuing royal reinstatement when they were not practically achievable. Instead, Otto Hapsburg devoted his efforts to promoting European unity.

As a member of the European Parliament between 1979 and 1999, Otto Hapsburg, who served as an elected representative for the German state of Bavaria, advocated practical steps for European unity while always emphasising that he did not recognize the legitimacy of an artificial division of Europe. Therefore, after the Berlin Wall fell in 1989, Otto Hapsburg fulfilled an important role in paving the way for former Soviet bloc nations to join the European Union (EU).

When it looked as though the position of Hungarian president would be popularly elected in 1990, the Smallholders Party moved to nominate Otto Hapsburg as their party candidate but he firmly but politely declined, re-emphasising his commitment to a democratic Europe. This commitment was perhaps most poignantly demonstrated when he laid a wreath in besieged Sarajevo.

The Hapsburgs Fight on for European Unity

With regard to Hapsburg successor states, the Hungarian Republic of 1989 has shown more respect for their former imperial house than Austria has. This has been manifested by the Hungarian Republic appointing some of Otto Hapsburg’s children to senior diplomatic postings. Since Crown Prince Otto’s death in early July 2011, there have been worrying signs that his children and grandchildren are involving themselves in Austrian electoral politics.

The above development is of concern because the Hapsburg family’s prestige in contemporary Austria is not transferable to electoral support where the voting bases of the nation’s established political parties are too entrenched. In the successor states, there are signs that the Hapsburgs are respected. There is no prospect now of a Hapsburg monarchy being established in Poland. However, the descendants of Archduke Charles Stephen (1860 to 1933) are respected for their family branch’s loyalty to Poland.

The Archduke Charles Stephen could have accepted the crown of Poland in 1917. Having previously driven the Russians from Poland, Austria-Hungary and Germany created a Polish regency to rule over the ‘Kingdom of Poland’ that was established in late 1916. Archduke Charles Stephen was a long time resident of Galicia, (‘Austrian Poland’) who spoke fluent Polish and whose two daughters had respectively married into two of Poland’s leading noble families. The Archduke refused to accept the Polish Crown for fear of ruling over a German vassal state.

With the collapse of the Central Powers in November 1918, the Polish Regency Council designated Marshal Jozef Pilsudski* as the new Chief of State. Pilsudski on becoming Chief of State promptly declared the establishment of the Polish Republic. It is from this point that the overwhelming majority of Poles consider that their nation was officially reborn after one hundred and twenty three year of foreign occupation.

(*Pilsudski was the founder of the Polish Socialist Party and later commander of the Polish Legions which played a crucial dynamic in Poland been re-founded in 1918 and in saving Europe from a Russian communist takeover by winning the Battle of Warsaw in 1920).

Archduke Charles Stephen immediately accepted the legitimacy of the Polish Republic and his eldest son, Archduke Karl Albrecht (1888 to 1951) served in the Polish army in the Russian- Polish War of 1919 to 1921. Archduke Karl Albrecht fought against the Nazi German invasion of Poland in 1939. Due to the archduke’s refusal to collaborate with the Nazis, he was tortured and interned in Germany throughout the war. Following the defeat of Nazi Germany in 1945, Archduke Karl Albrecht returned briefly to Poland before being forced into exile by the Polish communists. It was in exile in Sweden that Archduke Karl Albrecht died in 1950.

As heroic as Archduke Karl Albrecht’s life was in the service of Poland, his younger brother Archduke Wilhelm Franz (1895 to 1948) was more colourful, potentially more historically important and his life’s end far sadder. The younger archduke saw military service in the Ukraine toward the end of the First World War in 1918. Even after the collapse of the Austro-Hungarian Empire in November 1918, Archduke Wilhelm Franz fought for Ukrainian independence in the very confusing period in the Ukraine between 1918 and 1921.

