This nation was on the cusp of completing its journey to being a mature democracy, only to miss ‘the final train’ in 1922. The consequences for Italy and the world of its failure to consolidate a democracy were detrimental not only to itself but to the world. Because Italy is again at a critical juncture not only for itself but for the world in the context of the GFC detailed reference to Italian history and politics is made in this article.

What Can be Done (?)

The question; ‘What is to be done’?* was the title of an article written by the Russian totalitarian, Vladimir Ilyich Lenin in 1902. The essence of this Leninist polemic was that a vanguard revolutionary party be formed to inform and lead the working class to seize and maintain power. Lenin envisaged that the Marxist transformation of society be deliberately engineered by a vanguard party seizing power instead of waiting for capitalism to wither away.

(*The title was inspired by a 1860s novel written by Nikolay Chernshevsky. He was the romantic inspiration of the Russian revolutionary movement and his Spartan lifestyle was a precursor to Lenin’s power over-maximalist approach).

The November 1917 ‘revolution’ was a betrayal by the Bolsheviks of the Russian working class because it deprived them of the chance to live and participate in a democracy in which there could have been a diversity of ideas and beliefs. In the current context of the Global Financial Crisis (GFC), the threat of political extremism on the part of both the left and the right could derive the world of the capacity to contend creatively and successfully with the profound challenges that have arisen. In this context, the more apt question is not what is to be done, but what can be done?

Analysis is undertaken with reference to Russian, British and Italian history with regard to the importance of maintaining a ‘power-with’ as opposed to ‘power-over’ approach to create the necessary scope to surmount profound socio-political challenges. The benefit of a power-with approach is also undertaken with regard to recent and possible future political developments in Australia and in the United States.

Leninism: Power for the Sake of Power

The Leninist totalitarian ‘power-over’ approach helps explain how and why communism was politically successful for much of the twentieth century despite its internal contradictions. Lenin appreciated that a well organised minority could impose itself on society by first instigating a societal breakdown as a prelude to seizing power.

Having imposed themselves on society by force, Marxist-Leninist regimes could ultimately only survive by intimidation. There were relatively popular communist regimes* that gained a degree of qualified acceptance by applying a limited degree of political liberalization. But such communist regimes were the exception to the rule as a pure ‘power-over’ approach cannot be indefinitely sustained without political coercion.

(*Poland under Wladyslaw Gomulka and Hungary under Janos Kadar gained a limited degree of genuine, if temporary, popularity. But this popularity was mainly derived from their easing Soviet imposed controls on their respective nations).

The current (2011) historical situation of the world is one which Lenin would have regarded as propitious for facilitating revolution due to the self-imposed crisis within the capitalist system. Indeed, Trotskyist parties such as the Socialist Workers’ Party (SWP) in Britain probably see great potential for promoting violent political change following the July riots in British cities.

Trotskyist parties such as the SWP erroneously claim that Stalin betrayed the November 1917 revolution by ensuring a transfer of power from the working class to a statist bureaucratic party following Lenin’s death in January 1924. This Trotskyist construct is false because it was Lenin who betrayed the working class by instigating the 1917 November ‘revolution’.

The Russian Bolsheviks Emasculate Working Class Power

The incentive for Lenin’s seizure of power was to prevent the Congress of Soviets from convening in November 1917 in Petrograd which would have confirmed the ascendency of Menshevik (i.e. social democratic) aligned parties at that congress. In March of 1917, a frustratingly avoidable revolution overthrew the three hundred year old Romanov dynasty.

The March 1917 revolution was historically unique because power was shared by the Duma (which was essentially democratically elected in 1912, despite weighting of votes in favour of wealthier people) and Soviets (councils) formed following the revolution that were composed of workers, soldiers and political activists from a variety of political parties. The period between March and November 1917 (‘Dual Power’) was the only time in history when the working class were organised on a collective basis to the extent that they were practically involved in the day to day running of a nation.

Had the communists (who were then known as the Bolsheviks) not seized power in November 1917, worker councils (Soviets) probably would have been institutionalized in a democratic Russian republican constitution. Elections to a constituent assembly did take place later in November 1917 that was still won by social democratic Social Revolutionary Party which had been the senior party in the recently deposed Provisional Government of Alexander Kerensky. The Bolsheviks won less than 25% of the vote in the November 1917 elections. Lenin closed down the constituent assembly within twenty four hours of it convening in January 1918.

Leon Trotsky at this time of the Bolshevik coup was avowed Menshevik. Lenin’s November 1917 ‘revolution’ (sic) could not have succeeded had Trotsky not defected from the Mensheviks to the Bolsheviks. The 1917 coup that deposed the Provisional Government was legitimised by Lenin claiming that full power was been transferred to the Soviet work councils. In fact, all power was transferred from an embryonic constitutional democracy to the Bolshevik Party, (which was later renamed the Communist Party of the Soviet Union, the CPSU); such that the Soviet work councils became obsolete.

Trotsky knew that Lenin’s conceptualization of a vanguard ‘democratic’- centralist party meant that a regime led by him would be repressive. As war minister, Trotsky was the second most powerful person in the Lenin dictatorship. During this time (1917 to 1923) Trotsky never supported any political liberalization or pluralism. In fact, Trotsky supported the violent repression of the Kronstadt revolt by sailors in March 1921 and of the Tambov peasant rebellion of 1920-1921. (This peasant rebellion was led by members of a Marxist agrarian party, the Social Revolutionary – Left Party).

In a form of poetic justice, Lenin’s ‘principle’ that there be a ruling vanguard party came to fruition following his death in January 1924 as a result of the politburo closing ranks to deny Trotsky succession to lead the Soviet Union. This irony was compounded because Trotsky’s insistence that the army be subordinate to the party also denied him a capacity to succeed Lenin.

It is true that Trotsky did call for inner-party democracy in the period between 1924 and 1929 but this was only because the party elite and bureaucracy united against him. Senior party leaders such as Zinoviev, Bukharin and Kamenev supported Stalin out of fear of Trotsky. But they would be executed in the 1930s having been officially labelled as Trotskyists!

From exile between 1929 and 1940 (which ended with his assassination in Mexico), Trotsky railed against Stalin without acknowledging that his previous support of Leninist ‘democratic’ centralism was in fact Stalinism*. The radicalism that Trotsky advocated from his exile had a radical tinge that was reminiscent of Nikolai Bukharin’s anarchist inspired theories. (Bukharin was executed in 1938 following a Stalinist show trial. He had inspired an initially based German communist movement in Europe that was opposed to both Stalinism and Trotskyism).

(*To be fair to Stalinism in relative terms, it is actually ideological to the extent of advocating that Marxism be advanced by a ‘democratic’ (sic) centralist party).

That all the ‘old Bolsheviks’ were eventually executed by Stalin was reflective of the pitfalls of trying to impose a pre-conceived ideology on society because a monster (in the form of a vanguard revolutionary party) was created which eventually devoured its off-spring. Despite the abject failure of contemporary Trotskyists to recognize Leon Trotsky’s internal contradictions and his hypocrisy, they are now acutely aware of the opportunities to facilitate social break down in the context of international financial uncertainty.

Marxism: Class Based Politics Leads to Power-Over

An intriguing aspect of Marxist approaches to analysis is a tendency to conceptualize ‘capitalism’ as an intelligent being that must be opposed by a consciously organised Marxist group. Karl Marx believed that capitalism was an organic system that emerged as a result of changing economic conditions. He was probably correct that social classes in society can be formed based upon power relations between capital and labour. But Marx* and Lenin refused to accept that individuals and groups can be formed to fulfil an important role to advance the general good of all as opposed to advancing the interests of a particular class.

(*Marxism is probably derived from Karl Marx’s rejection of religion. As a philosopher, Marx broadly accepted the concept of dialectics that was linked to the German philosopher Georg Hegel, 1731- 1831. Dialectics entails discovering an existing truth by investigation and analysis of history. Rejecting Hegel’s premise that God and morality independently exist, Marxists devised Dialectic Materialism in which truth is pursued within an economic framework of relations between different classes based upon the ownership of the means of production).

The class based nature of Marxism led to a notional rejection of legitimacy of the state because the legitimacy of other classes (beside the working class) was recognised as having a legitimate role in society. This rejection is ironic because many conservatives consider Marxism to be a statist philosophy due to its hostility toward private property. Alternatively, there are liberal/conservatives who regard state power as a threat to the well-being of civil society and of the individual.

In the context of the Global Financial Crisis (GFC) the world does face an economic crisis that could facilitate social ruin. Trotskyites disingenuously hailed the overthrow of Marxist-Leninist regimes in Eastern Europe in 1989 and claimed that the time would come that the capitalist system would also collapse because of its internal contradictions.

Unfortunately, the above mentioned Trotskyite construct is correct to the extent that capitalism is facing a grave crisis due to internal contradictions within the contemporary international financial system. Neither Marxist revolution nor Marxist inspired socio-political and economic systems offer a solution and would in fact, if adopted, (to say the least) make matters worse for the world.

What is needed in this time of profound international crisis is an appreciation that governments around the world must co-operate to fix the international economic system before it is too late. Such an appreciation will entail a realization by liberals and conservatives that, in this instance, economics will be the determinant of socio-political outcomes in relation to the future viability of civil society. Consequently, there should be an accompanying recognition that the state (i.e. government) has a vital role in saving the world.

Great Britain: Overcoming Problems by Evolution and Tradition

Great Britain is a nation in which an acceptance of the state has helped sustain a strong civil society that is crucial to the nation’s well being. It is difficult to definitely pinpoint when Great Britain was founded as a nation. Was it when King James of Scotland succeeded Queen Elizabeth of England in 1603, the Act of Settlement between Scotland and England in 1707 or Ireland’s union with Great Britain in 1801? A crucially important historical date which laid the groundwork for the miracle that is Great Britain was the Glorious Revolution in England in 1688. This bloodless revolution established the paradox of a monarchy’s survival being ensured by it subordinating its power to the parliament.

Great Britain, following the 1688 Glorious Revolution, was really ruled by a Tory English Anglican parliamentary oligarchy. Had the Stuart claimant Bonnie Prince Charles won the Battle of Culloden in Scotland in 1746, most English, including Anglicans, would probably have rallied to accept a reinstatement of the Scottish Stuarts in place of the German House of Guelph which had become the new royal house in 1714.

The House of Guelph gained patriotic acceptance in England because of the Napoleonic wars of the late eighteenth and early nineteenth centuries. The dynamic of a monarchy being the cornerstone of constitutional democracy came following the ascension of Queen Victoria in 1837 when Her Majesty accepted the formation of a Whig government, thereby detaching the House of Guelph (which became the House of Saxe Coburg Gotha upon the ascension of Queen Victoria) from the Tories, enabling the monarchy to be above politics.

Queen Victoria’s reign (1837 to 1901) was a superlative success because the monarchy became the linchpin for Britain’s unwritten constitution actually becoming democratic in practice and of the royal family fostering a civil society during a time of rapid industrial change which had the potential to create widespread social alienation. The monarchy’s scope to adapt to these changes was initially due to the genius of Queen Victoria’s husband, Albert the Prince Consort of Saxe-Coburg.

Prince Albert persuaded Her Majesty to accept what is now a mainstay of constitutional monarchy: that the sovereign is above politics. His Royal Highness aligned the monarchy to technological change by organising the great industrial exhibition of 1851. The Prince Consort also reorganised the staff of the royal household so that they were separated from party politics and dedicated to serving the royal family on a professional basis.

The overall impact of Prince Albert’s was that the royal family separated itself from partisan politics, ensured that sycophants did not come between royalty and the people and that Britain’s aristocracy did not come into conflict with a newly emerging middle class. Prince Albert also addressed the social dislocation caused by industrialization as His Royal Highness engaged in a range of philanthropic and charity undertakings which are now mainstays of British royalty. The most political stance Prince Albert adopted was his public opposition to slavery.

The system that Prince Albert helped devise was vital to ensuring that the British monarchy’s constitutional role was safeguarded by its important role in sustaining civil society by public service. At the time of his death in 1861, Prince Albert (who was forty-two when he died) was respected by the public as opposed to being loved but his cultural legacy was to live on. It is often forgotten that Prince Albert had a transformational impact on the British Royal Family that in turn almost transformed Germany for the better. Prince Albert bequeathed a cultural legacy by introducing Christmas trees and tinsel to England* from his German duchy of Saxe Coburg.

(*Christmas is celebrated in Scotland but the Scots tend to celebrate New Year with more gusto).

Much was made of the deep mourning that Queen Victoria fell into following Her Majesty’s husband’s death. However, the vital role of the monarchy in British civil society was such that, even with a semi-reclusive monarch, the royal institution remained one of great importance. Queen Victoria spent most of her time following her husband’s death at her Scottish estate of Balmoral which helped reconcile most Scots to the originally German imported dynasty.

Even though Queen Victoria was a semi-recluse as a widow, Her Majesty maintained a strong political influence upon Great Britain, the British Empire and Europe through the prodigious correspondence that she maintained. The queen’s correspondence was mainly with her children who married into European royalty. Her Majesty remained closest to her oldest child, Victoria, the Princess Royal in whom she confided by mail correspondence.

Germany Rejects Prince Albert’s Model of Constitutional Monarchy

The relationship between mother and daughter almost changed world history for the better. In 1858 Her Royal Highness married Prince Frederick Wilhelm who became Crown Prince of Prussia in 1861 following his father’s ascension to the throne. It is one of the world’s great tragedies that, as parents, Prince Wilhelm Frederick and Princess Victoria did not get along with their eldest son Prince Wilhelm (1859-1940) who would gain historical notoriety as Kaiser Wilhelm II (whose reign lasted between 1888 and 1918).

The Prussian Crown Prince and Princess’s marriage became a love one due to their common intellectual interests. Realizing that her husband would not have become an anglophile British liberal had it not been for his university education, Crown Princess Victoria was adamant that her eldest son receive a university education in addition to his military training. In trying to impose her will on her non-intellectual but intelligent and wilful son, Her Imperial Highness alienated him such that His Imperial Highness hated his mother.

The young prince found happiness and security with his paternal grand father King Wilhelm I of Prussia (and Kaiser of Germany after 1871) who revelled in the military. In stark contrast to his maternal cousins (of whom he was the eldest), Prince Wilhelm did not have a close relationship with Queen Victoria. Consequently, in contrast to Her Majesty’s other grandchildren, the queen did not have a beneficial impact on His Imperial Highness’s character*. The critical upshot of this family dysfunction was that the future Wilhelm II would consciously decline to liberalize Germany’s political system and become anti-British, thereby helping pave the way for the outbreak of the First World War in 1914.

(*Wilhelm II was alienated from his siblings, particularly Princess Sophie, who later became Queen Consort of the Hellenes (Greece). Contrary to popular belief Her Majesty opposed her husband Constantine I’s pro-German orientation during the First World War).

Distressingly, but still promisingly, the Prussian Crown Prince and Princess spent just as much time in Britain as in Germany due to the ostracism they encountered from Wilhelm I. Crown Prince Frederick Wilhelm did fight heroically in the Franco-Prussian War of 1870 but was incensed that Chancellor Otto von Bismarck did not release Napoleon III and his troops from captivity so that they would crush the Paris uprising of 1870 and facilitate the re-establishment of the Second French Empire.

At this juncture, reference must be made to Bismarck’s disastrous impact on history. Bismarck was very politically skilled in reconciling contradictions as a result of which he is generally considered to be a great historical figure. But it was Bismarck’s success in perpetuating the ultimate contradiction – a constitutional non-parliamentary monarchy- that set the scene for the outbreak of the First World War in 1914 and the fall of the German monarchy in 1918.

Europe might have avoided the horrors of the First and Second World Wars and the subsequent rise of communism and fascism had Europe’s revolutions of 1848 precipitated a conversion of absolutist monarchies into democratic constitutional institutions (which Britain under Queen Victoria and Prince Albert was transitioning to). As mentioned in a previous article (‘Japan: The Antithesis of Rent Seeking’), those monarchies in continental Europe that utilised the 1848 revolutions to become democratic constitutional institutions still exist while those who did not or fudged the transition were destined not to survive.

The system of constitutional non-parliamentary monarchy was one where there was a democratically elected parliament (albeit by male suffrage) with powers to legislate and approve budgets. The defining qualification of a constitutional non-parliamentary monarchy was that legislatures were denied the right to form a government as this prerogative remained with the sovereign who, more often not, represented the interests of an authoritarian military and a reactionary aristocracy. To maintain their domestic ascendancy, monarchical elites often kept their nations on tenterhooks by engineering military alliances as part of a power balance approach to foreign affairs.

Prussia was the epitome of a nineteenth century state that pursued a balance of power approach in nineteenth century Europe. This nation’s failure to become a democratic constitutional monarchy was crucial in contributing to the outbreak of the First World War in 1914. Lacking the political skill to maintain a constitutional non-parliamentary monarchy, Wilhelm I had appointed Bismarck Prussian Chancellor in 1862.

Reconciling Contradictions: Bismarck Sustains a Flawed System

Bismarck was the scion of a prominent Prussian Junker (aristocratic) family who had served as ambassador to both France and Russia where he unfortunately gained an invaluable insight into diplomacy and statecraft. The tragedy of Bismarck was that he was to use his political skill to reverse the potential of the 1848 revolutions to establish constitutional democratic monarchy in Europe.

The new Prussian Chancellor defied the Reichstag (parliament) by using indirect taxation as a means of bypassing the submission of a budget. To break the domestic deadlock, Bismarck entered into an alliance with Austria to go to war with Denmark in 1864 to take the Danish duchy of Schleswig- Holstein. Bismarck then engineered a dispute with Austria over this duchy that led to the Austro-Prussian War of 1866 (The Ten Weeks War).

Prussian victory in the 1866 War led to the creation of the German Confederation in which a swag of Northern German states came under Prussian domination as a forerunner to full German unification. This unification was finally accomplished in early 1871 with the proclamation of a German Empire (with the Prussian king reigning as Kaiser (Emperor) of a German federal empire) after Prussian victory in the Franco-Prussian War in 1870 whose outbreak Bismarck had engineered.

The Prussian victory in the 1870 war was a disaster because it aborted France’s conversion from a family dictatorship into a democratic constitutional monarchy. It is often overlooked that Napoleon III was one of the most important figures in modern European history and, had His Imperial Majesty’s Second Empire survived, the First World War might have been averted.

Napoleon III was a product of the revolutions of 1848 which were a vindication of the liberal aspects of Napoleon I’s impact on Europe. The Revolution of 1848 led to the deposition in France of the Orleans royal family (a cadet branch of the House of Bourbon). The regime of King Louis Philippe was ironically a parliamentary one*but its refusal to extend suffrage, which would have enfranchised the conservative peasantry, alienated the industrial working class thereby leading to the founding in 1848 of the Second Republic.

(*The House of Orleans came to power as a result of the middle class revolution of 1830 in which the Bourbon dynasty was deposed due its hostility toward even limited constitutional restrictions. The new dynasty attempted to identify with the revolution of 1789 by adopting Bonapartist terminology and precepts. For this reason King Louis Philippe was known as ‘King of the French’- French emperors were known as ‘Emperor of the French’- as opposed to ‘King of France’).

The idiocy of King Louis Philippe’s refusal to extend voting suffrage beyond the middle class was borne out when the Orleanist party (‘The Party of Order’) presidential candidate Louis Napoleon was overwhelmingly elected as the first French president in December 1848. The Orleanist leader Adolphe Thiers supported the Bonapartist claimant for president because he mistakenly thought that Louis Napoleon was an imbecile whom he could manipulate to secure a reinstatement of the Orleans monarchy. The fallacy of Thier’s mis-assumption became apparent after President Bonaparte suspended the constitution in 1851 and engineered his enthronement as Emperor Napoleon III in 1852 following a plebiscite.

The Second Empire of Napoleon III (1852 to 1870) had its mixture of spectacular successes and abject failures but, as a born politician, Napoleon III (who was possibly even more politically astute than his uncle) who was focused on the objective of ensuring that he was succeeded by his son, Prince Eugene (1856 to 1879) as a democratic constitutional monarch. For all the vicissitudes of his reign, it seemed that Napoleon III had secured his dynasty’s survival when a plebiscite held in May 1870 approved constitutional reform by which the Second Empire effectively became a constitutional parliamentary monarchy.

In a masterstroke, the electorate were asked to endorse the adoption of a parliamentary monarchy. If the voters refused to do so, then Napoleon III could retain his dictatorial powers but, if they approved the constitutional reform, then authoritarian monarchy became a constitutional one. Following the overwhelming success in the plebiscite, Napoleon III planned to abdicate in 1874 upon the *Prince Imperial Eugene gaining his majority to consolidate the transition to a democratic constitutional monarchy.

(*The Prince Imperial became de jure Emperor following his father’s death in Britain in Chislehurst in 1873. Queen Victoria was most impressed with Napoleon IV that she supported her daughter Princess Beatrice eventually marrying the Bonapartist claimant. To gain popular support for this arrangement, Napoleon IV went to fight for the British in South Africa against the Zulus, but alas His Imperial Majesty lost his life in battle in 1879).

It was therefore a terrible mistake on Napoleon III’s part that he fell for Bismarck’s trap of going to war against Prussia in July 1870. The French emperor erroneously believed that he was his uncle’s equal in terms of military ability. Despite His Imperial Majesty’s defeat and capture at the Battle of Sedan, the Second Empire might have survived had Empress Eugenie not dismissed the parliamentary government of Emile Olliver while her husband was at the battle front.

France’s defeat in the Franco-Prussian War was a national trauma which paradoxically endowed a chronically divided Third French Republic (1870-1940) with the requisite sense of national unity and purpose to seek revenge against the Prussian created Imperial Germany (1871-1918). Had Bismarck heeded Crown Prince Wilhelm Frederick’s advice that captured French troops be released, the Second French Empire could have been re-established. A democratic Imperial France consequently could have become reconciled to the existence of the new German Empire. The respective links that the Bonapartes and Hohenzollerns had with the British Royal Family would have augured well for a democratic and peaceful Europe.

Bismarck’s authoritarian power-over approach (which was encapsulated in his infamous catch cry of ‘blood, sweat and tears’) might have been justified up until 1870 in that a militarist approach was successful in achieving German national unity. The dominant party in a democratic elected (albeit on a basis of male suffrage) Reichstag was the newly formed monarchist National Liberal Party. Had Bismarck come to an accommodation with the initially supportive National Liberals, then Germany could have become a democratic constitutional monarchy that promoted peace in Europe.

Instead Bismarck sustained a constitutional non-parliamentary monarchy by weaving a series of intricate diplomatic and military alliances against a hostile republican France. There is no doubt that Bismarck had the temperance and brilliance to maintain such alliances but they helped prevent Germany from developing a political system in which she could be at peace within Europe.

Wilhelm II, 1888 to 1918: Bismarckianism Without Bismarck

The best hope for democratic progress was the succession of Prince Frederick Wilhelm as Emperor. This did occur in 1888 but the new Emperor, Frederick III, alas only reigned for three months! Having succumbed to throat cancer, Frederick III was unfortunately succeeded by his son, Wilhelm II. The new Kaiser had a massive inferiority complex due to his hatred of his parents that was manifested by his unrelentingly hostility toward Great Britain*.

(*Wilhelm II’s mother, Empress Dowager Victoria, was not allowed to take her late husband’s papers from the palace because her son believed that she would pass them onto the British. The late Dowager Empress’s request that she be laid naked at Her Imperial Majesty’s 1901 state funeral covered by only by a Union Jack flag was denied by her son).

Wilhelm II’s hostility to Great Britain had a political impact on the German political system in bolstering the military component within German society that was opposed to democratization. The Kaiser encouraged the development of a German Imperial Navy which only served to make an enemy of Great Britain which, at the close of the nineteenth century was orientated toward its own form of isolationism (‘splendid isolation’) from continental affairs. The Kaiser’s support for Afrikaners in the Boer Wars also served to gratuitously generate British ill-will toward Germany.

Bulow: The Failed Bismarck Who Tried to Avoid War

That is not to say that elements within the German elite were not concerned that Wilhelm II’s temperamental character would lead to war. The complexities of maintaining a constitutional non-parliamentary monarchy were beyond Wilhelm II (who had ironically been able to force Bismarck’s resignation in 1890 by denying the Chancellor the support he needed to defy a hostile Reichstag) such that His Imperial Majesty was obliged by the Junker elite to appoint Count Bernhard von Bulow as Chancellor in 1900.

Bulow was an aristocratic diplomat whose ability was so respected that he was appointed foreign secretary (i.e. foreign minister) in 1897. His success in mitigating Wilhelm II’s blundering in foreign affairs was such that the Kaiser had the support of both the Junker establishment and Reichstag in appointing von Bulow as chancellor in 1900. Bulow did a splendid job as chancellor in that he successfully juggled a variety of domestic and foreign policy challenges with great aplomb.

As much as von Bulow probably abhorred Wilhelm II, it was beyond the chancellor’s ambit to transform Germany into a constitutional parliamentary monarchy or to seek a rapprochement with Great Britain*. Chancellor von Bulow however did seem to achieve what had evaded Bismarck in that he apparently broke Wilhelm II’s political power when he humiliated the Kaiser in 1907 by authorising the publication in the British Daily Telegraph of His Imperial Majesty’s indiscreet personal opinions concerning Anglo-German relations.

(* A German reconciliation with France would then have been beyond even a political genius).

When von Bulow lost his de facto majority (the ‘Bulow Bloc’) in the Reichstag in 1909, the Kaiser refused Bulow’s request for an early parliamentary election thereby obliging the Chancellor to resign. Even at a later critical juncture in 1917, when Wilhelm II needed von Bulow to rescue the German monarchy, His Imperial Majesty utilized the vestiges of his lingering power to veto his return as chancellor.

Von Bulow was succeeded as chancellor by the hapless Thoe Bethmann Hollweg who was the epitome of a first minister in a non-parliamentary constitutional monarchy in that he administered as-opposed to ruled-the nation. The bureaucratic Bethmann Hollweg was so totally reactive that it was beyond his capacity to prevent the outbreak of the First World War in 1914 following the assassination of the Grand Duke Franz Ferdinand, Crown Prince to the Austro-Hungarian throne.

Bismarck had warned that Germany-to avoid fighting against Britain in a two front war (facing off against France and Russia)-to support a weak Austro-Hungarian Empire. The praise that Bismarck (who died in 1898) engendered for his strategic prescience is negated by the fact the deeper cause for a European war was the general absence of constitutional democratic monarchies in Europe that he had contributed to. This absence was all the more frustrating because Crown Prince Franz Ferdinand of the Austro-Hungarian Empire had been dedicated to fundamental democratic reform which, had it been undertaken, could have prevented the outbreak of the First World War.

Wilhelm II as a monarch who was opposed to parliamentary monarchy welcomed the outbreak of the First World War in 1914 believing that a German victory would consolidate his power. For similar authoritarian motivations the German General Staff which welcomed the outbreak of war believing that their long standing Shlieffen Plan would succeed. This plan had first been devised in 1905 following the first signs that Russia was moving into an alliance with France. Under the Shlieffen Plan, Germany would quickly overrun France and then concentrate on defeating a less formidable Russia.

The First World War: The Failure to Reconcile Contradictions

The above scenario almost came to pass as Germany overran most of northern France in the first weeks of the First World War. In an incredible demonstration of sheer grit and determination, the French rallied to halt the German advance such that there was a bloody and sustained four year stalemate (1914 to 1918) on what became known as the Western Front. In the midst of exchanging heavy artillery and tear gas, the Germans and Anglo-French forces (which included troops from the British and the French empires) charged at each other with great loss of life for negligible territorial gain.

Dogged Allied resistance on the Western Front led to an inversion of the Shlieffen Plan in that the German objective became to knock Russia out of the war so that German forces could be freed to win the war in France. For all the determination and valour with which the French fought, they probably would not have held out without the support of Great Britain. But the British were facing breaking point in 1917 on the Western Front so that the Entente would probably have succumbed had it not been for the United States entry into the war against the Central Powers that year.

Even with the United States entry into the war, Wilhelm II and the General Chiefs of Staff* believed that a great military offensive would deliver victory on the Western Front. Due to the release of troops from the Eastern Front following Bolshevik Russia’s defeat, the meticulously planned German Spring Offensive that was launched in April 1918 was in fact a series of offensives that were launched over a five month period.

(*A 1917 resolution of the Reichstag effectively broke Wilhelm II’s political power by declaring that Reich government must have the confidence of the General Chiefs of Staff. Between 1916 and 1918, the General Staff was under the command of Field Marshals Paul von Hindenburg and Erich Ludendorff).

Crucial American troop and material support halted these German offensives and the Allied capacity to launch a counter offensive in August 1918 exhausted the German capacity to continue offensive military action such that a prudent Marshal Ludendorff sued for peace in November 1918 (although he would later support the false claim that Germany had been stabbed in the back by cowardly politicians).

Field Marshal Ludendorff’s agreeing to a ceasefire also precipitated the military’s withdrawal of support for Wilhelm II who was forced to flee to the neutral Netherlands. Ludendorff and Hindenburg supported the Social Democratic Party leader Friedrich Ebert’s accession to the position of chancellor so that Germany could negotiate a peace treaty as a parliamentary constitutional monarchy. In a comedy (if not tragedy of errors), the monarchist Ebert, much against his will, became the first president of a German republic!

Aborted Potential: Russia’s Half Democracy, 1906 to 1917

The fall of the German monarchy was in keeping with the prediction that the Russian statesman Count Sergei Witte had made upon the outbreak of the First World War in 1914 that a general war endangered European monarchies. A former finance minister, Count Witte had brilliantly redeemed Russia’s position by diplomacy following her massive defeat in the 1904-1905 Russo-Japanese War. Count Witte had saved the Russian monarchy by persuading a reluctant Tsar Nicholas II in October 1905 issuing an Imperial Manifesto that converted Russia into a constitutional non-parliamentary monarchy by Tsar Nicholas II.

Serving as prime minister of Russia between 1905 to 1906, Count Witte might have compelled Nicholas II to accept a parliamentary monarchy if it was not for the hostility of the Duma (i.e. the new parliament) toward the imperial institution. To secure the monarchy’s position against a predominately republican Duma, Nicholas II appointed Peter Stolypin as prime minister in 1906. Stolypin was a minor aristocratic civil servant who possessed great administrative and political skills.

Due to a substantial low interest loan from France* to Russia, Stolypin, was able to dissolve the First Duma in 1906 and ensure that the Third Duma which convened in 1907 was forced to accept the imperial prerogative of appointing the government. Through a combination of repression and reform, Stolypin by 1909 broke the revolutionary environment that had existed since 1905. His land reform programme was perhaps Stolypin’s most impressive achievement in that it spawned the kulak category of land owing farmer that Stalin would violently purge in the 1930s.

(*The dividend for France in granting this low interest loan was primarily political because it helped bring Russia into alliance against Germany).

The Stolypin era (1906 to 1911) was one of social reform in which insurance for workers was introduced as well as the granting of political reform such as freedom of the press. The successes of the Stolypin government were due to the high calibre of ministers that were appointed and their working constructively with the Duma.

In the political system that emerged following the 1905 Revolution, Nicholas II fulfilled an important role. Had the Tsar not been born to royalty, His Imperial Majesty probably would have been the ideal secretary or a personal assistant. His Imperial Majesty did not have a personal assistant as he directly attended to his own office work. As such, the Tsar kept a keen eye on the performance of Stolypin’s ministers. His Imperial Majesty had such a technical mastery of ministerial briefs that he often provided crucial support to ensure that government policies and initiatives were implemented.

The 1905 Revolution therefore created the paradox that Nicholas II had more of a role in ruling the Russian Empire than in the first eleven years of his reign (1894 to 1905) when he was dominated by his paternal uncles and cousins. There was however one maternal cousin who had an undue influence on Nicholas II during the first part (1894 to 1904) of his reign – Wilhelm II of Germany!

The German Kaiser encouraged Nicholas II to resist any prospect of granting constitutional rule and often communicated his supposed envy to his cousin that he was not encumbered by either a parliament or a constitution. As a proponent of absolutist rule, Wilhelm II gained Nicholas II’s trust to persuade the Tsar to focus on expanding Russian influence in the Far East thereby giving Germany a free hand in the Balkans. The disastrous ramifications of this con led to the outbreak of the Russo-Japanese War of the 1904-1905 in which Russia was comprehensively defeated.

The ensuing ramifications of Russia’s defeat were such that it subsequently adopted a system of constitutional non-parliamentary monarchy that contributed to the tinderbox that was Europe in 1914. Had Stolypin not been assassinated in 1911 by a left wing terrorist, he might have had the requisite power to have prevented Russia from going to war in 1914. Stolypin’s power had previously been demonstrated when he had banished the Tsarina Alexandra’s confidant Gregory Rasputin from court in 1911 despite Her Imperial Majesty’s vehement protests.

Rasputin was a purported Russian Orthodox from Siberia who gained the Tsarina’s full trust and devotion because he seemed to have an hypnotic power that stopped the haemophilic Tsarevitch Alexei (1904 to 1918) from bleeding to death. Rasputin was in fact a licentious fraud who, as a brilliant actor, managed to convince the Tsarina that he was a holy man who was in accord with the Russian pious peasants who venerated the monarchy.

To be fair to Rasputin, he was disinterested in money and power. His main vice was his voracious sexual lust and his major abuse was that he wilfully deceived the over anxious Tsarina into believing that he was something that he was not. Had court officials, aristocrats and ministers left Rasputin alone, he would not have exercised the destructive political influence that he did during the First World War by having competent ministers dismissed. Rasputin did this to maintain his position with the Tsarina and to avenge himself against those who had previously supported his banishment from court.

The important ramifications of Stolypin’s 1911 assassination were that Nicholas II regained political pre-eminence so that Rasputin was able to return to court. The very capable ministerial team that Stolypin had assembled still remained in place and effective governance continued. The quality of government was also ensured by there being an effective Duma which had an effective system of committees to scrutinize legislation. Russia also had a promising party system which created interesting political dynamics.

The Attributes of Democracy: Party Formation in Tsarist Russia

The equivalent of a Russian Tory Party was the *Octoberist Party which was led by Russian aristocrats and members of the upper middle class. Electoral ‘reforms’ that were introduced in 1907 had increased the weighting of votes of land owners and higher paying tax payers which naturally benefited the Octoberist Party. Ironically, this electoral slanting later rebounded on Nicholas II because most Octoberist parliamentarians became strong proponents of a parliamentary monarchy. The unexpected rift between the Octoberists and the monarchy was important in contributing to the downfall of the Romanov dynasty in 1917.

(* The Octoberist Party was named after the manifesto that Count Witte had written that had been reluctantly issued by the Tsar in October 1905. Reactionary elements backed a populist right wing party, the Russian People’s Union, which was organised by the secret police, the Department for Defence of Public Security, the Okhrana).

The Russian equivalent of a Whig Party was the Constitutional Democrats (the Kadets). The Kadets were a liberal party that had republican elements within it which were in the ascendant when the First Duma convened in 1906. Due to fraternization between the Octoberists and the Kadets (an alliance was formed in 1915 called the Progressive Bloc that was composed of the Kadets, liberal elements of the Octoberists and the Progressive Party) the latter eventually became orientated, but not unreservedly committed, to a constitutional parliamentary monarchy.

To the left of the Kadets was the Russian Social Democratic Labour Party (RSDLP) which was internally divided into respective Menshevik and Bolshevik factions with the latter formally separating to become a distinct parliamentary faction in 1913. The mainstay of the republican left was not however the RSDLP but the agrarian based Social Revolutionaries (SRs) which had its own conflicting social democratic and Marxist factions. A loosely organised Party of Labourers and Toilers approximated to being the urban wing of the SRs and their most prominent parliamentarian was the eloquent Alexander Kerensky.

There were also a slew of ethnically based political parties, the most powerful and prominent of which was the Polish National Democratic Party led by Ronan Dmowski who was controversial for believing that Poland could gain sufficient autonomy within the framework of a constitutional Russia.

The First World War Creates A Profound Crisis for Russian Democracy

The outbreak of the First World War in 1914 found most Russians supporting the Entente due to a strong sentiment toward Orthodox Serbia. Amongst the politically aware, there was strong support for the Entente due to the belief that an Allied victory would usher in a full Russian democracy. Due to the positive impact of the Duma as a legislature in contributing to the quality of governance, the Russian armed forces fought better than expected against the Central Powers.

It was still beyond Russia’s industrial and military capacity to defeat Germany and Austria-Hungary. This should not have mattered because all Russia essentially had to do was hold out to divert valuable resources of the Central Powers so that victory could be achieved by the Allies on the Western Front. This objective would have been achieved had it not been for Nicholas II’s action of passing power to his wife after he left for the front in September 1915 to assume direct (if nominal) command of the armed forces.

The disastrous consequence of Empress Alexandra assuming control of the Russian government was that Her Imperial Majesty systematically dismissed competent ministers and replaced them with incompetents who were suggested by Rasputin. The Tsarina did this due to her determination to remove all the ministers who had signed a collective letter to the Tsar imploring him not to go to the front. For Empress Alexandra, the ministers who had opposed the Tsar’s decision to depart were to be dismissed because they were probably desirous of converting Russia into a parliamentary monarchy.

The terrible spectacle of the Empress misruling between 1915 and 1917 and the influence Rasputin exercised over the Tsarina until his assassination in late 1916 has more often been analysed as reflective of the degeneracy of the imperial system. This perspective is incorrect. Russia’s system of government between 1906 and 1915 was highly efficient and effective due to the quality of its ministers who more often than not worked well with the Duma.

The problem with the Russian imperial system was that it did not make the final transition to a democratic constitutional parliamentary monarchy that the political dynamics between 1906 and 1915 demonstrated were there. Instead, the potential for a transition to full constitutional monarchy was aborted by the Tsarina dismissing competent ministers during the critical time of war. Indeed, most members of the Russian aristocracy were supportive of Russia becoming a parliamentary democracy as they were well positioned to maintain their influence through the Octoberist Party.

Another incorrect assumption concerning the Russian monarchy during the First World War was that Nicholas II’s acquiescence in allowing Rasputin to exercise power was due to his being a weak character who was dominated by his wife. This perspective is too narrow because it negates that the Tsar had his own agenda which he worked toward until his morale was ironically broken by the assassination of Rasputin in December 1916 even though His Imperial Majesty had been ambivalent about him. The agenda that Nicholas II had was to pass on the full autocratic power that the Tsars had traditionally exercised until the issuing of the October 1905 manifesto and to re found the Byzantine Empire to re-establish an absolute monarchy.

Nicholas II’s hostility toward constitutional monarchy can be traced to the trauma he felt he felt when was thirteen due to the assassination of his grandfather, the Tsar-Liberator, Alexander II in 1881. Alexander II had courageously abolished serfdom and commenced political reform with the granting of elected local government as part of his objective of moving Russia to responsible parliamentary government. The ascension of Nicholas’s father as Alexander III ended political reform and the intense focus of government became to maintain the absolute power of the monarchy.

Alexander III believed that the forces of liberalism/anarchism (which for His Imperial Majesty were interchangeable) could be thwarted by establishing the moral and intellectual primacy of the Russian Orthodox Church. The only substantial innovation of Alexander III’s reign was the establishment in 1881 of the efficient *Okhrana secret police. The objective of perpetuating the cultural dominance of the Russian Orthodox Church was reflected by Alexander III’s ‘Russification’ that was imposed upon the non-Russian peoples of the empire. In stark contrast to his father’s policy of supporting Finland having an elected diet as a forerunner to a Russian parliament, Alexander III conducted a virulent campaign against Finnish autonomy.

(*The Okhrana’s effectiveness broke down during the First World War due to its inability to balance domestic spying and wartime espionage)

Despite personal tension that had existed between Alexander III (who died in 1894) and his son, Nicholas II essentially shared his father’s autocratic objectives. For Nicholas II the shift in power from the aristocracy to a capable middle class bureaucracy that the 1905 Revolution had facilitated was a source of anxiety because it ‘threatened’ to convert Russia into a constitutional parliamentary monarchy. The irony of such an outcome was that it would have saved the Russian monarchy such that the Russian Imperial Family could have today a level of prestige that surpasses that of the British Royal Family.

For all the power that Nicholas II devolved to Stolypin, he adamantly refused to countenance a transition to a parliamentary monarchy. Any minister that Nicholas II suspected of working toward this end was summarily dismissed by His Imperial Majesty despite Stolypin’s protestations.

Conflicting Agendas as to Why Russia Entered the First World War

For Nicholas II, the outbreak of the First World War in 1914 presented a dilemma because he knew that an Entente victory could create the momentum for Russia to become a parliamentary monarchy. The sympathies of the aristocracy, the middle class, the bureaucracy, the Duma and most cabinet ministers were with the Entente due to their desire and expectation that Russia would become a parliamentary monarchy in the advent of an Entente victory.

The Tsar could have prevented Russia’s entry into the First World War but did not due to his desire to dismember the Turkish Empire so that a new Byzantium Empire could be re-founded with Constantinople as its capital. For Nicholas II, the re-establishment of the Byzantium Empire would constitute the final victory over godless modernism.

The Byzantium Empire had been effectively destroyed when the Muslim Ottoman Turks took Constantinople in 1453. Bu the spirit and traditions of the Byzantium Empire lived on due to the success of missionaries who followed on from the success of the ninth century Byzantium Greeks Saint Cyril and Saint Methodius in converting the Slavic peoples to Christian Orthodoxy of the Byzantine eastern rite. It was almost standard practice for Slavic rulers in establishing new dynasties to claim to be the successor of the Byzantium emperors and Russian emperors were no exception.

Indeed, an argument could be put that the Byzantine Empire lived on in the Russian Empire due to attempts by its rulers to emulate the by-gone empire. The reigns of Peter the Great (1682 to 1725) and Catherine the Great (1762 to 1796) saw a re-direction toward western European modernism but did not constitute a repudiation of the Byzantine Empire due to the power of the Russian Orthodox Church.

The fear that Britain and France had of Russia taking advantage of the decline of the Ottoman Empire to re-establish the Byzantine Empire-precipitated the Crimean War of 1854 to 1856. Russia’s defeat in this war led the new Tsar, Alexander II (who reigned from 1855 to 1881) to embark upon a series of radical reforms which could have culminated in Russia becoming a parliamentary monarchy to secure future Russian greatness. The regicide of the Tsar liberator was therefore one of the great tragedies of Russian and world history.