Archduke Wilhelm Franz positioned himself between 1919 and 1921 to become king of an independent Ukrainian kingdom and developed a small but dedicated following amongst Ukrainian nationalists. After Ukrainian independence was unfortunately crushed in 1921, Archduke Wilhelm Franz continued to fight for his adopted nation’s cause in continental Europe during the inter-war period. The archduke’s Ukrainian patriotism accordingly brought him into dangerous conflict with the Nazis and with the Soviets . Indeed, it was while courageously working as an intelligence agent for the Americans in Vienna that Archduke Wilhelm Franz was kidnapped by the Soviets in 1948 and taken to the Ukraine where he was subsequently executed.

Archduke Wilhelm Franz ‘s life attests to a major paradox of the Hapsburgs: they were a family which often fought for the specific interests of different sections of their empire. The real tragedy of the Habsburg dynasty following the French Revolution in the late eighteenth century was the too often missed alignment between opportunity and outcome. By contrast, Crown Otto’s life was beset by limited opportunities and extraordinary achievements which were reflected by his role in promoting European unity such that he became a statesman his own right.

Hapsburg Succession in the Successor States can Lead to Success

As fervently as Otto Hapsburg believed in European unity, he was concerned that EU member states would lose their distinct cultural identity and specific economic interests within a Brussels based bureaucratic Leviathan. It is improbable that either Austria or Hungary will ever reinstate the Hapsburgs as a reigning royal dynasty. However, there is merit in later successor states such as Croatia, Slovakia and becoming constitutional monarchies. This is because the Hapsburgs are still a very prestigious family which have excellent international connections with regard to culture, finance and trade.

The 2008 GFC demonstrated to the world the underlying fragility of the world economy when nations that are not adept at protecting their national interests within a globalized world. If later successor EU member states such as Slovenia* became a constitutional monarchy, this nation would have the potential to utilize the continuing prestige of the Hapsburg family to both maximize the economic and social benefits of EU membership wile maintaining Slovenian sovereignty within an EU framework.

(*Slovenia, as a constituent republic of Tito’s Yugoslavia, maximized the benefits of post 1948 political liberalization to become the most prosperous Yugoslav republic. It was this Yugoslav republic-which pushed the boundaries of promoting political liberalization in a post 1980 Yugoslavia-that earned it the enmity of the JNA. Therefore, when Slovenia declared its independence from Yugoslavia in June 1991, the JNA moved to crush Slovenian independence with as much violence as possible.

To the astonishment of the JNA, military observers and many Slovenes, a covert, well trained but lightly armed militia sprung seemingly from nowhere to cut enemy supply lines and confine occupying troops to their barracks until they were fully evacuated in November 1991. Slovenian brilliance was as much political as military in that careful considerations were made which realistically maximized existing talent in relation to overcoming an adverse external environment. A similarly objective analysis of the benefits to Slovenia of adopting by popular consent a constitutional monarchy could be undertaken).

The Miracle of Montenegro

A European republic that is now utilizing the benefits of its royal connections is Montenegro. This small Balkan nation has survived the vicissitudes of history by aligning its internal structures and domestic politics to adapt to its external environment. Montenegro was a principality formed in the Middle Ages that survived, due to its mountainous terrain. In 1910, Montenegro was raised to the status of a kingdom by Nikola I who had previously ruled as a prince, having ascended to the throne in 1860.

The most famous story told about Nikola I was that, when someone said to him that has kingdom had no exports, His Majesty replied, ‘you forget about my daughters’. The king was referring to his daughters who had married into foreign royalty. Two of his daughters married the cousins of Nicholas II, another daughter married into the Battenbergs (a German royal house with close relations to the British royal family) while another daughter married into the Serbian royal family. The most famous of the Montenegrin royal marriages was that of his daughter Princess Elena in 1896 to the Prince of Naples, who ascended the Italian throne in 1900 as Victor Emmanuel III.

Montenegro entered in the First World War on the Allied side which resulted in the Petrovich royal family being forced into exile after the kingdom was overrun by the Central powers. It was widey believed that Victor Emmanuel III was influenced by Queen Elena to support Italy’s entry into the war in 1915 due to her homeland’s alliance with the Entente. The war ended tragically for Nikola I (who died in exile in Italy) in that Montenegro was annexed to the new Kingdom of Serbs, Croats and Slovenians (which was known as Yugoslavia after 1929) that was created in 1918, under the Serbian royal family, the Karageorgivics.