For Alexander III and Nicholas II, this regicide demonstrated that liberal reform was an affront to God. From Nicholas II’s perspective, the First World War offered him the opportunity to gain through alliance with Britain and France what they had been determined to deny Russia in the 1850s – the re-establishment of the Byzantine Empire with Constantinople as its capital. To say the least, Nicholas II did not envisage his new Byzantine Empire being a non-parliamentary constitutional monarchy let alone a parliamentary one.

Nicholas II left for the front in September 1915 to remain close to the Russian officer corps and the troops so that, when the time came following victory over the Central Powers, His imperial Majesty would have the capacity to dispense with the Duma. The Tsar’s stratagem might have worked had it not been for Tsarina’s actions in dismissing parliamentary orientated ministers and replacing them with Rasputin nominees with the result that, by late 1916, Russia virtually had a non-functioning government.

Empress Alexandra: Noble Intention, Horrendous Outcomes

Much has been made of Empress Alexandra’s detrimental impact on Russian history. Empress Alexandra was not however the domineering personality that she was made out to be. Her Imperial Majesty was actually a deeply compassionate and self-effacing lady. It was Her Imperial Majesty’s determination to safeguard the life of her son by ensuring that Rasputin could never again be banished from court that led the Empress to wreak havoc on Russia during war time.

The Empress was really an English princess who was born in the German Grand Duchy of Hesse Darmstadt in 1872. She was the daughter of Grand Duke Louis IV and Princess Alice of Great Britain, a daughter of Queen Victoria. Her Serene Highness was devastated, when at the age of six, she lost her mother and a sister to diphtheria. She subsequently developed a profound religious faith and throughout her life which sought to discern if events had a deeper meaning that was reflective of divine will.

As the young princess grew up, she assumed the duties of the effective royal consort due to her mother’s death. Despite Her Royal Highness’s introverted nature, she gained widespread popularity and admiration in the close knit duchy due to the zest with which she took to her royal duties in Hesse Darmstadt. Similar to her maternal grandmother, Queen Victoria, Princess Alix was a dedicated mail correspondent such that she fell under the sway of the British monarch.

Although Princess Alix followed the Queen’s advice on how to conduct herself, she stunned her grandmother by refusing a proposal from Prince Albert Victoria (1864 to 1891), the eldest son of Prince Albert, the Prince of Wales. Queen Victoria delighted in arranging the marriages of her grandchildren who more often than not married their first cousins. Her Majesty was initially taken aback by Princess Alix’s refusal to marry the royal heir. However, Her Serene Highness consequently became Queen Victoria’s favourite grand-child for showing such strength of character in defying Her Majesty.

But the British Queen was therefore determined to have her way by arranging the marriage in 1894 of Princess Alix’s brother Grand Duke Ernest (who had succeeded his father in 1892) to his cousin Princess Victoria Melita, the daughter of Queen Victoria’s second son, Prince Alfred. Princess Victoria Melita’s mother was Grand Duchess Alexandrova, the daughter and favourite child of the Tsar Liberator, Alexander II.

Queen Victoria loathed her Russian daughter in-law who (with the backing of her over indulgent father) insisted upon having precedence at court as an imperial princess*. Despite her mother, Grand Duchess’s Alexandrova’s adamant opposition, Princess Victoria Melita (who erroneously believed that she was Queen Victoria’s favourite grandchild), dutifully consented to the marriage even though that she and her husband to be were, to say the least, incompatible.

(*It was rumoured that Queen Victoria arranged to be declared Empress of India in 1876 to outrank her Russian daughter in-law).

Princess Victoria Melita’s marriage to Grand Duke Ernest was resented by Princess Alix. Her Serene Highness regretted that she was going to lose her eminent role in Hesse Darmstadt society and she also resented her beloved brother marrying a major rival for her Grandmother’s affections. The marriage between Princess Victoria Melita and Grand Duke Ernest ended in divorce in 1901 (following Queen Victoria’s death that year). In an irony that often abounds in royal history, Princess Victoria Melita later married her paternal cousin Grand Duke Cyril of Russia in 1905, who in exile would declare himself Tsar in 1924. Thus Princes Victoria Melita would again step into a role that had once been filled by Princess Alix.

The marriage of Princess Victoria Melita and Grand Duke Ernest did surprisingly result in Princess Alix becoming Empress of Russia. Visiting Hesse Darmstadt for the wedding, Tsarevitch Nicholas unexpectantly proposed to Princess Alix. His Imperial Highness having previously met and fallen in love with Prince Alix on her visits to Russia to stay with her sister Princess *Elisabeth who had married Grand Duke Sergei, a son of the Tsar-Liberator.

(*Grand Duchess Elisabeth, 1864 to 1918, had a sad life. Her Imperial Highness had rejected Prince Wilhelm of Prussia’s ardent proposals of marriage. Had Princess Elisabeth married Wilhelm, the rift between the Houses of Hesse and Hohenzollern might have been healed. As Empress of Germany, Elisabeth could have moderated Wilhelm II by giving him the confidence and sense of security that His Imperial Majesty lacked.

Having married Grand Duke Sergei for love in 1881, Grand Duchess Elisabeth endeared herself to Russian people by voluntarily converting from Lutheranism to Russian Orthodoxy. Her Imperial Highness gained further public respect by forgiving her husband’s assassin prior to his execution in 1905 and subsequently forsaking her wealth to become a nun. Grand Duchess Elisabeth’s charity work was extensive and most appreciated during the First World War.

The only political intervention Her Imperial Highness undertook was to warn her sister and closest friend, Empress Alexandra in 1916 to break with Rasputin. Not only did this advice go unheeded but Empress Alexandra subsequently broke off contact with her sister.

Following the fall of the Romanov dynasty in 1917 the Grand Duchess refused to leave Russia and rejected pleas from Wilhelm II (who was later devastated by her murder) to go to Germany following the Bolshevik seizure of power. Her Imperial Highness was killed by the Bolsheviks throwing her down a well in July 1918. Even the most ardent anti-Russian Romanovs were shocked by Grand Duchess Elisabeth’s regicide.

Following White army troops finding her remains, her corpse was taken to Jerusalem where it remains interned in the chapel of Mary Magdalene. It was appropriate that, when communist rule effectively came to an end in Russia in August 1991, one of the first actions of the Moscow Patriarchate of the Russian Orthodox Church was to canonize Grand Duchess Elisabeth).

The Tragedy of Nicholas II and Empress Alexandra

Princess Alix was moved by the Tsarevitch’s proposal of marriage because she knew that his parents had tried to have him propose marriage to the highly intelligent Princess Helene of France*. Although Princess Alix was in love with the Tsarevitch, she initially refused his proposal because she could not renounce her Lutheran faith. It was due to her sister Grand Duchess Elisabeth in relating her experience of converting religion and Queen Victoria’s telling her grand-daughter that there was really no difference between Lutheranism and Russian Orthodoxy that Princess Alix consented to marry the Russian Tsarevitch.

(*Princess Helene later married into the Italian Royal Family to become the Duchess of Aosta. Even after Italy became a republic in 1946, Her Royal Highness maintained a high profile in her adopted country until she died in 1951).

Just prior to Nicholas and Alexandra’s (the name that Princess Alix assumed on converting to Russian Orthodoxy) 1894 marriage, Alexander III suddenly died. As a result, the soon to be Tsarina did not have sufficient time to prepare for her role as imperial consort. Empress Alexandra’s relations from the start were strained with her mother in law because Empress Dowager Marie had let it be known her reservations concerning her son’s choice of wife.

The frugal minded Empress Alexandra was taken aback by her mother in-law’s appreciation of the finer things in life, such as jewellery. Be that as it may, Dowager Empress Marie (who was originally a Danish princess) was adamant that royalty engage with the public as much as possible which her daughter-in-law considered to be vulgar and unbecoming. The imperial couple’s capacity to establish an extensive entourage or a social network at court was also restricted by Empress Alexandra’s intolerance of any extra marital affairs.

The Tsar and Tsarina were a solitary couple who enjoyed each other’s company. The Empress was happiest at the main imperial residence, Tsarskoe Selo, south of St. Petersburg. In the first ten years of her marriage Empress Alexandra had five children, -four daughters (Grand Duchesses, - Olga, Maria, Tatiana and Anastasia) and finally a son and heir, the Tsarevitch Alexei who was born in August 1904.

The joy of having a soon was soon tempered when it was discovered that Alexei had haemophilia. Indeed caring and worrying about the Tsarevitch’s absorbed much of the Emperor and Empress’s energy. When the Tsarevitch’s life was seemingly saved by Rasputin, the Empress became his most devoted supporter.

Until the outbreak of the First World War, Empress Alexandra was a remote figure from the Russian public and the elite. Her Imperial Majesty was prominent to the extent she was notorious for protecting Rasputin’s place at court. It is now forgotten that, due to the press freedom (which came with the issuing of the October 1905 Manifesto, the Fundamental Laws), Russian newspapers attacked Rasputin and his association with the imperial couple. Due to the concealment of the Tsarevitch’s haemophilia, it was mis-assumed that the Empress’s attachment to Rasputin was sexual.

The Empress did however become widely popular between 1914 and 1915 due to her dedication as a war nurse. In contrast to other aristocratic women who acted as nominal patronesses and honorary nurses, Empress Alexandra successfully undertook a nursing training course and administered the sprawling hospital that was established at Tsarskoe Selo. Her Imperial Majesty public gained great respect for the empathy that she showed to wounded patients. Therefore, Empress Alexandra’s insistence that Prisoners of War be recognized between 1914 and 1915 by the Russian public was reflective of her general humanitarian outlook rather than her German ancestry.*

(* Empress Alexandra was more English than German due to the close contact that she had had with Queen Victoria. English was the first language that the Emperor and Empress spoke with to each other and their children and it was in English that they corresponded to each other. However, the Empress was weary of Britain because Her Imperial Majesty feared that the British model of parliamentary rule would come to Russia in the event of an Allied victory.

Although relations between Empress Alexandra and her originally Danish mother-law, the Dowager Empress Marie, were personally strained, they both shared a deep dislike of Prussia which they blamed for German military aggression against their respective home countries. As a result, Her Imperial Majesty was a Russian patriot because her hopes for the future were centred upon her son being a future success as Tsar of Russia. The opprobrium of the ‘German woman’ that was later attached to the Empress after Her Imperial Majesty assumed control of the government was therefore misplaced).

Because Her Imperial Majesty had immersed herself in hospital work, her contact with Rasputin all but lapsed during the first months of the war. Indeed, the Tsar and Tsarina became temporarily estranged from Rasputin due to his opposition to the war. The Empress’s faith in Rasputin was powerfully restored when, against considered medical opinion, Her Imperial Majesty’s best friend, Anna Vyrubova, survived an horrendous train accident in January 1915 in accordance with Rasputin’s prediction.

The Failure to Reform Destroys the Russian Monarchy

In the period between 1915 and 1916, the Russian cabinet was overturned with capable and honest ministers being replaced with incompetents appointed by the Empress at Rasputin’s behest. The sorry saga had its comedic elements but the humour was counteracted by the horrendous consequences of a relatively effective war machine breaking down against such a formidable enemy.

Without going into the fascinating minutiae of the disintegration of Russia’s government and war effort during the Rasputin ascendancy, the worst excess of this period was the breakdown of Russia’s war time system of transportation and logistics. This development was due to the ineptitude of the interior minister, Alexander Protopopov. He had previously served as Deputy Speaker of the Duma where he had gained a reputation for sycophancy. The only reason that Protopopov maintained this position was due to his craven loyalty to the Speaker of the Duma, Mikhail Rodzianko.

Ironically, Protopopov was appointed interior minister in September 1916 at the suggestion of Rasputin to placate the Duma. Instead, most parliamentarians regarded his acceptance of the appointment as crass betrayal so that they were further alienated from the government and the monarchy. At Rasputin’s behest, responsibility for the administration of the nation’s rail system was transferred to Protopopov so that transportation bottlenecks could be ended by invoking the authority of the interior ministry.

But due to Protopopov’s monumental incompetence, the functioning of the rail and associated transportation systems virtually broke down. The ramifications of the breakdown of the transportation system laid the groundwork for the revolutions of March and of November of 1917. Disruption of weapons and rations supplies led to a breakdown in morale and discipline among junior officers and NCOs. The disruption of the transportation system also fatally compromised the operation of Russia’s relatively efficient rationing system that the leading cities of Petrograd and Moscow became threatened with mass starvation.

Under immense pressure from nearly everyone – family, ministers, generals, bureaucrats and courtiers - Nicholas II moved to dismiss Protopopov. The interior minister was only saved by the dramatic intervention of the Empress, who placed her marriage on the line to protect Protopopov’s position. Her Imperial Majesty supported Protopopov to the hilt due to his professed admiration for Rasputin.

Even the deputies of the ultra-monarchist All-Russia People’s Union joined with most other parliamentary parties (the Bolsheviks and ethnic secessionists deputies were conspicuously silent on this issue) in the Duma in demanding Protopopov’s dismissal. For Empress Alexandra, Protopopov became the defensive barrier against granting parliamentary rule. The Empress ensured that Protopopov was not dismissed believing that this would help the Tsarevitch inherit the full autocratic powers of a Tsar so that his reign would be easier than his father’s. Nicholas II’s failure to dismiss Protopopov fatally compromised His Imperial Majesty’s capacity to continue as Tsar.

Nicholas II sought to maintain his position by cultivating the support of the senior ranks of the armed forces. But the actions of the Tsarina and Rasputin even undermined this objective. At the behest of Rasputin, the Empress interfered with military decisions at the front to minimize military casualties. The disastrous military impact of Her Imperial Majesty’s interventions substantially undermined Russia’s military position that gave credence was given to the entirely false belief that Her Imperial Majesty was acting in Germany’s interests.

Having witnessed first hand as a nurse the carnage of war, the Empress believed that the army generals were sinfully bereft of humane considerations. As a Christian, the Empress believed that it was incumbent upon her to stop unnecessary carnage. The full support that the Empress had from Rasputin, who regarded war as inherently evil, reinforced Her Imperial Majesty’s belief in the moral correctness of her interventions on the front. The similarly deeply religious Nicholas II found it almost impossible to go against his wife because His Imperial Majesty knew that she was sincerely motivated.

However sincerely motivated the Empress was, Her Imperial Majesty’s mis-rule imperilled the viability of the Romanov dynasty. The assassination of Rasputin that was carried out in December 1916 by Prince Felix Yusupov and Grand Duke Dimitri (Nicholas II’s first cousin) was intended to save the monarchy. The conspirators believed that by killing Rasputin that the Empress would lose her capacity to rule (or more to the point mis-rule) Russia. They did not understand that Empress Alexandra had her own will to power and motivation which was derived from her determination to ensure her son’s succession as Tsar as an autocratic ruler.

In fact, Rasputin’s assassination consolidated the Empress’s power because Nicholas II (who had always been ambivalent about Rasputin) was so shocked by the murder that it precipitated an incapacitating nervous breakdown. By contrast, Empress Alexandra steeled herself so that Rasputin’s death (which for Her Imperial Majesty was a martyrdom) would have meaning in pursuit of a higher purpose.

Ironically, the new government that the Empress appointed in January 1917 following Rasputin’s assassination was (with the notable exception of Protopopov who was stubbornly and stupidly retained as interior minister) bereft of former Rasputin nominees. This government, which was headed by Prince Nicholas *Golitsyn, was mainly composed of aristocrats, who, similar to the prime minister, had previously been involved in administering the Empress’s vast war-time charities. Despite the honesty and competence of the new ministers, their government was ill-received due to their association with the Empress.

(*Prince Golitsyn happily returned to his non-political existence following the overthrow of the monarchy in March 1917. Foolishly, His Serene Highness refused to flee Russia after the Bolsheviks seized power. Hounded by the communists because he was the most senior remnant of a by-gone era, Prince Golitsyn was arrested in 1924 and executed the following year. Ironically, descendants of the late non-political prime minister claimed in 1990, the year that the Russian Monarchist Party officially surfaced, that they had helped organise this covert party in the 1920s and participated in subsequently leading it to avenge Prince Golitsyn’s execution).

Russia’s Forgotten March 1917 Revolution

The fall of the monarchy came in March 1917 when chronic food shortages in Petrograd precipitated violent bread riots. Cossacks garrisoned in the capital refused to suppress these riots that there was the prospect of military mutiny breaking out in the city. It is often forgotten that Empress Alexandra, in an inspirational speech to the sailors who guarded the capital’s Winter Palace, almost rallied them to crush the rebellion and endow Her Imperial Majesty with the possible power to have dispensed with the Duma.

Had the above scenario occurred, books, plays and movie scenes may have been written immortalizing Empress Alexandra’s dramatic rallying of the troops. Instead, the palace troops defected therefore precipitating the outbreak of a broader rebellion in the capital and across much of the nation. The defection of the palace guard was caused by the Tsar’s cousin, a senior but non-active naval officer, Grand Duke Vladimir Cyril (the husband of Grand Duchess Victoria Melita), declaring his support for constitutional parliamentary rule.

Grand Duke Vladimir Cyril along with Prime Minister Golitsyn and most cabinet ministers (with the notable exception of the hated Protopopov) made their way to the Tauride Palace where the Duma was housed to meet with deputies to call for the introduction of parliamentary rule. The Tsar, following an urgent telegram from his wife, tried to lead units of loyal troops to crush the rebellion but was thwarted by a rail strike.

Nicholas II therefore agreed to meet a parliamentary delegation led by the Speaker of the Duma, Mikhail Rodzianko which had been despatched by the Duma to meet the sovereign. The Tsar erroneously believed that the delegation was meeting with him so that a new parliamentary government led by Rodzianko would be appointed. Instead the delegation demanded that the Tsar abdicate.

Due to the hopeless political situation that he found himself in, Nicholas II complied with the demand to abdicate. The Tsar first abdicated in favour of his son Alexei, designating his brother Grand Duke Michael to serve as regent. But, concerned for his son’s health, the outgoing Nicholas II had the abdication document altered so that his brother succeeded him as Tsar.

The Romanov dynasty might have survived had the liberal Grand Duke Michael not refused to ascend the throne. The Tsar’s younger brother was a respected officer and a political liberal. His Imperial Highness had had a torturous life as the second in line to the throne. In courageous defiance of his brother, His Imperial Highness had married morganically in 1912. It took little persuading on the part of the Duma deputy Alexander Kerensky to have Grand Duke Michael* to renounce his rights to succession. This action was the final point of rupture between Michael and Nicholas as brothers.

(*Ex-Grand Duke Michael refused to leave Russia following his brother’s abdication. Michael declared his allegiance to the Russian republic upon its proclamation in September 1917, conditional on him been allowed to remain in Russia as a free citizen. Following the Bolshevik seizure of power, Michael attempted to flee Russia in March 1918 but was unfortunately apprehended at the last moment and executed in June that year with his British secretary).

Due to Grand Duke Michael’s non-ascension, His Serene Highness, Prince Georgy Lvov was appointed by the outgoing Tsar to be the new chief of state and it was in that capacity that the prince (who was the leading monarchist in the Kadet Party) appointed himself prime minister. With Nicholas II’s abdication Russia’s constitutional status was converted from an empire to a ‘state’. Russia’s eventual constitutional status was to be determined by a constituent assembly that was to be elected upon the expiration of the Duma’s term toward the end of 1917.

Prince Lvov’s ascension to office was ironic because he was descended from the ancient House of Rurik that had preceded the Romanovs as the rulers of the Grand Duchy of Moscow. (Romanov rule commenced in 1613). This prince’s ascension was not only due to his noble birth but due to the respect that His Serene Highness was held in as a member of the Duma.

The other leading candidate to be prime minister had been the parliamentary speaker, Mikhail Rodzianko. He was the leader of the liberal wing of the Octoberist Party and
a staunch constitutional monarchist. Ironically and tragically, Nicholas II and Empress Alexandra hated Rodzianko (whom they privately called the ‘fat Rodzianko’) due to this Ukrainian nobleman’s role in bringing the Octoberist Party over to the cause of constitutional parliamentary monarchy away from absolutist Tsarist rule. Had Nicholas II made Rodzianko* prime minister of a parliamentary government following Rasputin’s murder in December 1916 or during the early stages of the 1917 Petrograd revolt, then the Russian monarchy might have survived.

(* An impoverished Rodzianko prematurely died in 1924 in the Serbian capital of Belgrade due to the unfair hounding he unfairly received from Russian monarchist émigrés on the incorrect premise that he had betrayed the monarchy).

Between Epochs: Russia’s 1917 Provisional Governments

The new ‘Provisional Government’ that was formed in March 1917 was initially a coalition between the Kadets (which Prince Lvov belonged to) and the Progressive Party, which was a party of liberals that had split from the Octoberists in 1908 and were a key party within the Progressive Alliance*.

(* The Progressive Alliance (or Bloc) was a parliamentary coalition between the Progressive Party, the Kadets and the Rodzianko wing of the Octoberists that was formed in 1915).

With regard to the Octoberists, Rodzianko had them remain in official opposition to the new provisional government to convey their support for the reinstatement of the Russian monarchy. Octoberist Party support for the first Provisional Government was subtly conveyed by their founder, the rich and powerful industrialist, Alexander Guchkov (who had been a vehement critic of Rasputin’s) serving as the new War Minister, which was the only cabinet position that the Octoberist Party held .

The apparent maverick in the Provisional Government was Alexander Kerensky, who served as Justice Minister. Kerensky was the de facto leader of the urban wing of the rural based Social Revolutionary Party (the SRs). It was widely and erroneously believed that Kerensky’s power in the Provisional Government was due to his links with the Soviets as he became the first vice-chairman of the Petrograd Soviet upon its formation in 1917.

The Soviet Councils were formed following the March 1917 Revolution and were composed of workers, peasants and soldiers. Soviets varied in size and were either regional or workplace based. The power of the Soviets was initially not on a par with the Provisional Government. The potential for the Soviets to exercise and later take power was dependent upon the support that they received from rank and file soldiers.

So long as most junior officers and/ or NCOs remained onside with the Provisional Government’s objective to continue the war against the Central Powers, then the government’s position remained relatively secure. It was due to Kerensky’s impressive rhetorical powers in persuading troops to continue to fight that he was appointed Justice Minister upon the Provisional Government’s formation in March 1917.

Lenin himself realized that the way to power was through rank and file soldiers. Therefore, upon his arrival in Petrograd in April 1917, Lenin called for bread and peace to undermine war morale so that Soviets and rank and file soldiers and sailors would link up to seize power. Lenin’s opposition to the war’s continuance*put him at odds with the major parliamentary parties. These parties, which ranged from the Octoberists to the Mensheviks of the RSDLP, advocated continuing to fight the war against Germany so that their respective visions for a new Russia would come to fruition.

(*Lenin’s opposition to the war was disingenuous for, after seizing power, the new Bolshevik regime launched a military offensive against the Central Powers in February 1918).

The importance of keeping rank and file troops on side was manifested in May 1917 when the Provisional Government was obliged to reshuffle after the Foreign Minister and Kadet Party leader Pavel Milyukov offended rank and file troops by stating that Russia’s existing commitments to the Entente remained unchanged regardless of domestic political changes.

The importance of keeping troops at the front supportive of the war and of the government was such that Pavel was dropped from the cabinet as was Guchkov (thereby ending any lingering Octoberist Party involvement in government), his place as War Minister being taken by Kerensky. The government’s move to the left was reflected by the Mensheviks (who were then more strongly positioned than the Bolsheviks in the Soviets) entering the cabinet.

The issue of Russia’s continuing the war was the key issue of contention at the First All Russia Congress of Soviets held in early June 1917 in Petrograd. With a notional Menshevik majority at this congress, any prospect of the Soviets withdrawing their support for the war effort should have been negligible. However, Lenin’s oratorical skills were considerable that the Congress wavered in supporting Russia continuing with the war.

To counteract Lenin’s growing influence, the ‘Kerensky Offensive’ was later launched in June 1917. This offensive was aptly named because it was due to Kerensky’s extraordinary powers of persuasion that troops (who more often than not took orders from rank and file soldier’s committees) were motivated to take the offensive against the Germans. With the benefit of hindsight, the offensive should not have been undertaken because, no matter how inspired the Russian troops were, they could not withstand the firepower and discipline of the still formidable Germans.

Lenin was quick to take advantage of the debacle of the Kerensky Offensive. Bolshevik agents exploited rank and file discontent amongst soldiers and sailors at the home front to attempt a seizure of power in early July 1917. The Bolshevik coup attempt failed due to regular army officers maintaining discipline in the cities and Kerensky rallying troops at the front to return with him to Petrograd to crush the revolt. With the failure of the July Revolt, Kerensky took over as prime minister from Prince Lvov, who remained on as chief of state.

With Lenin fleeing to Finland and his activists either in hiding or in prison, it seemed that Russia was safe from the Bolsheviks. There was sufficient discipline within the armed forces for Russia to fight on in the war in a defensive capacity until the Allies won the war on the Western Front. There also seemed to be a consensus within the government, Duma and the Soviets that fundamental questions regarding Russia’s future would be resolved by a democratically elected constituent assembly to be elected in November 1917.

Lenin Exploits Internal Disunity

The reason that Lenin was able to snatch victory from the jaws of defeat was due to General Laur Kornilov’s attempted coup in September 1917. In fairness to General Kornilov, the coup attempt was precipitated by Kerensky’s heavy handed action in dismissing him. General Kornilov vehemently opposed the operation of soldier committees at the front because they undermined the traditional lines of authority between officers and soldiers, whereas Kerensky supported them as a safeguard against a possible Tsarist coup.

With the benefit of hindsight, Kerensky and Kornilov should have agreed to disagree so that elections to a constituent assembly had been finalised after which it have been very difficult for there to have been any extra-legal seizure of power. Emboldened by his success in crushing the Bolshevik coup attempt, Kerensky dismissed Kornilov in September thereby almost compelling the general to attempt a coup to safeguard the position of the officer corps. Kerensky himself only narrowly survived the coup attempt by freeing imprisoned Bolsheviks and co-operating with existing Bolshevik agitators within the armed forces to mobilize soldiers at the front to crush the Kornilov coup attempt.

Whether Russia would have been a better country had the Kornilov coup succeeded is a moot point, even though the ramifications of the revolt’s failure were disastrous for Russia and the world. The failure of the Kornilov coup enabled the Bolsheviks to re-activate their network within the armed forces which became even stronger than before their abortive July revolt. This was due to the vacuum that was caused by the purging of officers associated with Kornilov and the general undermining of lines of authority within the armed forces, with the power of soldier committees being consolidated.

The abortive Kornilov coup also destroyed the legacy of the 1905 Revolution. This revolution was initially a working class revolution against Tsarist autocratic rule but its traditions and political dynamics became liberal-conservative due to the issuing of the October 1905 Manifesto creating the potential for a parliamentary constitutional monarchy. Possibly, as Kerensky had intended by provoking Kornilov into attempting a coup that was crushed, the prime minister was subsequently in a position to politically remould the country by eliminating a still potent conservative-liberal right.

Furthermore, due to the failure of the Kornilov coup attempt, Menshevik traitors, such as Trotsky, defected over to the Bolshevik camp in September 1917 thereby facilitating their later gaining control of the key Petrograd and Moscow Soviets. The Bolsheviks still remained in a minority position in most Soviets across the country. But this would not matter if Lenin could (as he did) gain support amongst rank and file soldiers and sailors for a Bolshevik seizure of power.

The failure of the coup attempt did result in Russia immediately being declared a republic even though the sentimentally monarchist Prince Lvov (who was arguably the Rurik claimant to the throne) stayed on as titular head of state. Due to this abortive coup the Octoberist and Kadet parties were banned from participating in the November 1917 constituent assembly elections, although a republican rump of the Kadets participated gaining just over 5% of the vote.

The Regicide of the Romanovs

The more recently deposed Romanovs - up until the abortive 1917 September coup - were relatively secure in that they were safeguarded against any harm possibly coming to them. This was because there was still strong monarchist sentiment within the armed forces, amongst a caste of then powerful politicians and a formidable Russian Orthodox Church that was unwavering in its support for the confined Romanovs. Many Russians remained concerned for their captive former imperial family. A storekeeper in Tobolsk, where Nicholas’s family was confined, ensured that the imprisoned Romanovs were supplied with as much food and clothing as possible, free of charge.

Nicholas II’s family had first been first confined to their Tsarskoe Selo estate in comfort. Relieved of the burden of political crisis, the former Tsar regained his physical and mental health as his family drew closer together. The relative happiness and relief that the family held was tempered by a strong desire to depart for Britain where Nicholas and Alexandra’s family had spent their happiest times with Edward VII and then with George V.

The British king betrayed Nicholas II and his family by using his influence to deny them sanctuary in Britain for fear that their arrival would precipitate dangerous revolutionary unrest. The Romanov family were removed to the Siberian city of Tobolsk in August 1917 where they were still relatively well treated until the Bolshevik seizure of power in November. The family were taken further east in April 1918 to Yekaterinburg where they were held at Ipatiev House (‘the House of Special Purpose’) where they were all murdered in July that year along with their loyal servants.

Even before the advent of Glasnost and Perestroika under Mikhail Gorbachev in the 1980s, Russians from the 1950s onwards took private pilgrimages to Yekaterinburg (which during Soviet times was known as ‘Sverdlovsk’). Despite, or perhaps because of the vilification that Nicholas II was subjected to by the Soviet authorities, His Imperial Majesty became a revered figure for many Russians. This was perversely manifested in 1977 when the Politburo specifically ordered a regional party boss named Boris Yeltsin to demolish the Ipatiev House.

Yeltsin, as president of the Russian republic, later made amends by authorising and attending an official state funeral in 1998 in which the remains of Nicholas II, wife and children were interred in the Romanov family crypts at the Peter and Paul Cathedral in St. Petersburg. A church, which translates as the ‘Cathedral of the Blood’, was built in 2003 as a memorial to the martyred imperial family in Yekaterinburg.

The religious and secular veneration that Nicholas II is held in by many Russians is contemporary testament to the failure of communist rule following the fall of the Romanov dynasty. This is also ironic because the communists had intended that Lenin live on as a socialist demi-god with the late Tsar consigned as a footnote to Lenin’s supposed legend.

Historical Disaster: The November 1917 Coup

The failure of the Kornilov coup set the scene for the November 1917 Bolshevik coup. This coup coincided with the convening of the Second All-Russia Soviets Congress in Petrograd in which the misnamed Mensheviks (‘Menshevik’ meaning minority) were in the majority. Bolshevik activists were able to deceive soldiers and sailors to depose the Provisional Government on behalf of the Soviets (i.e. work councils) when in fact power was transferred to an elitist vanguard party which would late eliminate the Soviet councils.

The coup might have been crushed had Kerensky remained at the Winter Palace where the Provisional Government was headquartered. The prime minister should have remained in the capital and liaised with his Menshevik allies to utilize their working class support base within the vital Petrograd Soviet to stop the Bolshevik coup. The Bolsheviks shrewdly allowed Kerensky to flee in an American diplomatic car to the front to rally troops so that they could take control in Petrograd. By the time Kerensky reached the front, Petrograd was already so securely under Bolshevik control that it was impossible to rally any troops at the front to go to the capital to dislodge them.

The most touching resistance to the coup came from a group of Duma deputies (whose terms were about to expire) attempted to form a picket at the entrance to the Winter Palace to defend it from the Bolsheviks. The coup did not seem radical or undemocratic at the time because Lenin very cleverly allowed the national elections to proceed later that month. This gave credence to the lie that his new government would exercise power to protect the interests of the working class until the constituent assembly drew up a new democratic constitution.

In the period between the November 1917 elections and the convening of the constituent assembly in January 1918, the new government established a secret police (the Cheka) and restored discipline in the army using the pretext of launching an offensive against the Germans to eliminate soldier councils. Former Tsarist officers, such as Mikhail Tuchachevsky*, made their pact with the devil by supporting the new regime so that the authority of the officer corps could be re-asserted. These actions provided the new Bolshevik regime with the requisite capacity to dissolve the constituent assembly as part of establishing a one-party state.

(*Tuchachevsky was later executed in 1938 in the Stalinist purges as were most other former senior Tsarist officers who had collaborated with the Bolsheviks).

The impetus for the re-imposition of hierarchical authority in the armed forces was due to the new regime (which had seized power on a pretext of seeking an immediate cessation of hostility with the Central Powers) launching a new offensive in February 1918. Although this offensive failed, its more immediate objectives were achieved in that the new regime gained control of the military so that it could assert its authority.

The colossal failure of the 1918 February Offensive could well have precipitated the collapse of the new regime had it not sued for peace and signed the disgraceful Treaty of Brest-Litovsk in March 1918. Under this treaty, swathes of territory were ceded to the Central Powers and massive reparations inflicted on Russia. Lenin was not put out by this treaty because cessation of hostilities enabled his regime to focus on internal repression to avoid collapse and successfully prosecute the Russian Civil War which raged from 1918 to 1920.

The Democracy that Might Have Been: Analysis of the Results of the 1917 Russian Elections

The Russian Civil War initially broke out in January 1918 with the establishment by SR deputies (who had been prevented from taking up their seats in the dissolved constituent assembly) setting up a rival government in Siberia. That the SRs were at the forefront of opposition to the Bolsheviks was not surprising because they had come first in the November 1917 constituent assembly elections with over 40% of the vote. To be fair to the Bolsheviks, they came second with nearly 25% of the vote having appropriated most of the Mensheviks’ (who ran as the RSDLP) electoral support that they came fourth with just under 4% of the vote. Amongst the top four nationwide parties that ran, the republican rump of the Kadets who came slightly ahead of the Mensheviks.

Had the Bolsheviks not seized power, the Russian constituent assembly undoubtedly would have drawn up a federal republican constitution. The abortive September 1917 Kornilov coup had so altered the political dynamics that a viable liberal-conservative political tradition was eliminated because the majority monarchist faction of the
Kadets and the entire Octoberist Party were precluded from participating in the 1917 constituent assembly elections.

A post-1917 non-communist Russia probably could have had a strong agrarian political movement similar to what Bulgaria had in the early 1920s Alexander Stamboliyski ruled this nation as prime minister between 1919 and 1923. Stamboliyski’s peasant movement seemingly encapsulated the populist political traditions of Slavic peasantry. The Bulgarian Peasants/Agrarian Party before the First World War was at the forefront of a republican south Slav political movement that was known as ‘Yugoslavism’.

A political success of Kerensky’s brief period as prime minister was that he expanded the electoral base of the SRs into the cities to encompass the support of the Mensheviks and supporters of the Kadets and Octoberists. This was ironic because Kerensky was not a conventional SR but rather a member of the urban based and loosely organised SR aligned Labourers and Toilers Party. (Kerensky’s micro party was separate from the RSDLP and as such he was never a Menshevik as is commonly believed).

Had there been no Kornilov coup attempt, the participation of the Kadets and the Octoberists would have made for more interesting and representative electoral politics. Going by political trends, the relatively liberal Rodzianko wing of Octoberists probably would have formed a political configuration with the Kadets while conservative Octoberists could have aligned with the far right Russian Peoples’ Union.

There were ethnic based parties which participated that would have strongly agitated for a federal Russia. Touchingly, the SRs received a high vote in the Ukraine which would have created strong pressure for a federal republic had there being a constituent assembly. During the Russian Civil War of 1918 to 1920, the SRs were prevented from forming a Green army due to respective persecution by both the Bolshevik Reds and the generally reactionary Kolchak led ‘Whites’. Consequently, there were ethnic Russian SRs who made their way to fight in the Ukraine to unsuccessfully support the Ukrainian SRs. These Russian SRs may not have been primarily fighting for Ukrainian independence but they were at the very least out of necessity against the Russian and Ukrainian Bolsheviks.

That the Mensheviks won representation in the 1917 constituent assembly elections was due to the disproportionate vote they garnered in Georgia. Similar to the SRs, the Mensheviks lingered on in a non-Russian component of the aborted democratic Russian Republic where they effectively found themselves ambiguously supporting the subsequent Georgian struggle for independence by fighting against the Bolsheviks.

The Future Contagion Germinates: The World Fails to Support the Russian Whites

The White anti-communist Siberian based government, established in January 1918, was initially SR led but supported by conservative (if not reactionary) officers until a coup led by Admiral Alexander Kolchak in November 1918 eliminated the SRs and Mensheviks from this Siberian based government. The subsequent Kolchak regime main civilian political support base came from former Octoberists (which surprisingly included Rodzianko) who did not formally re-constitute as a political party. The only remotely liberal senior member within this White regime was Victor Pepleyayev, *Kolchak’s prime minister who was a former Kadet.

(*Kolchak declared himself ‘Supreme Ruler of Russia’ and it was plausible that had he won the Russian Civil War he might have declared himself Tsar of a new imperial dynasty).

What potential that existed for a future Russian constitutional monarchy paradoxically lived on in Finland. To maintain the pretence that his government was democratic in order to gain valuable time between the November 1917 elections and the scheduled convening of the constituent assembly in January 1918, Finnish independence was ostensibly recognised by Lenin in December 1917. In light of future events, it was ironic that a Russian communist regime delegation led by Stalin visited the Finnish capital of Helsinki in December of 1917 to notionally accept Finnish independence.

Lenin’s recognition of Finnish recognition provided a cover by which he could disassociate his government from a Bolshevik faction within the Finnish Social Democratic Party that attempted to seize power in January 1918. The Finnish Reds probably would have won the Finnish Civil War had the Finnish Whites not been led by the brilliant General (later Marshal) Carl Gustav Mannerheim. He was a Swedish speaking aristocrat who belonged to the Swedish elite in Finland who in return for supporting Russia rule in Finland were accepted into the Tsarist establishment.

It is not known if Mannerheim supported the Kornilov coup in September 1917 but he made a daring escape, departing from Petrograd Central Railway Station, reputedly dressed as an old woman, to avoid probable arrest, to return to his long since departed homeland. Having subsequently established himself as Regent* of Finland in 1918, Mannerheim was in a position to help the Russian Whites.

(* Mannerheim could have founded a new royal Finnish dynasty but refused to do so and made way for a Finnish republic in 1919 after also declining to be the first president of the new Finnish Republic. This Finnish statesman would subsequently protect Finnish democracy from fascism during the inter-war period, brilliantly extricating Finland from its forced alliance with Nazi Germany in 1944 and simultaneously thwart a Soviet attempt to foist a communist regime on the nation. During his time as Finnish President between 1944 and 1946, Marshal Mannerheim prominently displayed a framed photo on his desk of himself as a military cadet meeting with Nicholas II).

A Mannerheim backed Russian North Western Government was established in Finland in 1918. This alternate White coalition government was composed of monarchists, SRs and Mensheviks. Wisely, this government deferred important issues such as Russia’s form of government to be decided by a new elected constituent assembly. This government’s army was commanded by the conservative monarchist but widely accepted General Nikolai Judenich.

While the Bolsheviks were distracted by fighting against Admiral Kolchak’s forces in Siberia (who they were unfortunately beating) Mannerheim devised a brilliant plan for White Russian forces, using Finland as their base, to launch the liberation of Petrograd. Mannerheim had worked out the logistical details of what was required with the British military attaché in Helsinki, General Hebert Gough, for a successful military operation. Grand Duchess Victoria Melita*conveyed in her letter to King George V an outline of Mannerheim’s plan and the resources that were needed from the Allies for success.

(*Mannerheim had provided protection to the Grand Duchess and her husband Grand Duke Vladimir Cyril who he hoped would be a future Tsar of a Russian constitutional parliamentary monarchy).

George V in a reply letter to Grand Duchess Victoria Melita refused to help which reflected the stance of Lloyd George’s government. The French government and the French armed chiefs of staff however were prepared to provide crucial help but would not do so without the support of Britain. (This probably reflected the then anglophila France’s ruling ‘Radicals’).

The failure (or refusal) of the Allies to help the Whites (particularly the North Western Whites) destroyed any prospect of a post-war democratic Russia emerging. This had been a key objective of Russians from various political backgrounds in supporting their country’s membership of the Entente. A post-war democratic Russia would have been morally indebted to Britain and France. This would have augured well for a democratic and peaceful Europe because France was a staunch supporter of the independence of successor states such as Poland.

There was limited Anglo-French, as well as American and Japanese military support for the Admiral Kolchak Whites in the Far East but this was ineffective due to the war wariness of Allied governments. Had foreign support for the Whites been more forthcoming, this would also have helped create a democratic Russia with successor states such as the Ukraine and Georgia coming into being that the First World War might ultimately contributed to a better world.

The significant cultural impact that Russian émigrés had in exile (most notably in Paris) was reflective of the brilliant future that a non-communist Russia might have had on the world. Exiled Russian political parties lived on in quality émigré newspapers that were a reflection of what might have been had there been a Russian democracy. In non-political terms, the cultural impact of Russian émigrés in Paris in art and ballet was also a sign of the greatness that might have been, had Leninism as a power-over ideology not hi-jacked Russia.

The shrewdness of Russian political émigrés was reflected in 1934 when the leadership of the RSDLP (the Mensheviks) closed up their Paris based party when they surmised that most of their members were probably Soviet NKVD spies. This action was probably a blow to the Soviets because they were denied an important de facto spying agency. Ironically, the Menshevik tradition lived on in the United States in the Russian émigré newspaper, The Socialist Messenger.

The establishment of a communist Russia was, to say the least, one of the great disasters of modern history. The ramifications of this development included the loss of lives of millions of people, the subsequent emergence of fascism in the inter-war period and the later artificial division of the world following the Second World War into two nuclear armed power blocs.

The ideological legacy of Russian communism may still return to afflict the world. There are Trotskyite-Leninist parties that could emulate Lenin’s power-over approach by entrenching powerfully organised but destructive minorities if the world does not pull out of the GFC crisis that now threatens to precipitate great social destruction.

A Democracy Consolidates: Britain Before and After the First World War

A nation that did tremendously benefit from being on the winning side in the First World War was Britain because her democracy was accepted by nearly all of her people thereby constituting its final application. Great ideological struggles in Britain (albeit within a generally classical liberal framework) in the nineteenth century between Benjamin Disraeli and William Gladstone not only established the contemporary framework for Britain’s traditional two party system but helped create a strong British civil society (as opposed to a strong state).