Due to family connections between the Montenegrin and Serbian royal families, King Nicola’s grandson and claimant to the Montenegrin throne, Prince Michael settled in Yugoslavia where his family was treated as a cadet branch of the Karageorgivic royal family. Due to the respect that the House of *Petrovich was accorded, Montenegrin separatism was never a problem during the period of the Kingdom of Serbia.

(*Petrovich royal family members were not however allowed to live in Montenegro proper and were discouraged from making visits to their home region during the period of the Kingdom of Yugoslavia*).

Displaying the strongest possible sense of character, Prince, Michael actually refused the offer of ascending a resurrected Montenegrin kingdom that was made after Germany and Italy overran Yugoslavia in 1941. Having been taken Yugoslavia to Germany and having rejected respective offers from the German and Italian foreign ministers to ascend the Montenegrin throne, Prince Michael and his wife were eventually interned in a concentration camp.

Montenegrin resistance to the Axis occupation was intense with most Montenegrins supporting Tito’s communist led resistance movement. Due to the exceptional contribution that Montenegrins made as Partisan guerrillas, Tito granted Montenegro full republican status despite its small size thereby preventing its re-absorption into Serbia. Marshal Tito’s respect for the Montenegrins was such that he invited Prince Michael to return to live in Yugoslavia which His Royal Highness did in 1947. Sensing *Montenegrin hostility toward Tito following his break with Stalin, His Royal Highness left Yugoslavia in June 1948.

(*Due to the traditionally close relations between Russia and Montenegro, many Montenegrins were aghast when Yugoslavia was expelled from the Soviet bloc. In the ensuing purge of the Yugoslav Communist Party of Stalinist elements, -how ironic- a disproportionate number of Montenegrins were purged. There was even a later attempt to establish a clandestine pro-Soviet Communist Party in Montenegro in the 1970s).

Prince Michael in the 1960s committed himself to Serbian émigré opposition to Tito’s regime. By recognising the exiled Peter II as king of Yugoslavia, Prince Peter gained a strong support base amongst Serbian exiles and he died in 1986, a respected figure among Yugoslav émigré communities. Had Prince Michael collaborated with the Axis powers and remained aligned to Tito, there probably would not be high levels of respect in contemporary Montenegro for the Petrovich royal family. This respect was manifested when the Yugoslav republic of Montenegro accorded state funeral for King Nikola and other deceased family members in 1989.

The ruling League of Communists of Montenegro were divided between advocates of hard-line Serbian centralist rule and a more decentralist approach with Marshal Tito was more often than not supported. With the unravelling of Yugoslavia’s authoritarian quasi-Marxist-Leninist framework in the late 1980s, Serbia’s ruling communists became avowed socialists although they in effect became violent nationalists. An approximating division occurred in Montenegro with the emergence (or re-emergence) of nationalist sentiment.

Patriotic sentiment in Montenegro was hostile to the Milosevic regime in Serbia. The republic’s ruling socialists, who were notionally aligned to the Milosevic regime, were more genuinely social democratic and respectful of the rights of the Albanian and Macedonian minorities. Montenegro’s ruling socialists were also respectful of the centre-right opposition which advocated independence, with elements supporting a reinstatement of the Petrovich monarchy.

The wide parameters of political pluralism in Montenegro correlated with caution in regard to relations with Serbia. For all intents and purposes, Yugoslavia ended in 1992 but remained in official existence due Montenegro’s federation with Serbia. It was only after political conditions in Serbia were such that there was an acceptance that Montenegro had the right to go its own way that was a referendum held there in 2006 on the issue of independence. The subsequent vote in favour of independence brought about the seeming miracle of the rebirth of one of Europe’s seemingly ever lost nations.