The Tory (Conservative) Party’s protectionist orientation gave it a strong working class support base (which still lingers today) but this was not converted into profound social and economic reform due to a limited voting franchise. Tory opposition in the late 1840s against repeal of the protectionist Corn Laws expanded their support amongst the peasantry and the emerging industrial working class despite their support for the maintenance of a relatively narrow voting property-owning suffrage.

Tory/Whig rivalry of the nineteenth and early twentieth century was normally good natured (except for the issue of Irish Home Rule). A positive ramification of this rivalry was that talented members of the establishment or aspiring middle class often committed themselves to entering electoral politics such that Britain had a generally higher calibre of politician than most nations. Administering the world’s largest geographically spread empire also helped spawn a critical mass of able bureaucrats and soldiers who became adept problem solvers.

For all of Great Britain’s greatness, this nation and empire would have been ill-equipped to handle the major struggles that came with the outbreak of the First World War had it not been for the legacy of Edward VII (1841 to 1910) who reigned from 1901 to 1910. This monarch is probably most famous for his bon vivant character, but when he was Prince of Wales, His Royal Highness’s frustration at having to wait to succeed to the throne had to endure difficult personal relations with his mother. It is too frightening to think of how disastrously history might have turned out had the Prince of Wales become personally warped by his challenging maternal relationship as Wilhelm II was.

For all the frustration that Edward as heir to the throne as the Prince of Wales felt, His Royal Highness’s time (contrary to appearances) was productively spent. This was due to his friendship with Napoleon III of France helping give the British heir an understanding of continental politics that the most political of his countrymen did not share due to their immersion in the British Empire. From 1851 to the last years of his life, the future Edward VII made a point of annually holidaying in France so that he could secure an Anglo-French alliance.

The Prince of Wales was naturally distressed by the fall of Napoleon III’s Second Empire in 1870 but was determined that the fallen Emperor’s objective of an Anglo-French alliance be achieved. Prince Albert Edward was often subjected to taunts (which were expressions of hostility derived from negative memories of the Napoleonic Wars) during his annual French holiday. The usually extroverted prince surprised all by his cool stoic non-response which was derived from his overwhelming determination for Britain and France to enter an alliance to safeguard against a future bellicose Germany.

Prince Edward Albert’s first holidays to France were probably motivated by his profound admiration for the political acumen of Napoleon III and mutual wish that the memory of the Napoleonic Wars not lead to permanent ill-feeling between the British and French peoples. This desire for Anglo-French reconciliation was increased on Prince Albert Edward’s part due to his concern with regard to the emergence of a Prussian led Germany in 1870.

Due to long visits to Britain by his sister Princess Victoria and her husband Crown Prince Frederick, Prince Albert Edward realized that unless the German monarchy restrained Prussian militarism an authoritarian Germany would dominate Europe. The death of the three month reigning Frederick III of Germany (German sovereigns went by the reign date of Prussian kings) in 1881 was such a hideous blow to both Prince Edward and Queen Victoria that mother and sone were partially reconciled.

For all Queen Victoria’s shrewd insights that Her Majesty gained through her prodigious royal correspondence, (which gave Her Majesty an intelligence system that rivalled a national spy service), Her Majesty did not have the stamina and tenacity to forge a British alliance with France. The irony was that the Queen’s virtual exclusion of her son from the affairs of state gave him the necessary time to devote to his serious project when His Royal Highness was not enjoying the good life. The determination of the French to avenge the defeat of 1870 also endowed Prince Albert Edward’s project with the scope for future success.

The forging of the Entente Cordiale in 1904 was therefore a testament to the success of French foreign policy and the personal diplomacy of Edward VII. Due to the failure (or more to the point the conscious refusal) of Wilhelm II to restrain Prussian inspired militarism (which he actually encouraged), German militarism probably would have dominated Europe had Britain not entered the First World War in 1914.

Britain’s ostensible entry into the First World War to defend the integrity of plucky Belgium has now been dismissed as a cynical excuse to go to war. But it should not be forgotten that Belgium had been established in 1830 with Queen Victoria and Prince Albert’s uncle, Prince Leopold of Saxe-Coburg-Gotha becoming King of the Belgiums in 1831. Due to the influence of the Prince Consort Albert, an important objective of British foreign policy in continental Europe (such as it was) which crossed over into the early twentieth century was to safeguard Belgium independence.

The British entry into the First World War may have been due to the Asquith government’s desire to delay Irish Home Rule to avoid a unionist revolt in Northern Ireland. But the German violation of Belgium neutrality hit on a raw nerve within Foreign Office circles due to the royal family’s concern for this relatively small kingdom. Popular enthusiasm for Britain’s entry into the war was derived from Wilhelm II’s widespread unpopularity which His Imperial Majesty had foolishly stoked.

There was a widespread belief in military circles and among the peoples of Europe that a general war in Europe would be relatively brief, similar to the Franco-Prussian War of 1870-1871. There was an erroneous assumption, that as with the aforementioned war, artillery would decide the outcome and therefore make for a sharp and short war. This was an untenable premise because Anglo-French and German artillery were so much on a par with each other that a bloody stalemate ensued.

The First World War Threatens Europe’s Social Structure

As the Russian statesman Count Witte insightfully observed, a sustained all-out war threatened the social structures of participating nations to the point of imperilling their political-social systems. Unfortunately for the Count, his prediction was to prove only too prophetic for Russia.

The development of the ‘Great War’ (as the First World War was known until the outbreak of the Second World War) into a protracted war did present a profound challenge to the British establishment which helps explain why a radical Whig Welshman, David Lloyd George, (who radical in the context of the then Tory-Whig dichotomy) became prime minister in 1916 at the head of a national coalition government.

Lloyd George had previously gained fame (or notoriety) for his courageous support of the Afrikaners during the Second Boer War. He saw the Afrikaners as similar to the Welsh, to the extent that they were fighting against a stronger power for their national identity. The Welsh parliamentarian’s stance established himself as the leading radical within the Liberal Party so that he became the Minister for Munitions in 1915. His real task in this portfolio was to maintain the patriotic war morale of munitions workers by making inspirational speeches. The success of Lloyd George in his ministerial endeavours was such that he became War Secretary in 1916, and by the end of that year, he had succeeded the lacklustre Hebert Asquith as prime minister.

Prime Minister Lloyd George’s successfully led his nation to eventual victory in 1918 by ensuring that, in the preceding two year interregnum, British morale had withstood the incredible tribulations of war. The role that Lloyd George fulfilled in the immediate post-war period was by contrast far from illustrious. In the post-war period, Lloyd George helped inflict respectively harsh peace treaties against Germany and Hungary, refused to provide sufficient support to the Russian Whites and despatched the Black and Tan death squads to Ireland.

The general hope amongst the British that the world would be a better place was reflected by strong bi-partisan support for the new League of Nations. As terrible as the war had been there had been, technological changes which helped improve the standard of living with the advent of new factory technologies and home gadgets.

An important socio- political change that came to Britain following the First World War were granting initially limited female suffrage and extending full male suffrage to men twenty one and older. (Full suffrage for women aged twenty-one and over was granted in 1929). Further socio-political change was also manifested by the impact of the war in regard to changes to Britain’s party system.

British Party Formation Following the First World War

The most important political change that the war helped usher in was the British Labour Party displacing the Liberal Party in the 1920s as one of Britain’s two major political parties (with the Tories remaining the other major party). The British Labour Party was founded in 1906 as a parliamentary party following on from the *Labour Representation Committee that had been founded in 1900. This committee had first co-ordinated trade union backed candidacies for parliament-a practice that had first began in the 1880s.

(*Confusingly, an Independent Labour Party, the ILP, continued on as a more or less Labour Party aligned political party. The ILP notionally represented the interests of unionists and labour activists associated with the Labour Representation Committee that did not formally join the Labour Party founded in 1906).

Increased class consciousness as a result of the demands made of workers during the First World War combined with the Liberal Party splitting into Asquith and Lloyd George wings had helped the Labour Party become a national contender for power. The Labour leader Ramsay Mc Donald formed the first British Labour government in 1924 (which lasted between January and November that year) and heading a minority Labour government between 1929 and 1931 that received support from the Liberal Party.

The Conservative Party (Tory) also experienced profound change, gaining strong middle class support due to the steep decline of the Liberal Party. The Tory Party’s change was manifested in 1922 when party backbenchers formed the 1922 Committee which essentially took the party out of the National Coalition Government. *This committee ensured the succession in 1923 of the first Tory leader from the middle class, Stanley Baldwin. He first served as prime minister from 1924 to 1929.

(*The Conservative Party formally adopted a formalised selection process in 1965 by which parliamentarians then elected the party leader).

The advance of the Labour Party to be one of the nation’s two major political parties was a reflection of increased working class consciousness. Britain’s new second force was closely connected to the British union movement. An important political tradition in British trade unionism was that of voluntarism. In contrast to the American version of voluntarism (which emphasises civic involvement in society) the British version was (and is) trade union focused.

British voluntarism refers to the important role of trade union shop stewards (workplace delegates) in organising and often leading a virtual parallel force within the working class in regard to the interests of employers. Voluntarism has often been strong in coal mining communities. Ironically, an impact of British union voluntarism has been to facilitate a strong sense of working class identity and rank and file support for union organisation without a necessarily strong institutional bargaining position due to shop stewards arriving at ad hoc arrangements with management*.

(* The British scenario is almost the inverse of what occurred in Australia where a coherent and effective system of state backed arbitration was developed from the 1900s onwards enabling Australian unions, which were often craft based, effectively representing their members’ interests. The dilution of arbitral supports in the 1990s has led to a focus within the Australian union movement upon generating rank and file support to facilitate union effectiveness but achieving this outcome is still a work in progress).

The mobilization of working class support for the war effort was an important factor in the Labour Party displacing the Liberals in the 1920s as one of Britain’s two major parties. The Mc Donald led Labour Party’s refusal to support the May 1926 General Strike (which was precipitated by a coal miners strike after draconian changes in pay and conditions were imposed on mine workers) ensured that the party essentially remained a social democratic party despite Marxist sentiment amongst many rank and file members and some affiliated unions.

Mc Donald’s staunch refusal to support the 1926 General Strike resulted in the Labour Party gaining sufficient public acceptance to increase its number of seats in the 1929 elections to form a government with Liberal Party support. The new government essentially had no strategy to deal with the trauma that beset Britain and the world with the onset of the Great Depression in October 1929. The need for the Labour government to take ‘radical’ action to solve the problems was encapsulated in the advocacy by Oswald Moseley’s of Keynesian economics.

Labour’s Refusal to Adopt Keynesianism Spawns Mosley’s Fascism

Mosley, at this time (1929 to 1931) was the Chancellor of the Duchy of Lancaster (i.e. Minister without Portfolio outside the cabinet). This war hero was elected at the age of twenty-one to parliament in 1918 as a Conservative candidate and feted as a future prime minister. The young Mosley demonstrated great courage by breaking with the Conservatives due to their support for violent oppression in Ireland during the immediate post-First World War period. After a stint in the ILP, Mosley formally joined the Labour Party with the enthusiastic support of Prime Minister Mc Donald.

The relatively young minister might have had a very important positive impact on history had Prime Minister Mc Donald endorsed and implemented Mosley’s then radical Keynesian economic ideas. Keynesianism, (which was derived from the ideas of the great economist, John Maynard Keynes, 1883-1946) basically entailed increasing government spending to boost demand so that employment is generated. This economic approach became the economic orthodoxy in Britain following the Second World War.

Had Ramsay Mc Donald adopted a Keynesian approach to economics, Britain might have come out of the Great Depression earlier than what it did with his government being remembered as an important historical success. A political ramification of Mc Donald’s refusal to adopt Keynesianism was that Mosley broke with the government in 1931 to found the New Party. This party was probably the world’s most explicit politically Keynesian operation.

Due to the two party nature of the British political system, the New Party failed to win any parliamentary seats in the 1931 General Elections. Mosley should have taken the rump of the New Party which had an array of intelligent people to later transition them and their ideas into the political mainstream. Mosley’s political time could have come during and after the Second World War when Keynesianism virtually became the norm of government economic policy. Instead, Mosley fell under the sway of Italy’s ambassador to the Court of St. James (i.e. Britain) Count Dino Grandi. With secret Italian fascist regime funding, Mosley stupidly founded the British Union of Fascists (BUF) in October 1932.

Prospects for Keynesian economics being adopted before the Second World War were also ended by Prime Minister Ramsay Mc Donald in August 1931 breaking with his party to form a new coalition government composed of his personal Labour supporters (later known as ‘National Labour’), the Liberals and most importantly, the Conservative Party. The development of the National Government ended any prospect of Keynesianism being used to get Britain out of the Great Depression.

Indeed, the Mc Donald government between 1929 and 1931 had been a centre-left government which had refused to take the plunge by moving to a Keynesian economic paradigm. This refusal was probably due to uncertainty that deficit financing could work and the related fear that Britain’s existing banking-financial system might be consequently imperilled.

Both the Labour and Liberal parties missed a golden opportunity to innovatively lift Britain out off the Great Depression by utilizing Keynesian economics. National Labour and the National Liberals (those Liberals that remained in the National Government following the October 1931 elections) supported a Conservative Party dominated government that rejected Keynesianism.

The main non-parliamentary activity of interest of the National Labour Party (which was essentially a Tory satellite party that was first led by Ramsay Mc Donald and after his death in 1937 by his son Malcolm until this party was formally closed after the Second World War) was its publication, ‘The News Letter’. From a counter historical perspective, the National Labour might have avoided its inevitable decline had the publishers of the ‘News Letter’ linked up with former members of the defunct New Party to provide ideas and a sense of policy direction.

Future Labour foreign secretary Aneurin Bevan and future Conservative prime minister, Harold Mac Millan had been supportive of Mosley’s advocacy of Keynesianism but declined to follow him into the New Party. Both Bevan and Mac Millan would later be instrumental in having their respective parties adopt Keynesianism following the Second World War.

Mosley was thwarted in 1930 in his attempt to have the Mac Donald Government adopt his Keynesian ideas by his arch-rival, James Thomas, the Lord Privy Seal (i.e. Member without Portfolio within the cabinet). Thomas’s opposition was primarily derived from his deep personal dislike of Mosley. Although Thomas was undoubtedly correct in his character assessment of Mosley, the Lord Privy Seal’s opposition was unfortunate in that it probably denied Britain a possible means of getting out of the Great Depression.

A Stolid Centre Holds: Extremism Fails to Destroy British Democracy

The Mc Donald National Government (which was confirmed in office in the October 1931 elections) from 1931 to 1935 was really dominated by the Conservative Party. It is now seems ironic and seemingly inexplicable that the Baldwin-dominated Mc Donald government was then popular. The major accomplishment of this government was that it maintained general socio-economic and political stability.

During the Great Depression, Britain had the advantage of having a strong pound sterling as its currency. The value of the British pound sterling was partially derived from British banks and financial institutions having long term and diverse international investments. The value of the pound helped Britain to avoid the hyper inflation that Germany suffered in the 1930s that would be crucial to facilitating Hitler’s rise to power.

The real crime of the Mc Donald-Baldwin era was that the government allowed the heavy industrial and coal producing north of Great Britain to bear the brunt of massive unemployment. The more service orientated south survived in more modest but still relatively prosperous circumstances due to the government’s fiscal prudence.

Baldwin was considered to be the ‘strong man’ in the Mc Donald Government as its Chancellor of the Exchequer and because the Conservative Party was the biggest party within the coalition. The boorish Baldwin was popular due to his steady and uninspired safe handling of the economy. His stolid personality helped the Tories maintain their popularity with, if not the allegiance of most of the middle class and some of the working class during the 1930s.

The National Government maintained its internal cohesion due to the interest of Prime Minister Mc Donald in foreign affairs in preference to domestic concerns which were left to the narrow minded Baldwin. Prime Minister Mc Donald did have a passion for foreign affairs that was focused on making the League of Nations into the pre-eminent power in international relations. There was a bi-partisan belief in Britain that the horrors of the First World War could be avoided if there was an effective League of Nations

With regard to Britain’s domestic context, social and economic stability was also maintained in Britain during the Great Depression because the hard hit industrial north remained staunchly loyal to the British Labour Party instead of the unattractive Stalinist Communist Party of Great Britain (CPGB). The November 1935 elections paradoxically solidified the Labour Party’s position despite the Conservative Party maintaining its majority as the opposition party took seats from the National Labour Party whose prestige had been eroded after Mc Donald stood down as prime minister in June to be formally succeeded by Baldwin.

Political extremism in Britain in the 1930s was confined to the working class areas of East London. However, it was rumoured that elements of the aristocratic establishment financially supported the BUF to fight against the communist presence in East London so that the fascists would not threaten the Conservative Party on a nationwide basis, particularly by to appealing to the lower middle class. Another benefit of the BUF’s presence in East London was that it diverted the CPGB’s resources from potential bases of support in northern Britain.

The British Nexus Between Patriotism and Democracy

Traitors within the British establishment following the Fall of France in 1940 believed the BUF established the foundation for a future collaborationist regime. Such a regime probably would have been a coalition between deluded aristocrats and mindless East London working class toughs.

The idea of there being a collaborationist Britain was inherently ridiculous because the overwhelming majority of Britons were opposed toward any accommodation with Hitler. Indeed, Hitler had initially not been inclined toward conquering Great Britain after the 1940 Fall of France because he believed that the British government would acquiesce to German dominance of Europe in return for Germany forgoing an invasion of Britain and allowing the preservation of the British Empire.

The German dictator did not realize that, for most British, the war was more than a struggle for military supremacy but was an ideological one in which victory would be measured by the destruction of Nazism. Hitler, in deciding to conquer Britain, intended to impose the cruellest occupation regime that Mosley would probably have had a marginal role in heading a collaborationist regime.

Italy’s Failure to Consolidate Democracy Facilitates Fascism

For all the determination of Britain’s people and leadership to not only to resist Hitler but to destroy his regime there was still a strong British sentiment toward the Italian dictator Benito Mussolini until Italy’s declaration of war against France and Great Britain in early June 1940. Due to the current importance of Italy in determining whether the European debt crisis precipitates a profound international economic crisis, an overview of modern Italian history was overtaken.

The purpose of this review is to identify key themes so that possible courses of action to avert an international financial catastrophe can be averted by placing advocated solutions in a broader historical context to assess their viability.

Benito Mussolini’s (1883 to 1945) impact on Italian history was immense. In Europe in the 1920s and in the 1930s Mussolini was widely admired for apparently giving his nation a sense of purpose and achievement following the horrors of the First World War. It now seems bizarre that such a seemingly strange person as Mussolini, who came to power in 1922 by an apparent combination of bluff, opportunism and caprice, was internationally admired. In fact, Mussolini had already made a substantial impact on Italian history before being appointed prime minister and, had he never become dictator of Italy, he might have now an honoured place in Italian history.

The future Duce had been a socialist agitator with a great flair for journalism due to his simpatico writing style. His success in journalism was apparent when he edited the Socialist newspaper Avanti between 1912 and 1915. Avanti under Mussolini gained a nation wide circulation due to the paper’s compelling written style and lay out as opposed to its subject content. The avowedly Marxist and pacifist Mussolini stunned his Socialist Party (the PSI) and politically aware Italians in 1914 when he declared his support for the Entente which contradicted his party’s position of supporting neutrality.

Mussolini’s amazing about face led to amazing paradoxes that were partly reflected by his helping to sustain improbable alliances. The term ‘fascist’ that would notoriously become synonymous with Mussolini was coined in 1914 in reference to the improbable interventionist alliance between the liberal Italian Republican Party (PRI) and the authoritarian monarchist Italian Nationalist Association (ANI). Fasces originally referred to the bundle of sticks that had been used by officials in ancient Rome to symbolize the unity and justice of the state regardless of differences in rank. The fasces symbol was used to denote the temporary alliance between the PRI and the ANI.

The political polar opposites of the PRI and the ANI came together between 1914 and 1915 in joint rallies to agitate for Italian intervention on the side of the Entente to complete Risorgimento (‘Resurgence’) or the unification of Italy by taking the Italian speaking components of the Austro-Hungarian Empire. Mussolini through his rhetorical talents and the publicity he generated by flamboyantly resisting arrest helped forge the ‘fascist’ alliance between the two domestic opposites.

The future dictator might have been consigned to being an interesting footnote in history whose agitation had moderately contributed to Italy joining the Entente in 1915 by declaring war on Austro-Hungary had it not been for his role in subsequently sustaining the Italian war effort. Through the propaganda agitation of the French secret-service funded-Popolo d’ Italia, the commitment of Italy’s mildly anti-clerical middle-class to supporting the war effort was sustained. Without the determination of Italy’s middle class (who were the back bone of support for the Italian monarchy), the Italian war effort probably would have collapsed.

As the editor of Popolo d’ Italia, Mussolini succeeded in lifting home morale. He somehow managed to maintain his paper’s readers’ interests in himself by despatching egocentric but enthralling articles about his experiences at the front between 1915 and 1917 as a front line soldier. Although Mussolini’s first fascist electoral slate only garnered 54,000 votes in the 1919 national elections he still had a dedicated national following that extended beyond his then paltry voting base which would later be manifested by his seeming improbable rise to power.

Italy’s Royal House of Savoy

The later rise to power of Mussolini to power was due to the support that he received from the Italian ‘liberal’ monarchist elite and the Italian middle class. Italian unification was essentially achieved in 1861 due to the brilliance of Count Camilo Cavour and the supportive role of the House of Savoy.

The royal House of Savoy, which had originated in what is now Switzerland, ruled over territory for over one thousand years until Italy became a republic following a rigged referendum in early June 1946. A unique characteristic of this royal family was that they it did not remain stationary by ruling over a particular territory. As a result, the House of Savoy retained close links to its officer corps and troops to provide a sense of continuity when and after a territorial shift had occurred.

Therefore, the House of Savoy’s autocratic King Charles Albert of Piedmont-Sardinia was probably an insincere constitutional democrat when he aligned his kingdom with the revolutions of 1848 that swept the Italian peninsula that year. Despite the Austrian defeat of the 1848 Italian revolutions, the House of Savoy gained belated acceptance as the standard bearer of national aspirations among most Italian liberals desiring national unity against the dynasties of various Italian kingdoms and duchies whose survival was ultimately predicated upon Austrian support. Due to political necessity, Piedmont-Sardinia adopted an ambiguous constitution, the 1848 Statute.

The 1848 Statute was ambiguous because it fudged the issue of whether governments were responsible to the king or to the parliament. The fact that, between 1848 and 1922 (with a brief period of constitutional ambiguity in the 1890s under the authoritarian prime ministership of Francesco Crispi, whom Mussolini would later cite as his political inspiration) Piedmont- Sardinia was a parliamentary monarchy, due to the political legacy of the great liberal Italian statesman, Count Camilo Cavour.

The authoritarian-inclined King Victor Emanuel II in 1849 (who succeeded his father Charles Albert following his abdication) due to political necessity was compelled to accept parliamentary rule in 1849 and to appoint Count Cavour as prime minister of Piedmont-Sardinia in 1852. Count Cavour was a dedicated constitutional monarchist who held Victor Emanuel II in personal contempt due to His Majesty’s disdain for the 1848 Statute.

The political achievements of Count Cavour as prime minister are too numerous and the political skills he utilized to achieve them too complicated for them to be briefly overviewed. His major political accomplishments that can be briefly listed are the foundation of the Kingdom of Italy in 1861 and forcing a very reluctant Victor Emanuel II (who reigned as king of Italy from 1861 to 1878 until his death) to not only accept the 1848 Statute but to appoint governments based upon parliamentary support.

The achievement of Italian unification in 1861 was due to Count Cavour aligning Piedmont- Sardinia with Napoleon III’s Second Empire in 1859 to go to war against Austria. The French Emperor’s objective had been to destroy Austrian power on the Italian peninsula so that an Italian confederation could be established under the leadership of the pope. Because the temporal rule of the popes in the Papal States had been reliant since the 1848 revolutions on the support of French garrisons, Napoleon III envisaged that Italy would be dominated by the French and that he would be able to gain and maintain Catholic domestic support for his regime.

Napoleon III’s scenario did not come to pass because the vacuum caused by Austria’s military defeat in 1859 was so great that Italian unification was achieved in 1861 under the leadership of Piedmont-Sardinia instead of by a French backed papal led Italian confederation. This tremendous achievement of Cavour’s created too much a strain on his health and he died within weeks of Italian unification been achieved.

It has been said Napoleon III’s reign could have ended in great success had His Imperial Majesty not had to contend with the superior political skills of Otto Bismarck and Count Cavour. That may have been true, but in the case of Cavour (as opposed to Bismarck) it was his intention to consolidate the newly created state as a constitutional parliamentary monarchy whereas Bismarck had wanted to maintain autocratic rule via domestic and foreign policy manipulation.

Stalled Party Formation Retards Italian Democracy

That the Kingdom of Italy did not consolidate as a parliamentary monarchy was due to the dysfunction of the Italian party system which was reflective of unresolved religious and class differences in Italian society. Due to papal hostility toward the Italian Kingdom (which resulted from the Italian incorporation of the Papal States in 1870 following the withdrawal of French troops to fight against the Prussians), too many Catholics initially refused to participate in national politics.

Ironically, to guard against possible Catholic infiltration, the ‘party’ of the Italian liberal elite, the Italian Liberal Party (PLI), was not a conventional political party with branches. Instead government appointed prefects (who acted as representatives of the national government at a local government level) more often than not organised PLI electoral tickets and campaigns.

The Italian liberal elite also maintained its power by initially restricting the voting suffrage and gerrymandering and manipulating votes in the south of Italy as male suffrage was extended. As a result, when the working-class supported Italian Socialist Party (PSI) was founded in 1895, it was strongly Marxist orientated and staunchly republican. This militated against Italy being a functioning parliamentary constitutional monarchy with widespread public acceptance.

Furthermore, due to the covert power that Italian kings exercised through having a secret service, links to the Piedmontese officer corps and personal network within the diplomatic corps, Italy’s capacity to have a non-political constitutional monarchy was further constrained.

In the light of subsequent events, it was ironic that the accession in 1900 of Victor Emanuel III (1869 to 1947) as king seemed to herald Italy becoming a genuine constitutional parliamentary monarchy. The new king (who succeeded his assassinated father Umberto I) was then considered to be a political liberal. His Majesty was considered to be an intelligent man in his own right. But Victor Emanuel III’s intelligence was overwhelmingly derived from the cynical deductions that His Majesty made.

The king’s cynical nature was manifested when he went into a political alliance with another cynic, Giovanni Giolitti (1842 to 1928). This liberal statesman was a cynical operator but his political aims were sincere in that he considered himself to be the political heir of Count Cavour. As such, Giolitti’s political objectives were to create an overwhelmingly accepted constitutional democratic parliamentary monarchy. Therefore, as *prime minister, Giolitti often took either a neutral stance or pro-labour stance in industrial disputes as part of his strategy of converting the PSI into a parliamentary orientated party that accepted the legitimacy of the Italian monarchy.

(*Giolitti served as prime minister from 1903 to 1905, 1906 to 1909, 1911 to 1914 and from 1920 to 1921).

Giolitti’s intermittent absences from office as prime minister were strategic withdrawals. Until 1915, the Italian governments that were formed were based upon Victor Emmanuel III acting on Giolitti’s advice or parliamentary majorities that he had assembled. When there was pressure for political reform, such as extension to the voting suffrage, Giolitti cynically granted reform to strengthen his political position.

This Italian statesman’s cynical approach to reform was manifested in the 1900s when voting suffrage was expanded so that electoral manipulation could be undertaken by government-appointed local-government prefects in the south. As cynical as Giolitti was, he still believed the foundation for Italy becoming a genuine democracy was being set by expanding voting suffrage to help convert the PSI into a social democratic party.

Giolitti in Eclipse? : Italy Enters the First World War

Giolitti was opposed to Italy’s entry into the Second World War in 1915 and his power went into temporary political eclipse after Victor Emmanuel III defied him by exercising the royal prerogative of declaring war on Austria-Hungary. The socio-political ramification of Italy’s agonising involvement in the First World War was such that there was a widespread demand for political reform emerged at the war’s end.

The post-war groundswell for political reform was such that the parliament in 1918 heeded calls from a determined, if war weary public, to pass legislation (over Giolitti’s strenuous objections) that introduced a proportional system of parliamentary representation elected on a list system instead of on a single member constituency basis.

Giolitti’s fears that Liberal dominance would be ended were seemingly confirmed when the PSI and the Christian Democrat Populari slates won a parliamentary majority between them in the 1919 elections. Profound differences within the PSI and the Populari as well as internal party differences within the two respective parties enabled the politicians from the liberal elite to hold onto power. This was reflected by Victor Emanuel III recalling Giolitti as prime minister in 1920.

In his last tenure as prime minister (1920 to 1921) Giolitti was his last and least auspicious because he inadvertedly paved the way for fascism to come to power in 1922. Under Giolitti’s orders, prefects and city police chiefs helped organise fascist squads to overthrow Marxist orientated PSI councils and break up industrial strikes. Giolitti supported these actions in pursuit of his objective of transforming the PSI into a democratic centre-left party and the PLI into a conventional political party.

The role that Giolitti fulfilled in cultivating Italian fascism has been condemned but his objective was always to break the power of the Marxist wing of the PSI. For this reason, Giolitti bolstered Mussolini’s position as the leading fascist on the basis that this former socialist would eventually return to the PSI to facilitate its transformation into a social democratic party. To support Mussolini’s political standing the prime minister placed fascists on his electoral slates for the May 1921 elections. Thirty five fascists (including Mussolini) were elected to parliament out of five hundred and thirty five seats. From the parliamentary caucus that was formed Mussolini instigated the establishment of the Italian Fascist Party in August 1921.

Mussolini did his covert mentor (Giolitti) a favour following the 1921 elections by entering into an ostensible alliance with anti-Giolitti ANI. This seeming act of ingratitude provided Giolitti with the pretext to resign as prime minister so that he could continue his work behind the scenes to transform the PSI. The two succeeding prime ministers (Luigi Facta and Ivanoe Bonomi) between 1921 and 1922 were covertly aligned to Giolitti that they continued his strategy of discreetly supporting the fascists.

The possible turning point in Italian history was almost reached in June 1922 in relation to Giolitti reaching his long fought goal of transforming the PSI when a general strike was crushed due to government backed fascist counter mobilization. The general strike of June 1922 was called by the Italian General Confederation of Labour (CGIL) to mobilize working class opposition to fascism. The failure of the general strike led to the PSI severing its links to the Marxist dominated CGIL.

To prepare his way for a return to power in coalition with the PSI Giolitti called an inaugural congress of the PLI in October 1922 to convert this ‘party’ into a conventional middle class centre-right one instead of a loosely organised political operation that served the interests of Italy’s elite ( of which Giolitti belonged). Giolitti might have succeeded in his transformation of Italian politics had it not been for the intense resistance of the authoritarian ANI.

The ANI was an elitist authoritarian organisation founded in 1910 by nationalists who advocated territorial irredentism and Italian colonial expansionism with a government that was responsible to the king rather than the parliament. From the outset, there were different ideological tendencies within the ANI but Italian nationalists had an overriding belief that Italian national renewal could be achieved via power being exercised by national elite that was dedicated to the acquisition of an Italian colonial empire in Africa.

The most important ANI leader was Luigi Federzoni who secured his pre-eminence within the nationalist organisation by being elected to parliament in 1913. The ANI first made its mark on Italian national politics by linking up with its nemesis the PRI to demand that Italy enter the First World War against Austria-Hungary to secure Italian speaking territory that was part of the Hapsburg Empire. The ANI was vehement in its condemnation of the 1919 Treaty of Versailles which it considered had sold Italy short with regard to the territory that had been promised under the secret 1915 Treaty of London with the Entente.

The real power of the ANI was derived from its support for Antonio Salandra who became the major rival to Giolitti within the Liberal camp, when as prime minister he defied the Liberal statesman, to help instigate Italy’s entry into the First World War in 1915. After the war’s conclusion the ANI established its own blue shirt militia which was mainly based in the south that was primarily composed of war veterans. Although the ANI only had a handful of seats in the Italian parliament, it was a powerful party because right wing Liberals denoted their anti- Giolitti stance via their support for the ANI.

Who is Using Who? The 1922 ‘March on Rome’

In response to Giolitti convening a PLI congress in Rome in October 1922, the ANI, which also had links to anti-Mussolini elements within the Fascist Party, convened a meeting of fascists in Naples where it was resolved that there would be a ‘March on Rome’ to seize power. The aim of the March on Rome was not to bring Mussolini to power but to make Salandra prime minister so as to prevent Giolitti’s return to office.

The four leaders (the quadruvirs) who led the October 1922 March on Rome were Michele Bianchi, Italo Balbo (who was a fascist republican), Emilo De Bono and Cesare de Vecchi (who was a staunch monarchist). The quadruvirs, with the possible exception of de Vecchi, probably did not know that the March on Rome was being used by pro-ANI elements at the royal court to facilitate Salandra’s return to power.

Mussolini knew that the objective of the ANI backed March on Rome was to prevent Giolitti’s return to power without which he himself could not re-enter the PSI. Consequently, Mussolini took refuge in the Milan offices of Popolo d’ Italia so that he could escape to Switzerland if the March on Rome was crushed. Much would be made of Victor Emanuel III’s refusal to sign the state of emergency to authorize military action against the fascist Black Shirts. But the king’s decision to thwart military force was derived from His Majesty’s desire to restore Salandra’s return to power and to finally politically eliminate Giolitti whom His Majesty had been compelled to restore to power in 1920 to end Gabriel d’Annunzio’s occupation of Fiume.

The ever astute Giolitti, knowing that the March on Rome was intended to politically eliminate him, moved to protect Mussolini. Even though a state of emergency had not been declared due to the king’s refusal to authorize one, the outgoing Facta government still issued an order for Mussolini’s arrest to prevent his possibly coming to power. (There was also a theory that Facta was covertly aligned to Salandra). However, the police chief and prefect in Milan who were loyal to Giolitti refused to arrest Mussolini.

The fascist entry into Rome with Mussolini still free in Milan ironically enabled Giolitti to turn the tables on Salandra and the ANI that he could return to power in coalition with a domesticated PSI. Such a development would have consolidated Giolitti’s position within the Liberal camp and marked a point of no return with regard to Italy’s transition to an unambiguous democracy. The international ramifications of such a scenario would have also been very positive because Giolitti’s political heir was the former Foreign Minister and diplomat Count Carlo Sfroza (1872-1952).

The anglophile Milanese Count was a staunch supporter of the League of Nations and in contrast to his mentor Giolitti, Count Sfroza was never prepared to manipulate democratic processes. A restored Giolitti probably would have appointed Sfroza Foreign Minister thereby paving the way for him to later become prime minister or at the very least be a future PLI leader.

Salandra’s realization that the fascist March on Rome would now precipitate return of Giolitti to power led him to offer Mussolini by phone the position of deputy prime minister. Mussolini refused that a desperate Salandra offered him the prime ministership! The prime minister-to-be insisted that the king send him a telegram commissioning him to head a new government. With the necessary telegram from the king’s secretary in his shirt pocket, Mussolini departed by train from Milan to Rome to take up his appointment as prime minister.

It was Mussolini’s original intention to appoint PSI members to his cabinet but, on arriving at the Termini central train station in Rome and being met by Salandra and Federzoni the prime minister designate was compelled to relent. The cabinet that was formed, still initially contained pro- Giolitti Reformist Socialists (who had previously split from the PSI in 1912), respective Giolitti and Salandra Liberals and the Populari with Federzoni being the only ANI cabinet minister as Colonial Secretary.

The immediate political ramification of Mussolini’s appointment as prime minister was that he actually gained control to discipline fascist Black Shirts by turning them into a state funded and controlled militia. The Fascist Party merged with the ANI in 1923 to form the National Fascist Party (PNF). This merger helped regularize the fascists within a more regular political framework while providing them with a base south of Rome which had previously been the base of the ANI.

What is Fascism? The Mussolini Regime in Transition, 1922-1926

The major abuse of Mussolini’s regime between 1922 and 1924 was stacking the parliamentary gallery with Black Shirts to coerce the parliament to pass the Acerbo electoral law in 1923 which allocated a two thirds majority of parliamentary seats to a winning national list. The PNF ‘National List’ won the requisite two thirds majority in the April 1924 elections with varying degrees of intimidation across the nation.

Impressively, the major opposition parties, encompassing the Populari, Reformist Socialists, PSI, the PRI and Sfroza Liberals still won a majority of the vote in northern Italy which helped them gain a third of the seats in the lower house despite their failure to form a united slate. (The Reformist Socialists and the Populari had separately withdrawn from the cabinet in 1923 and 1924 to go into opposition).

Mussolini’s April 1924 election ‘victory’ did not necessarily mean that a fascist dictatorship was going to be established. A majority of the candidates on the National List were Salandra ‘Liberals’ and it was Mussolini’s intention to bring the former PSI leader Claudio Treves into the cabinet. Such a development might have changed the course of Italian history had the social democratic parliamentarian Giacomo Matteotti not been murdered in June 1924 following a heated exchange with Mussolini in parliament.

Most Italians were so shocked by Matteotti’s murder that Mussolini was moved to resign in favour of Treves, who had recently broken with the PSI to form a new party, the Unitary Socialists, the PSU. Had Mussolini resigned, he actually would have been succeeded by Salandra who then had the most supporters in the Chamber of Deputies. That Mussolini did not resign was due to the intervention of the * Queen Mother Margherita who adored him.

(*The Margherita Pizza is named after Queen Margherita).

A listless Mussolini lingered on as prime minister in a zombie type fashion for six months. Power probably would have passed from Mussolini to Salandra had Federzoni not moved into the political void by becoming interior minister. Between June and December 1924, Federzoni turned Italy into an authoritarian nation state in which power was exercised through the state bureaucracy. During this six month period, elected local government was abolished and strict press censorship was imposed.

Roberto Farinacci: Fascism’s Fascist

Federzoni probably would have displaced the beleaguered leader to establish an authoritarian regime had Roberto Farinacci (‘Fascism’s fascist’) not burst into the Prime Minister’s office at the end of 1924 to force him in early January 1925 to make a speech before the Chamber of Deputies in which Mussolini repudiated parliamentary democracy and assumed implicit responsibility for Matteotti’s murder.

The January 1925 speech probably precipitated a nervous breakdown on Mussolini’s part that between January and February 1925 he disappeared from public view. Although details are unclear it seems that Federzoni, Giolitti* and Salandra moved with Victor Emanuel III’s support to form a secret ruling triumvirate reflective of the interests of the ruling liberal elite. This may have occurred with Mussolini being dispensed with had the prime minister not capitulated to Farinacci by appointing him PNF Secretary in March 1925.

(*Giolitti, who due to his prestige retained his seat in parliament, denounced the regime in a parliamentary speech before he died in 1928, thereby disassociating himself from fascism. A message was discreetly, if curtly conveyed, by the Giolitti family to Victor Emanuel III that it would be best that His Majesty not attend the former prime minister’s funeral).

During his six months as PNF Secretary (March to August 1925), Farinacci established the basis by which the ruling fascist party became a regimented vanguard semi-totalitarian party similar to the CPSU in the Soviet Union. The strengthening of the PNF led to a reconfiguration of the liberal elite into a new fascist corporatist framework that would rule all of Italy until 1943. The formation of a strong fascist party so helped Mussolini consolidate his power that he became ‘head of government’ at the end of 1925 which meant he was only responsible to the king who had the prerogative to dismiss him.

Reconciling Contradictions: The PNF Activist Bureaucratic Regime, 1926 to 1943

The convoluted ways by which Italy became a dictatorship in the four years following the ‘March on Rome’ in 1922 has helped make the Mussolini regime between *1926 and 1943 difficult to politically categorize. In broad terms, the 1926 to 1943 PNF regime was a statist bureaucratic one, which in contrast to such regimes had a strong mobilization capacity based upon a charismatic leader who appealed to nationalism. Co-option as opposed to domination or elimination of powerful institutions such as the monarchy, big business and the Catholic Church was a key determinant of the regime’s success. Mussolini’s strongest asset was his capacity to synthesise different interests to make himself practically indispensable.

The dictatorship’s power was exercised through both a bureaucracy and a well organised and state funded ruling party*. The technical skills of the nation’s elite, which had previously constituted the pre-fascist liberal establishment, were co-opted by the regime. Through its avowed corporatism, the regime utilized the support of big business into helping formulate and implement the regime’s economic policies.

(*In 1926, Italy formally became a one-party state and Federzoni was removed as Interior Minister, although he remained a member of the Great Council of Fascism).

With regard to the statist dimension of the regime the PNF was a bureaucratic organisation with most of its members (or officials) coming from the middle class. Nevertheless, the PNF gained widespread support among poorer Italians by servicing their local needs. This was due to there being an efficient system of local government in place because Rome-appointed prefects directly took control of local government.

Although prefects were compelled to join the PNF, Mussolini did not allow the party bureaucracy to exercise any power over them. Instead, parallel party structures at a local government level were established that were headed by party chiefs known as ‘Rases’. The role of a Ras was to build up local support for the PNF and to proselytize among local inhabitants. Even in small hamlets, Rases (or their representatives) established a party presence which often conveyed the impression that Mussolini’s power was omniscient.

The regime may have seemed omniscient to most Italians because it consciously made a difference in everyday lives. ‘Fascism’ now generally denotes a reactionary negative approach to new ideas. But in the 1920s and in the 1930s, this term then conveyed an avant guard acceptance of novel ideas and approaches. Mussolini gained his greatest notoriety for supporting Hitler’s anti-Semitism but in the 1920s he was the first major European leader to publicly support the establishment of a Jewish state.

The German Nazi regime also gained infamy for its mistreatment and murder of the mentally ill but a conference that Mussolini addressed in Rome in 1930 was the beginning of psychology being accepted as a legitimate branch of medicine. Although Mussolini was a self declared male chauvinist, he appointed Maria Montessori as the de facto Education Minister as Inspector of Italian schools. But the first signs of anti-Semitism led Montessori to break with the regime and leave Italy in 1934.

Montessori’s break with Mussolini was a sign that he was not infallible. Even though Mussolini’s post-war reputation would become the inverse of what had it had previously being, that of being overwhelmingly admired many Italians and non-Italians still regard him as a brilliant ruler whose chief mistake was that he aligned Italy to Nazi Germany. In fact, Mussolini’s very coming to power in 1922 was a disaster because it occurred at the point at which Italy was transitioning to become an unambiguous constitutional democratic monarchy by having a coherent democratic competitive party system.