The challenge that confronts Montenegro is not only to become a EU member but, in joining this union, maximizing the benefits of membership while not losing national sovereignty. Indeed, maximizing EU membership and maintaining national sovereignty are interconnected objectives which, going by past experience, Montenegro has the skill to achieve. The Montenegrin republic’s formal recognition of the Petrovich family’s royal status will help Montenegro in its pursuit of EU membership. This is because there are still powerful networks in Europe associated with reigning and non-reigning royal families that can be utilized within the EU to support small European nations such as Montenegro. An actual reinstatement of the Montenegrin constitutional monarchy would provide Montenegro with non-duplicable sources of competitive advantage.

A Spanish Scenario for Serbia?

As for Serbia, that nation’s prospect for renewal is also linked to joining the EU, accessing the full benefits of EU membership and ensuring that there is no consequent loss of national sovereignty. These objectives would be advanced by Serbia again becoming a constitutional monarchy with Crown Prince Alexander as king. Crown Prince Alexander, (who is probably as adept as Spain’s King Juan Carlos) as an actual constitutional monarch, would advance Serbia’s international standing in the world while promoting a sense of national unity in which talents could be harnessed to overcome the terrible legacies that the Milosevic regime bequeathed.

Crown Prince Alexander (His Royal Highness was born in 1945) had a challenging life in exile due to the death of his father King Peter II in 1970 and his family’s lack of financial security. The prince refused to pursue his rights to the Yugoslav throne so that he could focus on his professional career, first in the British army and then in finance. That is not to say that Crown Price Alexander did not retain close links with the royal families of Europe to which he is related. (The Karageorgivics are one of the bluest blooded royal families in Europe).

The Crown Prince first visited his homeland in 1991 as the Milosevic regime tried to generate nationalist sentiment. However, Crown Prince Alexander refused to align himself with such an odious regime and he used his 1991 entry into public political life to offer to help mediate amongst the Yugoslav republics. In offering to mediate, the Crown Prince emphasised that any republic that wished to leave Yugoslavia should be allowed to do so. In fact, the break up of Yugoslavia in the 1990s was due to the aggression of the Milosevic regime as much as it was to do with nationalist sentiment.

Having witnessed the destructive orientation of the Milosevic regime, Crown Prince Alexander offered his services to mediate amongst Serbia’s divided opposition. This was a formidable undertaking considering the extent of opposition disunity and the gangster nature of the Milosevic regime. The Crown Prince was in a position to be a force for opposition unity because there were bailiwick bases of monarchist support in Serbia because areas that had supported Draza Mihailovic’s Cetniks had been discriminated against by Tito.

The fall of the Milosevic regime in 2000, and the connections that he had with the opposition allowed Crown Prince Alexander to settle in the former royal palace in Belgrade in 2001 . The Crown Prince receives money from a state civil list which has helped him and his wife Crown Princess Katherine to dedicate themselves full time to charity work. The royal couple have also treated republicans, former supporters of the Milosevic regime and those who continue to venerate Tito, with respect and goodwill.

Although Crown Prince Alexander is well positioned to run in national elections to become prime minister of a republican Serbia, His Royal Highness has refused to do so. This is because he does not want to forfeit the goodwill that he is generating as a civic figure or undermine his royal status which he uses to cultivate his international connections. (The Crown Prince is a godfather to Prince William of Great Britain). Nonetheless, His Royal Highness is prepared to serve as a constitutional monarch if the majority of his people desire it.

The benefits of a Serbian monarchy being reinstated are that it would help the Karageorgivic family continue to provide the Serbian people with unique services that have been invaluable. These have included resisting the Ottoman Turks, precipitating the foundation of Yugoslavia and serving as potent symbols to Serbs of the pre-communist era.

Bulgaria: Systems are Often More Important than Statesmen

A former king who did return to power as a prime minister was Simeon II of Bulgaria (1937- ). Simeon II is a genealogical miracle who (with the exception of the Albanian royal family) is related to every royal family in Europe and considered to be an exceptional individual in his own right. Due to a desire to break the electoral cycle of being voted out of power, Bulgaria’s ruling centre-right Union of Democratic Forces (UDF) deliberately lost the 2001 elections to the king’s Simeon II Movement party to prevent the former communist Socialist Party from returning to power.