The economic and social achievements of the PNF regime would have occurred anyway had Italy had a coherent party system with a social democratic PSI, a Christian democratic orientated Populari and a lateral PLI. Such a coherent party system would have brought to the fore the talents and energy of Italian society within a context of public acceptance of the state as represented by their monarchy. The ultimate benefit of a constitutional monarchy with a coherent party system would have provided sufficient safeguards against Italy pursuing an aggressive foreign policy that culminated with entry into the Second World War in 1940.

With regard to the regime’s successes they reflected Mussolini’s leadership skills which were derived from a superb opportunism that reflected his amoral pathology. As a result, Mussolini was able to turn seeming hopeless situations to his advantage and square stark contradictions to seemingly achieve spectacular results. The Italian dictator also had an often endearing capacity to combine sternness with a droll sense of humour.

But for all of Mussolini’s simpatico, his great failing was his adamant refusal (until after his 1943 dismissal) to admit that he could be wrong or fix mistakes that he had made thereby admitting that he had initially being wrong. Mussolini therefore (with the exception of his beloved brother Aranaldo who died in 1932) denied himself competent and honest advisers who could have warned him of possible pitfalls of his decision making.

Count Dino Grandi: The Regime’s Intelligent Fascist

Due to the skill of one of his key advisers, Count Dino Grandi (1895 to 1988) Mussolini’s leadership deficiencies did not become apparent until Italy’s opportunistic and ill-considered entry into the Second World War in June 1940. Count Grandi was a sycophant, but in contrast to most sycophants, he normally gave good advice and was usually successful in persuading the dictator to accept his counsel. The successes of the Mussolini regime were primarily due to the ability of Count Grandi so that a brief biographical overview of his life is warranted.

Count Grandi returned to complete his law degree at the University of Bologna after the end of hostilities in 1918. At university, Grandi possibly formed Italy’s first squadristi of university student/war veterans in 1919 which was based in the Po Valley. In the pay of big landowners and industrialists, the Grandi led squadristi terrorised the PSI in the Po Valley. This massive valley in Italy’s north-west is the industrial heartland of the nation.

It cannot be said that fighting against tenant farmers who were trying to gain an equitable rent was a noble undertaking by Grandi’s squadristi. But Grandi was shrewd enough to realize that the strong support that tenant farmers gave to their PSI commune (communes were and are the lowest level of Italian local government and as such are not to be confused with Mao’s version of Chinese agricultural collectivism) was based upon inequitable rents. Count Grandi therefore had his landowner political masters agree to reduce rents and improve conditions for their tenants in return for their withdrawing support for the PSI.

The Count’s success in Bologna established the model that Giolitti and succeeding Giolittian governments applied between 1920 and 1922 of supporting squadristi gangs (which were usually composed of war veterans) attacking the PSI local councils, newspapers and unions. This Giolitti backed strategy was undertaken to crush the Marxist wing of the PSI to ultimately transform this party into a social democratic party.

Elected to parliament in 1921 with thirty four other fascists on the Giolitti slates, Grandi unsuccessfully tried to become leader of the Fascist Party upon it being formally constituted a party in August that year. As a result, Grandi was initially on the outer when Mussolini came to power in October 1922. Due to his party power base in the Po Valley, Count Grandi was involved in the negotiations with Federzoni (who similarly came from Bologna) which helped lead to the formal merger of the Fascist Party and the ANI to form the National Fascist Party (PNF) in 1923.

Utilizing his friendship with Federzoni, Count Grandi was appointed undersecretary (i.e. deputy) secretary for the interior in 1924 and in this position he helped Federzoni as interior secretary to establish a statist bureaucratic authoritarian regime. Despite Count Grandi’s initial support of Federzoni, he ingratiated himself with Mussolini by vigorously defending the prime minister in parliament following Matteotti’s murder. Grandi’s rhetorical skills in defence of Mussolini probably saved his government from a successful parliamentary vote of no-confidence. Mussolini’s subsequent capacity in asserting his power over Farinacci and Federzoni by dismissing them respectively in 1925 and 1926 was assisted by Count Grandi’s support.

The basis for the fascist regime’s economic strength was also derived from Count Grandi. In 1925 he made a very successful visit to the United States in 1925 where he negotiated a loan that enabled Italy to repay its wartime debts. This loan also provided the financial base for industrialization and public works programmes to be successfully undertaken by the regime in the 1920s and 1930s. Count Grandi was appointed undersecretary (i.e. deputy) foreign sinister in 1926 to then become of one of Europe’s most respected foreign ministers after he was promoted to that position in 1929.

As foreign secretary (i.e. foreign minister) Count Grandi helped negotiate the Lateran Treaty in 1929 in which the Vatican and Italy established diplomatic relations thereby recognizing each other’s legitimacy. This was probably the Mussolini regime’s most impressive achievement because it reconciled many still recalcitrant Italian Catholics into accepting the legitimacy of their state. The regime’s international power was also manifested due to Count Grandi’s skill that was demonstrated in 1931 when helped block a customs union between Germany and Austria.

To clip Count Grandi’s wings, Mussolini sent him into diplomatic exile by appointing him Ambassador to Great Britain in 1932. As previously mentioned, he mis-advised Mosley into founding the BUF in October 1932. The ambassador to the Court of St. James more substantially made his mark on history during the Italian invasion of Ethiopia (then known as Abyssinia) between October 1935 and May 1936.

The Italian invasion was a military shemozzle, and had the League of Nations imposed oil sanctions on Italy, the invasion would have failed and the Mussolini regime would probably have fallen. Exploiting the then British elite obsession with the League of Nations, Count Grandi helped persuade British Foreign Secretary Sir Samuel Hoare to oppose the League of Nations imposing oil sanctions on the basis that the viability of the League would be undermined by alienating Italy. Count Grandi sent Mussolini coded daily messages from London relaying his progress in stalling the British. Knowing that possible international action was being stalled by Count Grand, Mussolini sent daily urgent messages to commanding officers in Ethiopia to continue their advance.

Mussolini Enters Hitler’s Orbit

While the ill-considered Italian conquest of Ethiopia in 1936 had essentially placed Italy within Germany’s sphere, Count Grandi’s influence in London remained strong. This was because Britain’s Tory leadership believed that Count Grandi could prevent Mussolini from entering into an alliance with Nazi Germany. This misassumption helped lead British prime minister, Neville Chamberlain to support having Mussolini as a mediator at the September 1938 Munich Conference.

The Munich Conference was a farce because there was no mediation on the part of the Italians, British and French between the Czechoslovaks and the Germans. The Czechoslovak delegation was shut away from the proceedings as Hitler was given Czechoslovakia’s Sudetenland territory without any qualifications. The great political loser (besides Czechoslovakia) of the Munich Conference was France as once stalwart allies such as Roumania and Yugoslavia breaking with the French to go into alliance with Italy.

Italy’s industrial and military capacity was not as great as France’s but, between 1938 and 1940 Italy superseded France in political power in Europe due to the Munich debacle. Count Grandi helped arrange the visit of Prime Minister Neville Chamberlain and his Foreign Minister Lord Halifax to Rome in January 1939 so that Italy’s power could be consolidated as a bulwark against Nazi Germany. Instead of heeding Count Grandi’s advice to accept the British offer of alliance, Mussolini and his alter ego son-law, the Foreign Minister Count Galeazzo Ciano, scorned Chamberlain and Halifax’s offer of an alliance considering it to be a sign of the weakness of a declining empire.

Mussolini and Count Ciano therefore sealed their personal future doom and that of fascist Italy by solidifying an alliance with Nazi Germany by concluding a treaty in May 1939 that was called ‘Pact of Steel’. Hitler, on his visit to Rome in May 1939 to sign this treaty personally insisted upon Count Grandi’s recall from London because he regarded the then Italian ambassador to the Court of St. James as the major obstacle to an effective Italian-German alliance.

The July 1939 recall of Count Grandi (who was subsequently appointed Justice Minister) initially rebounded on the Germans. The German invasion of Poland in September 1939 was a shock to Mussolini because the Polish regime was an Italian ally and because the Italian dictator knew that his country was militarily unprepared to go to war. The self-generated dilemma for Mussolini was that his regime’s projected bellicosity was such that it would seem incongruous for fascist Italy to declare neutrality following the outbreak of war. Acting on advice from Count Grandi, Foreign Minister Ciano forwarded on to Mussolini the concept of ‘non-belligerence’ as the official stance for Italy’s status in regard to the state of war.

Count Ciano: The Feckless Heir Who Still Changed History

Having officially adopted the official stance of ‘non-belligerence’ Mussolini then appointed a new cabinet in September 1939 primarily composed of ministers that believed it best that Italy not go to war. The ministers were appointed by Mussolini on Count Ciano’s recommendation which seemed to consolidate the foreign minister’s unofficial status as the regime’s heir apparent. In reality, the newly appointed ministers were originally suggested to Ciano by Count Grandi and as such these ministers were staunch monarchists whose deeper loyalty was to Victor Emanuel III.

For all his faults, Count Ciano (1904-1944) remained a monarchist until his execution, at Hitler’s instigation, in January 1944. Count Ciano’s appointment as foreign minister was not only due to the nepotism of being Mussolini’s son-in- law but also as the son of Admiral Costanzo Ciano. Admiral Ciano’s historical importance was that he helped secure aristocratic support for Mussolini without which he probably could not have established a dictatorship in the 1920s. The marriage of Galeazzo Ciano and Mussolini’s daughter Edda in 1930 essentially constituted a political consummation of the alliance between Mussolini’s middle class support base and the Italian elite as represented by Count Ciano.

Following the Second World War, Mussolini’s widow, Donna Rachele Mussolini, erroneously attributed her husband’s 1943 fall to her son-law whose power she had overrated and reviled. Senora Mussolini was incorrect because Ciano’s domestic power was ultimately derived from Mussolini and Count Grandi.

As feckless as Ciano was, he was a very powerful foreign minister (1936 to 1943) because he bypassed official diplomatic structures to personally conclude alliances with national leaders. He was singularly similar to his father-in-law in that he was an amoral opportunist for whom treaties and agreements, even if at first sincerely entered into, would be cynically discarded for immediate gain.

This approach of Count Ciano’s was manifested when he utilized his rapport with Yugoslav Prime Minister Milan Stojadinovic to forge a de facto alliance with Yugoslavia in 1938. Up until this time, Yugoslavia had been Italy’s main rival in the Mediterranean. Nevertheless, Italy participated in the invasion and temporary dismemberment of Yugoslavia in 1941 which ultimately helped bring Italy under further German domination.

As evidenced in his diaries, Count Ciano was an often perceptive but cynical analyst, particularly with regard to Italy falling under German domination. His diaries also revealed someone who despite his anti-German reservations, still supported the Axis alliance with Germany as a means of advancing Italian power. This contradictory approach of Ciano’s was sustained because his anti-Gestalt, day to day approach helped determine his subsequent actions on an opportunistic basis.

Count Ciano’s real impact on history was that he crucially helped his father-in law-exercise domination in foreign policy by bypassing diplomatic channels, which eventually led to Italy becoming subordinate to Nazi Germany. The only time that Ciano had even a potential capacity to more laterally determine events was when he took advice from Count Grandi.

Ironically, the only actual nominee of Ciano’s that was appointed in 1939 to the cabinet was Alessandro Pavolini, who became the Minister for Popular Culture (i.e. propaganda). Pavolini would break with Ciano by opposing Mussolini’s July 1943 dismissal to become the number two in Mussolini’s Italian Social Republic *(RSI) as head of the new Italian Fascist Republican Party.

(* The RSI was created in September 1943 by the Germans and lasted until they were finally defeated in Italy in April 1945).

In the period between the outbreak of the Second World War in September 1939 and the Fall of France in June 1940, Victor Emanuel III, Ciano and Count Grandi formed a de facto triumvirate that was sufficiently powerful enough to have prevented Mussolini from entering Italy into the Second World War. Had Victor Emanuel III and Count Ciano not broken with Count Grandi to support Mussolini’s declaration of war on Britain and France in June 1940, Italy would have avoided entering a war in which at best she could only be subordinate to a successful Germany or at worst, as did eventuate, go down to military defeat.

The king, Mussolini and Count Ciano knew that Italy was militarily unprepared to fight a war but they believed that the Fall of France meant a ‘peace settlement’ similar to the 1938 Munich Agreement would be arrived at in which Britain would acquiesce to German domination of Europe in return for allowing the British to keep their empire. Due to persistent British attempts to cultivate fascist Italy right up to June 1940, it was erroneously believed by Mussolini and the traditional elite-dominated Italian diplomatic corps that Italy could fulfil a mediating role at such a ‘peace’ conference between the Germans and the British.

The Italian declaration of war was cynically envisaged by the Mussolini regime as a means of appropriating most of France’s North African Empire and gaining subsequent domination in the Mediterranean as Italy’s ‘sphere of influence’. The problem was that the Italian elite having moved from supporting an ostensible liberal framework to a fascist one were too cynical not to understand the Great Britain was a genuine democracy for which any accommodation with Hitler was an anathema.

Exits for Italy Close as the United States Enters the Second World War

The disaster of Italy’s declaration of war against Britain was consolidated by Mussolini declaring war on the United States in December 1941 following the Japanese bombing of Pearl Harbour. The United States entered the war with the determination to ensure regime change in Germany, Italy and Japan. With American support, the British and Free French had driven the Germans and Italians out of North Africa by May 1943, and in early July of that year, Allied landings were undertaken in Sicily.

In relative fairness to Mussolini, he did appreciate in February 1943 that with the German defeat at Stalingrad the Axis could not win a two front war. The Italian dictator then moved with his unique skill (which he had utilized on coming to power in October 1922 and in mastering the political fallout from the 1924 Matteotti assassination) of turning seemingly hopeless situations to his advantage to break with *Germany.

(* Unaware of his earlier attempt to break with the Axis, Hitler met with Mussolini in Germany in September 1943 following his daring rescue by German paratroopers. A dejected Mussolini reluctantly agreed to Hitler’s demand that he head the new RSI regime. Ever the opportunist, Mussolini, who now knew that an agreement with the western Allies could not be obtained, suggested to Hitler that a cease-fire be reached with Stalin so that the Axis could fight against the British and the Americans. Hitler gruffly ignored Mussolini’s suggestion.

What autonomy and effectiveness that the RSI had was in regard to its propaganda output. Hitler’s status as German Fuehrer had been partially linked to the German people revering Mussolini (the ‘Duce’) as a demi-god whose rule over Italy had presaged the Nazis coming to power in Germany in 1933. It was therefore more than an act of friendship on Hitler’s part to Mussolini that he was restored to nominal power as ‘president’ of the RSI.

Due to Hitler’s desire that Mussolini retain his mystical status as Duce, the only substantial concession that Mussolini was granted by Hitler was to direct RSI propaganda. RSI propaganda projected the regime as left-wing based on the mainly unimplemented ideas of Mussolini’s new confidant, Nicola Bombacci, who was a former communist. Mussolini’s forlorn hope that a political settlement be reached with the Soviet Union was subtly conveyed in RSI propaganda and derisively tolerated by the Germans due to its inherent non-viability).

Firstly, to both ingratiate himself with the Germans and to deceive them, Mussolini dismissed Count Ciano and Count Grandi from the cabinet in February 1943 following the German defeat at Stalingrad. The cabinet revamp was intended to convey to the Germans that their Stalingrad defeat would not result in Italy breaking with the Axis. However the appointment of Count Ciano as Italian ambassador to the Vatican was made so that the former foreign minister could initiate contacts with Allied diplomats. The dismissal of Grandi similarly conveyed that Mussolini was ostensibly distancing himself from ablest and most anti-German fascist, Count Grandi.

The break that Mussolini intended to make with the Germans centred upon the convening of the Great Council of Fascism (the Council) on July 24-25th. The Council was the highest organ of state and was not as has been assumed the fascist equivalent of a Communist Party type of Politburo. The Council was essentially a corporate statist encapsulation of the ruling elite rather than the supreme directorate of a ruling vanguard totalitarian party.

This Council had been created by Mussolini to ensure that, in case he was to die in office, his power would not transfer to the monarchy. Indeed, the royal laws of succession were changed in 1930 to stipulate that Crown Prince Umberto’s (who was officially titled the Prince of Piedmont) accession to the throne be approved by the Council. Due to this qualification (which Victor Emanuel III strongly resented), there was the prospect that the royal succession could be diverted to the Aosta cadet branch of the House Savoy. The strong support that the Aosta branch had within the aristocracy became all the more committed to Mussolini on the basis that the royal succession might be changed.

The creation of the Council was therefore a source of power to Mussolini rather than a restraint. Prior to the July 1943 meeting of the Council, Rome (which had just been subjected to an Allied aerial bombing) was agog with rumours of conspiracy against Mussolini. The dictator had been warned by family members and PNF officials of a conspiracy against him and they urged him to arrest leading members of the Council and even move against the king. Instead, Mussolini not only proceeded with the Council meeting but permitted Count Grandi to table his motion that was critical of the regime.

July 1943: Mussolini’s Abortive Defection Precipitates His First Fall

It is often forgotten that Grandi’s motion did not call for Mussolini’s resignation but rather that his prerogatives of head of government and commander in chief of the armed forces be transferred to Victor Emanuel III. The proposed diminution of Mussolini’s powers also offered the prospect of enhancing the Council’s powers.

The Council proceedings lasted over seven hours because they were further complicated and delayed by a motion tabled by Farinacci that was similarly critical of Mussolini but instead proposed that the Italian armed forces to be placed under German command. In what seemed to be an incredible blow to Mussolini, the Grandi motion was passed by nineteen votes out of the Council’s twenty-eight members.

Mussolini did not actually consider the vote to be adverse because he was prepared to transfer his former prerogatives to the king so that Victor Emanuel III could negotiate an armistice with the Allies. The dictator envisaged that the king would allow him to remain on as prime minister so as to not arouse German suspicion. Although Mussolini was displaying his uncanny skill of turning an impossible situation to his advantage, he did not realize that in this instance circumstances were against him.

The Allies, particularly the Americans, were insistent upon an unconditional surrender and would not have agreed to an armistice if Mussolini remained on as prime minister. Furthermore, Mussolini did not realize that the king intended to break with him. The dictator was correct that Victor Emanuel III was a sincere admirer of his but did not realize that the king would move against him to save the Savoy dynasty. Mussolini was therefore stunned the day after the Council vote (26th of July) to be dismissed by the king and arrested as he left Villa Savoia following his royal audience*.

(Queen Elena* was most put out by Mussolini’s deposition and conveyed this by criticising her husband for having the former prime minister arrested as he left the palace grounds which Her Majesty denounced as a violation of the ‘laws of hospitality’).

Count Grandi actually knew that the adverse vote against Mussolini would result in his dismissal and arrest by the king. The Count envisaged that Mussolini would be replaced by a new cabinet composed of bureaucrats and PNF aristocrats headed by Marshal Enrico Caviglia*. Guided by him, Count Grandi intended that a Cavallero government would repudiate the alliance with Germany and resist the consequent German invasion so that the Allies would be compelled to accept Italy as an ally. This would avoid Italy having to conclude an armistice in which sovereignty would be surrendered thereby allowing former fascists such as himself to remain in power.

(*The courageous Marshal Caviglia* attempted to defend a virtually abandoned Rome in September 1943 from the Germans).

It is probable that Count Grandi envisaged himself being appointed prime minister by Victor Emanuel III after Marshal Caviglia had utilized his military skill to affect Italy’s change of sides. But similar to Mussolini, Grandi mis-anticipated the king’s subsequent actions. Instead of Marshal Caviglia being appointed prime minister that position went to Marshal Pietro Badoglio. This marshal owed his appointment to involvement in a separate anti-Mussolini conspiracy that had centred on the king’s estranged daughter in law, the Crown Princess, Maria Jose.

Crown Princess Maria Jose Almost Rescues Italy

The Crown Princess was a Belgium princess of the Saxe-Coburg Royal Family. Her Royal Highness married Crown Prince Umberto in January 1930 in what, until Prince Charles and Lady Diana’s July 1981 wedding, was considered to be Europe’s most spectacular royal wedding. The Belgium princess’s betrothal to Umberto had not been unexpected because the House of Savoy and House of Saxe-Coburg were then considered to be Europe’s two leading Catholic royal houses.

The prior education that Princess Maria Jose received at Italy’s most exclusive ladies’ finishing school (which was also attended by Edda Mussolini) helped ‘Italianize’ the Belgium princess. Although Her Royal Highness looked forward to marrying the handsome Crown Prince, and despite their having four children, the marriage was not to meet the new Crown Princess’s expectations.

Adhering to the injunction of her mother Queen Elisabeth of the Belgiums (who was originally a Bavarian princess) that royalty remain close to the people, the new crown princess did exactly that. Her Royal Highness often surprised passengers when she rode on city trams and her love of music also endeared the princess to her adopted country. The Crown Princess’s intelligence so impressed Mussolini that he repeatedly assured Her Royal Highness that her husband’s accession to the throne was guaranteed. Indeed, Mussolini let it be known that he looked forward to Princess Maria Jose becoming Queen Consort of Italy.

The Crown Princess’s major political conviction (even though she was ethnically German) was a detestation of Germany which went back to the First World War. Italy’s 1940 entry onto the German side so enraged Her Royal Highness that she became determined to overthrow Mussolini. The Crown Princess first met with Marshal Badoglio in 1941 following his dismissal due to the debacle that was Italy’s unprovoked invasion of Greece in October 1940.

Her Royal Highness’s civilian contacts commenced and were subsequently facilitated through Ivanoe Bonomi. The former Giolittian social democratic prime minister (who had served as prime minister between 1921 and 1922) had established his own party in the 1940s, called the Labour Democratic Party, (PDL) whose active membership was essentially his personal entourage.

Through Bonomi, Crown Princess Maria Jose established links with the PLI which had been secretly re-founded under the leadership of the Neapolitan philosopher, Benedetto Croce in November 1942. The Crown Princess’s Vatican connections were utilized by Her Royal Highness to establish contact with the Populari which was covertly reconstituted in 1942 as the Christian Democrats (DC) under the leadership of the Vatican librarian and former parliamentarian, Alcide De Gasperi. The intrepid princess also established contact with the Communist Party of Italy (PCI) which was then secretly led by academics based at Rome University. In an ominous future sign, the Crown Princess’s approaches to the republican Action Party (Pd’A) and the PSI were rebuffed.

The Crown Princess’s ties to the Vatican were also utilized to establish contact with American and British officials. The plan that Her Royal Highness eventually formulated was that of deposing Mussolini, with Marshal Badoglio heading a cabinet initially composed of Giolittian liberals and social democrats that would take Italy immediately over to the Allied side. Had this plan eventuated, the war would have ended much sooner in Europe*. Italy could consequently have been utilized as a base from which Allied land troops could land in the Balkans to prevent the future artificial division of the continent by keeping the Soviets out of Central and Eastern Europe.

(*Indeed, King Michael of Roumania’s daring coup against Marshal Ion Antonescu in August 1944 shortened the war in Europe by six months).

The feasibility of Crown Princess Maria Jose’s plans was challenged by American reservations. From an American perspective, the utility of a military campaign on the Italian peninsula was that it was to be long and drawn out so that German troops would be drawn away to undertake a successful Allied liberation of France. An expeditious Italian defection, by contrast, would have facilitated the Churchill strategy of using Italy as base to liberate the Balkans. This strategy did not gel with President Roosevelt who was misguidedly more afraid of Britain establishing dominance in Europe rather than the Soviets.

The prospects for the Crown Princess’s plan being successfully carried out by Her Royal Highness were terminated after her father-in-law was informed of them by the Minister of the Royal Household, the Duke Pietro d’ Acquarone. The Duke had been in close contact with the Crown Princess and Count Grandi so that the Quirinale Palace had links to both conspiracies. When the king was informed by the Duke of his daughter in law’s plotting, Her Royal Highness*, whom His Majesty had not met for two years, was confined to her palace apartments without use of a phone. Although the king had ended the Crown Princess’s involvement in politics, His Majesty moved to take advantage of the political actions that Her Royal Highness had put in place.

(*Crown Princess Maria Jose and her four children in August were soon sent close to the Swiss border where they crossed over as the Germans invaded Italy in September 1943. The Crown Princess’s refuge in Switzerland also removed Her Royal Highness from the royal court of the future ‘Kingdom of the South’).

The day before his appointment as prime minister, Marshal Badoglio had an audience with the king who handed him a list of the ministers who would serve in his cabinet. Badoglio’s request that Giolittian liberals and social democrats be appointed was vetoed by the king on the basis that they were ‘ghosts’. The king made the point to Badoglio that, since no armistice had been previously made with the Allies, the alliance with Germany would continue until one could be secretly negotiated. The ministers that were to serve in the Badoglio cabinet were those that had previously been proposed by Count Grandi to be in a Caviglia cabinet.

Armistice Politics: The Scramble for Italy

Count Grandi himself met with the king following Badoglio’s appointment. The Count was disappointed that Marshal Caviglia had not been appointed prime minister and that an immediate break with the Germans had not been made. But the king, as future events would show, was not prepared to break with the Germans until an armistice with the Allies had been signed, so that he could guarantee the continuance of the Italian state by his person escaping to Allied occupied Italy.

To help facilitate the above mentioned outcome, the king personally gave Count Grandi a diplomatic passport and designated him as a royal envoy with instructions to contact the British embassy in the Spanish capital Madrid to negotiate an armistice. Madrid was the logical destination for Count Grandi to depart for because the British ambassador to Spain was none other than Sir Samuel Hoare, the former British Foreign Secretary who had previously supported the Count during the Italian invasion of Ethiopia.

Count Grandi’s departure for Madrid in August 1943 marked the scramble for Italy between the Americans and the British. Marshal Badoglio despatched his son to Malta to seek an armistice with the British and Marshal Giuseppe Castellano to the Portuguese capital Lisbon to negotiate an armistice with the Americans. The public’s general toleration of the Badoglio regime was the expectation that under him Italy would defect to the Allied side.

The fall of Mussolini was greeted with euphoria across Italy, particularly in Rome, on the false premise that it was tantamount to Italy changing sides or extricating itself from the war. The continuance of the war, even if there was a common expectation that Italy would soon defect, caused widespread unease as did the new regime’s heavy handed approach to maintaining public order which seemed more fascist than the preceding fascist regime.

Although the PNF was dissolved and its assets seized, the ban on non-fascist political parties remained in place and strict press censorship was maintained. The only remotely liberal concession that the Badoglio regime made was a nominal legal retention of the 1848 Statute because it entailed Italy remaining a monarchy. Most Italians (and German troops and diplomats stationed in Italy) were amazed at the overnight disintegration of the PNF and associated agencies such as the secret police, the OVRA. The rapid collapse of Mussolini’s first regime was derived from its statist nature and because the PNF was really a bureaucracy rather than a Soviet or Nazi type of totalitarian party which was separate from the state.

There were no massacres following Mussolini’s first fall in July 1943 as there would be when his second regime was overthrown by partisans in April 1945. However, a critical mass of former PNF officials was sufficiently incensed by Mussolini’s first overthrow that they would become committed to his future republican regime.

With regard to Mussolini’s successor regime, the only really substantial task that confronted the Badoglio government was how and when to break with the Germans. The achievement of this objective was complicated by whether the Badoglio regime should negotiate an armistice with either the British or the Americans. In this regard, the major leverage that the Badoglio regime had was Anglo-American rivalry due to Roosevelt’s and Churchill’s conflicting objectives as to how Italy should be strategically utilized for war time purposes.

An American policy objective was to keep the British at bay by pre-empting them from concluding an armistice with Count Grandi. The American General Walter Bedell Smith (acting on behalf of the Allied Supreme Commander in Europe, General Dwight Eisenhower) expeditiously signed an armistice with Marshal Castellano on the third of September 1943. The armistice was to take effect on the 9th of September but the Americans broadcast the terms on the 8th of September so at compel the Badoglio regime to honour the armistice.

The pre-emptive American revelation was also probably undertaken to forestall the Badoglio government from making alternative arrangements with the British. A German invasion almost immediately followed the American broadcast. Rome was therefore subjected to American bombing and hostile German military action before the armistice took effect. German paratroopers landed in Rome and German troops stationed outside the capital moved in to take control.

Hitler ordered the commander of the Rome operation, Marshal Albert Kesselring, to arrest the government and the royal family. Kesselring shrewdly and subtly ignored Hitler’s orders. By allowing the royal family and members of the Badoglio government to escape, Marshal Kesselring knew that it would be consequently easier for his troops to take the capital. The royal family (i.e. the king, the queen and crown prince*) along with Badoglio, an assortment of cabinet ministers and generals made their way to Crecchio, a village east of Rome where they stayed for the night. They then departed from a small port in Ortona to sail on the Baionetta to the port city of Brindisi in south eastern Italy.

(*The German dictator did not believe that Crown Princess Maria Jose as a woman was capable of co-ordinating a conspiracy against Mussolini. The German dictator erroneously believed that Her Royal Highness was a front for her husband. As a result, a major priority of Hitler’s was Crown Prince Umberto’s arrest even though His Royal Highness was a marginal participant in the recent political intrigues).

The king’s flight discredited the monarchy to the extent that a sufficient and dedicated support base among Italian public opinion was created to abolish the Italian monarchy. Following the armistice, the Germans seized two thirds of Italian territory including the industrial north. Despite public uproar and hostility toward his person, Victor Emanuel III was at ease with himself when he arrived in Brindisi because His Majesty believed that his escape had ensured the legal continuity of the Italian state as represented by his person. Indeed, the king’s escape from Rome enabled His Majesty to establish the ‘Kingdom of the South’.

‘The Kingdom of the South’: 1943 to 1944

The Kingdom of the South has generally been derided as phantom state similar to Mussolini’s doomed RSI in northern Italy, consequently warranting little historical study. However, the Badoglio regime adroitly thwarted Sicilian secession which might have destroyed the Italian state before Rome’s 1944 liberation and maintained a substantial degree of de facto independence due to the Allied focus on fighting the war against the Germans.

In legal fact, since the armistice took effect, Italy came under the legal authority of the Allies as represented by the Allied Control Commission (ACC). The ACC was a three man committee composed of the British General Sir Frank Mason-Mac-Farlane and two civilians, the American diplomat Robert Murphy and the British politician, Harold Mc Millan. The major challenge that confronted the ACC was that of exercising their authority over Victor Emanuel III who, as previously mentioned, had a degree of latitude while the Allied primary military objective was focused on liberating Rome.

Without consulting the ACC, Victor Emanuel III declared war on Germany and Japan in October 1943. This fait accompli presented a dilemma for the Allies that they resolved by granting Italy the status of a ‘co-belligerent’. To disengage with his previous association with fascism, Victor Emanuel III also reluctantly renounced his titles of Emperor of Abyssinia and King of the Albanians.

To re-establish a new political support base, Victor Emanuel III granted a royal audience with a recently returned exile, Count Carlo Sfroza. This count, the liberal political heir of Giovanni Giolitti, believed that the king granted him the audience to gain his support for the continuation of the monarchy by abdicating. To Count Sfroza’s astonishment, the king not only refused to abdicate but offered to appoint him prime minister!

Count Sfroza declined the king’s offer and made his way to meet Marshal Badoglio to inform him of the king’s attempt to dismiss the marshal as prime minister. The count asked the Marshal to depose the king and become regent for Crown Prince Umberto’s six year old son Prince Victor Emanuel who was then domiciled in Switzerland. The count proposed that he would serve as prime minister under a Badoglio regency. Marshal Badoglio declined to support Count Sfroza’s scheme but relations between the prime minister and the sovereign became strained.

Another attempt by the king to boost his position had previously been made in late September 1943 by trying to recall Grandi from his Spanish exile to become foreign minister! This suggestion was officially made by Marshal Badoglio but at Victor Emanuel III’s behest. Count Grandi as foreign minister would have undoubtedly changed the course of modern Italian political history as the king would probably have later appointed him prime minister to safeguard the Italian monarchy. Although Churchill was supportive of Grandi’s return, the Americans were aghast at the proposal.

From the American point of view, Count Grandi was a war criminal who should have been tried as such rather than a candidate for a senior ministry that he could possibly use to come to national power! The American veto of Grandi’s appointment ended his political career and ensured that he remained exiled from Italy until the 1950s*.

(Grandi’s* later return to Italy was facilitated by his acquittal by a special anti-fascist tribunal in 1947. Count Grandi returned to Italy as a living historical curiosity as the most senior figure of the Mussolini regime to have survived the Second World War. The fact that Grandi had no role in post-war politics and that the post war neo-fascist movement was hostile to him until his death in 1988 resulted in the public underestimating his major impact on Italian history).

The king’s failure to restore Count Grandi to political office denied His Majesty the only real chance he had of holding onto his throne. Nevertheless, the king was relatively safe from deposition so long as the royal army remained loyal to him and the Allies pre-occupied with military objectives before they liberated Rome.

In the mean-time, prior to Rome’s liberation, through calculated indolence, the Badoglio regime allowed a flowering of press freedom which often served as a safety valve that counter-acted potential popular unrest in the south. Due to overwhelming hostility to the Germans, there was no discernable neo-fascist movement* in the south and many former PNF members joined either the DC or the PLI.

(*There was however a very effective RSI spy ring that operated in Rome between 1944 and 1945 and its members served as contacts with the political establishment which later helped lay the groundwork for a neo-fascist presence in republican Italy).

There were gripes among many southern Italians about Allied heavy handedness, such as requestioning hotels, which helped establish the House of Savoy as representative of Italian sovereignty and national pride. This was an ironic development because the Kingdom of the Two Sicilies incorporation into the Kingdom of Italy in 1861 was then considered to be a colonial conquest such that the House of Savoy was hated in much of the south for most the nineteenth century with this hostility lingering into the twentieth century. Renewed or newly acquired popularity for the House of Savoy was evidenced by the strong support in the south for the monarchy’s retention in the June 1946 ‘institutional’ referendum.

The most important accomplishment of the Kingdom of the South was its valuable contribution to the Allied war effort between 1943 and 1944. This was reflected when Naples became the first city in German occupied Europe to free itself by local uprising without external assistance in October 1943 as the Kingdom of the South (which was still officially the Kingdom of Italy) declared war on Germany.

Although it still fashionable to ridicule the Italians as hopelessly inept during war-time, the Italian resistance movement in German occupied Italy was one of the most formidable in Europe. The performance of the regular armed forces after 1943 in fighting the Germans was markedly better than when Italy was aligned to Nazi Germany. The change in Italian fighting quality was due to a change in morale that came with the motivation to free Italy from German domination. Nevertheless, for many Italians, politics remained an area of focus regardless of the war.

The Italian Resistance and the Future Republic

Italy probably stood out as a nation at war that was still convulsed with politics because there was still a functioning state behind the front that was at odds over its future direction as were Italians awaiting liberation from German domination. Resistance to the German occupation was co-ordinated by the Committee for National Liberation (CLN).

The CLN had been proclaimed upon the German occupation of Rome in September 1943 and was a six party coalition that co-ordinated resistance against the Germans. The Rome CLN, which was chaired by Ivanoe Bonomi, was the most important of the CLNs which operated throughout the country.

The CLNs in the Kingdom of the South convened a conference in January 1944 in Bari where they called for Victor Emanuel III’s abdication and for Crown Prince Umberto to renounce his right of succession. This call fell just short of declaring a republic. The king scornfully ignored the CLN Bari congress and attempted to expand his support base by re-shuffling the Badoglio cabinet.

In a seemingly extraordinary turn of events, the recently returned PCI leader Palmiro Togliatti declared his temporary support for the king on the basis of the need for wartime unity. The communist preparedness to enter the cabinet compelled the PLI and the DC which belonged to the CLN to join the Badoglio cabinet following a reshuffle in March 1944 despite their previous insistence that the king abdicate.

The Americans became alarmed that Victor Emanuel III might be able to stay on his throne following the March 1944 cabinet reshuffle. Consequently in April 1944 the three member ACC met with King Victor Emanuel III to demand His Majesty’s immediate abdication. The king at first obstinately refused but His Majesty was informed by the delegation that their request directly came from the American and British governments. (This was not quite true because in the case of Britain Prime Minister Winston Churchill was opposed to Victor Emanuel III’s abdication).

The king seemingly relented but undertook to abdicate upon Rome’s liberation. Having gained this concession, the king later further hedged by declaring that he would transfer his prerogatives so that his son became Lieutenant-General of the Kingdom of Italy with His Majesty remaining as titular king. Later, Victor Emanuel III moved to change his son’s title to that of ‘Lieutenant –General of the King of Italy’.

The liberation of Rome came in June 1944 after the Germans declared the capital to be an open city. Victor Emanuel III announced his intention of transferring his prerogatives following his personal return to the capital. The Americans responded by threatening to arrest the king for fear that, once in Rome, His Majesty would repudiate any transfer of prerogatives.

Confronted by an impeccable American veto which could now be militarily enforceable due to the German abandonment of Rome, Victor Emanuel III reluctantly signed the transfer of his royal prerogatives to his son. This action legally constituted an abdication and, which under then Italian constitutional law, compelled a prime minister to resign. Prime Minister Badoglio however advised the Crown Prince to remain outside the city until he informed His Royal Highness when it was safe to enter the capital.

Realizing that Marshal Badoglio was possibly moving to secure his position at the monarchy’s expence, Crown Prince Umberto took the first and only really independent and politically astute action of his life by defying the prime minister to enter the capital on the fourth of June 1944. To the Crown Prince’s relief and obvious happiness, His Royal Highness was welcomed by most Romans as he entered the capital.

His Royal Highness may not have then known his arrival in Rome not only secured his succession as Lieutenant –General of the Kingdom of Italy but it possibly saved Italy from then being declared a republic! The executive of the Rome CLN (CLN Central) was considering declaring Italy a republic as the Allies entered the capital. The declaration of a republic by the CLN Central was prevented because the Crown Prince had the option of withdrawing to Naples to support a continuing Kingdom of the South led by the PLI leader, Benedetto Croce. Had this occurred, Italy would have had three governments: a Kingdom of the South, a Rome based republic and Mussolini’s RSI in the German occupied north.

The Allies refused to support a declaration of a republic by the CLN Cental so as to avoid complicating the war effort. Nevertheless, the Allies insisted that executive and legislative power by vested with the CLN Central. Consequently, the CLN Central reluctantly accepted Crown Prince Umberto’s Lieutenancy (i.e. regency, the ‘luogotenente’). This acceptance was clinched by Rome CLN Chairman, Ivanoe Bonomi’s preparedness to serve as prime minister under Crown Prince Umberto

The new cabinet was overwhelmingly republican and Crown Prince Umberto’s role was uncertain because executive and legislative power was vested with CLN Central. There was also initial ambiguity as to whether Crown Prince Umberto as Lieutenant-General would exercise the powers of head of state or Ivanoe Bonomi as CLN Chairman*. Bonomi also served as prime minister. Promisingly, Bonomi was the only member of the new cabinet to swear the optional oath of allegiance to the Italian Crown.

(*Throughout the luogotenente it was an ambiguous point as to whether CLN laws had to be sanctioned by subsequent royal decrees).

The Luogotenente, 1944 to 1946: Umberto II’s De Facto Domiciled Reign

The historical aspect of the Bonomi cabinet’s assumption of office was that it marked the end of the rule of an elite that could be traced back to Count Cavour. This elite had first exercised its power in Piedmont-Sardinia and then in a united Italy through a parliamentary system between 1848 and 1922. Mussolini’s ‘March on Rome’ resulted in the Cavourian elite reconfiguring within a fascist framework and then becoming an integral component of the quasi-military regime of Marshal Badoglio.

That the CLN regime constituted a break from the Cavour elite was manifested when a law was passed by the CLN executive on the 25th of June 1944 that elections be held to a constituent assembly following the end of the war to determine Italy’s constitutional status (‘the institutional question’) and to draw up a new constitution. Considering that it was nearly impossible for a monarchist party to garner a sufficient vote over the six parties in the CLN, two of which were monarchist inclined, (the PLI and the PLD), it was then considered a certainty that an elected constituent assembly would declare Italy a republic.

The major political asset that Crown Prince Umberto then had was the sincere support of Winston Churchill and of the opportunistic support of Prime Minister Bonomi. This political balance was evidenced in November 1944 when Bonomi moved to resign as prime minister after the PSI and the Pd’A criticised him for not removing officials with fascist backgrounds from the bureaucracy. This criticism carried over from complaints by Count Sfroza who headed the commission charged with purging the bureaucracy of former fascist elements.

Due to criticism from Count Sfroza, Bonomi as prime minister submitted his resignation to Crown Prince Umberto in his Royal Highness’s capacity as Lieutenant-General. The resignation could have been presented to the Chairman of the CLN Executive. Bonomi however argued that because he was both prime minister and CLN Chairman he could present his resignation to himself. As CLN Chairman, Bonomi acting on instructions from the executive of the CLN Central, commissioned Count Sfroza as prime minister. Sfroza would have formed a cabinet had it not been for the British representative on ACC (on direct instruction from Churchill) vetoing that count’s appointment.

Churchill’s vetoing of Count Sfroza’s appointment enabled Bonomi to form a new cabinet (minus the PSI and the Pd’A) in which he received his new commission from Crown Prince Umberto as Lieutenant- General subject to majority endorsement from the executive of the CLN Central. This manufactured crisis enabled His Royal Highness to gain royal prerogatives by which he became Italy’s head of state as Lieutenant-General instead of the CLN Chairman. It was ironic that, as a Giolittian social democrat, Bonomi had apparently shown himself to be more of a monarchist than Count Sfroza, who was a Giolittian liberal.

The position of the monarchy was also strengthened by the publication and distribution from late 1944 of the ‘Average Man’ Uomo Qualunque (UQ) newspaper. This newspaper was founded and edited by Guglielmo Giannini. The UQ was popular in the south and in Rome due to its trenchant criticism of CLN politicians who seemed to be condescending towards too many people that they considered to be insufficiently anti-fascist. Giannini coined popular and populist phrases such ‘Down with Everybody’ and ‘We Were Better off When We Were Worse Off’ which seemed to encapsulate public discontent toward the elitism of the CLN republican parties.

Integral to the UQ’s populism was its implicit anti-republicanism. For many Italians, particularly south of Rome, republicanism was considered to be a form of elitist Jacobinism that was been imposed on them by unelected politicians. But for Italians in the German occupied north, republicanism was a potent and positive force that would create a better future. For most northern Italians, Victor Emanuel III’s flight from Rome was a national betrayal that had forfeited the legitimacy of the Italian Crown.

Stipulations were made by the CLN Executive with the re-constitution of the Bonomi government in November 1944 that a successor government would be formed following the liberation of the north from German rule. It was anticipated that a new government would re-inject further republicanism because leaders of the northern CLN, the CLNAI (Committee for the National Liberation of Northern Italy), would later join the cabinet and serve on an expanded executive of the CLN Central.

The liberation of northern Italy eventuated with an uprising on April 25th 1945 that was co-ordinated by the CLNAI. This uprising led to the violent overthrow of Mussolini’s RSI. In an irony that abounded in a political career as contradictory as Mussolini’s, he tried to enter into an anti-monarchist and anti-communist alliance with the PSI in the final days of his life.

The Last Days of the RSI

At a meeting in Milan mediated by Cardinal Idelfonso Schuster between Mussolini and representatives of the CLNAI that was supposed to negotiate the terms of surrender and safe treatment of RSI troops and officials, Mussolini brazenly attempted to forge an alliance with the PSI representatives. This belated reconciliation attempt by Mussolini with his old party had been aborted in 1922 and 1924 and was now being attempted one last time by the doomed fascist leader. In fact, this late April 1945 meeting marked the end of Mussolini’s alliance with Nazi Germany*.

(*Mussolini still tried to flee German occupied Austria in the back of a German army transport truck but local partisans were tipped off by a German informant. He was captured and executed by communist guerrillas the following day in a village just outside of Milan. Most unfairly, the communist partisans acceded to a request from Mussolini’s unreservedly loyal and brave, but profoundly stupid mistress, Clara Petaci, that she be allowed to join her lover to be executed with him).

A PSI representative at the mediation meeting, Alessandro (‘Sandro’) *Pertini, brusquely informed Mussolini that the Germans under General Karl Wolff had negotiated a deal with the CLNAI for their safe passage out of Italy in return for allowing them to commence their uprising to overthrow the RSI. Mussolini, on being informed of this deal, fled the meeting and it was that point it is considered that the RSI came to an end.

(*Sandro Pertini was probably the most beloved public figure in modern Italian history. He had been a Matteottian socialist, and as such, Pertini was both strongly anti-fascist and anti-communist. This respected maverick politician was elected by the parliament as president of the Italian republic on the thirty-fifth ballot in 1978 as a compromise choice.

President Pertini also endeared himself to Italian monarchists by publicly calling on the Italian parliament to vote to rescind the constitutional ban on Umberto II (whom he corresponded with) and His Majesty’s male descendants from being domiciled on Italian territory before the exiled king died from terminal cancer. No such parliamentary vote was taken and Umberto II died in Switzerland in March 1983. His Majesty is presently buried in Hautecombe in Savoy, France as is Queen Maria Jose who died in January 2001.

As matter of historical justice their Majesties should be buried in the Pantheon in Rome (where the first two kings and the first queen of Italy are interned) in partial acknowledgement of their patriotism in preventing a civil war by leaving Italy in 1946).

The RSI Defence Minister Rodolfo Graziani, having initially complained to Mussolini that he was besmirching Italian honour by attempting to negotiate with the PSI representatives, fled the meeting. Being forewarned of the Germans arrangements, Graziani made his way to RSI regular troops under his command to hold against CLN partisans until surrendering to the Americans. Due to his being in American protective custody, Graziani was the most senior RSI official to survive the war.

Tried by an Italian court in 1948, Graziani was sentenced to twenty five years prison but was pardoned in 1950 to help a DC backed faction take control of the post-war neo-fascist Italian Social Movement (MSI). Graziani (who during Mussolini’s time in power denied that he was a fascist) was honorary president of the MSI from 1950 until his death in 1955.

Most RSI officials were not as fortunate as Graziani as senior to minor fascist republicans that were apprehended by CLN partisans were invariably executed. Support for the RSI at the time of the April 25th 1945 uprising was relatively small but still very committed.

Mussolini himself had been probably relatively popular because RSI propaganda had successfully conveyed the message that the German occupation would have been harsher had it not been for his ‘sacrifice’ in heading the RSI*. This personal popularity was apparent when Mussolini received a rapturous response on making an unannounced visit to Milan in December 1944 which astounded the Germans. This surprising reception probably deluded Mussolini into thinking that he had sufficient support to make a strong last stand.

(*Had Mussolini not been freed by German paratroopers led by Colonel Otto Skorzeny at the high Alpine mountain resort of Gran Sasso in September 1943, the collaborationist regime would have been headed by Roberto Farinacci).

The Politics of Plebiscite: The Institutional Question, 1945 to 1946

The success of the April 25th 1945 uprising placed most of northern Italy in the control of the CLNAI. Even with the CLNAI accepting Allied authority, northern Italy remained under strong left-wing domination at the time of the June 1946 referendum which helped facilitate the tampering of the ballot count in the North that resulted in Italy becoming a republic. Furthermore, the bloody excesses following the April 1945 uprising created a sense of revulsion against the hard left in the north. This helped provide the MSI with an anti-leftist voting base in the North, as opposed to a fascist voting base, which came into being at with the 1972 general elections.

Public concern regarding CLN rule in Italy south of Rome became an issue when the former chairman of the CLNAI, Ferrucio Parri, was selected prime minister by the CLN Central in June 1945. Parri was a leading member of the Pd’A and as such a staunch republican. The new government was then Italy’s most left wing regime and Parri openly advocated a republic even though it had been agreed that no ministers would publicly comment on the ‘institutional question’.

Prime Minister Parri did not conceal his contempt toward the Lieutenant-General and hostility toward the continuance of the Luogotenente. The only benefit for the Lieutenant-General of Parri’s prime ministership was that his unpopularity in Rome and in the south gained support for the monarchy which was reflected by increased circulation of the UQ newspaper.

The Lieutenant-General’s political position was essentially derived from the monarchist bloc on the CLN Executive was known as ‘ONB’. This acronym referred to the respective surnames of Vittorio Orlando, Francesco Nitti and Ivanoe Bonomi who had successively served (but not in immediate succession) as prime ministers of Italy between 1917 and 1922. These prime ministers were constituted the survival or revival of the ‘historic left’. This ‘left’ referred to ideological differences within the pre-1922 Italian elite as opposed to broader national ideological discordances.

Orlando and Nitti were leading members of the PLI by dent of their being former prime ministers and Bonomi’s PLD was a manifestation of a Giolittian variant of social democracy within a revived historic left. The PLI and the PLD were so relentless in their attacks on Parri on the CLN Executive that, when the DC and PCI withheld their support for Parri, he submitted his resignation in November 1945 to the Lieutenant –General.

The CLN Executive’s selection of Alcide De Gasperi and his subsequent commissioning by the Lieutenant-General as prime minister in December 1945 was then considered to be an anti-climax because he was apparently a compromise choice. In fact, De Gasperi’s appointment as prime minister was to ensure that Italy became a ‘politician’s republic’ and the ramifications of this development are still manifested by the close between Italy’s mainstream political right and former Prime Minister Silvio Berlusconi’s corporate empire.

Indeed, the formation of DC led the De Gasperi government to inaugurate a political dominance by a political party which Western Europe did not experience in the post-war period. The DC supplied Italian prime ministers between 1945 and 1981, from 1982 to 1983 and from 1987 to 1992. Contrary to the popular stereotype of Italy being the most unstable country in Europe, if not the democratic world, the fact that Italian republic until 1992 was very stable because power always remained with an oligarchy of party politicians whose capacity to form new governments was testament to their actual control.

De Gasperi could not have become prime minister and the DC gained their subsequent political domination in the future republic if it was not for the support, if not instigation of the PCI leader, Palmiro Togliatti. At the time of Parri’s resignation, it seemed that there would be a left-right divide (loosely correlating with a republican- monarchist dichotomy) between the respective candidacies of Pietro Nenni and Vittorio Orlando.

*Nenni was then the PSI leader and a lifelong republican. Exiled to France in 1926 Nenni was captured by the occupying Germans in 1943 and extradited to Italy. Due to his previous friendship with Mussolini, Nenni was sent into internal exile on the island of Ponza instead of prison. Ironically, Nenni had more freedom on Ponza than Mussolini did when he too was briefly detained on the island after his deposition.

(* In his youth, Nenni was a member of the PRI and as such involved in supporting the then ‘fascist’ alliance between the Republicans and the monarchist ANI which advocated Italy joining the First World War as an ally of the Entente. Nenni had been a strong supporter of Mussolini’s between 1914 and 1915 and during the war but, to convey his personal and political break with his former friend, he left the by then middle class PRI in 1921 to join the PSI as opposed to the Fascist Party which was then an option for him).

Vittorio Orlando, by contrast to Nenni, was the epitome of an establishment political figure (albeit one on the notional left within the Italian elite) and a staunch monarchist who was a long time admirer of Prince Umberto. It was not surprising that the Lieutenant-General supported Orlando’s selection as prime minister. It was expected that the PSI, PCI and the Pd’A would ardently support Nenni’s selection while the PLI and the PLD backed Orlando. The question was would the republican orientated DC, which essentially held the balance of power on the CLN, capitulate to pressure from the apparently monarchist Vatican to support Orlando becoming prime minister?

Advance By Retreating: The Brilliant Manoeuvres of Palmiro Togliatti

In an apparently gracious concession, Togliatti broke the deadlock by supporting De Gasperi becoming prime minister. This seemed (and is still erroneously regarded) as a good choice in the national interest. The new prime minister was known to be emotionally calm, intelligent and rational. It was widely believed that De Gasperi in contrast to the leadership and the rank and file of his party was a monarchist which seemed apparent in his cordial relations with the Lieutenant –General.

The subsequent actions that De Gasperi took as prime minister (with PCI support) seemed moderate, if not monarchist inclined. The major issue of contention between monarchists and republicans was whether there should be a referendum to decide if Italy became a republic. A referendum was opposed by the republican parties of the CLN because they seemed to have a stronger chance to prevail in constituent assembly elections due to the comparative weakness of monarchist or monarchist inclined political parties.

It was therefore something of a seemingly amazing concession when the CLN executive scheduled (on the First of March 1946) that a referendum by compulsory vote on the ‘institutional question’ be held simultaneous to the election of a constituent assembly by compulsory voting to be held on May 25th-26th*. Compulsory voting had been a key demand of monarchists to boost voter turn out because it was believed that monarchist support was not as committed as the republican support. The 1946 elections was the only one where voting was compulsory in Italian political history.

(*The referendum was later moved back a week to be held on the June 2nd -3rd 1946).

The ‘concession’ of a referendum by compulsory voting actually (as subsequent events would show) benefited the DC more than the monarchy. How and why this occurred is explained in the following overview of events leading up to and following the 1946 referendum.

Party Manoeuvring in the Context of Plebiscite Politics

The first really free elections in Italy in twenty five years were held in March and April 1946 at a local government level. These elections were conducted and contained to the strongly republican north and in Tuscany. It was therefore not surprising that committed republican parties (mainly the PCI and the PSI) prevailed with over 40 % of the vote. The DC (which was officially uncommitted on the ‘institutional question’ but would endorse a republic by a two-thirds majority shortly after at its national convention in April) garnered 34% of the vote and the monarchist inclined PLI gained just over 6% of the vote. (The PLI’s late April 1946 national convention by majority vote advocated retention of the monarchy but there was a strong republican minority sentiment among northern party delegates).

The monarchist vote in the March/April 1946 northern local government elections was just over 11% which was principally garnered by the UQ. This was a relatively impressive performance for a southern orientated party and a warning that the UQ could appropriate a substantial, if not most of the DC vote in the June constituent assembly elections due to the Christian Democrats’ republican orientation. The introduction of compulsory voting also compelled many political Catholic voters to the polls. *Pope Pius XII’s subtle but distinct endorsement of the monarchy in an Italian wide radio broadcast the day before the referendum, influenced many Italian monarchists to support the DC even though its leadership and rank and file were republican.

(* Whether Pope Pius XII, who reigned from 1938 to 1958, was sincerely a monarchist will never be definitely known. His Holiness did however refuse to meet with future Italian presidents to convey his ostensible non- acceptance of the legitimacy of the Italian republic).

Containing elections to the republican north and Tuscany also provided a practical means for local councils to appoint partisan republican poll officials who could, if need be, rig the count with regard to the ‘institutional question’. As events were also to show, scheduling local government elections to be held in the south in November 1946 led to the future equivalent of a DC-PCI ‘*diarchy’.

(*The term ‘diarchy’ referred to the co-existence of respective and often rival, monarchist and fascist state institutions in the 1930s and 1940s. E.g. the Chamber of Deputies, which became a corporatist legislature in 1939 was considered to be fascist, even if the Speaker between 1939 and 1943, Count Dino Grandi, was a monarchist. By contrast, the Senate was regarded as a monarchist bastion. The essence of the duality of power that the term diarchy infers was transferable to the pervasiveness of post-war divisions within society based upon respective partisan allegiances to the DC and to the PCI).

It should be pointed out that rigging the referendum was a fall back by the political mastermind of the Italian republic, the 1945 to 1946 interior minister, Giuseppe Romita. He was a stalwart of the PSI who initially led the remnants of his party in Rome on an ad hoc basis. The major anti-fascist resistance organisation was the Giustizi e Liberta (GL) (Justice and Liberty). GL was an émigré organisation that was primarily based in France but its members were prominent during the Spanish Civil War (1936 to 1939) fighting for the Second Spanish Republic. This opposition organisation went into seeming decline 1937 when its two primary leaders, the brothers Carlo and Nello Rosselli, were assassinated in France at the instigation of the Mussolini regime.

Invoking the memory of the Rosselli brothers, GL aligned academics at Italian universities founded the Pd ‘A in 1942. The Pd’A seemed to be the principal domestic resistance party with the PCI coming a strong second. Indeed, 1942 seemed to be the year for founding or re-founding political parties in Italy as the entry of the United States into the Second World War in late 1941 seemed to herald the impending end of the fascist regime.

The communists had gained strength by infiltrating Fascist Party organisations during the Second World War. Although the story may be apocryphal, it was widely believed in political circles that the PCI covertly printed and distributed its underground newspaper from the offices of the stridently fascist Ill Tevere newspaper. The disintegration of the PNF, with Mussolini’s dismissal in July 1943 and the collapse of the Italian state with the armistice in September 1943, helped the communists move into the void by utilizing the clandestine operations they had previously established within the Fascist Party.

Although Togliatti realized that an immediate PCI takeover was impractical (for fear of precipitating a military coup) he considered that his party could achieve the status of the leading anti-clerical force in society. Appreciating the brilliant insights of his late party comrade, Antonio Gramasci (1891 to 1937), Togliatti knew that Marxist transformation and power could be achieved through a ‘levers of power’ approach. This entails a Marxist party foregoing seizing control of the government to focus on infiltrating the bureaucracy, trade unions, the educational institutions and party front organisations thereby gaining control of the state. In the long term, Togliatti envisaged that with the onset of secularization of society, Italians would eventually move away from clerical influence to support the PCI*.

(*The PCI leader was correct that Italians would become more secularized but failed to envisage that, due to the impact of the pontificate of Paul VI, 1963 to 1978, that Italian clerics in the twenty first century would help turn the tables on the communists by fulfilling a vital role in establishing a social democratic party in place of the PCI).

But, for Togliatti to help create a divided society with a Marxist reference point, it was first necessary to eliminate the monarchy. The ‘concession’ of granting a referendum did not seem fatal to the republican cause because Crown Prince Umberto and Crown Princess Maria Jose were considered to be too far behind in regaining support for the monarchy. When Rome was liberated in June 1944, American military intelligence estimated that support for the monarchy was at best between 10% and 15%.

When Personal Courage is Insufficient to Win: The Courage of Umberto II and Queen Maria Jose

The increasing popularity of the UQ newspaper in the south and in Rome indicated that the position of the monarchy was improving. The Crown Prince and *Crown Princess extensive war relief work (part of the Quirinale Palace was turned into a hospital) won them considerable personal popularity even amongst republicans. The royal court was noted for its openness and that the Crown Prince and Crown Princess undertook a hectic social schedule. Many of the contacts that their royal highnesses established during the luogotenente would be maintained by Umberto II as an exiled king.

(*As head of the Red Cross from 1940 to 1943, Crown Princess Maria Jose gained considerable popularity. After Her Royal Highness’s return from Swiss exile in April 1945 the Crown Princess resumed an important role in war relief and charity work until she was unfortunately permanently banished from Italy in 1946).

The most political undertaking of Umberto as Lieutenant- General was the appointment of Falcone Lucifero as minister of the Royal Household Department. This was because Lucifero was a Matteottian socialist and most of the royal household officials came from networks that had supported Matteotti’s PSU which was founded in 1922 and had re-united with the French based PSI in exile in 1926. Romita did not mind former PSU members joining the PSI with the backing of the Royal Household Department as he did not anticipate the monarchy surviving the referendum and because their entry served to dilute communist influence over his party.

A major asset that the Italian monarchy had going into the June 2nd-3rd 1946 referendum was the Crown Prince’s and the Crown Princess’s personal popularity. It was commonly said of His Royal Highness that had he not been born to royalty he could have been an actor who made his living by merely appearing on stage due to his good looks. The tours that His Royal Highness undertook during the referendum generated considerable enthusiasm among female voters. Furthermore, the Crown Princess’s intelligence and approachability was even acknowledged by many republicans.

The Lieutenant- General demonstrated considerable personal courage by touring republican strongholds such as Turin and Milan where His Royal Highness was threatened with being lynched! Indeed, Italian monarchists north of Rome also demonstrated courage trying to organise rallies that more often than not were broken up by resistance veterans and RSI supporters (some of whom were released to support the republican campaign) with the connivance of local police.

By contrast, Italian republican rallies in Rome and in the south were rarely attacked. This difference was due to the influence of the PCI and because republicanism in the north was more intense due to the strong resentment as a result of the recent memories of the German occupation. The communist press also threatened civil war if the monarchy ‘was to unexpectedly prevail’ to influence voters against retaining the Crown.

Although Crown Prince Umberto and the Crown Princess Maria Jose had clawed back substantial support for the monarchy, it was widely considered to be too late. Ironically, the real impact of their referendum campaign was to bolster support for the republican DC so that this party became the standard bearer of the conventional right.

The impending defeat of the monarchy in a legitimately conducted referendum was averted on the 9th of May when Victor Emanuel III stunned the nation by abdicating! Historical reference to Victor Emanuel III’s abdication invariably cites it as a desperate and belated political manoeuvre that was destined to fail because it was left too late. In fact the abdication was brilliantly timed because the CLN Central would never have authorized a referendum on the institutional question had Crown Prince Umberto previously ascended the Italian throne as king.

The republicans correctly surmised that the electorate would not retain the monarchy with *Victor Emanuel III remaining as titular king because His Majesty represented the monarchy’s previous collaboration with fascism and military defeat. For this reason the king’s abdication on the 9th of May was cleverly timed because it represented a symbolic break as that date was the tenth anniversary of Mussolini’s declaration of an Italian empire with the conquest of the Ethiopian capital Addis Ababa.

(*The former king and former queen departed for Egypt where they were most hospitably treated by that nation’s Italophile monarch, King Farouk. Victor Emanuel died in Egypt in December 1947 and was given a grand state funeral that was arranged by the Egyptian king. Former Queen Elena died in Montpellier in the southern France in November 1952 where Her Majesty is buried. Both late monarchs are separately buried because the late queen could not be interred with her husband in Egypt due anti-monarchist miliary coup in 1952 and because the French were not prepared to bury Victor Emanuel III in their country).

The intensely hostile reaction of the republican press reflected that the abdication had greatly strengthened the monarchy. The potential turning point in the campaign were celebrations that were held in Rome on the *25th of May to celebrate Umberto II’s recent ascension to the throne. It seemed that nearly all of Rome turned out for the rally which was to be the highlight of the domiciled component of Umberto II’s thirty-seven year reign. (Umberto II would later be dubbed the ‘May King’ by Italians). The outpouring of support at the rally emboldened many wavering Italians to vote in favour of retaining their monarchy.

(*As previously mentioned the referendum and national elections had originally been scheduled for the 25-26th of May 1946. Romita agreed to the week delay to gauge the level of support for the monarchy so as to decide whether or not it would be necessary for him to arrange for the padding of the vote north of Rome. The interior minister knew that the May 25th rally was an important indication of support for the monarchy. His acquiescence to the delay was ironic because, as Romita later admitted, a six month re-scheduling of the referendum would have been fatal to the republic because the monarchy was gaining so much support it would not have been impossible to have rigged the referendum vote.

Due to the importance of timing, monarchists swamped the office of the ACC in Rome with telegrams demanding that a referendum on the institutional question be held six months later with an elected government in place. Had the Americans and the British granted the request to delay the referendum for six months they might have spared themselves the later anxiety of having a communist party as the major opposition party in a vital NATO nation. This was because the establishment of the Italian republic in 1946 set the scene for PCI becoming the principal opposition party following the 1948 general elections).

Even though Victor Emanuel III’s unexpected last minute abdication had probably gained the monarchy sufficient support to win the institutional referendum, Romita held his nerve. The interior minister now realized that he would have to rig the referendum by padding the vote in the north of Italy to make the country a republic. Because the Italian government was never going to conduct a fair referendum in which the monarchy was retained, with the benefit of hindsight, Victor Emanuel III should have abdicated in April 1946 and Crown Prince Umberto renounced his rights of succession following the local government election results in northern Italy and Tuscany.

His Royal Highness could have stayed on as regent as Lieutenant- General for his son, the Prince of Naples, Victor Emanuel, until the constituent assembly voted on whether Italy should become a republic or not . It had been mooted just before the April announcement of the June referendum that Victor Emanuel III and Crown Prince Umberto make way for the Prince of Naples as titular king with a new luogotenente to be headed by Cardinal Schuster. The benefit of such an arrangement was that it could have orientated DC representatives in the constituent assembly to have voted to retain the monarchy.

Alternately, further pressure could also have been applied by King Umberto II withdrawing to Naples to secure either a vote by the constituent assembly in favour of the monarchy or authorization of a referendum on the institutional question to be conducted six months later following the convening of the provisional legislature thereby preventing electoral possible republican electoral fraud.

An important reason why the DC’s leadership ensured that the institutional referendum and the election of the constituent assembly vote occurred simultaneously was so that a monarchist party could not have appropriated Christian Democrats voting base. It was estimated that six million of the eight million DC voters supported the monarchy in the June 1946 referendum.

The strong monarchist vote that the DC was expected to receive (and did receive) combined with pressure from the Vatican could have induced some monarchist inclined DC deputies to combine with PLI, UQ and PLD deputies as a majority to vote for the monarchy’s retention. There were also PSI constituent assembly deputies with political links to Lucifero Falcone, the Minister of the Royal Household Department, who would have voted to retain the monarchy.

Republican Myths Concerning the 1946 Referendum

Due to the historical importance of the June 2nd-3rd 1946 referendum, there are mythologies concerning this vote that have been perpetuated which require refutation because they have helped provide legitimacy to the tampering of the ballot count. The first myth (besides that the referendum was not rigged) was that the popular Queen Maria Jose was a republican who expected to be allowed to return following the promulgation of a new republican constitution due to Her Majesty’s previous role in contributing to Mussolini’s 1943 deposition.

(*The constitutional banishment on Her Majesty was rescinded by a parliamentary vote in 1987 but only after Umberto II had died four years previously. The Queen initially refused to return to Italy until the ban on her son and grandsons was also rescinded but eventually made emotional return visits to her adopted homeland.

Queen Maria Jose died in Switzerland in January 2001, where Her Majesty had made a cultural impact through her involvement in music and the arts. The gracious funeral condolences from President Carlo Ciampi to Her Majesty’s son, Victor Emanuel IV and her grandson, Emanuel Filberto, the Prince of Venice, were crucial to clearing the way for the Italian parliament to vote in November 2002 to rescind the constitutional ban on male descendants of Victor Emanuel III and Umberto II returning to Italy).

The fiction that Queen Maria Jose was a republican was given credence by the fact that Her Majesty cast a blank ballot on the issue of the institutional question and because she let it be known that she voted for the republican PSI. In fact Umberto II also a cast a blank ballot on a premise, similar to the Queen’s, that His Majesty was an interested party concerning the institutional issue. Because the CLN had made voting compulsory (which is a worthwhile principle in itself that all nations should apply to promote democratic participation) members of the royal family were obliged to vote in 1946 elections even though the 1948 republican constitution would later deprive them all of their franchise rights.

Which party Umberto II voted for (unless he also cast a blank ballot) was a secret that His Majesty took with him to his grave. The Queen’s vote for the PSI (and Her Majesty’s admission of it) was not really surprising because most Socialist Party voters in the south voted for the monarchy. The Royal Household Department had been encouraging Matteottian social democrats to join the PSI to bolster a moderate Italian polity. Had the votes on the issue of the institutional question been fairly and accurately counted, (i.e. the monarchy had been retained) then the Queen’s vote for the PSI would have been regarded as a masterstroke by contributing to Italy having a stable two party orientated political system.

Following the elections, Queen Maria Jose and her four children flew from Rome to Naples to leave by ship for Portugal to await the referendum results. The send off that the royal family received from Naples was tumultuous which reflected the then strong monarchist sentiment in the south. Indeed, as the votes came in from the south, indicated a landslide in favour of the monarchy that there was too much ground for the republican option to legitimately make up. Therefore Romita brazenly held back the release of the figures in the north of Rome in favour of the monarchy so that they could either be discarded or altered.

(* Voters were given a ballot with the Savoy royal coat of arms on it and a symbol of a woman very similar to the Madonna representing the republic. Preference for either a republic or a monarchy was to be indicated by marking one of the two symbols).

The Politics of Disingenuousness: The Birth of the First Italian Republic

The fact that the monarchy had really prevailed was indicated by a letter (dated the 4th of June) that the Minister of the Royal Household Department Lucifero Falcone received from Prime Minister De Gasperi which acknowledged the vote in favour of the monarchy. But when His Majesty received De Gasperi for an audience on the 5th of June at the Quirinale Palace, instead of discussing how to overcome the rigging of the vote the prime minister respectfully insisted that His Majesty accept the referendum result by leaving the country!

The prime minister was probably not a privy to the rigging of the referendum but it is plausible that his personal secretary, Giulio Andreotti, was. A stunned king subsequently departed from the palace to stay incommunicado with his friend, the journalist Luigi Barzini. The official, but rigged, result in favour a republic was declared on the 6th of June. The formal result indicating that, by a margin of two million votes (officially ten million votes for the republic and twelve million votes for the monarchy) was met mostly with outrage in the south and in Rome because it was too brazenly apparent that the referendum vote had been rigged.

The Dilemma of Exiting: Losing After You Have Won

Usually, when there is an adverse outcome in a referendum or an election, the losing side accepts the result however grudgingly. The massive demonstrations and celebrations north of Rome indicated a determination that the referendum result be accepted, regardless of how nefariously it had been arrived at. This determination was reflective of deep seated hostility toward the House of Savoy in the north because Victor Emanuel III’s flight from Rome had helped cause nearly two years of suffering in the form of the German occupation and subsequent fighting.

There were also massive protest rallies in support of the monarchy in the south and in the capital where four monarchists were killed in rioting that was violently dispersed by the police. But despite counter massive monarchist support, Umberto II was still confronted with the dilemma of the prospect of civil war if His Majesty did not accept the rigged vote. It was strangely unfair that the onus had been placed on the king to decide whether or not to plunge Italy into a civil war when it had been the republicans who had initially forced the issue by rigging the vote on the institutional question.

The king’s personal situation was also undermined due to His Majesty’s inability to contact his three main counsellors, the former prime ministers, Orlando, Nitti and Bonomi. The queen’s absence also undermined Umberto II’s position. Her Majesty might have provided intelligent counsel as to how the king could have proceeded in a very difficult situation. Having the benefit of hindsight, it is plausible that it was engineered for Queen Maria Jose to quickly depart so that, in Her Majesty’s absence, the king would take advice from his friend Luigi Barzini who was not a committed monarchist.

With the nation on the brink of a civil war, Prime Minister De Gasperi convened a cabinet meeting on the 10th of June to demand that the king leave the country. The prime minister at the cabinet meeting disingenuously claimed neutrality on the issue of whether the vote had been rigged by declaring that there was an ambiguity regarding the legitimacy of the referendum result because the two million blank votes cast (which were really deliberately spoilt monarchist northern votes) meant that the republic had not received a majority of valid votes cast.

With the cabinet’s *authorization, it was decided that De Gasperi as prime minister would assume the prerogatives of head of state on June 13th to await the decision of the 18th of June of the Supreme Court of Cassation concerning the validity of the referendum result.

(*There was only one dissenting vote in the cabinet against the demand that Umberto II leave the Quirinale Palace and that His Majesty’s prerogatives be transferred to De Gasperi. There were more than one PLI and PLD cabinet members at the time which raises the question as to how sincerely monarchists these two parties really were).

The PLI did however withdraw its representatives from the cabinet as an ostensible protest against Italy becoming a republic. However, the first two presidents of the Italian republic Enrico De Nicola, 1946 to 1948 and Luigi Einaudi, 1948 to 1955, both came from the PLI. The determination of the DC and the PCI to secure conservative acceptance of the Italian republic ensured that only two PLI members, Einaudi and Orlando, were candidates for president in 1948 parliamentary election despite the PLI’s paltry legislative representation.

Orlando’s failed 1948 presidential candidacy was a deep disappointment to an exiled Umberto II because His Majesty believed that the former prime minister was a sincere monarchist. The sincerity of the PLI’s monarchism was also suspect in that its representatives in the constituent assembly fulfilled an important intermediary role between the DC and the PSI in drawing up the new republican constitution. The fact that PLI constituent assembly members were able to incorporate specific laws associated with the Luogotenente was testament to their squandered potential to help draw up an excellent monarchist constitution to replace the Statute of 1848 which provisionally applied with a presidential head of state between 1946 and 1948.

Many Choices, But Few Options: The Banishment of Umberto II

Although the king had gone incommunicado, the Minister of the Royal Household Department Falcone Lucifero still held the fort at the Quirinale Palace. The king on returning to the palace on the 13th of June was presented with two options by Lucifero. The first plan was to arrest De Gasperi and the cabinet and form a military backed government headed by General Adolfo Infante, who had previously served as the king’s aide de camp when His Majesty was Lieutenant- General. The second option was for the king to withdraw to Naples to re-establish the Kingdom of the South.
The first option was viable to the extent that the armed forces were overwhelmingly monarchist. But had a militarily backed government been formed, there undoubtedly would have been a rebellion north of Rome that would have precipitated a civil war. The second option of the king withdrawing to the south was more viable due to overwhelming popular monarchist support in that part of Italy. But there was no guarantee that a government of a northern backed republic under PCI influence would not have induced a ‘war of liberation’ to retake the south with the support of southern communist partisans.

Another complicating factor with regard to Falcone’s plans was that Italy was still technically under Allied occupation with occupying troops (Italy regained national sovereignty in September 1947 when the constituent assembly under protest ratified the Treaty of Paris which had been signed in February 1947). Uncertainty with regard to Allied intervention was a practical obstacle regarding the viability of Lucifero’s plans. Had a Kingdom of the South been established, the Allies undoubtedly would have recognized the legitimacy of the Italian republic as having legal suzerainty over all Italian territory, thereby denying a separatist kingdom international diplomatic recognition.

The immediate insurmountable obstacle to Lucifero’s plans was Umberto II’s reluctance to possibly plunge Italy into a probable civil war. The king was counselled that his defiance of the referendum result would result in a civil war in which might imperil the Vatican. Through intermediaries between the government and the Vatican, His Majesty agreed to go into exile while a new republican constitution was being drawn up. Secret undertakings were given that, following the promulgation of the new republican constitution, His Majesty and family would be allowed to return as an honoured citizens on the condition that they refrain from politics to enable the new republic to consolidate.

Umberto II would leave Italy in 1946 for an exile that became embittered because it became permanent. The republican constitution of 1948 banned His Majesty’s return. Under the new constitution *Umberto II and former king Victor Emanuel III, their wives and male descendants were banned from Italian territory. This constitution also forbade any constitutional amendment that would alter the republican system of government.

(*From his exile in Cascais in Portugal, the king often arranged foreign travel excursions. But the king’s desire for air travel was so that His Majesty could make stop overs in Rome and other Italian cities. Although His Majesty was not allowed to disembark he was still able to see Italy from the air and from his window seat and when plane landed on the airport tarmac).

The king, in rejecting Falcone’s counsel, did so for a combination of patriotic and personal reasons. The patriotic reasons entailed avoiding a civil war. Furthermore, His Majesty was taken with the idea that, by going to Naples the House of Savoy’s fundamental achievement of uniting Italy in 1861 would be undone. Ironically, Umberto II’s refusal to withdraw to Naples terminated the one thousand years secret of the dynasty’s survival: the Savoyard stratagem of withdrawing to secure territory when a military or political position had become untenable.

It is probable that, had Umberto II withdrawn to Naples, a civil war would have ensued. Therefore the king should have withdrawn to the island of Sardinia to ostensibly wait the promulgation of a republican constitution that allowed His Majesty’s return. The subsequent prohibition against the king’s return under the 1948 constitution would have enabled His Majesty to have established a permanent separatist monarchist regime on Sardinia. An Italian republican invasion of Sardinia was not viable because monarchist sentiment in the armed forces would have been too strong and monarchist opinion on the mainland would have been alienated.

Sardinia until 1718 had belonged to either Spain or Spanish kingdoms until the island was awarded to the House of Savoy in exchange for their ceding the Kingdom of Naples and the Two Sicilies which went to Spanish Bourbons. Throughout the Bonapartist occupation of mainland Italy in the late eighteenth and early ninetieth centuries, the Savoys survived by being based on Sardinia.

Even though over two hundred years of House of Savoy rule was to ‘Italianize’ Sardinia, the regional dialects on the island remained closer to Castilian and Catalan. Consequently, there was an argument that there would have been no violation of Italian unity by Umberto II going to Sardinia and that the Savoys had a right to return to an island that they had brought to Italy and which had overwhelmingly supported them in the 1946 referendum.

Instead of withdrawing to a new bastion, Umberto II on returning to the Quinrale Palace on the 13th of June publicly over-ruled a visibly and understandably distressed Lucifero* and released all officials from their oaths of allegiance to the Italian Crown. Determined to leave Italy before De Gasperi appropriated his prerogatives as chief of state, Umberto II inspected an honour guard at Quirinale Palace and departed with the royal standard still flying over the palace.

(*Lucifero later reconciled with Umberto II by becoming the king’s official representative to the Vatican after indignantly refusing a presidential nomination to the Senate in 1948. He later accepted a knighthood from Umberto II as a Cavaliere in 1969).

The king was driven to Rome’s Ciampino Airport to depart for Portugal. The crowds that gathered along the king’s route to Ciampino Airport probably did so for a variety of reasons. For some, it was to witness history as a king permanently left his country. Others undoubtedly turned up to demonstrate their continuing allegiance to the monarchy and this was reflected by exhortations from the crowd that His Majesty not leave.

Whatever Umberto II’s motivations in deciding to go into exile, it cannot be denied the His Majesty had spared Italy civil war that would have politically embittered Italians for generations. His Majesty’s departure reflected that, had the referendum been fairly conducted, Italy would have had a democratic constitutional monarchy serving the genuine national interest by fostering national unity and honest governance.

Predictably, the Supreme Court of Cessation on the 18th ruled that the referendum result was valid; clearing the way for the constituent assembly on its inaugural meeting on the 28th of June declared Italy a republic and elected Professor Enrico De Nicola as provisional president. The choice of De Nicola was surprising because he was a former Salandra liberal who had served as Speaker of the Chamber of Deputies from 1920 to 1924 and who had been Victor Emanuel III’s chief constitutional advisor after His Majesty had fled South in 1943. Indeed, it was De Nicola who had formulated the legal concept of the luogotenente in 1944.

The choice of a southern liberal monarchist in the person of De Nicola as provisional president was part of a DC-PCI strategy to have the public accept a republic. The new head of state was a Neapolitan whose home city had voted by over eighty percent in favour of the monarchy. De Nicola was persuaded to accept the new position by Andreotti but he later tried to resign as president and adamantly refused to stand for election in 1948. The new president (who everyone knew had voted for the monarchy) gained a degree of good will amongst monarchists by making gestures such as allowing servants and staffers at the Quirinale Palace to remain in their jobs if they so desired.

Turning Negatives into Positives: Togliatti Consolidates The Italian Republic

A more substantial action that De Nicola took in consolidating the Italian republic was to issue a presidential pardon upon the proclamation of a republic on the 28th of June of minor to middle ranking officials of the PNF regime between 1922 and 1943 and of the RSI. (To establish the legitimacy of the rigged referendum, the anniversary of the Italian republic is celebrated on the date of that vote, the 2nd of June, as opposed to the formal proclamation of the Republic on the 28th of June 1946). The pardon was instigated by the then Justice Minister and PCI leader Palmiro Togliatti.

As with other Togliatti actions that were ostensibly conciliatory, there was a sinister ulterior motive. Even without rigging the referendum, the DC- PCI leadership had the challenge of overcoming monarchist sentiment in the south. In fact, Togliatti not only overcame southern monarchist sentiment, he gained a strong base of communist support in the south as part of a carefully pre-arranged plan. As previously mentioned, local government elections were not held in Rome and south of the capital in March/April but took place in November 1946 after the referendum.

Due to outrage in the south over the rigging of the referendum, the avowedly monarchist UQ party performed sensationally in the November 1946 local government elections. In Naples and Foggia, the UQ received over 45%, in Lecce and Catania this ‘party’ gained over 35% of the vote and over 25% of the vote was garnered in Palermo while in Rome the UQ received just under 20% of the vote. Considering the voting system that was in place, these results were outstanding and no single party since has ever received over 45% of the vote in Italian local government elections.

These election results should have institutionalized a strong Italian monarchist movement/party in republican Italy. But, alas, these election results had been anticipated by PCI and DC strategists who ensured that the candidates that the UQ ran were former fascists, many of whom had received the recent presidential pardon and to say the least were not really monarchist.

The UQ leader Guglielmo Giannini was a monarchist but his greater commitment was to the PLI. Giannini had really intended that the PLI become a mass based party by riding on the wave of the UQ’s successes of the November 1946 local election. Indeed, some UQ local government officials did go into the PLI which helped facilitate a functional merger between them in the 1948 general elections.

However, some of successful UQ candidates went into the MSI which was founded in December 1946. Without the entry of successful UQ local government candidates, there could have been no politically viable neo-fascist party in post-war Italy. Promisingly, some of the elected UQ councillors almost immediately broke with their ostensible party to join the National Monarchist Party (PNM) which had been founded by Alfredo Covelli in July 1946. (He had previously been the leader of the monarchist Italian Democratic Party which had been the key component of the Bloc of Freedom, BLN).

But the real historical impact of the UQ’s stunning electoral success was that most of that electoral configuration’s successful local government candidates went into the PCI! This development was not as strange as it seemed because it was pre-arranged by Togliatti whose pardoning of former fascist officials had enabled them to successfully run on UQ tickets.

With regard to the 1946 constituent assembly results, the DC had come first with 34% of the vote, followed by the PSI with 20% and the PCI with 18%. The PLI and PLD had combined to form the National Democratic Union (NDU) which gained over 6% of the vote. The monarchist vote and subsequent parliamentary representation would have been considerably strengthened had the NDU, the UQ (5% of the vote) and the National Bloc of Freedom, BLN (with just under 3% of the vote) combined to form a single monarchist slate.

The monarchist vote would have been further bolstered had Count Sfroza (whose title was retained because the 1948 republican constitution recognized titles that were awarded before Mussolini came to power in October 1922) run on a united monarchist slate. Instead, Count Sfroza ran with the *PRI which came sixth with just over 4% of the vote.

(*The PRI 1946 vote was really a northern middle class Liberal Party vote that went to the Republican Party because of hostility toward the monarchy in that part of the country at the particular time and because of Count Sfroza’s support. Had Count Sfroza run with the PLI, or on a united monarchist slate and endorsed a democratic constitutional monarchy, the liberal monarchist vote would have been crucially stronger in the north. Ironically, the ultimate beneficiary of the PRI vote was the Pd’A which gained just over 1% of the vote. This pathetic performance of the principal non-Marxist resistance group was due to the Pd’A being a party of ‘too many chiefs and not enough Indians’.

But the Pd’A was to live on in the PRI because most Action Party leaders and members went into its fold at the 1947 Republican Party Congress. This development provided Italy’s second oldest but then virtually moribund political party with a much needed rank and file structure enabling it to be a political force into the 1990s. The PRI averaged 2% in general elections and its branches were usually based around university campuses).

The UQ councillors who entered the PCI by dispensing patronage enabled the communists to leap frog their ostensible PSI ally to become Italy’s principal opposition party in the April 1948 general elections. Without Italy becoming a republic in 1946, or perhaps more to the point without the rigging of the referendum, the political dynamics would not have been there for the PCI to subsequently become the principal opposition party in the 1948 general elections.

The Italian Republic Spawns A Blocked Democracy

Concerning the ramifications of the 1948 general elections, Italy became what in political science terms is known as a ‘blocked democracy’. This is where an extremist party’s status as the major opposition effectively precludes its winning office so that the ruling party can indefinitely hold onto power. Republican Italy’s notoriety for frequent changes in government was not due to the proportional electoral system facilitating a proliferation of small political parties having parliamentary representation but the incapacity of the PCI to win a majority in its own right.

The superseding of the PSI by the PCI in the April 1948 elections was also helped by Pietro Nenni’s stubborn refusal to break his party’s alliance with the communists. His stubbornness was based on the notion that the rapture in working class unity had enabled the fascists to come to power in 1922. Nenni’s refusal to realize that the threat to democracy came from communism and not fascism led Giuseppe Saragat, a leading anti-communist member of the PSI, to beak away to found the Italian Socialist Workers Party in January 1947.

Saragat’s new party was primarily composed of Matteottian social democrats who had joined the PSI. The new social democratic breakaway party was mildly strengthened later in 1947 when Bonomi took his small PLD into this new party. Even though many Matteottian social democrats had previously joined the PSI at Falcone’s instigation, they did not later object to the Italian Socialist Workers Party merging with the United Socialist Party to form the Italian Democratic Socialist Party (PDSI) in 1951. The reconstituted United Socialist Party, the PSU, (which had split from the PSI in 1949) was led by the founder of the Italian Republic, the former interior minister, Giuseppe Romita.