Both the Socialists and the UDF actually supported Simeon II as prime minister so that he could use his talents to gain Bulgaria’s entry in the EU and NATO which His Majesty did. As prime minister from 2001 and from, 2005, Simeon II refrained from utilizing his political skills and engaging personality to solidify his political base or taking any step toward reinstating a Bulgarian constitutional monarchy. The political deal done by His Majesty was reflected by his public declarations that he wanted to see Bulgaria join the EU and be able to live in Bulgaria on a personal basis.

The above mentioned objectives that Simeon II committed to have been achieved. The former prime minister is now a respected international statesman who is well positioned to assume the mantle of the late Otto Hapsburg as the leading champion of European unity. However, European unity as the recent GFC and the European debt crisis has shown, can only be of benefit to particular countries if they develop political systems that maximize their unique strengths. Simeon II has endowed Bulgaria with advantages as a respected statesman but these will not suffice because the advantages that could have been gained by the nation again becoming a constitutional monarchy have seemingly been lost.

Great Britain: The Unique Balance Between Tradition and Flexibility

The importance of constitutional monarchy giving their nations unique advantages is reflected by the role of the British monarchy. The positive impact of the British monarchy on history cannot be adequately summarized. However, the contemporary importance of this institution and the threats it now confronts warrant analysis because they are pertinent to Britain’s membership of the EU and future international trends with regard to the pitfalls of a ‘power-over’ approach.

The 2008 GFC so undermined the value of the Euro and the credit worthiness of financial institutions that the financial viability of a number of EU nations is now under threat. These nations are rather insultingly referred to as the ‘PIGS’- Portugal, Ireland, Italy, Greece and Spain. Considerable anxiety exists that a default by any one of these nations, particularly Greece, will create a financial contagion that could destroy the current global economic system.

There are a number of cardinal lessons that can be learned from the current European crisis. One of the most important of these is the importance of nations-that have the capacity to do so-to retain and protect their national currencies. Following the Second World War, there was a Marxist inspired theme in post 1945 academic literature that Great Britain was a declining economic power because of a loss of empire and maintenance of a capitalist system.

The above narrative was flawed because it negated the British genius for having an adaptable approach to devising political and economic systems that were aligned to an organic reality because they had linkage to previous traditions that were themselves adaptable to changed circumstances. An important aspect of this adaptable capacity was Britain having a constitutional monarchy with an unwritten constitution. Therefore *countries such as Scotland and Wales not only avoided subjugation by England but were actually able to advance their positions economically, politically and socially by being part of a union which had the Crown as its focal point.

(*Ireland was in a different category because elements of the British Establishment abused the institution of the Crown to inflict a ‘win-lose’ on the majority of Irish people).

The impact of Britain’s monarchy in facilitating the balance between flexibility, continuity and adaptability was also crucial to the longevity of the British empire and its remarkable transformation into the Commonwealth of Nations. The Commonwealth has achieved the balance of providing member states with the domestic and international benefits of membership while still respecting the sovereignty of member sates.

Great Britain benefits from its Commonwealth membership but must exercise caution with regard to its EU membership. If Britain is to continue to exercise the magic of being Britain, then the British skill of facilitating adaptability derived from tradition must be retained. Retention of this unique balance has been and is due to the maintenance of the British pound. Even with the economic challenges that confronted Britain after the Second World the benefits of the nation’s trading position, domestic and international portfolio of financial investments and industrial capacity were protected and reflected by the British pound.

The importance of national currencies was reflected by the fact that the ‘German Economic Miracle’ could not have occurred had the Deutsche Mark that was introduced in 1948 not become such a success. President Francois Mitterrand’s decision in 1983 to effectively peg the French Franc to the settings of Deutsche Mark set the scene for the introduction of the Euro in early 1999. Being the canny politician (if not statesman) that he was, President Mitterrand ensured that a massive enhancement of German economic power helped facilitate a corresponding expansion of French political power within a European framework.