The PSI’s shift to the communist orbit was further advanced in May 1947 when Nenni socialist ministers followed their communist comrades in resigning from the De Gasperi government due to their opposition to acceptance of financial and economic support from the United States under the new Marshall Plan.

That the communists were in a position to win the April 1948 general elections due to the base that they had established at a local government level following the rapid 1946 demise of the UQ and the Nenni socialists combining with the PCI to form the Popular Democratic Front (PDF) for the 1948 poll. It should be pointed out that Togliatti probably did not want the PDF to win the 1948 elections due to his plausible fear that a military coup would ensue. Nevertheless, the PCI exploited to the full the opportunity to establish themselves as the major opposition party in a Western European nation.

The April 1948 elections were the most intense in Italian history. The full resources of the Catholic Church were understandably mobilized to prevent a possible communist takeover. Catholic parish based Civic Committees (CCs) were formed to harness maximum support for the DC. A wide range of Catholic lay groups also supported the Christian Democrat campaign. With the open encouragement from the Vatican, parish priests read pastoral letters advocating a vote for the DC.

The DC not only had the support of the Vatican in the 1948 elections but also that of the Untied States. The first major political operation of the American Central Intelligence Agency (CIA) was undertaken in relation to these elections. The United States had established a major military intelligence operation in Italy during the Second World War under the auspices of the Office of Strategic Services (OSS). Consequently, the Americans were well placed to co-ordinate election campaign operations against the PCI because the OSS was the direct precursor of the CIA.

American support for the DC was wide ranging and it encompassed funding and helping to organise anti-communist radio broadcasts and printing and distribution of election campaign material.

The polarizing intensity of the 1948 anti-communist election campaign was such that the issue of monarchy versus republic temporarily receded to virtual irrelevance. This development was ironic because the Vatican’s support for the monarchy, coupled with the one-off provision of compulsory voting, had paradoxically bolstered support for the republican led DC in the 1946 constituent assembly elections such that the Christian Democrats had come first with 34% of the vote. The DC consolidated its position as Italy’s dominant ruling party in the 1948 elections (with 48% of the vote) as the major bulwark against a communist takeover.

Quality Democracy: West Germany Gains While Italy Does Not

For reasons that have already been detailed with regard to the UQ, had the votes in the 1946 institutional referendum been counted as they were cast, (i.e. the monarchy been retained) the PSI probably would have retained its status as the major opposition party after the 1948 elections or won government in its own right. The upshot is that, as a post-war constitutional monarchy, the Italian party system could have provided Italy with a democracy similar to the Federal Republic of Germany (West Germany).

Even though Germany had inflicted more harm on Europe and the world as a member of the Axis than Italy ever had, West Germany emerged with a better quality of democracy which was reflected by its post-war party system. Similar to Italy, a Christian Democratic Party (the CDU) with a strong trade union wing emerged in West Germany as the principal standard bearer of the mainstream right. In contrast to Italy, the West German CDU did not become a corrupt catch-all party
because the opposition Social Democratic Party (SPD) was not displaced by the stalinist Communist Party (KPD).

Another potential parallel in relation to political party dynamics that could have existed between Italy as a constitutional monarchy and a post-1949 West Germany was a centrist liberal party having a worthwhile role in domestic and international affairs. The German Free Democratic Party (FDP) was similar to the PLI in that post-war dynamics were such that it had to give way to a Christian Democratic party as the standard bearer of the conventional right. But due to there being the viable prospect of the SPD winning government, the FDP was in a position to positively exercise a balance of power position with its impact being felt in promoting European unity.*

(* Since 1969, FDP leaders have served as foreign ministers in a succession of either CDU or SPD led German governments).

Had there been a CD –PSI dichotomy in a post-war Italian constitutional monarchy, the PLI could have been in a similarly positive balance of power position similar to that of the German FDP. Indeed, Count Sfroza ably served as foreign minister from 1947 to 1951. But the Count, as a member of the PRI, belonged to an electorally minor party due to the polarizing impact of the 1948 elections. Therefore, both the PLI and the PRI consequently operated as DC satellites until De Gasperi respectively dispensed with them from government in 1950 and in 1951.

If Count Sfroza had supported the monarchy in the 1946 referendum and/or led the PLI, Italian liberalism would have been stronger in a post-war context. Indeed, the scope for Count Sfroza being foreign minister and leader of a democratic PLI holding the balance of power between the PSI and the Populari had been there had it not been for the so-called fascist ‘March on Rome’ in 1922.

The weakness of post-war Italian liberalism was also a factor that later contributed to the survival of post-war neo-fascism because anti-communists in the northern Italy voted for the MSI rather than a DC-dependant PLI in the 1972 elections. By contrast, the relative strength of the FDP in West Germany was such that it helped prevent its support base going over to a neo-Nazi right.* Ironically, Italian neo-fascism was weaker in the immediate post-war period than neo-Nazism but the former was to gain a relatively secure niche in the Italian Republic while the latter abysmally failed to do so in the German Federal Republic.

(* The Nazi vote rapidly increased between 1930 and 1932 by gaining support from people who had previously abstained from voting and from the voting bases of the then two parties of German liberalism, the republican German Democratic Party and the monarchist inclined German People’s Party).

However, contrary to popular opinion, republican Italy was one of the most stable countries in Western Europe because changes in government were really a re-arranging of ministerial deck chairs with the same faces in new positions under a continuously ruling catch-all type of party. The really detrimental dimension of the Italian republic being a blocked democracy was the artificial polarization that was inflicted upon Italian society which had ramifications in promoting engrained corruption.

When Bi-Partisan Rivalry Facilitates Societal Division

This societal polarization was brilliantly caricatured in the world famous Don Camillo stories written by the Italian monarchist, Giovannino Guareschi* (1908-1968). The Don Camillo series tell the humorous stories of the DC supporting priest, Father Don Camillo Tarocci, sparring with the communist town mayor, Peoppone. The stories of Don Camillo’s ‘small town’ being divided by DC and PCI football teams disturbingly reflected the general situation in Italy.

(* Guareschi was interned by the Germans in the Auschwitz concentration camp in Poland following the 1943 German invasion of Italy. As editor of the monarchist magazine Candido Guareschi was briefly imprisoned in the 1950s for refusing to pay a fine for defaming President Luigi Einaudi by describing the former monarchist traitor as ‘The President of Wine’ when he visited a wine vineyard).

In either the lead up to or following the 1948 general elections, important institutions such as trade union confederations divided upon communist and anti-communist fault lines. This phenomenon was also manifested in 1950 when anti-communist elements within the then peak union confederation, the PCI/PSI dominated CGIL broke away to form three new rival union confederations: the DC backed Italian Confederation of Trade Unions (CISL), the PDSI and PRI supported Italian Labour Union (UIL) and the neo-fascist Italian Confederation of National Workers’ Unions (CISNAL).

More vivid divisions in sync with the emerging DC-PCI dichotomy from the 1950s onward were community splits within towns and villages where even social clubs were formed on party lines. Although there was a comedic ridiculous dimension (as the Don Camillo stories attested) to these divisions, they were ultimately a counterproductive waste of time that empowered self-seeking party bureaucracies. Had post-war Italy been a democratic constitutional monarchy, there could have been a viable transparent two party system with a non-partisan monarchy inspiring civic virtue, national unity and serving as a focal point for an impartial civil service.

The societal divisions caused by Italy being a blocked democracy were avoidable had De Gasperi been prepared, following the 1953 election, to make an accommodation with the PNM. That the prime minister would not was testament not only to his refusal to come to terms with the rigging of the 1946 referendum but also to his determination to personally dominate Italian politics. For all the elaborate checks and balances that the 1948 republican constitution supposedly put in place to prevent Italy again becoming a dictatorship, there was no constitutional protection against the passage of the Scelba electoral law of 1953 (‘the swindle law’).

The Scelba electoral law (named after the DC Interior Minister, Mario Scelba) was eerily similar to Mussolini’s 1923 Acerbo Law in that it awarded two thirds of parliamentary seats to the party (or electoral coalition of parties) that won 50% or more of the popular vote. Had the DC polled 50% or more of the vote in the 1953 elections, then Italy may have become a de facto one party state, with the smaller parties squeezed out and the PCI permanently consigned as the major opposition party.

Thankfully, the DC fell way short with 40% of the popular vote in 1953. Yet, the Nenni-led PSI still refused to terminate its alliance with the PCI. Nevertheless, the prospects for Italian democracy were strengthened by the PSI at least running a separate list from the communists which diminished the sense of urgency for anti-communists to vote for the DC. The June 1953 elections saw the PMN come fourth (after the DC, PCI and the PSI) with nearly 7% of the vote giving the monarchists forty lower house seats!

Keeping the Monarchists in the Wilderness

The relatively strong monarchist vote in the 1953 elections was not really surprising because there was still residual resentment in the south over the rigging of the 1946 referendum. Due to the absence of an immediate threat of a communist takeover, Neapolitans felt secure in 1952 to elect *Achille Lauro of the PNM as mayor of Naples. The PNM vote was nearly double that of the monarchist inclined PLI which came seventh with 3% in the 1953 vote. Consequently, the PNM was positioned to become the standard bearer of the conventional right. At the very least, the PNM had the capacity to consolidate monarchist sentiment in the south and possibly secure a future monarchist voting base in the north.

(*Lauro served as mayor of Naples from 1952 to 1957 and from 1960 to 1962. The monarchist lost the Naples mayoralty in 1962 to the DC and, after 1963, were not part of the city’s ruling coalition).

The entrance of the monarchists into the mainstream of Italian politics could have orientated the DC to being a centre-right party so that the PSI (which broke with the PCI in 1956 over the Soviet invasion of Hungary and temporarily re-united with the PDSI between 1966 and 1969) could eventually have become a viable competitor for national government in its own right. But, in De Gasperi’s last dis-service to Italy, he effectively ensured that the PNM remained outside the ‘constitutional arc’ by refusing their support.

Having failed to ensure de facto one party rule by passing the Scelba Law, De Gasperi tried to present himself as a principled democrat by refusing to form a centre-right coalition with the PNM and the then monarchist inclined PLI. In his August 1953 resignation speech, De Gasperi referred to the PNM deputies as ‘these strange gentlemen’ who had brought Italy to the brink of civil war. This denunciation was inaccurate as it was unfair because the outgoing prime minister rejected the reality that the referendum vote had been rigged by the republicans and that it was Umberto II’s action in leaving the country that had averted bloodshed.

De Gasperi, by spurning the support of the PNM, ensured that the DC remained a catch-all party that operated in a polity that blurred the distinction between left and right. It was in this political context that De Gasperi intended to wield predominate power as DC General Secretary. Although De Gasperi was DC General Secretary between October 1953 to his death in August 1954, he was not able to exercise the equivalent power of a Communist Party General Secretary because, with all the DC’s faults it could not operate as a regimented Leninist type of party.

The succeeding DC led caretaker government of Giuseppe Pella (August 1953 to January 1954) was a three party coalition with the PNM and the PLI. The fact that the exiled Umberto II was prepared to support a republican government with PNM cabinet ministers did not lead to any reciprocation on the part of the political establishment with regard to accepting the legitimacy of monarchist involvement in republican politics. In fact, the major purpose of the Pella government was to serve as a stop gap to prepare the DC to form amorphous cabinets.

Keeping the Monarchists Out Spawns Calculated Instability

This pattern of nebulous DC governance commenced in February 1954 with the formation of the Scelba government which was a coalition between the DC, the PLI and the PDSI. Over the next nine years, there was a pattern of successive DC led coalitions involving the PLI, the PDSI and the PRI. After 1963, following the so-called ‘opening to the left’, the PSI entered the coalition mix.

The rapid turnover of governments (which usually lasted six to eighteen months) encouraged the factionalization of the DC. Because parliamentary votes were by secret ballot, tight factional groups within the DC were formed which more often than not had links to junior coalition parties that were based upon patronage capacity as opposed to ideological considerations.

Avowed monarchists perversely became part of the patronage politics of the Italian republic when Achille Lauro, a ship builder who had previously supported the Mussolini regime, broke away from the PNM to form the Popular Monarchist Party (PPM) in 1954. The PPM was really a conduit for Lauro to gain patronage for his supporters and further his business interests. The utility of the PPM for the DC was that this party undermined the capacity for the PNM to be sufficiently strong to be accepted into the mainstream of Italian politics.

The impact of the PPM undermining the PNM was manifested in May 1958 elections when the MSI garnered 4.8% of the vote thereby coming fourth. The combined vote of the two monarchist parties was nearly the same as the MSI’s with the PPM and the PNM respectively gaining 2.6% and 2.2 % of the vote. The cumulative monarchist vote was still greater than the PLI’s 3.5% of the vote.

Covelli and Lauro as respective leaders of the PNM and the PPM met with Umberto II as mediator in Paris in April 1959 to thrash out the re-unification of the two monarchist parties. A reconciliation was reached which was manifested by the formation of the Democratic Party of Monarchical Unity (PDIUM) following the royal mediation. But the damage was done due to the impact of the previous split undermining monarchist leverage to be accepted into the mainstream of Italian politics.

Due to apprehension among southern conservative voters regarding the impending entry of the PSI into government (‘the opening to the left’), there was a transfer of monarchist votes in the April 1963 elections to the PLI which came fourth with just over 7% of the vote. The PDIUM came seventh with 1.8% of the vote behind the fifth placed PDSI and sixth positioned MSI but still marginally ahead of the PRI.

The electoral weakness of the monarchist movement in Italy in the 1960s did not reflect the high levels of sentimental support for the House of Savoy in the south of Italy. It was not uncommon in the 1960s for the Italian tricolour to be flown in the south with the royal standard. Portraits of Umberto II and Queen Maria Jose often adorned town halls in southern Italy. Across Italy, articles and photos on the royal family still featured prominently in newspapers and magazines. A lucrative travel industry by the 1950s had emerged of organising tours to the royal court at Villa Italia in Cascais, Portugal.

The royal court secretariat at Villa Italia in Portugal maintained regular contact with Umberto II’s supporters. The king’s cause was also helped by having an efficient personal Rome office which maintained communication links with monarchists throughout Italy while also keeping His Majesty appraised of contemporary developments.

But by the mid 1960s, the political electoral developments in Italy for Umberto II were not promising because it was near impossible to convert sentiment for the monarchy into electoral support. This was due to advances in communications (such as the widespread availability of television) diminishing regional differences between north and south which adversely affected the PDIUM and the MSI which had essentially become southern protest parties.

Post Monarchism or Post Fascism? Forming a New Italian Right-Wing Party

The non-viability of the PDIUM became apparent in the May 1968 elections when its vote fell from 1.8% to 1.2% (six seats). The monarchist party came second last in the elections, just ahead of the South Tyrolese People’s Party which represented the German speaking minority of the South Tyrol region of northern Italy. Monarchist electoral support by the time of the 1968 elections was concentrated in the south, was based on upper middle aged to elderly diehard royalist support and the so-called women’s magazine vote.

There was still a monarchist impact on the 1968 elections in that retired general, Giovanni de Lorenzo, was elected to parliament on the PDIUM ticket. The election of de Lorenzo to parliament provided him with parliamentary immunity which he needed because the L’ Espresso newspaper revealed during the 1968 election campaign that he had planned a military coup in 1964 as head of military intelligence, the Service Information of the Armed Forces, SIFAR.

The 1968 press reports concerning a planned military coup combined with General de Lorenzo’s demurral denials ultimately benefited the DC because the message was subtly conveyed that it was best to vote for the ruling party to avoid the danger of a PCI victory precipitating a military coup.

De Lorenzo’s narrow election to parliament was reflective of the PDIUM’s declining fortunes such that its leader Alfredo Covelli realized that monarchist interests would be secured by becoming part of a new right wing conservative party. The PLI’s move to the left in the 1960s, in which it adopted secular, if not libertarian social positions similar to the PRI’s, created the space necessary to create a new right wing party.

The MSI leader, Giorgio Almirante (1914 to 1988) with his party’s declining vote (4.5 % of the vote) also had the objective of creating a new conservative party. Although Covelli and Almirante were initially to work together after the 1968 elections they were to become rivals in the 1970s with the latter ultimately winning out. Because Almirante’s surprisingly substantial impact on modern Italian history continues to the present a brief overview of his political life is undertaken.

Giorgio Almirante: The Political Winner Who Backed a Losing Cause

Almirante was born in northern Italy to a family of theatre actors that originally came from Sicily and were of Spanish descent. He attended Rome University in the 1930s where he graduated with degrees in law and literature. At university, Almirante became a fascist and, following his graduation, he worked as a journalist with the hardline fascist newspaper Ill Tevere. During the Second World War, Almirante served in the Italian army. Following the September 1943 Armistice, he refused to flee to the ‘Kingdom of the South’ and instead made his way north to join Mussolini’s RSI.

The paradox of Almirante supporting the doomed RSI (1943 to 1945) was that he gained a relatively senior position in the republican fascist regime which he probably would not have gained had Mussolini still ruled all of Italy. From 1944 to 1945, Almirante was the chief of the Ministry of Popular Culture (MINCULPOP) which he later asserted made him a junior minister in the RSI government. A major success of the RSI was that it established an effective propaganda agency that was focused on defending Mussolini’s 1922 to 1943 regime and in claiming that Mussolini’s collaboration with the Germans mitigated the effects of their occupation of northern Italy.

Almirante later claimed that he became personally close to Mussolini when he was based in the Lake Garda of northern Italy that the RSI ‘president’ had wanted to establish secret contact with the Allies. These contestable claims helped advance Almirante’s post-war political career. The first claim bolstered Almirante to press his case to lead the MSI while the second claim helped him disassociate from the Nazis.

The future neo-fascist leader first demonstrated his acute survival skills by evading arrest and probable execution following the RSI’s violent overthrow in April 1945. He avoided arrest and eked out a living between the war’s end and the June 28th 1946 declaration of the Italian republic when an amnesty for minor to middle ranking fascist officials of both the 1922 to 1943 PNF regime and the RSI was granted.

As previously analysed, the benefit of this 1946 amnesty, (which was instigated by PCI leader and then Justice Minister Palmiro Togliatti), was that it enabled former fascists to run with the UQ in local government elections in November 1946 in Southern Italy. Due to uproar in the then monarchist south that the monarchy had been overthrown in a rigged referendum, the UQ performed spectacularly well in the southern local government elections. But, as Togliatti had previously arranged, most former fascists that had run under the auspices of the UQ subsequently joined the PCI therefore creating a strong communist base in southern Italy.

Not all successful UQ local government candidates joined the PCI and, due to their fascist backgrounds, it was not unnatural that some of them would want to join a neo-fascist party. At the end of the war in 1945, the best organised fascist grouping was a former RSI spy cell that was based in Rome. This cell metaphorised as the MSI in December 1946 and adopted Almirante as its leader due to his claim that he could bring former RSI officials into the fold of the new party. In fact, the only political asset that the MSI had at the time of its founding was that it provided a base for pro-fascists who had successfully run with the UQ to subsequently join a neo-fascist party.

Almirante consolidated his leadership of his party when he demonstrated tremendous physical courage by being the chief campaigner for the MSI ticket that ran in council elections in Rome in September 1947. MSI candidates were heckled and beaten up in the staunchly anti-fascist capital which had voted to retain the monarchy in June 1946. Nevertheless, the MSI polled strongly in the district of Rome where civil servants lived. These civil servants had first made their careers under the Mussolini regime, had served in his subsequent RSI regime and maintained their positions following the Allied liberation of Rome in June 1944. They were orientated to a party such as the MSI and ultimately voted for this party due to advocacy that a strong bureaucratic state be maintained.

There was public astonishment regarding the Rome vote that MSI had garnered in Rome because the aberrant factor of the civil service vote was not taken into account. The relative success of the MSI’s Rome vote helped provide the momentum for this fledgling party to garner 1.9 % of the vote in the April 1948 elections. This was a credible result due to the intensity of the DC/PCI polarization, the still strong anti-fascist sentiment and the MSI’s lack of resources. It was ironic that the MSI 1948 vote was concentrated in the south because fascism had been non-existent south of the capital in 1922 and neo-fascism probably would not have re-emerged in a post-war context had it not been for the existence of the northern based RSI.

Had Italy introduced the five percent minimum threshold for the 1948 general elections, (similar to the requirement that the Federal Republic of Germany introduced in the 1950s), for a party to gain parliamentary representation, then there probably would have been no neo-fascist parliamentary presence in the Italian republic. Senior DC strategists decided that it was useful to maintain the MSI as a factor in Italian politics to help divert votes in the south from going to the PCI.

Accordingly, Almirante was denied his parliamentary immunity in 1949 by a vote of the parliament and sentenced by a court to one year’s house arrest after being found guilty of trying to revive the fascist party which was (and is) expressly forbidden under the 1948 constitution. A 1950 MSI party congress was held at the instigation of the DC eventually provided the base for Augusto De Marsanich to succeed Almirante as party leader in 1951.

Even though De Marsanich came from Rome, he led the southern based component of the MSI that identified with the PNF regime of 1922 to 1943. This dominant wing of the MSI was prepared to work in alliance with the DC, the PNP and the PLI against the communists in local government elections in the 1950s. The benefit of these anti-communist electoral alliances for the MSI was that they not only undermined the PCI but enabled this party to gain a degree of patronage from access to local government. Almirante remained within the MSI as a focal point of nationalist hostility towards De Marsanich’s de facto alliance with the DC.

Ironically, Almirante’s prominent presence within MSI still helped this party to increase its vote by over a million in the 1953 elections (5.9% of the vote, 23 seats) due to his prominence in demanding Italian sovereignty over Trieste. This massive increase in the MSI vote reflected widespread hostility toward Allies for not allowing the Italian component of the Free State of Trieste to return Italian sovereignty. Had it not been for the Trieste issue in the 1953 elections, the MSI might not have been able to have continued as a viable electoral party.

The 1953 MSI vote still fell behind the PNM and, had the De Marsanich wing of the neo-fascist party subsequently joined up with the Covelli led monarchists, Italy could later have had a monarchist inclined party that was entrenched as a conservative/centre right party. Instead, a DC instigated split within the PNP was engineered in 1954 which led to the foundation of Achille Lauro’s PPM which not only thwarted a De Marsanich-Covelli configuration but eventually split the monarchist vote. Consequently, the MSI superseded the two competing monarchist parties in the 1958 elections even though the neo-fascist vote had fallen by 1 % when compared to the 1953 election results.

The entrenchment of a neo-fascist presence in Italian politics was not a threat to Italian democracy. This was because the major objective of the MSI under the successive leaderships of De Marsanich and from 1954 under Arturo Michelini (who was a Florentine who had links to the Vatican) was to support DC rule as a bulwark against the PCI. Most MSI members supported this unstated objective due to their success in gaining patronage at a local government level by broadly supporting the DC.

Ironically, for a party whose roots were with an undemocratic regime, there was abundant inner party democracy due to Almirante leading an institutionalized faction that vehemently and openly criticized the MSI’s incumbent leadership. The MSI’s implicit accommodation within the political system in the late 1950s and 1960s by the DC establishment aroused strong anti-fascist opposition. This was manifested when massive riots broke out in 1960 because a relatively junior DC official, Fernando Tambroni (who was a former PNF member), formed a five month government that was reliant upon MSI and PDIUM parliamentary votes.

The 1960 riots were reflective of the strong anti-fascist tradition that existed in Italy particularly in the north where there had been an extensive anti-German resistance movement between 1943 and 1945. Almirante’s faction of the MSI had provocatively convened a party congress in Genoa in 1960, thereby sparking violent riots in that staunchly anti-fascist city.

The Opening to the Left: The DC Goes into Coalition with the PSI

The fall of the Tambroni government consequently raised the question of the so-called ‘opening to the Left’: should the DC should enter into a coalition with the PSI? This had notionally been an option for the DC since the PSI had split with the communists following the Soviet invasion of Hungary in 1956 but had not been pursued due to opposition from the DC’s Vatican supported right wing.

The papacy of John XXIII (1958 to 1963) led to an ideological reconfiguration of DC factions with the supposed right wing faction based upon Luigi Gedda’s Catholic Action essentially becoming non-ideological as it passed into Giulio Andreotti’s orbit at the 1962 DC party congress. Andreotti established himself as leader of the DC’s right wing by passionately speaking against his party entering into a coalition with the PSI at the 1962 party congress, only to then serve in a newly formed cabinet as defence minister in a government formed by Amintore Fanfani later that year that was reliant on PSI parliamentary votes.

The Vatican’s support for the Fanfani cabinet helped the new prime minister (who had once belonged to the PNF) reposition himself as ‘a man of the right’ to a centre-left political position by declaring there to be common ground between the DC and PSI with regard to their both supporting government economic planning.

It was due to Fanfani’s support that the leading figure within the DC’s left, Aldo Moro, was able to form a series of coalition governments with the PSI (which as previously mentioned re-united with the PDSI between 1966 and 1969) between 1963 and 1968. Moro’s position was also bolstered by his friendship with Pope Paul VI, the former Cardinal Giovanni Battista Montini, who was elected pope in 1963 following the death of John XXIII in June that year.

The DC’s ‘opening to the Left’ essentially ended their supporting the MSI and the PDIUM at a patronage local government level as clientistic parties. As previously mentioned, the DC’s so-called move to the left provided the MSI and the PDIUM with a limited degree of support by appealing to anti-communist southern Italians who opposed the Christian Democrats’ 1963 accommodation with the PSI. But even this niche was threatened due to the upsurge in support for the PLI in the 1963 elections emerged both as an anti-communist standard bearer and as the possible future leading national centre right force. The PLI’s increased 1963 vote came from one time anti-communist DC voters and from former PDIUM voters.

The PLI failed to become the fulcrum of Italy’s centre-right because its leader Giovanni Malagodi lacked the inclination and perhaps necessary political skill to win over MSI and lingering PDIUM voters and key activists into his party. Between 1963 and 1972, the PLI was excluded from any access to patronage due to its remaining outside the centre-left coalition governments of this period. This probably did not unduly concern Malagodi because the PLI had a solid middle class vote that supported its economic policies as opposed to gaining benefits from the party’s patronage capacity.

Patronage shortfalls were compensated by the PLI’s links to Italy’s leading employer confederation, the Confidustria. The Confidustria often helped supply the PLI with candidates and logistical support as it later did for the PRI. From Malagodi’s perspective advances in communication and economic development were bridging the gap between northern and southern Italy so that it would only be a matter of time before MSI and PDIUM support base passed over to the PLI.

That the PLI*did not supplant the MSI and the PDIUM was due to these parties forming an electoral alliance for the 1972 elections called the MSI – National Right (MSI-DN). The formation of this electoral alliance occurred after Almirante resumed the leadership of the MSI following the death of Arturo Michelini in June 1969.

(*Indeed, the PLI vote declined to 3.9% in the 1972 elections and, after joining successive centre-left coalitions, its vote fell to 1.3% in the 1976 elections. Thereafter, until the 1990s, the PLI survived as a patronage satellite party of the DC. What continuing quality input the PLI had into Italian politics was derived from its links to the Confidustria. Any capacity that the PLI had to be a centre-right party was undermined by espousing liberal social policies from the mid-1970s onward which alienated many Catholics).

Almirante Attempts to Move from Neo to Post Fascism

Prior to Almirante’s 1969 return to the MSI leadership, he had formed an activist party faction (‘The National Platform’) whose potency had been undermined by the DC forming centre-left governments in the 1960s. This development circumvented anti-fascist demonstrations that Almirante had previously utilized to support his then hardline fascist position within the MSI. In the 1950s and 1960s, a bedrock support base for Almirante within the MSI came from underemployed uneducated male youth who gloried in street fighting. By contrast, staunch monarchist support disproportionately came from wealthy middle aged to elderly women.

Almirante gained a political advantage from 1963 onward within his party and over the PDIUM when he parlayed the support of an educated militant youth to establish MSI university clubs. The recruitment of anti-communist student activists brought in a more intelligent critical mass to the MSI. At a university context in the 1960s with the DC being entwined in centre-left governments, there was a gap with regard to there being a right wing anti-communist force at university campuses. This gap was filled by Almirante initiating the foundation of an MSI university student wing, the University Front for National Action (FUAN).

The FUAN and its successes in university campus elections (particularly in winning control of the student union at Rome University in 1965) provided Almirante with a strong inner party base MSI which he utilized to resume party leadership in 1969. The MSI’s student wing also established for Almirante a conduit to middle class families which saw a maturation in some of his policy positions.

Almirante shifted his position from opposing Italy’s membership of the North Atlantic Treaty Organization (NATO) - which Italy had joined as a foundation member in 1949 - to being an ardent supporter of the military alliance as a bulwark against communism. Similarly, Almirante went from being an opponent to a supporter of Italy’s membership of the European Economic Community (ECC, which is now known as the European Union, the EU). With regard to economics, Almirante moved from being avowedly anti- capitalist to a policy position of a pre-1980s French Gaullist: having the state support a market economy.

The MSI-DN alliance received 8.7% of the vote in the 1972 elections which was nearly a one million increase on the combined neo-fascist and monarchist vote in the 1968 elections. This respectable showing was due to the new electoral alliance holding existing support, garnering the support of some ardent anti-communist DC voters in northern Italy, and appropriating the PLI’s voting base across the nation.

The benefit for the former PDUIM being in the DN alliance was that a monarchist presence was retained in parliament that probably would not have been had an overt monarchist party run in the 1972 elections. Monarchist support for the DN alliance helped prompt non-neo-fascist conservatives, such as the retired Admiral Gino Birindelli, to run as alliance candidates. The MSI might (as Almirante wanted) have dissolved itself as a party following the 1972 elections so that the DN could become a conservative/anti-communist centre- right party had Pino Rauti’s fascist New Order Party (ON) not been re-admitted to the MSI as part of the process of forming the DN alliance.

Rauti had been a strong supporter of Almirante’s following his DC instigated deposition as MSI leader in the early 1950s. He was therefore put out when Almirante refused to split from the MSI to form a new neo-fascist party when it had been Almirante’s public opposition of the return of the Italian section of the Trieste Free state to Italian sovereignty that had resulted in the MSI gaining an increase of one million votes in the 1953 elections over the 1948 election results.

Rauti’s action in splitting from the MSI to form ON in 1956 probably later benefited Almirante because a hardline fascist presence in FUAN in the 1960s would have undermined the MSI from moving toward becoming a conventional right wing party. Ironically, Rauti’s return to the MSI was initiated by Almirante to undermine fascist terrorists groups, such as Prince Valerio Borghesese’s National Front (FN), by having hardliners move into a legal political framework.

In keeping with the cyclical nature of Italian politics, Rauti’s return to the MSI fold rebounded on Almirante with regard to achieving his objective of converting the DN alliance into a conventional right wing political party. At a 1973 convention of the constituent groups of the MSI-DN was held to establish such a new political party. At this convention, even some of Almirante’s staunchest supporters rallied to Rauti by blocking the MSI’s dissolution. Due to the productive working relationship that Covelli (who was MSI-DN president) had established with Almirante, the monarchist leader did not then utilize the convention’s failure to establish such a new party to break with the MSI to achieve this objective.

Because Almirante and Covelli still shared the common objective of establishing a new post-fascist party, they both supported a DC initiated referendum in 1974 to repeal a divorce law that had been passed by the parliament in 1972. The failure of the referendum (the anti-divorce proposition garnered 40% of the vote) undermined the DC to the extent that it almost set the scene for the PCI later coming to power in a strategic scenario that had been initially envisioned by Togliatti. The late PCI leader believed that, as Italian society ‘matured’ by becoming more secularized there would eventually be a shift of power to the PCI from a clericalist DC both at gross roots electoral level.

Togliatti’s Post-War Impact on Italy Re-Capped

Due to Togliatti’s impact on modern Italian history, his role in shaping the nation should be re-overviewed particularly because the DC’s post-war political hegemony had really been engineered by Togliatti. Despite all Victor Emanuel III’s fundamental mistakes in appointing Mussolini prime minister in 1922, supporting the subsequent establishment of a dictatorship and almost botching Italy’s defection to the Allied side, His Majesty was still later able to blunder by allowing the communists into government in 1944 to try to hold onto his throne.

The PCI leader’s support for Victor Emanuel III to remain as king had enabled the communists to enter the cabinet in March 1944 and subsequently have an important role in ruling Italy after the liberation of Rome later in June that year. PCI support on the executive of the CLN Central was crucial in ensuring De Gasperi’s appointment as prime minister in December 1945. Togliatti also helped ensure that the DC became a catch all party by ensuring that most monarchists voted for the Christian Democrats (instead of a secular centre / centre-right monarchist party) by supporting the proposition that that Italy’s constitutional status be determined by popular vote as opposed to a vote of the elected constituent assembly.

As Justice Minister, Togliatti granted an amnesty to minor to middle ranking fascists upon the proclamation of the Italian Republic on June 28th 1946. This enabled them to successfully run (due to outrage that the referendum had been rigged) under the auspices of the UQ in local elections held in southern Italy in November that year. As Togliatti had previously arranged, most UQ local government officials joined the PCI to establish a strong communist base in southern Italy.

The strong base that the PCI established in southern Italy through exploiting the UQ, combined with its existing support in other parts of Italy and Nenni’s naiveté of aligning the PSI to the communists, enabled the PCI to become the dominant opposition leader following the 1948 elections. Togliatti was too shrewd to want to see the PCI outright win national elections because he knew that this would precipitate a military coup. Instead, Togliatti envisaged a scenario that, as Italians (from his perspective) ‘matured’ by moving away from the mores of the Catholic Church, a communist backed left-of-centre regime led by a party such as the PSI would eventually displace the DC.

The above scenario of Togliatti’s was not fanciful. Had the Vatican not supported the DC’s ‘opening to the Left’ in the 1960s by having the PSI admitted to cabinet then the ruling Christian Democrats might have imploded over the issue of neo-fascist involvement in government. The formation of DC led centre-left governments therefore later presented a fundamental challenge to the PCI in achieving power.

That Togliatti* still had a strategy in the early 1960s of the PCI taking power through an avowedly centre-left party was reflected by discreet communist support that was provided in establishing the Italian Socialist Party of Proletarian Unity in 1964 (PSIUM). This party was mainly composed of former members of the PSI who were initially disillusioned by their party’s re rapprochement with the DC and then the PSI’s brief re-unification with the social democratic PDSI between 1966 and 1969. The major utility to the communist of the PSIUM was the maintenance of a non-PCI neo-Marxist party that could be utilized by the communists to help them win national elections as part of a broad left front.

(*Togliatti died in August 1964. To the end, he demonstrated political shrewdness by adopting an ostensible neutral stance in relation to the Peking-Moscow split which emphasised the PCI’s supposed independence and therefore as supposed legitimate competitor for national office).

The PSIUM polled respectably in the 1968 elections with 4.5% of the vote but, following the 1972 elections, (in which the PCI and the PSIUM formed a joint senate ticket) this party split three ways: one group formally entered the PCI, another returned to the PSI and a third group continued as a fringe party. The first two mentioned factions both served the PCI’s ultimate purpose of maintaining a viable pro-PCI socialist party through which the communists could win power.

Enrico Berlinguer: The Great Who Could Have Been of Italian Politics

Although the 1972 election results indicated that the PCI was still entrenched in second place (27.2 % of the vote), this party was still a long way from defeating the DC which had garnered 38% of the vote. Nevertheless, visitors to Italy during the 1972 election campaign could have been forgiven for thinking that the two major protagonists were the PCI and the MSI-DN. Newspaper coverage focused on the seeming titanic struggle between Almirante and the new PCI leader Enrico Berlinguer. Ultimately, the high profile of the leaders of the two respective extremes of Italian politics influenced moderate voters to support the DC.

The 1972 elections were historically significant because they marked the emergence of Berlinguer (1922 to 1984) as a major political leader in Italian politics. Berlinguer is probably the most respected political figure in post-war Italy. There is now little doubt, that had Berlinguer lived to see the fall of the Berlin Wall in 1989 and subsequently transformed the PCI into a social democratic party, that he would have become Italian prime minister.

The late communist leader was actually born into an aristocratic Sardinian family which had once been loyal to the House of Savoy. Although it was understandable that Berlinguer became an anti-fascist in his youth, he did not have to become a communist in 1943. His meeting with Togliatti in 1944 probably set Berlinguer on the path to becoming future leader of the PCI. Togliatti recognised in Berlinguer some-one who had the charisma and the intelligence to eventually take the communists to power after Italians broke with the DC as they became more secular inclined.

The PCI’s opposition in the 1974 referendum to repeal the 1972 divorce law marked the point at which millions of Italians who admired Berlinguer were prepared to go to the next step of voting for the PCI. Admiration for Berlinguer had previously been generated by his public opposition to the Soviet led invasion of Czechoslovakia in 1968, his declared independence from Moscow and his avowed support for a pluralistic political party system.

The increased support for the Berlinguer led PCI was reflected by the communists increasing their vote by 10% in the June 1975 local government elections to win 34% of the national vote (while the DC received 38% of the vote). Eerily enough, the respective DC and PCI voting percentages for the June 1976 general elections were almost the same as the local government elections results the year before.

The increased PCI vote in the 1976 Italian general elections sent shockwaves across Western Europe and the Soviet bloc. Momentum developed following the elections for the DC and the PCI to form a government of national unity! Ironically, the relatively strong performance of the PSI (which was now pro-DC and had come third with 9% of the vote) saved the Christian Democrats from having to go into coalition with the communists.

The DC vote held up because some of the voters who usually supported the centrist parties of the PRI, PDSI and the PLI as well as some MSI-DN stalwarts transferred their support at the last minute in the 1976 elections to the Christian Democrats to prevent the communists from winning a plurality of the vote. But the DC was still confronted by the prospect that PSI voters eventually going over to the PCI.

The worst case scenario for the DC was that an MSI-DN vote would hold up thereby creating the scenario for the Christian Democrats would have to rely on neo-fascist support. Such a development could at best have precipitated a break up of the DC and at worst plunged Italy into civil war due to still strong anti-fascist sentiments in Italian society.

Following the 1976 elections, the leadership of the DC closed ranks against entering into a coalition with their second placed rivals, the PCI. But, from Berlinguer’s perspective, the break through that then had to be made was that of the PCI having some role in government as a means of eventually being able to formally enter government. Considering the perilous state of affairs for Italy’s parties following the 1976 elections, an arrangement was made in which the PCI, the PSI and the centrist parties agreed to the formation of a DC minority government led by Giulio Andreotti.

The selection of Andreotti as prime minister by the DC was clever. His previous impact on Italian politics had been in the 1960s when his support for the PSI’s entrance into government had resulted in the DC’s right wing either ideologically moving to the centre-left (or following his lead) becoming more focused on patronage and power.

The virtual disappearance of an ideological right in the DC had paradoxically brought the DC’s left wing led by Aldo Moro closer to the Vatican which had helped underpin the viability of centre-left governments in the 1960s and early 1970s. Andreotti himself had close links to the Vatican which helped anti-communist elements within the DC broadly accept loose PCI policy input into the Andreotti government*.

(*The really positive impact of the PCI’s ill-defined support and input into the Andreotti government was that the DC’s monopoly over television through the RAI television network was ended in 1976. For all the supposed protections of freedom under the 1948 republican constitution, the DC had been able to establish a television monopoly. Berlusconi’s media empire can be traced back to the precedent that was set by DC’s previous television monopoly).

The Historic Confrontation: The Soviet Backed Red Brigades versus Berlinguer

The prospect of the PCI eventually entering and even leading an Italian government caused alarm in Moscow. The Soviet leader Leniod Brezhnev was afraid that a communist led government in a western democracy would set a precedent for pluralistic political reform and economic reform in Soviet bloc nations. *The Soviet leader therefore organised a summit of European communist leaders in June 1976 in East Berlin to counteract the spread of Eurocommunism. This form of communism was one which advocated that communist parties come to power through democratic elections and consequently maintain a pluralist democratic system.

(*The major victory that Brezhnev achieved at the 1976 East Berlin summit was the attendance of Yugoslav dictator, Marshal Josip Bronz Tito. For all Tito’s supposed independence from the Soviet Union, he supported Brezhnev’s opposition to Eurocommunism so that he could resist calls for multi-party democracy in Yugoslavia).

The only communist party in Western European nations that in the main accepted Eurocommunism was, naturally enough, Italy because the PCI had a remote but still viable chance of winning power electorally. There was also minority strong support for Eurocommunism in the generally stalinist French Communist Party (PCF) due to the limited but loyal voting base that this party then had.

Even if it meant that the brilliant French Socialist Party (PS) leader Francois Mitterrand appropriate PCF votes, Brezhnev insisted the French PCF leader Georges Marchais oppose Eurocommunism. Marchais’s later reluctant repudiation of Eurocommunism eventually enabled the PS to appropriate the PCF’s electoral base even though the presently marginalized PCF is now an avowedly Eurocommunist party*.

(*The only real benefit of Eurocommunism to European democracy was that it helped Spanish Communist Party (PCE) leader Santiago Carrillo provide crucial support for Spain’s transition to democracy in the 1970s. Carrillo, in contrast to Marchais, did not later capitulate to Soviet pressure by renouncing his previous endorsement of Eurocommunism.

That the PCE later repudiated Eurocommunism in the 1980s was due to the influence of the deplorable Dolores Ibarruri (‘La Pasionaria’) who, despite her sweet grandmotherly persona and endorsement of the 1978 Spanish constitution always remained an unreconstructed Stalinist until she died in late 1989. Whatever Carrillo’s previous excesses, his role in supporting Spanish democracy and the Spanish monarchy in the 1970s can never be legitimately denied).

For Brezhnev, a Berlinguer led Italian government could be as ‘dangerous’ to Moscow as what Alexander Dubcek’s 1968 Prague Spring had been. Indeed, some of Dubcek’s communist supporters who had fled Czechoslovakia following the 1968 Soviet Union invasion wreaked vengeance on the Soviets by going to Italy and France to promote Eurocommunism. Conversely, the hardline Czechoslovak Gustav Husak regime (1969 to 1987) became covertly involved in Italian politics in the 1970s by supporting the terrorist Red Brigades (BR) in order to undermine Eurocommunism.