For all the debates within Britain concerning the threatening power of the EU, this nation was always safe so long as its system of constitutional monarchy was in place along with a strong national currency. It is ironic that Britain’s hard left are ardent advocates of EU integration, when during the Cold War, they were opposed to Britain joining a European Common Market. This then opposition was then derived from the hard left’s desire to prevent a strengthening of the western alliance against the Soviet Union.

The shift in stance by the hard left within the British Labour Party is due to a desire to exercise their power so that economic, industrial and political settings in Britain can be determined by a bureaucracy that they will have strategic links to. Whatever the laudable intentions of the former Blair Labour government in introducing Scottish and Welsh devolution, the hard left element of the British Labour Party still wish to undermine the role of the British state to bolster a EU leviathan through which to inflict their ideological agenda on the nation.

The European financial crisis has therefore provided Britain with the breathing space to safeguard the integrity of the British pound. The efforts of the Cameron/ Clegg government to address the massive problems of debt and deficit are most commendable. There is a danger that the Liberal Democrats Party could be wiped out at the next election by a hostile voting base. However, with threats come opportunity. The Liberal Democrats are descended from the 1988 merger between the surviving centre left-left Liberal Party and the British Social Democrats who were founded in 1981 after the lateral components of the Labour Party split from their party which had lurched too far to the left.

The political centre have a potentially very important role in British politics if they can help restore the nation’s financial position while devising and implementing policies that improve the nation’s socio-economic settings. Industrial relations policy is one very important area that the Liberal Democrats should not neglect to establish a point of difference from the Conservatives as part of building a new base.

It should be pointed out that a Lib-Dem coalition with the Labour Party would not have been satisfactory because the hard left of the Labour Party would not have allowed such a coalition government to have made the necessary austerity measures to save Britain from financial ruin. If the Cameron/ Clegg government fails, the consequences of Labour leader Ed Miliband becoming prime minister are too frightening to contemplate.

The way in which Ed Miliband deviously outmanoeuvred his own brother David to snare the election as Labour leader in September 2010 is reflective of his inclination and capacity to reconfigure the British nation according to his own prescriptions. A major problem with Ed’s brother David is that, as with many moderates, he seems to lack a sense of ideological cohesion. If David Miliband or another political leader within the Labour are going to embark a titanic quest for their party’s soul they should have a coherent ideology.

The British Liberal Democrats are now in need of developing a cohesive ideology so that they can deliver positive policy outcomes while in government. Moderates within the British Labour Party are similarly now in need of ideological formation to sustain the essentials of what has made Great Britain great. Luck is where preparation and opportunity come together.

As the First and Second World Wars illustrated, Great Britain’s successes in overcoming adversity have often been of benefit to the world. Countries such as Greece and Italy are threatened by the adverse ramifications of Franco-German domination of the EU via their de facto control of the Euro. History has shown that middle powers such as Greece and Italy have shrewdly been able to advance their interests when they have aligned with Britain.

It is impossible, nor desirable, that trade barriers in Europe be re-established or that other practical measures conducive to improving people’s everyday lives be reversed. However, countries such as Greece that are heavily indebted should look to measures that will enable them to benefits that are still potentially there from EU membership but will safeguard national sovereignty. European nations that are threatened should consider innovations such as re-introducing their previous currencies by pegging them to a British pound which is supported by a financially sound United States.

Conclusion

The problems that confront today’s world are complex to the extent that a perpetual power-over approach is not viable. The world is not only complex but it is also fragile as reflected by contemporary environmental and financial challenges. Great care must therefore be undertaken that serious problems that confront the world are not exploited as opportunities by self seeking minorities to establish their dominance by constructing power-over approaches. The best safeguard against such an outcome is to perpetuate a Gestalt approach to leadership and political systems that is ultimately orientated toward ‘power-with win/win-outcomes’. Japan is a nation that has essentially achieved this outcome after great tragedy and sacrifice. Time is of the essence, why should the world endure a continuing cycle of destructive conflict when Japan shows that a viable scenario exists?

Dr. David Bennett is the Editor of Social Action Australia.