The BR were founded in 1967 by university academics who were avowed Marxist radicals that were supposedly anti-Soviet. This Marxist group was opposed to the PCI entering government and taking office legally because such developments would entail an acceptance of the bourgeois state. Berlinguer seemed to move Italy toward such a progression by instigating the fall of the Andreotti government in January 1978 and insisting that a new DC minority government be formed, based upon specific PCI support and direct policy input.

The above mentioned Berlinguer conditions became plausible because they had the support of Aldo Moro, the leader of the DC’s left wing. The day (March 16th 1978) on which a new Andreotti DC communist supported minority government was to be sworn in, the BR kidnapped Moro. The former Italian prime minister was ostensibly kidnapped to provide the BR with leverage to have imprisoned left wing extremists released from prison. Most politically aware Italians realized that the real BR objective was to disrupt the functioning of a DC minority government that was reliant upon PCI support.

The ensuing two months (March to May 1978) of Moro’s covert imprisonment were a national agony for Italy. Most graciously and dramatically, His Holiness Pope Paul VI* offered to become a hostage for the BR to secure the release of his friend Aldo Moro. Prime Minister Andreotti’s refusal to negotiate with the BR caused bitterness within the DC amongst the left to centre-left because there was a widespread belief that Moro’s death would sabotage a DC-PCI governing modus operandi. This fear became a reality after Moro was killed by the BR.

(* The offer of Paul VI -born Giovanni Montini, 1897 to 1978- to take Moro’s place as hostage for the BR was in keeping with the character of one of the most underappreciated but greatest popes ever, who respective self-declared Catholic Church conservatives and liberals have both unfairly condemned from their differing perspectives.

For Church ‘conservatives’, Paul VI unnecessarily diluted the authority of the Catholic Church by seeing through the Second Vatican Council (1962 to 1965) which was initiated by his transformational predecessor Pope John XXXIII (born Angelo Roncalli, 1881 to 1963) who stunned everyone by being more than an elderly stopgap pope). Vital reforms that the Second Vatican Council implemented were the introduction of a church liturgy in the vernacular and removing artificial barriers between the clergy and laity and between Catholics and non-Catholics (such as allowing Catholics to attend the funerals of non-Catholics).

It is often forgotten that Paul VI was the first reigning pope to leave Europe and it is now insufficiently appreciated that, by His Holiness’s visit to Jerusalem in 1964, the Church effectively repudiated anti-Semitism. The most notable aspect of Paul VI’s reign was that His Holiness was prepared to engage with people of all backgrounds of good will regardless of their perspectives. His Holiness permitted critics within the Church who challenged official teachings to have their say without excommunicating them while not forgoing the integrity of those teachings.

The most important legacy of Paul VI was that His Holiness prevented the Catholic Church from becoming Integralist - in which laity and clergy withdraw or condemn people who disagree with them or those that they judge to be sinful. The onset of improved communications after the Second World War opened up new vistas for many Catholics that challenged the traditional power-over approach that they had paradoxically expected to be exercised over them.

Had Paul VI not seen through the Second Vatican Council, the Church might only have appealed to neo-Jansenists who regard submission to a higher authority in and of them a form of earthly redemption in and of itself.

The neo-Jansenist approach, in assuming that those so-called modernists ‘who are not with us are against us’, can ultimately only drive away from the Catholic Church people who are not similar minded, thereby marginalizing the acceptance of the values that underpin the Catholic Church.

A touching aspect of Paul VI’s pontificate was that His Holiness was a Vatican bureaucrat/ technocrat who probably would not have initiated the Second Vatican Council but, out of a sense of duty to John XXXIII, saw the Council’s reforms through. Therefore, His Holiness often consulted widely with regard to reform, finally making up his mind as to what he believed God guided him to do to support the fundamental values of the Church that had to be applied to the situation.

This balanced approach of Paul VI was manifested with regard to the issuing of Humanae Vitae (Of Human Life) in 1968. So-called Church ‘liberals’ and many non-Catholics frankly did not understand that Paul VI’s opposition to abortion and contraception was not based on a desire to exercise social control but from a determination to defend those (unborn) who cannot defend themselves. For Paul VI, because the truth was truth, the Church had to value every single person and be of service to all regardless of who they were- a stance which is the antithesis of Integralism and neo-Jansenism.

For all the vitriol to which Paul VI was subjected, His Holiness still maintained the Church’s capacity to engineer cause and effect by conveying that Humanae Vitae is reflective of the broader mission of fighting for everyone because of their inherent worth as human beings. For Paul VI, as it must be for all Catholic popes, recognising and defending human dignity cannot be relativist.

For all the criticisms that the Catholic Church was subjected to concerning the anticipated impact of over population in the Third World, it was in poorer countries that the Church gathered strength in during the remainder of Paul VI’s reign. This was due to an appreciation in less materially resourced nations that the Catholic Church was an institution of service arising out of the determination to serve others by living by the golden rule of ‘doing onto others as they would do onto you’.

Despite changed social mores in the 1960s due to increased travel, improved communications, enhanced education opportunities and the widespread use of contraception, Paul VI’s stance regarding artificial birth control was still widely respected (even if not adhered to) by Catholics and non-Catholics because its underlying premise was still conveyed. In this regard, Paul VI was an authoritative pope as opposed to an authoritarian one.

As the world enters a period of even more radical change, the Catholic Church will find that an authoritative pope as opposed to an authoritarian pope will be more appropriate. It is therefore ironic that most Catholics and non-Catholics consider the pontificate of John Paul II (Karol Wojtyla, who was born in 1920 and reigned from 1978 to his death in 2005) to have been a more successful pontificate than Paul VI’s. This assessment has been due to John Paul II’s importance in crucially helping bring down communism in the late 1980s.

In the struggle against Marxist-Leninist regimes in Europe, an authoritarian power – over approach by the Catholic Church was often accepted in East European nations by laity and clergy due to overriding the need to maintain a unity of purpose. Naturally, following the end of communism in Europe by the 1990s, the power of the Catholic Church declined because the threat of communism receded.

But in the case of Joh Paul II, ‘a them versus us attitude’ was accelerated, particularly in regard to ecclesiastical appointments. Bishops, archbishops and even cardinals, regardless of their qualifications or experience, were appointed on a basis of their disposition to adhere to an unqualified acceptance of the Vatican line.

Under John Paul II, Integralist lay organisations, such as Opus Dei, had more resources allocated to them after the fall of communism in Europe in the late 1980s. Such a development can only ultimately bolster neo - Jansenism to the point that such insularity becomes equated with Catholicism. As important as John Paul II’s pontificate was in bringing down communism, an authoritarian approach in and of itself is not viable in the long term. This is because mores in societies around the world are continuing to change. But, as Paul VI demonstrated, the Catholic Church can be adaptive to change without sacrificing its values by engaging and serving society in accordance with unchanging and non-changeable principles.

The current Pope Benedict XVI (who was born Joseph Ratzinger in Germany in 1927 and became pope in 2005) is not a neo-Jansenist but rather a traditionalist in relation to liturgy and interpretation of church teachings. As a non neo-Jansenist pope, Benedict XVI has reverted to the approach of Paul VI in making appointments of bishops and archbishops based upon qualifications, experience and personal qualities as opposed to a criterion in which an inflexible authoritarian approach is expected which could ultimately leave the Catholic Church as an institution that is ‘all Chiefs but no Indians’.

The Catholic Church is not the only church that is confronted with the challenge of Integralism and neo-Jansenism. The Anglican Church is confronted with challenges of ecclesiastical issues surrounding the ordination of female priests which are reflective of broader issues of authority which reflect Anglicanism’s interaction with secular society.

In the case of Anglicanism, the distinction between ‘conservative’ and ‘liberal’ has been more pronounced than in the Catholic Church to the point that two churches in one have effectively co-existed. Let this continue to be the case because a formal break away of ‘conservative’ Anglicans will have two broad consequences: Firstly, it will lead to Integralism/neo-Jansenism insularity on the part of conservatives as they draw inward, eventually leading to nothingness.

A second possible consequence will be that ‘conservative’ breakaway Anglicans take up pre-existing arrangements that have been made for them to join the Catholic Church. Such a development may affect the dynamics concerning the election of Benedict XVI’s successor, possibly leading to a reversion of neo-Jansenism. This would be a ‘lose-lose’ scenario as there could be a net loss for Anglicanism and a shift toward Integralism and neo-Jansenism within the Catholic Church.

The Catholic Church in Australia has experienced its form of neo-Jansenism with regard to the so-called ‘Mannix Tradition’. This approach supposedly maintained that Catholics laity should be active in secular affairs by promoting Catholic social teachings but achieved the exact opposite. This tradition was promoted by the Catholic polemicist B.A. Santamaria (1915 to 1998) in honour of Daniel Mannix (1864 to 1963), Catholic Archbishop of Melbourne from 1917 until his death. Santamaria promoted what he later dubbed the ‘Mannix tradition’ through an organisation that from the 1940s was known as ‘The Movement’.

The Mannix Tradition, as propounded by Santamaria, involved Catholic laity thinking critically for themselves and then applying Catholic social teachings in broader society. This was done with Movement supporters opposing communism in trade unions and in the Australian Labor Party (ALP). The Movement fulfilled an important role in inspiring Catholic union members to form groups within their unions, as a result of which they became known as the ‘Groupers’.

Movement involvement in the ALP was then considered almost natural since a party split over conscription during the First World War had helped make the Labor Party a predominately Catholic party.

But there was still anti-sectarian sentiment within the ALP which was exploited by the Communist Party of Australia (CPA) and by the paranoia of then ALP federal leader H.V. Evatt which led him to proscribe the Groupers at the illegal ALP ‘Hobart Conference’ in 1955. This purge led to terrible divisions in Australia as families were divided and religious sectarianism became a national problem.

As a result of the Evatt Purge, the predominately Catholic Democratic Labor Party (DLP) was formally formed in 1957 and the Movement (which had officially been the Catholic Social Studies Movement) became the National Civic Council (NCC) in January that year. Santamaria’s intention that the DLP become an insular Catholic party was manifested when he helped sabotage an attempt to re-unite the ALP and the DLP in the 1960s. Other actions on Santamaria’s part strained relations between him and the DLP’s leadership.

DLP leaders in the 1960s were less than impressed with Santamaria (who was never a DLP member) when he presumptuously negotiated a preference deal with the ruling Liberals which fell short of the longstanding party demand that non-government schools receive state funding. Even though the Liberals only gained the preferences after the DLP leaders intervened to demand education funding for non-government schools, Santamaria disingenuously later claimed in the 1990s that he had gained this funding.

The overall impact of Santamaria’s impact on the DLP was to ensure that it was a ‘Catholic’ party which gained garnered Catholic votes to keep the ALP in opposition at state and federal levels. This approach only allowed the Communist Party of Australia (CPA) to eventually help foster a left wing faction in the ALP that became known as the Socialist Left (SL). As a result, a powerful left wing presence within the ALP was institutionalized.

Through Santamaria’s negative influence on long term DLP federal leader Senator Vince Gair, the prospects for Australia’s third force to be a lateral centrist balance- of- power party in the Senate were undermined. Santamaria used what influence he had on the DLP to ensure that it would be the narrow ‘Catholic party’ that its left wing critics derided it as.

Santamaria’s worst betrayal of the supposedly activist Mannix tradition that he espoused was to purge the union wing of his organisation at a stacked out NCC Conference in 1982 by expelling and then denying former staffers of access to their offices. As NCC president, he timed the 1982 purge knowing that it would (as it did) fatally undermine the capacity of his union supporters (or perhaps former supporters) in the Queensland branch of the Federated Clerks Union (FCU) to win branch elections that year. The loss of the Queensland branch of the FCU enabled the hardline component of the SL of the ALP to later gain control of all of that-then-vital white collar union.

The SL capture of the FCU cleared the way for the long held CPA policy of union amalgamation to take place in 1980s, in which craft based unions were destroyed as they merged into impersonal industry unions with less than satisfactory union rank and file democracy and servicing. The union amalgamation policy led to a concentration of power, establishing the groundwork to foist rent-seeking on Australia.

In the 1990s, Santamaria decried union amalgamation, the de-unionising ramifications of which are that just over 20% of the Australian workforce is unionised, as opposed to 51% in 1976. But Santamaria never acknowledged his own role in helping facilitate union amalgamation by previously undermining the FCU.

Furthermore, the four ‘Grouper’ unions that continued had no reason to be grateful to Santamaria, for in 1984, he publicly endorsed their re-admission to the ALP knowing that this would make it more difficult for them to return to the Labor Party. This disingenuous action on Santamaria’s part conformed to a leadership pattern of destroying what he purported to fight for one that reflected his neo-Jansenist outlook.

The major ‘benefit’ for Santamaria of the 1982 Purge was gaining control of funds. But without a viable political party or a union wing for the NCC to support, it was difficult for Santamaria to have political influence. The major impact that Santamaria did have after 1982 was for the NCC to support neo-Jansenist Catholics who were disillusioned with the onset of ‘modernism’. Despite Santamaria’s focus on ecclesiastical matters, he more often than not was critical of Catholic clergy for being unorthodox.

For all Santamaria’s decrying of the secularisation of society, he never appreciated that his neo-Jansenism contributed to this process by encouraging Catholics to retreat from the world. By contrast, Italian clergy fulfilled an important role from the 1960s onwards in engaging in society. In a political context, the support of some clergy was vital to the eventual emergence of the centre-left Democratic Party (PD) in 2007. Consistent clerical and Catholic lay support since the 1940s for Italy’s second biggest union confederation, the CISL, was also of great benefit to broader Italian society.

The current GFC is testament to the major challenges confronting the world. Phenomenal technological change is also creating opportunities to downgrade the value of labour and for people in general to lose their innate worth as humans unless they have a utilitarian value. For over two thousand years, the Catholic Church as well as most other religions be they Christian or not, have been of great significance because they have recognised the intrinsic value of all people.

Consequently, millions, if not billions of people, have been prepared to voluntarily submit to ethical frameworks based on religious faith which is often seen to be reflected in the values and sense of service of the organisations to which they actually belong. The continuance of religious organisations in which people can help themselves might be challenged by future technological advances. Be that as it may, the world will be confronted by the challenge of potential massive de-employment.

To help prevent the massive social dislocation that now, due to rapid change, confronts the world, organisations that believe in the sanctity of every person regardless of who they are, such as the Catholic Church, must have a commitment to serve and accept all as Paul VI did. A transition on the part of the Catholic Church to insular neo-Jansenism will not only be very detrimental to those who might be vulnerable in the future but possibly fatal to the Catholic Church).

That the intended Soviet objective of *BR generated terrorism undermining the position of the PCI was achieved was reflected by the June 1979 election results in which the PCI vote (30%) fell by eight percent in comparison to the 1976 elections. The respective DC and PSI national voting percentages for the 1979 elections remained almost unchanged from previous elections (38% and 9% respectively) so that, with the decline in PCI vote, it was safe to resume the previous pattern of forming unstable DC led coalition governments with the centrist parties.

(* The BR went into steep decline after 1981. This was attributed to more effective counter-terrorist measures by Italian security agencies and an apparent split in the BR in 1981 between pro and anti-Soviet factions. In fact, because of unrest in Poland in 1981, Moscow realized that it was too dangerous to foster terrorism in a NATO country by having the Husak regime continue to support the BR. Brezhnev’s success in undermining Berlinguer’s capacity to win power through elections had also rendered Soviet induced Czech support for the BR unnecessary).

The Post-Fascists and Monarchists Split

The 1979 election results were also noteworthy because the MSI vote still held up electorally with 5.3% of the vote which was down from 6.1% of the vote in the 1976 elections. The strong stance that Almirante had taken against neo-fascist terrorism during the 1976 to 1979 period of BR terrorism helped him hold the support of the predominately anti-communist middle class vote that the MSI received. That Almirante had held this vote for the MSI was all the more impressive because he beat off a serious challenge from the non-fascist conservative right.

The ambiguous role of the PCI in supporting DC minority governments between 1976 and 1979 had led to calls within the MSI-DN for a repudiation of neo-fascism by forming a new conservative party. Almirante was open to such a transformation but refused to commit to such a course of action because he knew that most of his supporters would go into Rauti’s camp as part of a continuing MSI.

The non-neo fascist elements within the MSI-DN were not prepared to wait for Almirante and subsequently formed National Democracy (DN) in February 1977. This new party seemingly did everything correct in terms of securing its position as new a conservative force in Italian politics. Half the MSI-DN’s parliamentarians joined the new party, thereby helping DN to acquire public funding as the successor to the previous parliamentary alliance.

By using the ‘DN’ of the acronym, National Democracy had seemingly staked a claim amongst non-neo fascist supporters of the former MSI-DN alliance to vote for the new party. Indeed, the DC’s ambiguous alliance with the PCI created a seemingly strong rationale for anti-communist Italians to vote for the DN. That National Democracy very unfortunately only garnered 0.6% of the vote in the June 1979 elections was due to anti-communist Italians voting with the MSI out of personal respect for Almirante.

The respect that anti-communist Italians had for Almirante was undoubtedly derived from his withstanding an attempt to expel him from parliament in 1974 supported by the DC and the PCI. Almirante’s support for the repeal of the divorce in the 1974 referendum to help create a new post-fascist conservative party was a threat to the DC’s right wing which had tried to use the popular vote to politically revive. The move to expel Almirante from parliament was undertaken to politically eliminate a right-wing threat the DC’s base.

Almirante’s tenacity in defying the expulsion attempt was manifested by his speaking for a record twenty-four hours in a parliamentary speech in his defence! The MSI leader consequently consolidated a national following among anti-communist Italians which would have resulted in the DN supplanting the MSI had Almirante joined the new party that he seemed more ideologically in sync with. This did not occur because most of the DN’s leading members, including the party leader, Alfredo Covelli, were former stalwarts of th PDIUM

(The MSI leader since the time of the RSI had been a republican and was the first prominent Italian politician to advocate an executive presidency similar to France’s Fifth Republic).

Had Almirante joined DN, this would have enabled the defunct PDIUM to acquire a new voting base under the auspices of a new party. Under this scenario, Almirante would have cut off from his old party base without any guarantee that he would not later be deposed as DN leader by former PDIUM stalwarts. From Almirante’s perspective, it was better to stay on as party leader to utilize his power to orientate the MSI toward his evolved ideological outlook.

The failure of the DN to win any parliamentary seats in the 1979 elections essentially ended over thirty years of a monarchist parliamentary presence in the Italian Republic. The vicissitudes of Italian politics have since been such that Italian monarchists later re-entered parliament in the 1990s and there are now monarchist cabinet ministers even though no electorally viable monarchist party has been revived. These developments have occurred due to the structural weaknesses of the Italian republic which date back to the rigging of the June 1946 referendum.

Be that as it may, how and why the Italian republic has been able to survive and indeed prosper economically (which is distinct from political structural weaknesses of the Italian republic) are now important questions in the context of the current European financial crisis.

The Italian Miracle: Italy’s Post-War Economic Recovery

No nation in western Europe benefited more than Italy from the generous European Recovery Program (ERP) or the Marshall Plan as it was more commonly known. The Marshall Plan was the initiative of then American Secretary of State George Marshall. This American economic assistance programme commenced in 1947 and ended in 1951 due to its outstanding success.

The Marshall Plan crucially helped provide Italian industry with sufficient financial capital so that. by 1950, industrial output surpassed pre-war levels. Communication and roads had been damaged by war time fighting but otherwise industrial facilities such as factories in northern Italy had remained remarkably intact. Trading opportunities with the United States and Northern Italy’s geographical proximity to Western Europe also helped Italian industry to revive.

Expanded industrial output in northern Italy throughout the 1950s and the 1960s helped soak up unemployment as many southerners made their way north to take up industrial jobs and employment opportunities in related services. A Southern Development Fund launched by the De Gasperi government in 1950 had a negligible impact in closing the economic gap between northern and southern Italy. The Land Reform Law of 1950 was a limited success in breaking up big landed estates and distributing them to former tenant farmers*.

(*Had Mussolini come through with the land reform that he had ruminated about undertaking in southern Italy in the late 1930s, he would now be an overwhelmingly revered figure in that part of Italy despite his regime’s terrible failures in other policy areas).

Post-war migration of Italians to countries such as Australia in the 1950s and 1960s also helped alleviate post-war poverty. The development of a booming tourist industry in the 1950s also promoted economic development and the goodwill that was generated by foreign visitors to Italy helped bad memories associated with the war to recede. Furthermore, Italy’s 1943 defection from the Axis and the fact that most Italians clearly disdained Mussolini’s 1939 anti-Semitic laws helped Italy regain international respectability before the West Germans did.

Italian economic recovery was due to Foreign Minister Count Carlo Sfroza’s success in engineering Italy’s prompt international rehabilitation. The emergence of a domestic communist threat paradoxically helped Italy quickly become an important ally to the United States in the Cold War. For this reason, Italy was an important foundation member of NATO in 1949 such that the United States respected the Italian republic as a key ally.

Italy’s international rehabilitation was also facilitated by its pivotal role in forming the European Coal and Steel Community (ECSC) in 1952 which was the forerunner to the EEC (which is now the EU) which was formed with the signing of the Treaty of Rome in 1957. The nation was also well served by retaining a high quality diplomatic corps which might not have been in place had Umberto II not released Italian diplomats from their oaths of allegiance to the Italian Crown. The exiled king also used his influence to dissuade PNM leader Alfredo Covelli from having the monarchist party become what is now known as a ‘euro sceptic’ party.

Foreign Relations Under the Italian Republic

The foreign policy of the Italian Republic was renowned for placing a premium on promoting inter-European co-operation at the expence of an assertive foreign policy. Even though Italy was a strong supporter of Britain’s entry into the EEC, Italian governments never publicly protested French president Charles De Gaulle’s vetoing of British ECC membership in the 1960s. With regard to the issue of Italian sovereignty in Trieste, where there was still considerable and strong nationalist feeling, the Italian republic did not depart from the post-war orthodoxy that the nation always refrain from armed conflict.

Acceptance of NATO bases was a mainstay in Italian defence policy and only became an issue of limited controversy when American bases were used to bomb Yugoslavia in 1999 with the acceptance of the centre-left Olive Tree alliance government. A paradox of Italian politics was that the left, which included elements of the PCI, was often reluctant to criticise the United States due to the widespread appreciation in northern Italy that liberation from the Germans might not have been achieved without American support.

Berlinguer gained the ire of the Soviets when he intimated in the 1970s and 1980s that should the PCI enter government, or even lead a government, the Italian communists would support Italy’s continuing membership of NATO. The legacy of Berlinguer’s acceptance of Italian membership of NATO helped explain why a former senior official of the PCI, Massimo D’Alema, was able to co-operate with the Americans when he served as prime minister between 1998 and 2000 as the leader of the centre-left Olive Tree alliance government.

Similar to Japan, the Italian republic gained a degree of international respectability as a stalwart member of the United Nations, which Italy was admitted to as a member in 1956. Prior to Italy’s re-admission to the United Nations the Italian republic effectively regained control of the former Italian colony of Somalia in 1950 when it was granted to Italy as a UN trusteeship.

Restored Italian rule in Somalia under UN auspices made amends for previous repressive colonial rule due to the provision of health services and education. The fact that Somalia was later to become a failed state was due to the legacy misrule (1969 to 1991) of General Mohamed Siad Bare whose 1969 coup terminated the democracy that restored Italian rule had previously help lay the groundwork for.

The Italian republic also established cordiale relations with the restored Empire of Ethiopia under Haile Selassie who was reinstated by the British in 1941. The post-war Italian desire to make amends for their brutal rule (1936 to 1941) paradoxically helped foster a relatively close relationship between Italy and Ethiopia that has endured despite radical changes in regime in Addis Adaba.

Umberto II’s Personal Diplomacy from Exile

(Had the Italian monarchy been retained, cordial links with former Italian dominated nations would have been established. A major objective of Umberto II in exile was to reconcile with royal families that had been deposed by Italian military intervention. Most graciously, His Imperial Majesty Haile Selassie accepted Umberto II’s overtures.

The exiled Albanian royal family accepted Umberto II’s apology and Queen Geraldine (widow of King Zog) of the Albanians eventually became a friend of Umberto II’s sister, Queen Ioanna, the exiled Queen Consort of Bulgaria. Reconciliation between the House of Savoy and the Yugoslav royal family, the Karageorgivics, was manifested in 1955 when Umberto II’s eldest child, Princess Maria Pia married Prince Alexander of Yugoslavia).

The Italian Republic Gains International Respectability

With regard to Libya, the Italian republic established pointedly close relations with the successive regimes of King Idris and Colonel Qaddafi. Cordial relations with Libya helped Italy maintain generally amicable relations with the Arab world such that even so-called ‘radical’ Arab regimes grudgingly accepted Italy’s alliance with the United States and support for Israel.

The international respectability that the Italian republic gained was evident when Italian soldiers served with distinction in Lebanon as UN peacekeepers to protect Palestinian refugee camps in Beirut between 1982 and 1984. Italy’s strategic location in Europe, proximity to Africa and the Mediterranean has positioned the nation well to positively contribute to international organisations. Until the 1935 invasion of Ethiopia, Italy was a leading member of the League of Nations.

Indeed, had Mussolini not come to power in 1922, Count Sfroza undoubtedly would have succeeded Giolitti as PLI leader and been a long serving foreign minister of a liberal Italy. Count Sfroza would have bolstered Italian prestige as a leading member of the League of Nations and European and world history might have been very different. Be that as it may, Count Sfroza utilized his anti-fascist credentials as foreign minister between 1947 and 1951 to help Italy regain international credibility by promoting European unity and ties with the United States.

Had the Italian monarchy been retained in 1946, (the prospects for retention would have been bolstered had Count Sfroza run with the PLI and not the PRI in the 1946 constituent assembly elections) aristocrats and royals from families who had been deposed in 1861 could have been utilized as diplomats as a form of reconciliation between them and the House of Savoy which had traditionally had its own private foreign service with direct representatives of the king serving unofficially in Italian embassies.

This practice could have continued under Umberto II but in pursuit of promoting European unity which was an ideal that was close to His Majesty’s heart. Even as an exiled king, Umberto II retained cordial but unofficial links with some Italian diplomats. In exile, Umberto II was known to reigning and non-reigning European royalty as ‘Zio Beppo’ (‘Uncle Beppo’) and His Majesty was still considered a doyen even to royal families that had previously fought against the Axis.

The Economic Successes of the Italian Republic

The international successes of the Italian republic were also reflected by economic advances. To be frank, these post-war successes were partially derived from the Mussolini regime having established the Institute for Industrial Reconstruction (IRI) in 1933. The IRI was a conduit through which state finance and managerial assistance was provided to struggling industrial concerns. This institute provided trained managers to companies that received state financial assistance to ensure that they ran efficiently.

Although the state through the IRI more often than not acquired shares in companies that were provided with assistance, they still remained privately owned or, if the state did acquire a controlling interest, often still had private shareholders. The main benefit of the IRI was that it provided Italian industry with needed capital which enabled Italy to develop strong steel, shipping and hydroelectricity sectors by the 1930s and ensure that the nation had a strong infrastructure sector. Economic growth was also spurred by Italian genius in industrial engineering.

The IRI was also important in that its role in facilitating massive industrialization also strengthened the Italian banking sector which had a strong capital base. As a result, Italy was able to stave off mass unemployment during the Great Depression due to the fostering of a strong infrastructure base, cheap electricity sector and an efficient transport system. These developments helped foster the development of new industries and innovative production techniques in the 1930s.

The statist approach of the fascist regime was surprising because the Mussolini government between 1922 and 1925 - as the then continuation of the ruling liberal -elite was initially free trade inclined. The success of Count Grandi in negotiating an American loan in 1925 not only helped Italy to pay off its foreign war debts but provided the state with a capital base to become involved in Italian industry which established the basis for fascist corporatism.

The establishment in 1926 of a notionally corporatist economic and political Italian state paradoxically helped facilitate the establishment of a powerful, autonomous and cogently organised corporate business-industry structure. To Mussolini’s credit, he initially respected the autonomy of the business sector which helped lay the groundwork for the establishment of the IRI in 1933. The IRI operated effectively throughout the 1930s even though the regime moved toward self-sufficiency (‘autarky’) and diversion of resources for re-armament purposes following the adverse international reaction to the Italian invasion of Ethiopia in 1935.

The IRI remained intact following the government’s flight from Rome in September 1943 as some of the RSI’s ministries and agencies including the IRI were located in Rome which was ruled by the pro-German mayor, Riccardo Motta. The declaration of an ‘open city’ in June 1944 facilitated the peaceful liberation of Rome by the Allies. The peaceful liberation of Rome ensured a degree of continuity as bureaucracies and civil servants that had successively served the PNF regime, RSI, the luogotenente (1944to 1946) and into the Italian republic. This continuity ensured the survival of the IRI so that it similarly fulfilled an important post-war role in promoting Italy’s impressive financial and industrial recovery.

The major positive impact of the IRI was maintaining a strategic connection between industry and the financial sector was helping ensure that Italian banks were adequately capitalized. Having successfully served its purpose there was apparently no need for the IRI that it was dissolved in 2002.

Italy’s Successful Industrial Relations System

Italian post-war prosperity was sustained not only by the financial assistance of the Marshall Plan and staunch Italian support for European integration but also because of the high quality of Italy’s pre-eminent employer association, the Confederation of Italian Industry (Confidustria) which had been founded in 1910. The Confidustria has fulfilled an important role in promoting industrial productivity, European integration and bolstering Italy’s international trading position.

The Confidustria also judiciously stepped in to support declining political parties such as the PLI and the PRI in the 1970s and 1980s. This employer confederation also established productive relationship with the CISL and UIL union confederations.

A very important role of Italy’s four rival trade union confederations is their role in administering employee pension funds. Rivalry between the four union confederations has often ensured that there is a substantial role for rank and file union workplace delegates in formulating agreements with employers which has resulted in workplace productivity gains. The major contentious issue with regard to Italian industrial relations has been that of the inflationary impact of wage indexation.

Prosperity in the first Italian Republic (1946 to 1993) was also facilitated by there being an excellent civil service which efficiently operated inspite of, or perhaps because of, the frequent changes in government. This professional civil service was drawn from outstandingly successful university graduate recruitment programmes.

The existence of an efficient and honest civil service counteracted the impact of a corrupt self-seeking party patronage system that was derived from the rigging of the 1946 referendum and sustained by Italy being a ‘blocked democracy’ due to the PCI becoming the major opposition party in 1948. Had the Italian monarchy been retained, not only would a corrupt party system have been averted but the civil service would have had a strong focal point in the Italian Crown to have inspired excellence in governance.

A Strong Banking Sector: The Key to Italian Economic Well-Being

The need to have strong institutional supports to compensate for Italy not being a constitutional monarchy was reflected by the post-war role of the Bank of Italy (Banca d’Italia) in facilitating national economic recovery. The Bank of Italy is the nation’s central bank. Due to fascist corporatist ‘reforms’ in the late 1920s, an enduring relationship between private and public capital has been established with regard to the Bank of Italy that is rare among national central banks.

The Governor of the Bank of Italy is appointed by the Italian government (confirmed by presidential decree). The Governor is responsible to a Board of Directors that is elected by private shareholders at an Annual General Meeting (AGM) which usually represent major industry concerns. The nexus between private capital and the state helped the Bank of Italy to make grounded and inspired strategic decisions that immensely benefited Italy. The input of major industry facilitated capital formation while the state component of the bank ensured that fiscal prudence was undertaken.

The previous role and success of the Bank of Italy in bolstering Italy economically (particularly in the post-war period) was reflected by it issuing the lira, Italy’s former currency which was replaced in 2002 by the Euro. Jokes were previously told about the lira with regard to its low exchange rate value compared with other currencies. A visiting non-Italian tourist could be an Italian ‘millionaire’ having exchanged a couple of hundred American dollars for hundreds of thousands of Italian lire.

The traditionally *low exchange/ conversion rate of the lira provided Italy with the flexibility to bridge the gap between the industrial north and the predominately agricultural south. This was because the lira realistically reflected the state of goods and services in the Italian economy which helped support a small to medium size business sector. The comparatively low rate of the lira led to financial boom in the 1950s because foreign tourists to Italy could undertake relatively cheap but quality holidays which considerably bolstered the secondary services sector of the economy.

(*One of the worst economic mistakes of Mussolini’s was to intervene to overvalue the lira in 1926 for reasons of what he considered to be international prestige. This action damaged Italy’s international trading position).

There were ostensible problems with the Italian economy with regard to high public budget deficits and high inflation from the 1970s onward but Italy had a strong informal sector of the economy which counteracted these official problems. Furthermore, Italians tended to be high savers with relatively low levels of private debt. Therefore, comparative criteria against international standards and official economic data were not necessarily indicative of the actual socio-economic situation.

A strong source of comparative / international advantage for Italy was the strength of the nation’s private banking sector which had judicious links to the Bank of Italy. This is not to say that issue of public sector debt and local government corruption (that came with the inherently corrupt nature of the party system of the first republic) was not of concern. But the relatively low value of the lira actually helped this currency to maintain its purchasing power despite officially high inflation rates.

Structural problems in the Italian economy were often addressed through the trading advantages that came from EU membership such as access to relatively close European markets. Italian bureaucrats in Brussels often had previous experience in Italy’s civil service, the banking sector (particularly the Bank of Italy) and private industry which was often of benefit to their home country.

Italy and European Unity: Balancing Integration and Independence

European integration helped Italy to avoid accruing financial debt. This was evident with regard to the installation of the Euro Rail train service in the late 1990s, which was instrumental in closing the infrastructure transportation gap between northern and southern Italy. It was therefore not surprising that Italian governments in the 1990s of either the right or the left were enthusiastic supporters of European economic integration.

Indeed, the groundwork of post-1990s European integration was probably established by post-war DC Italian governments strongly supporting European unity by bolstering is known as the EU. This was probably the main substantial and consistent ideological objective of the post-war DC.

The centre-left governments of the Olive Tree alliance (a key component of which was the left of centre of the superseded DC) between 1996 and 2001 consistently supported European integration to the point of preparing the way for the abolition of the lira in 2002. Italy’s full entry into the Eurozone had the support of the nation’s mainstream left and right. There was even a degree of public acceptance of austerity measures so that gaps in the Italian economy such a sub-standard housing in some urban pockets could be addressed in the future through greater European integration being facilitated.

There was still grumbling that the price of everyday goods effectively rising due to the higher value of the Euro but, in the main, Italians seemed to adapt to their country’s entry into the Eurozone. The policy of currency substitution was adopted in 1999 with the lira becoming a sub-unit of the Euro. This helped clear the way for the abolition of the lira in 2002.

Whatever the pros and cons of the lira’s abolition, Italy was generally able to adapt to the adoption of the Euro due to the inter-related strength of the Bank of Italy and the domestic Italian banking sector which was an international power house (particularly in a European context) in its own right.

The 2008 GFC and its continuing effects are therefore of crucial importance to Italy in an international context. If the GFC banking contagion undermines the viability of the Italian banking sector, then the international ramifications will be grave to say the least.

Italy and the GFC

An unfortunate cause of the 2008 GFC was that European banks brought collateralized loans that were owed on American home mortgages on the misassumption that they were secure because they were based on property. In the cases of Ireland and Spain, the financial crises that confronted these nations were due to speculative property booms in which the bubble burst and their governments had to step in to cover awry bank loans.

For all the doom, gloom and understandable concern regarding the GFC hitting Europe, it has often been overlooked that sovereign governments (with the exception of republican Greece) have generally been able to bail out the banks. The acute inter-related issues of contemporary concern are. Where do sovereign European governments now gain further finance capital after having bailed out their banks and will they have enough capital resources if another banking contagion breaks out?

Already the Italian government is under pressure to cut expenditure and raise taxes as part of EU advocated austerity measures to keep Italy solvent. These advocated domestic measures are being coupled with an EU push to establish a European Stability Fund (ESF) in which member states would provide sufficient capital to cover the credit of European banks and governments. This is probably a worthwhile and sensible policy approach. However, there are questions to how and where governments are going to obtain future sustained sources of capital.

Uncertainty with regard to capital formation is the most vexing issue. This is particularly so because the GFC has challenged the viability of the traditional (but often opposing) Keynesian and monetarist policy options. The need for European sovereign governments to master the debt levels has challenged the viability of a Keynesian approach of spending to stimulate demand.

Regardless of the merits or otherwise of a Keynesian approach, it is difficult to envisage it successfully working in the current situation due to the EU demanding austerity measures which in the short term will deflate demand. There is also the grave danger that austerity measures could precipitate considerable social unrest conducive to political extremism. When it is all said and done, political extremism essentially entails a maximalist power-over approach which is focused upon a minority imposing itself on society.

Whatever the ideological correctness of Marxism (which is probably non-existent) the driving objective behind the ‘radicals’ (as was the case with Lenin) is to impose domination on society by a vanguardist minority. A ‘win-lose’ invariably ensues but as recent history has shown, a lose-lose situation invariably eventuates because a self-appointed minority cannot in the long run rule in the genuine public interest.

Why History Must Not Repeat Itself

The threat of Marxist totalitarian rule or disruption caused by ‘left-wing’ social movements (such as the ‘Occupy Wall Street’ protest movement in the United States) can lead to elites within democratic states resorting to populist authoritarian alternatives that have support from a threatened middle class. In the historical case of Italy, the elite turned to Mussolini whose political skill, for a time, provided popular and effective government by way of co-opting talent.

Unfortunately for Italy, and the world, the German Junker elite regained power in 1932 and foolishly ceded power to Hitler the following year to definitively bury democracy, erroneously thinking that they could manipulate him. The German Junker elite did not realize that the application of a ‘Mussolini model’ on Germany was not transferable due to Hitler’s focus on waging wars of conquest as ends in themselves. All in all, even though right wing movements may have the laudable objective of preventing undemocratic ‘left wing’ forces from seizing power, they can often destroy more than what is gained if they move against democracy*.

(* The only exception to this historical pattern was the Franco regime in Spain, 1939 to 1975. Due to Franco applying the precepts of the Spanish monarchist leader Jose Calvo Sotelo (1893 to 1936), Franco stopped Spain from becoming communist and subsequently established the basis for Spain to become a democratic constitutional monarchy following his death in November 1975).

If there is a financial implosion in Italy due to the Sovereign Banking Crisis (SBC), not only will the world suffer but there are terrible political consequences for Italy that could serve as a template for other European nations. This is because Italy’s two major parties, Berlusconi’s People of Freedom Party (PdL) and the Italian Democratic Party (PD)*both have respective fascist and communist roots. At the very least, there are continuing Marxist and neo-fascist groups that could well appropriate the bases of support of Italy’s two leading parties should social melt-down follow on from an economic implosion.

(*Everyone seems to forget that Alfredo Covelli led the monarchist Italian Democratic Party into the constituent assembly elections of June 1946 as part of the Bloc of Freedoms electoral configuration which later gave way to become part of the PNM).

How and Why European Banks Need Capital Formation

The main challenge that confronts the Italian economy (and probably all other EU economies) is that of capital formation in the banking sector. It is probably appropriate that the Italian government and the Cameron government in Britain impose spending cuts and contribute to the ESF to help stave off a banking contagion. However, a longer term perspective needs to be developed to shake off the threat of the GFC because it has caused the problem of there being a lag in relation to capital formation.

The EU needs (with input from member nations) to find capital (finance) for their banking sectors as soon as possible. The best source for international credit is Japan. Japan has more than ample financial reserves of capital in its private sector that, in liaison with that nation’s Ministry of Economy, Trade and Industry (MEITI), can be utilized as a credit stream to European banks. The International Monetary Fund (IMF), hopefully with input of funds from Russia and the PRC, can also contribute to both the EFS (to cover existing debts) and as a source of credit supply to support small to medium banks in Europe engineer economic and employment growth.

The balance that needs to be struck in Europe is that of implementing austerity measures to cover the sovereign debts of Europe states and their bonds with other sources of capital that support the banking sector so that it can help stimulate needed employment growth during a period of austerity. This would not be a social credit approach because the lending would be undertaken by privately owned banks. The major state intervention, in possible conjunction with the EU, should be the setting of realistic prudential guidelines to ensure credit solvency and the monitoring of those guidelines in action.

The Italian banking sector, with or without the support of the Italian state or the EU, should be initiating contact with MEITI, Japanese banks and industry or all the aforementioned parties to obtain further financial credit. The massive industrial capacity of northern Italy is incredible. It is crucial to world trade and therefore to the future economic viability of Japan as a trading nation. Italians themselves (despite challenges of public foreign debt) are renowned savers. Such savings have previously underpinned a strong service sector in southern Italy.

But due to the impact of the GFC, Italian banks are facing grave problems with regard to credit formation. As challenging as the situation is in Italy, it is not as bad as it was for Japan in the immediate post-war period due to the destructive impact of the Second World War. Indeed, the situation in Japan was all the more grave because the United States did not have the money to support Japan, having decided to give priority to Europe.

For all the ingenuity of Japanese industry and support of the American led occupation authorities, there could have been no ‘Japanese economic miracle’ had the alliance of Japanese financial conglomerates, the Zaibatsu, not had billions of Yen salted away in Swiss bank accounts. These funds were judiciously utilized by the Zaibatsu (which became the Keiretsu) in conjunction with the Japanese state to facilitate an economic recovery by helping facilitate the capitalization of Japanese banks.

This capitalization of banks provided Japanese industry with the capacity for recovery which could not have been sustained without foreign trade. Furthermore, the lending capacities (with a degree of state intervention via considered prudential settings) helped support small to medium business engineer employment growth. Since then, (despite a downgrading by the Japanese elite of promoting employment) the Japanese state has helped guide economic activity by MEITI providing technical and strategic advice to Japanese industry.

This advice has not been resented by the Japanese corporate and private sectors because it has been crucial in filling in gaps with regard to Japan’s geographical distance from important trading partners and the nation’s lack of natural resources. MEITI, in formulating international trading strategies, has often analysed and subsequently advised Japanese companies to undertake specific domestic investments to indirectly facilitate trade with Japan.

Japanese capital formation capacity, combined with the realistic approach of the Japanese state and private sector to assess the nexus between investment and trading opportunities, make Japan the ideal nation to crucially assist the EU, individual European countries and the banking sectors of European nations. The Japanese also possess the capacity to link the possible future re-foundation of European currencies to replace or co-exist with the Euro depending on economic circumstances, with regard to factors such as debt servicing, trade competitiveness and inflation.

Overall, Japan is now a very important country because the Japanese state and corporate sector have the available finance and strategic appreciation of how to revive the European banking sector while helping sustain crucially important trade links.

Japan: The White Knight that can Save Itself By Saving the European Banks

In a macro context, Japan should also be considered to help bail out Europe as an
option because current trends indicate that the Franco-German dominated European Central Bank (ECB) will attempt to be the capital source force for European banks and for cash strapped European governments. The ECB can probably cover, through the European Stabilization Fund, (ESB) the debts that Greek banks have accrued. However, the ECB is demanding austerity measures that may cause more socio-economic problems than what they solve.

Furthermore, the economic well being of France and Germany could ultimately be imperilled if both nations have to carry the burden of financing the ECB-which probably cannot provide sufficient finance capital to European banks to re-generate economic activity and employment growth. An associated issue with regard to European recovery is the operation of the Euro Zone.

Italy is a nation where there are now difficulties in aligning the value of the goods and services of its economy to the exchange rate value of the Euro. This problem, since 1999, had been overcome due to the strength of the Italian banking sector. But the current GFC induced sovereign debt crisis has placed pressure on the operation of Italy’s formidable banking sector. Therefore the following option should be considered:

- central banks in the European System of Central Banks (such as the Bank of Italy) assuming pre-eminent responsibility for either issuing Euros and/or re-introduced domestic currencies that operate within a substituted currency regime of convertible currencies that co-exist with Euros.

- and if necessary having domestic currency as the sole currency that can be used in a country, as is the case with Britain.

If Japan were to supply credit lines to European banks or provide new loans to stimulate economic growth, repayment options would naturally be a determinant of success. A problem for a nation such as republican Greece is that she could be burdened with generations of foreign imposed austerity because of the comparatively high value of the Euro. An indefinite austerity regime for republican Greece in itself would be self-defeating to the extent of challenging the viability of its service based market economy.

The Nexus between EU Currency Reform and Needed Capitalization for Banks

A re-introduced Drachma might allow Greece the flexibility to repay future loans* because they can flexibly be devalued to reflect domestic economic fluctuations. That is not to say that Greece’s new national unity government should not proceed with the EU backed austerity programme. The importance of acceptance of this financial package is that it will enable republican Greece to cover its public sovereign debt and thereby re-assure global markets.

(* Existing debts would probably have to be re-paid by republican Greece in Euros).

The question that emerges is how can republican Greece regain economic vibrancy if it is weighed down by a perpetual fiscal austerity programme and cursed with under capitalized banks? The re-capitalization of banks therefore must be a priority for Greece. This could be facilitated by Japan or the IMF loaning money to support small to medium domestic Greek banks so that they can help revive the service and trading sectors of the Greek economy*.

(*When Her Majesty, Anna Maria, was domiciled Queen Consort of the Hellenes, between 1964 and 1967, she was involved in supporting one of the world’s first micro-credit schemes. Under this programme, small no-interest loans were provided to economically disadvantaged women to help them establish financially viable small businesses that provided them with an independent and/or supportive income.

The principle of this micro-credit programme-which low risk loans are directly provided to the small, medium and informal sectors of the economy- so that the macro impact of national austerity measures can be counteracted).

Strict prudential controls would have to be put in place and-due to advances in internet technology monitoring processes-can be put in place. The radical shift that needs to be made is for the Japanese or the IMF to transition to a process of supporting the small to medium sectors of a service economy. This has normally not been undertaken because the focus of the IMF has usually been on financing nation states.

The question therefore might be asked as to why should Japan or the IMF (including donor nations within this fund) provide capital to private banking sectors to support small to medium sectors of a domestic economy? The answer is that the nature of the GFC is such that this crisis now shows the financial interconnectedness of the world economy which includes economies that relatively economy’s such as Greece which need help both in the short and in the long term. Short term help for Greece can be provided in the form of the current bail out package while longer term support can occur by loaning capital to Greek banks to specifically support the ‘people on the ground’ who are the backbone of Greece’s service economy.

There is also the question of Greece (and other so-called ‘PIGS’ nations) re-introducing domestic currencies to assist with the needed capitalization of their banks and flexible repayment of future loans of money to the ‘grass-roots’ sections of their economy? There is no hard and fast answer to this question except to say that EU bureaucrats and politicians must take into account and respect the individual circumstances of each affected European nation.

Should a comparatively small economy such as Greece receive financial support from Japan for a revived Drachma - and a domestic currency creates the *flexibility for new future loans to be repaid - then Greece’s right to have its own currency (which could co-exist with a Euro) should be respected by the EU. The fundamentals of European unity were essentially achieved in 1992 when trade barriers were removed as opposed to currency union necessarily facilitating economic integration. If there can be a viable and non-inflationary revived Drachma, then the EU should assist Greece in such a development.

The immediate danger of Italy or so-called PIGS nations defaulting can be overcome in the short-term by raising money for bail outs. The more important long term issue is that of capital creation to revive activity within a small to medium sectors of economies while also protecting and promoting international trade. It is in this context that currency reform within Europe should be carefully assessed*.

(* Argentina was a nation that was devastatingly hard hit in the 2000s by a collapse in its banking sector and the loss of purchasing power of its then currency. However, this nation defied the odds to economically recover. This was due to the introduction of a new currency which reflected the value of the goods and services in its economy so that this nation could economically revive while servicing its foreign debt. How Argentina did this deserves analysis with regard to both the specific European context and the overall challenge of the GFC.

I have a deep interest and knowledge of Argentine history and politics which encompasses that nation’s financial crisis. To spare the reader an exhaustively boring overview of Argentine history and politics, an analysis of Argentina’s former debt crisis was not undertaken).

Nations such as France, Germany and the Netherlands*probably do not need to re-introduce a domestic currency to complement or substitute the Euro because this currency reflects the value of the goods and services of their economies. Because Austria’s banking sector is closely connected to Germany’s, it would not be practical for that country to re-introduce its old currency, the Schilling.

(The Netherlands, similar to Britain, has a very strong banking sector which is derived from extensive investment portfolios that date back to their trading power during an earlier colonial era).

Indeed, if there were EU nations that left the Eurozone (or re-introduced new domestic currencies within the zone), they would have to be careful of possible inflationary impacts. However, the need for capital formation for European banks has created the scope for financial institutions with state support to underpin new domestic currencies to facilitate flexible repayments for new loans. The critical point however is that European banks need an expeditious injection of capital if the Euro is to be sustained on a European basis or if new domestic European domestic currencies are to be re-introduced.

It needs to be restated that the 1992 abolition of trading barriers between EU nations is the most important and beneficial reform that has guaranteed (and will continue to guarantee) European economic unity. The EU consequently has the capacity to negotiate new trading arrangements with Japan in return for an infusion of Japanese capital into European banks, loans to European governments or underpinning future EU backed bonds.

Why China Should Save Itself Rather Than the World

The scenario regarding the EU looking to Japan for crucial assistance is not fanciful in the context that the People’s Republic of China (PRC) is a mercantilist power that is already moving to cheaply buy assets in Greece in return for financial assistance. If a mercantilist regime such as the PRC can potentially position itself as a source of capital funds during the GFC, then why can’t a democratic but natural resource deprived Japan do so if it has massive un-utilized capital?

Japan is presently preferable to the PRC as a capital source for Europe because of political structural problems China. The Chinese mainland economy is essentially state directed in despite there being a substantial private sector. The late Chinese paramount leader *Deng Xiao-ping actually remained a committed Marxist. He knew that, by the state controlling the banking sector and supporting State Owned Enterprises (SOEs), private capital would be subservant to the state.

(* The other prescription that Deng laid down was that central controls be applied so that there would not be any discrepancy between regions with regard to rates of economic growth).

Deng’s model of state capitalism has transformed the PRC into an economic powerhouse. Indeed, an argument can be put that the PRC’s bureaucrats and technocrats have been far more astute than American and EU policy makers with regard to handling the GFC. Be that as it may, the current Chinese power-over approach is vulnerable in that it possibly could not cope with unforseen developments.

The recent crisis concerning the raising of the American debt ceiling is a case in point with regard to the PRC possibly not having the requisite flexibility to deal with unforseen circumstances. Had the American Congress not raised the debt ceiling, an estimated US $1.4 Trillion in Chinese investments in American Treasury bonds may have been lost which could have plunged the PRC into an economic crisis similar to the inflation spiral of the 1940s which was crucial to bringing down the Nationalist regime of Chiang Kia-shek.

The consequence of such a PRC financial crisis probably would have plunged the world into its worst economic crisis which would have cancelled out the United States current capacity to get away with printing money to pay debts because the American dollar is still effectively the international currency reserve. Therefore, although the PRC probably has a brilliant technocratic brains trust, there are structural problems within the Chinese mainland economy which make it risky for China to fulfil the role of ‘white knight’ for Europe and the world.

The PRC’s model of state capitalism is viable so long as annual economic growth rates of 9% are sustained. Due to brilliant co-ordination by the PRC state, these growth rates are being sustained but this cannot be done on an indefinite basis. If the PRC were to fulfil the role of bailing out European banks and states, the overall impact would eventually rebound due to inherent weaknesses in mainland China’s current economic and political systems which are too focused on short term financial and trade manipulation to sustain high rates of long term economic growth.

There is now the prospect of a European banking crisis but there could also be a future ‘China Crisis’. But there need not be because mainland China has a massive domestic market base which could support full employment if the state was to strategically withdraw from utilizing Sovereign Wealth Funds (SWFs) and eventually allow private shareholders to assume majority control in what are currently SOEs. The need for social equity, if there is to be a transition from a state socialist system to a market economy, could be ensured by permitting genuine trade unions that both protect labour rights and potentially facilitate employee input to achieve productivity rises and consequently secure employment.

The current coercive controls* that are in place in the PRC, (which are probably now accepted by the Chinese middle class due to a critical appreciation that they have facilitated economic growth), could be parlayed into the formation of a Chinese equivalent of MEITI. The problem with the operation of MEITI for Japan is that the Japanese state and private sectors are seemingly immobilized. It is understandable that Japan is cautious but international economic events are now bigger than Japan, so that new approaches to international trade and finance should urgently be considered by Tokyo.

(* It is a great pity that Berlinguer died in 1984 and that Zhao Ziyang broke with Deng in 1989. Had Berlinguer lived longer and Zhao inherited Deng’s power, then there could have been a PRC transition to a Chinese democracy with the adoption of the previous Japanese model of achieving full employment because the two communist reformers had communicated with each other).

Why Self-Fulfilling Prophecies Must be Avoided

Even though the PRC is not a democracy, care should be taken by the United States with regard to relations with mainland China. There is a fine line between appeasement and counterproductive confrontation that the United States and other countries may not be taking account with regard to the PRC. This is not to say that the United States should decline offers of alliance or closer ties with existing allies. Indeed, the Obama administration is garnering substantial international good will towards the United States as a nation that can be trusted.

But trust in the United States should not be based upon fear of a country as important as the PRC. The Eighteenth Chinese Communist Party Congress is scheduled for October 2012. The future domestic and foreign policy setting for China for the next ten to fifteen years will be set because a new generation of senior Chinese Communist Party (CCP) leaders will assume office. Undoubtedly, compromises will be made regarding China’s future direction which will reflect different outlooks and priorities within the senior echelons of the CCP.

Compromises in CCP policy eventually pan out with circumstances and unfolding events determining which competing approach should prevail. Over the next ten to fifteen years, the CCP’s leadership will have to decide whether to support SOEs or take steps to allow an independent corporate sector, transparent capital formation and supporting a labour sector that is free from the control of a single party but connected to a Chinese state with a strong civil society conducive to national unity.

Attacks and/or military alliances against mainland China may only serve to bolster the position of CCP hardliners who have a cynical interest in not progressing with future economic and political reform. A counter-productive cycle may ensue where political and economic reform is retarded or abandoned due to the CCP’s senior leadership perceiving there to be international hostility.

Abandoned economic reform could result in the PRC consolidating a mercantilist approach to trade which actually causes international tensions. This could lead the PRC to bolstering its armed forces, thereby further undermining the prospect of needed economic and political reforms being adopted over the next ten to fifteen years.

The final determiner of power and the nation’s strategic alliance in the PRC is the armed forces, particularly the People’s Liberation Army (PLA). The PLA since 1949 has applied the Confucian precept that civilians rule the country and that the army will not divide to avoid imperilling national unity which could occur by the armed forces directly ruling. A paradox of this approach has been that foreign policy and defence concerns have often determined who rules China and determined what domestic policy directions should be followed by national leaders.

Mao-Tse Tung probably made a colossal political blunder by inviting former American president, Richard Nixon, on a private visit to Peking in February 1976 to commorate the fourth anniversary of RN’s historic visit to China. The importance and prestige that was accorded to RN’s visit helped influence PLA commanders to block the Gang of Four’s taking power upon Mao’s death so as to not risk China forgoing crucial American from the then *Soviet threat.

(*Due to their long border, there is an inherent disposition toward Sino-Russian which rivalry has been long standing. In terms of contemporary comparison between China and Russia, the latter is probably doing better in terms of economic reform. Although Russia probably could not have broken with Marxist-Leninism in the 1990s and after without there being a so-called crony/oligarch class, substantial progress is being made due to state support for an emerging private bank sector.

In contrast to China’s so-called ‘shadow banks’ and to the unwise lending practices of American and European banks, Russian banks have, subject to sensible prudential controls, being supporting a growing private sector that is conducive to having a stable civil society.).

Deng Xiao-ping’s domestic consolidation of power in 1979 following a brief border war with Vietnam was primarily due to the PLA’s assessment of external defence considerations to support Deng as the nation’s paramount leader. The PLA will subordinate external defence considerations if China’s national unity is seemingly threatened. For this reason, the PLA compelled Deng to acquiesce to the violent suppression of a civil reform movement whose symbolic centre was Peking’s Tiananmen Square. The massacre in this square in June 1989 of demonstrators almost ended Deng’s rule but he was able to re-assert his power due to renewed PLA support due to the strategic ramifications of the Soviet Union’s break up in late 1991.

The world is in a perilous economic situation and the PRC’s help and expertise will be needed for the international good. China similarly faces formidable socio-economic challenges. Adopting a bellicose stance toward the PRC could well orientate the PLA’s senior leadership away from supporting the introduction over the next ten to fifteen years of positive socio-economic domestic reforms. The enactment of such reforms will help guarantee Chinese national unity and a respected role in international relations. Furthermore, China clearly has a very talented technocracy that can provide innovative ideas and support that should not only be of domestic benefit but could greatly help the world.

The United States: Capitalism Needs Finance Capital

Japan and the EU will probably need American support for an international plan that protects the world economy. This is particularly so because the contemporary GFC crisis is one which, in comparison to the Great Depression, is relatively easier to fix but a failure to do so will plunge the world into a worse catastrophe than the crisis that the1929 Crash caused. This unsettling paradox is due to the fact that there is sufficient finance capital around the world to cover credit shortfalls but a failure to utilize this capital-by adroitly engineering an allocation of existing funds to cover credit shortfalls-will lead to a financial contagion that will be infinitely worse than the ramifications of the 1929 Crash.

Due to similarities and differences between the contemporary GFC and the Great Depression, broad comparisons are undertaken between these two economic crises for the sake of avoiding an international financial cataclysm. The Great Depression can be traced to the October 1929 Crash on Wall Street. This crash was essentially caused by banks (who had been liberally loaning money) calling in some of their debts in response to the Federal Reserve tightening credit availability. The attempt by bank debtors to sell some of their shares helped cause the 1929 stock market crash as too many shares were overvalued and could not be sold quickly enough to cover existing bank debts.

In many ways, the fundamentals of the 1929 Crash were similar to the current GFC: a chasm between money owed and incapacity on the part of the state or banks to cover the credit shortfall. From a broad right wing/market perspective, the economic crisis that ensued following the 1929 Crash was primarily due to the emergence of protectionism impeding the flow of international trade which in turn stilted economic growth thereby prolonging the agony of the Great Depression. Alternately, from a broad left-wing viewpoint, insufficient demand sustained the economic downturn which was exacerbated by inadequate public spending.

Whatever perspective is accurate regarding the Great Depression, a shortfall in capital was the major factor which caused that economic crisis in the first instance. By contrast, with regard to the current GFC, there is sufficient finance capital in the world to avoid a fundamental economic crisis. But the key issue is how capital that currently exists can best be applied to address the capital-shortfalls in global banking sectors and for the sovereign states that have had to cover credit gaps.

The above question is complex but it is one that the United States must lead the world in addressing with regard to its domestic economy. The benefits of Washington successfully grappling with the crucial issues by covering credit shortfalls of capital (i.e. money) formation is vital not only to the United States but to the world. The United States cannot indefinitely persist in printing money to cover spending and borrowing. This approach is presently only viable due to the American dollar being the world’s reserve currency and due to the purchasing of American Treasury Bonds.

Stopgaps are Worthwhile if they Provide Scope for Future Integrative Unity

But an end point will eventually be reached when the money printed will not validly align with the value of the goods and services in the American economy. The lifting of the American debt ceiling was a vital stopgap, but just that, a stopgap. The formation of the congressional *super committee following the raising of the debt ceiling was a very promising development because such a committee had the potential to establish a fiscal regime conducive to necessary capital formation that could save the world from profound economic crisis.

(*The super committee is, or was, composed of three House Democrats and three House Republicans with six senators, three from each of the two major parties).

The super committee divided on the contemporary Democrat-Republican fault line of increased tax and spending versus tax cuts to stimulate economic and employment growth. This dichotomy misses the fundamental GFC induced problem: that the American banking sector is facing a liquidity crisis due to a shortfall in finance capital. A dangerous development since 2008 in the United States has been that too many small and medium banks have undergone because of under-capitalization.

The issue of bank capitalization could be the focal point for future integrative unity in relation to establishing a ‘law of the situation’ for President Obama and the eventual Republican Party presidential nominee and the Congress to co-operate to overcome the GFC over the course of next year.

The concept of ‘Law of the Situation’ was formulated by the American political scientist Mary Parker Follet* (1868 to 1933). The Law of the Situation can refer to a particular problem (or problems) in which there are different parties with their own ideas as to how to meet that challenge. For Follet, authority and power should be exercised by focusing on the cause of the problem and then synthesizing different perspectives to formulate and apply a solution which might not have been devised without an overall approach conducive to integrative unity.

(*Although Follet is dead, she will be referred to in the present tense to denote the continuing relevance of her ideas).

The paradox of integrative unity is that the more parties there are involved in a situation, the more scope there is to devise a very effective and enhanced solution than what there otherwise might have been. Conversely, there is also corresponding scope for conflict when there are more parties (or using contemporary neo-liberal jargon, ‘stakeholders’) in a power situation. Consequently, adoption of a ‘Law of the Situation’ framework can identify the often delicate fine line between success and failure. Whether failure or success is achieved by applying ‘Law of the Situation’ depends on the approach that is adopted in relation to conflict.

For Follet, conflict is potentially positive if there is a canvassing of different ideas to synthesise an enhanced outcome. It is in relation to the exercise of authority that the various combinations of ‘win-win’, ‘win-lose’ and ‘lose-lose’ are determined. These aforementioned combinations more often than not correlate with whether a ‘power-over’ or a ‘power-with’ approach to authority is applied.

There is a tendency to regard the above mentioned approaches, particularly ‘win-win’, as insipid and naïve. It should be pointed out that the ‘guru’ of modern management Peter Drucker (1909 to 2005) adapted Follet’s concept of ‘Law of the Situation’ from a political context to a business one to formulate Management by Objective (MBO). MBO has provided a framework for managers to apply diversity management to synthesize different perspectives and, very importantly, to devise new ideas/modes of operation from a rational and hard headed analysis of the existing context.

Follet regarded achieving a ‘win-win’ outcome as reflective of skilful leadership having been applied. Consequently Follet abhorred compromise which she regarded as taking aspects of different (and often competing) proposed solutions. This is correct because it is impossible to synthesize contradictions.

Integrative Unity: Why Co-operation as Opposed to Compromise is Needed

Mikhail Gorbachev, as Soviet ‘President’ in 1990, helped lay the groundwork for his own fall in 1991 by trying to combine the competing and contradictory ‘500 day plan’ and the ‘800 day plan’ for economic reform. What Gorbachev probably regarded as skilful leadership only produced failure because his ‘compromise’ only resulted in an unworkable plan.

Therefore, as heretical as it may seem to say, ‘compromise’ in the current context of the United State’s leadership in contending with the GFC compromise, should be avoided. It was because the super committee sincerely strove to achieve a compromise that no solutions ensued as contradictions cannot be synthesized. Indeed, the conciliatory approaches of super committee members failed- and members of other Congressional and Senate committees will fail- to find a solution by seeking common ground via compromise. It is co-operation not compromise that is needed.

Co-operation in Washington to achieve a ‘win-win’ outcome is still needed to overcome the fundamentals challenges that confront the United States and the world in relation to the GFC. For a ‘power-with/ win-win’ result to be achieved in the current context, a hard headed, dispassionate and non-ideological radical approach (‘radical’ meaning going to the roots of a problem as opposed to causing gratuitous disruption) is required of America’s leadership.

Let there be a focus on determining what the actual technical causes of the GFC are and then implementing practical solutions which not only remove dangers but improve the situation from what is was previously. Arguably the key economic danger in the United States is that of undercapitalization of small to medium financial institutions. At the very least, a dispassionate analysis of bank capitalization as both a cause and a possible solution to the GFC should be analysed.

The Vital Need for American Banking Diversity

A key contributor to the realization of the ‘American Dream’ was the existence of small to medium sized banks or financial institutions in American towns, regional cities and rural communities. An important reason why the new American Republic consolidated was because banks were established in local communities. The wealth of farming communities and small businesses in regional towns was productively invested by banks. This in turn, enabled financial institutions to grant viable loans to working and middle class people which helped facilitate productive wealth creation and further capital formation.

The United States could not have geographically expanded and gained the deep patriotic commitment of all its citizens to become the miracle that is America had there not been a strong banking sector in place since the 1800s. The major danger of the GFC is that small to medium sized domestic American banks will collapse and that large financial institutions will consolidate on a monopoly basis. It is improbable that dominant corporate backed mega-banks will have a commitment to fostering business and employment growth at a local level that has been an important foundation of American prosperity.

Change We can Believe in: The Need for American Bank Capitalization and Diversity

President Obama when running for office promised ‘change we can believe in’. This catchcry conveyed that there would be an interconnection between making profoundly beneficial progress and a practical capacity to achieve such advancement. The current context is now one more than ever when a synthesis between the inspirational and the practical is required.

Funds raised by cuts in wasteful spending and increased taxation will help facilitate the needed capitalization of domestic American banks. A synthesis between the best of *Democrat and Republican brains will be needed to devise a regulatory framework that protects the domestic American banking sector as the future driver of prosperity and employment growth.

(*The Democrat proposal for an infrastructure bank is an excellent idea and one which the Republicans should consider supporting as a valuable quid pro-quo for Democrat acquiescence for approving spending cuts of wasteful programmes. The deflationary potential of spending cuts needs to be countered by newly capitalized banks, such as an infrastructure bank, lending money to support small to medium business as engines of employment growth).

The growing gaps in the American financial sector resulting from the reduced number of small/medium banks and credit unions essentially renders irrelevant the Democrat-Republican debate as to whether there should be increased spending or reduced taxes to stimulate employment facilitating higher economic growth. There is actually merit in both the Democrat and the Republican perspectives regarding cutting taxes and increased spending. However, in the current context, the inadequacies of both approaches as stand alone policy options need to be assessed.

Cutting taxes alone will not, in the current economic environment, stimulate sufficient employment growth in the United States because of the depth of the downturn caused by the 2008 GFC. In the current context, there is no guarantee that tax cuts will stimulate employment growth due to economic uncertainty being a disincentive toward spending. Therefore, any tax increases should be considered by Congress on the basis that they reduce the public foreign debt and facilitate prompt and needed capitalization of American banks.

If there are to be tax increases, they should be directed at those who can afford them as opposed to the economically vulnerable. Regressive taxation in the current economic American context will only deflate demand. By contrast, temporary increased taxes for those who can afford it will be generally accepted by them on an interim basis if the increased revenue helps the United States reduce its dangerously high foreign debt to GDP ratio and vitally contribute to capital formation for small to medium sized banks and/or credit unions.

Banking Diversity Saved Australia from Going ‘Down Under’

Australia was effectively insulated from the2008 GFC because the former federal Treasurer (1996 to 2007) Peter Costello had presciently put in place effective prudential controls that ensured that Australian banks and building societies were sufficiently capitalized if there was an international credit crisis. Australia’s public foreign debt had previously been paid off by Treasurer Costello and he had secured a budget surplus that also vitally contributed to financial and fiscal security.

The upshot of Costello’s financial preventative maintenance was that Australia’s secondary services sector was sufficiently strong to withstand the 2008 GFC that the subsequent stimulus packages introduced by the Rudd ALP government were not only unnecessary but they were part of a long term strategy (which has the covert support of elements of the Liberal Party) to create an over-dependence on mineral exports to the PRC. The great myth that needs to be debunked is that Australia’s relative success in weathering the2008 GFC was due to the so-called ‘China Boom’.

The debunking of Australia’s ‘China Boom’ myth is not only important domestically but also in an international context. This is because Mr. Costello’s financial policies established a valid model that is salient in the contemporary global economic context: that of a capitalized banking sector crucially supporting the domestic services component of an economy. Consequently, even if there had been a collapse of the international banking systems, Australian banks would have remained solvent, thereby helping underpin the domestic secondary sector of the Australian economy regardless of how detrimental the GFC’s impact was.

There are aspects of what Mr. Costello did with regard to protecting domestic banks that are not transferable in a non-Australian context but the principles of establishing effective prudential banking controls to bolster the small and medium sectors of the economy is broadly applicable. It should also be emphasised that prudential regulations (such as deposit to loans ratios) were the means by which Mr. Costello helped protect the secondary sector of the economy as opposed to implementing a prescriptive social credit style economic approach.

Because the Costello policies were cumulatively a judicious form of preventative maintenance, Australian banks and building societies were not confronted with the challenge of de-capitalization. (Although credit shortfalls and an incapacity of Australia to service its public foreign debt may become critical problems if the nation continues on its current rent seeking path). For countries whose banking systems and governments were hit hard by the GFC, bank re-capitalization is a crucial challenge that is worth being met if prudential controls are established which extend vital credit lines to small and medium sectors of an economy to engineer needed employment growth.

Australia is a medium sized economy so, to state the obvious, the United States and the EU will have to make the running with regard to surmounting the GFC. Therefore, in the American context, further borrowing to fund government spending must begin to be phased out because the United States cannot afford to go into more public debt. The current stop gap that the United States has, of being able to print money, will eventually become unviable.

Win-Win Outcomes: Reducing Debt and Capitalizing Small to Medium American Banks

It is therefore imperative that the United States pay off (or substantially reduce) existing debts and have an actual revenue base to underwrite the value of Treasury bonds and currency and to facilitate needed bank capitalization. This can be achieved by temporary tax increases, allowing tax cuts from the previous Bush administration to lapse and cuts in wasteful spending that the American Congress* will hopefully occur as a result of Democrat- Republican co-operation in response to the GFC.

(*Going to the default positions of steep spending cuts in defence and health care is a ‘lose-lose’ scenario. Not only will such spending cuts fail to help the United State’s credit and fiscal position but they will precipitate domestic political polarization and social dislocations at a point when America and the world can least afford it).

The situation in the United States is so topsy turby that the American Congress could simultaneously advocate cuts in wasteful spending programmes with new spending increases. New spending increases should only be granted if they are genuinely aligned to generating demand that facilitates actual employment growth.
The Democrats have shown considerable promise with regard to moving to the vision advocated by the late Congresswoman, *Barbara Jordan (1936 to 2009) when she gave a keynote address at the National Democratic Convention in New York in 1992.

(*Congresswoman Jordan still fulfilled an ignominious role as a member of the House Judiciary Committee by making a sterling speech in 1974 which helped legitimise Senator Ted Kennedy’s entrapment of President Richard Nixon in the so-called ‘Watergate scandal’ (sic). Furthermore, Ms. Jordan later effectively moved away from her position as a civil libertarian by opposing basic rights for illegal migrants in the United States).

In that 1992 speech, Ms. Jordan mentioned various long term policy positions of the Democrats, paused, cited a corresponding alternative improved policy, paused again and then invoked the term ‘change’. Her most effective call was for the Democrats to ‘change’ from being the party of ‘tax and spending’ to that of ‘savings and investment’.

Savings and investment is now really code for capitalization of American banks and financial institutions. This policy orientation is in itself worthwhile but now has a considered urgency in the current context of the GFC. It must be emphasised that an important cause of the 2008 GFC was regulatory authorities forcing banks to lend money to recipients who were not in a position to repay. These loan recipients often did not help the overall situation by abandoning ‘their’ houses after they failed to sell them.

Therefore, ‘regulation’ in the more recent contemporary context should mean government assistance in bank capitalization to help protect and advance the position of small to medium banks and credit as opposed to the state dictating who the money should be lent to. The Obama administration is already reforming real estate laws so that housing mortgages cannot be simply abandoned. Republican Party co-operation in supporting the administration’s efforts in real estate reform could be expanded by lateral input in formulating legislation that creates a new regulatory system that shields and improves the lending capacity of small to medium domestic American banks and credit unions.

The point concerning the need to support the small and medium American banking sector cannot be over-emphasised. The 2008 GFC was caused by an undermining of the operation of the American banking system and this crisis can be overcome by the American president and the Congress co-operating to revive the American domestic banking sector which have been traditional bulwarks of both American prosperity and equity. Reforming and protecting the domestic American banking sector will not be an easy task so it will be essential that there be high powered bi-partisan co-operation.

If the Congress and the President do not take a lateral lead to achieve high powered bi-partisan co-operation, the initiative could pass to extreme political movements with equidistant opposite agendas that will lead to failure that, in the current GFC context, could be catastrophic.

Coffee or Tea? Failed Presidential and Congressional Leadership will Facilitate Economic Failure and Destructive Political Extremism

The anxiety caused by the GFC has already generated a hard left wing protest movement that is viable due to social media. Across the world, the Marxist methodology of focusing on a common grievance upon which to agitate is now successfully being applied. Practical solutions to grievances (such as supposed Wall Street greed) that will actually improve the situation are never advocated by protest organisers. Instead, the common grievance is focused upon which invariably leads to a common enemy/culprit being agitated against to generate a destructive mass protest movement.

If there is a failure on the part of political leadership to redress the underlying causes of anxiety, the left wing social movement becomes stronger until a critical mass is constituted that can challenge the existing socio-economic and political system.

The United States is probably not in a situation where the ‘Coffee Party’ (the left wing version of the Tea Party that was founded in 2010) will gain sufficient strength that the United States will become a Marxist dictatorship as Cuba, did following the failure of talks in 1956 (‘the Civic Dialogue’) between the democratically inclined Batista government and the moderate opposition. However, a political impasse over how to address the GFC could lead to a political polarization in the United States not seen since the Civil War (1861- 1865).

A Coffee Party backed hard left ascendancy could be facilitated by incumbent Democrat congressmen and local and state officials adopting non accommodating political positions to win primary endorsement. A more left wing Democratic Party will undoubtedly support President Obama’s 2012 re-election bid. But should a non-moderate Congress be returned next year, a power–over/win-lose approach to governance may ensue that undermines the social cohesion that is needed to help make the American dream a reality.

An Obama-Biden combine offers the best hope for a moderate but still potentially brilliant Democrat presidential ticket. President Obama has a skill similar to the late Barbara Jordan of using rhetoric to articulate practical directions that are needed to advance the general good. If the president is to win re-election, he will have to propose worthwhile legislative policies that address the fundamental challenges posed by the GFC and then articulate during the campaign why the Congress should pass them.

The proposed Jobs Act of the President’s is a promising indication of lateral and appropriate public policy of the Obama administration. The Republican majority in the House of Representatives may not agree with this proposed legislation as it is but this bill still serves as a basis for the GOP to have lateral input by legislative amendment. Effective co-operation can be reached if common underpinning objectives are achieved by synthesizing different ideas.

The outcomes that President Obama and the Congress will hopefully achieve will be these of reducing the American public debt to GDP ratio and recapitalizing the operation of the federal government and of domestic banks/credit unions, particularly small to medium ones. The practice of printing money to perpetuate endless borrowing of money to sustain federal government operations must be ended before the American dollar can no longer be accepted as the world’s reserve currency.

There will be scope for lateral ‘win-win’ bi-partisan co-operation if there is a Mitt Romney and Newt Gingrich Republican presidential ticket. These candidates for the Republican Party nomination appreciate the profound threat that the GFC poses to the American and international financial systems and to social stability. They also have a technical capacity to formulate policies that can help save the world from the GFC.

But, because there is still abundant scope between now and election day in November 2012 for economic catastrophe, a possible Romney-Gingrich ticket would have to advance their ideas and policies during the course of the campaign as a basis for synthesis with the Obama administration’s proposed solutions.

It may seem bizarre for a presidential race to be used as a platform to canvass different ideas of presidential candidates to be advanced and then enacted by Congress on a bi-partisan basis, but then, the current context is one which is in keeping with the Chinese saying: ‘May you live in interesting times.

If President Obama and Vice-President Joe Biden are opposed by a Romney-Gingrich Republican presidential ticket, the dynamics will be in place for the scope will be there for an intense interchange of ideas and passage of consequent legislation to save the United States and the world from economic catastrophe. The respective blue and red lines of the Democrat and Republican parties are now so entrenched that lateral synthesis between the two presidential candidates will ensure a still close 2012 vote.

Paradoxically, if either ticket (assuming that there is a Romney-Gingrich presidential Republican ticket) decisively wins in 2012, it will be an indication of socio-economic disaster. If President Obama wins re-election by a large margin, then it will be an indication that the Republican majority in the House of Representatives has blocked the administration’s policies which, since the raising of the debt ceiling, have been promising due to their focus of appreciating the importance of capital formation in relation to employment growth.

The American people will punish a Congress that does not engage positively (which does not necessarily mean that the President’s proposals should be automatically accepted at the initial stage) with lateral and considered (if not brilliant) ideas and solutions that President Obama will probably advance in the course of the campaign for congressional approval.

Alternatively, if there is a Republican landslide in the 2012 elections, it will be due to an economic catastrophe (such as in Europe) occurring between now and next year’s vote. If this is to occur, I would not wish the job of American president on my worst enemy.

It Is Not All Doom and Gloom

In the context of the contemporary doom and gloom, it is often overlooked that there have been real bright spots such as the Bush and Obama administrations providing (with congressional approval) financial aid which helped contain unemployment and underemployment respectively to 10% and 9%. As bad as the current employment situation is, it could have been much worse had if financial aid had not been provided to corporations such as General Motors (GM) to fend of bankruptcy and maintain an employment generating capacity to bolster the American economy.

With regard to American GM, this corporation is now solvent and stronger than it was before the GFC. This car manufacturer is still a crucial contributor to employment in the United States, to associated industries and in facilitating foreign trade. For all the managerial and employee talent that GM had, they could not have successfully adapted without the provision of capital which was provided by emergency loans (that were re-paid) from the state.

GM’s success did not lead to a state takeover of a vital component of private American industry or the commencement of a social credit paradigm in American public policy. However, a crucial precedent was set that showed that the American state can and should step in as an emergency step not to supplant capitalism but rather to support it. The current challenge for American capitalism is that current gaps in American banks and financial institutions require capital formation to avoid a financial cataclysm that has threatened the world since the GFC in 2008.

Creative Destruction: Without Secure Employment, There Can Be No Social Stability

Hopefully, there will be temporary support from the American state to help ensure that the miracle that is American capitalism will not only survive but continue to provide crucial support to the global economy. The GFC provides the opportunity-for the Obama administration and the American Congress (in dealing with this crisis) to help establish a set of values that can help adapt to technological induced socio-economic change.

How the GFC is addressed can determine whether the effect of ‘creative destruction’ that technological change has on employment will be negative or positive on labour employment. Creative destruction was originally a Marxist concept which envisaged technological innovation creating a crisis for capitalism by destroying jobs. A counter perspective on creative destruction was advanced by the Austro-American political theorist, Joseph Schumpeter (1883 to 1950). He maintained that technological advance created new industries and employment opportunities which would compensate for jobs temporarily that were lost.

Presently, new technology is reducing employment more rapidly than it can be replaced with no jobs and industries. This phenomena is due to the rapid rate of technological change rather than the inherent injustices of the capitalist system. However, the GFC is yet to be adequately addressed so that there is scope for the negative Marxist version to prevail. This could occur if capital (i.e. the private sector) is dominated by big corporations which will utilize technological changes to minimize the use of labour (i.e. employment) as a cost impost.

Indeed, by ensuring that technological changes do not facilitate new employment growth opportunities the GFC could be used by some leaders in industry around the world to help ensure that creative destruction does have negative ramifications. Having a post-GFC banking sector that mainly supports big business is one way of consolidating a transition to low employment regimes around the world.

A major problem with the above negative outcome is that technology can now be used for social media to organise and sustain demonstrations and social unrest for the sake of challenging the capitalist system. Already this is happening, with ‘left wing’’ social movements attacking and scapegoating the banks. In actual fact, re-capitalizing and instituting new effective prudential safeguards for banks so that they will lend to spur economic and employment growth at a micro level is a key strategy to overcome the GFC by ensuring that creative destruction will have a positive impact.

Scope for positive creative destruction can be created if internet technology is used to create new trade and investment, wealth and employment opportunities. Due to technological advances, international transfers of money are now almost instantaneous. Therefore capital can be expeditiously and strategically transferred - to create new wealth and employment opportunities* for as many people as possible therefore counteracting the Luddite threat of recent technological advances.

(*Technology can now also be used to facilitate needed bank capitalization).

President Obama in campaigning for president in 2008 implicitly promised to utilize existing talent to help make a better world. Utilization of existing talent can be achieved by President Obama and/or the American Congress striking a balance between capitalization, prudential security and transparency for the domestic American banking sector to overcome the profound threat posed by the GFC. Accomplishments in American banking reform could be used as a framework approach of ensuring that technological induced creative destruction has positive wealth and employment ramifications.

(In a foreign policy context, the United States under President Obama and Secretary of State Hillary Clinton have being making the world better by supporting struggles for freedom and democracy).

Historical Greatness: Helping Those Who Need Assistance

Political greatness is something which should not be consciously sought due to the potential pitfalls for egocentricity as opposed to achieving a higher purpose. An historical figure who validated this perspective was Sir Winston Churchill (1875 to 1965). He was someone who was ridiculed because he stuck to his beliefs no matter how unpopular and derided they were. His becoming prime minister in May 1940 was a belated admission that he had been correct but, with the impending Fall of France, it seemed that it was too late. Churchillian greatness was manifested in the context of persisting when one was not necessarily in a position to prevail.

Due to a combination of Churchill’s inspirational leadership and Hitler’s ineptitude, Britain held out against capitulation. For all that, Britain could not have reversed the disaster of the 1940 Fall of France had it not been President Roosevelt’s support for Churchill in ensuring that Germany was defeated before Japan. There are criticisms that can be made of President Roosevelt in trusting Stalin over Churchill due to his fear of an Allied victory reviving European imperialism.

However, President Roosevelt still demonstrated greatness by initiating the Lend Lease programme before the United States entered the war at the end of 1941. This programme provided a beleaguered Britain with needed arms and equipment despite there being strong domestic isolationist opposition to President Roosevelt’s policy. In this context, President Roosevelt demonstrated another aspect of historical greatness: utilizing existing power to help a nation (or a cause) when there is no immediate dividend for your own country in doing so.

Post Qaddafi Libya: Precarious but Promising

The Obama administration’s assistance to the Libyan freedom fighters was an example of historical greatness because help was provided to a heroic people who could not have prevailed without external assistance due to Qaddafi’s initially superior military position. The assistance that the United States, EU/ NATO nations and some members of the Arab League provided to the Libyan people is what should have occurred in 1991 when the Iraqi people rose up against Saddam Hussein.

The prudent policy approach of the Obama administration in Libya of assisting without directly intervening is continuing. The United States, for example, is helping Libya’s transitional government recover funds that the Qaddafi regime embezzled and banked abroad. This policy action is also noteworthy because America is helping provide help to a nation when there is not an immediate dividend in doing so.

This does not mean that all requests from Libya’s interim government should be acceded to without individual nations, such as the United States, taking into account their domestic/foreign policy requirements and actual capacity to help. Furthermore, nations that are prepared to assist Libya have a right to set criteria, such that their assistance is conducive to promoting democracy and human rights.

Foreign countries, in relation to considering requests from Libya’s transitional government, will naturally need to evaluate ‘the situation on the ground’. The contemporary context in Libya is precarious but promising. A promising aspect of the Libyan situation is that the nation’s interim leaders are rational. The strategic brilliance with which the freedom fighters successfully fought against Qaddafi indicates that there are smart people associated with the new provisional government. Furthermore, the overwhelming majority of Libyans desire free and democratic elections in the immediate future.

The precarious aspect of the Libyan situation is that there is considerable scope for anarchy due to the widespread availability of arms and the existence of armed gangs. The formation of a new professional army and the disarming of armed gangs is a priority for Libya’s transitional government. The skill with which the rebellion against the Qaddafi regime was brilliantly conducted (such as in Tripoli, where clans that were aligned with the regime judiciously defected to ensure the capital’s liberation) indicates that there is potential to forge a professional Libyan armed force capable of maintaining law and order.

Different ideological, clan or regional demographics will need to be taken into account to forge a new Libyan army. The Dominican Republic precedent of 1965-1966 illustrated that a provisional government can successfully form a new armed force reflective of different political interests to maintain order for and after the holding of democratic elections. The post-1966 Dominican armed forces became professional because political differences that were originally reflective in the composition of the officer corps were thrashed out in the context of the Dominican Republic developing a competitive party system.

The parlaying of political differences into electoral competition will hopefully commence with elections to a constituent assembly to draw up a new Libyan constitution. Unless democratic elections for a constituent assembly are held, the Libyan Revolution will not consolidate. It should not be the role of provisional governments to draw up new constitutions because they are bound to be reflective of the orientation and biases of those in power. Let the multitude of ideas and expectations of the Libyan people be parlayed into electoral politics, commencing with elections to a constituent assembly.

A missed historical opportunity illustrating the importance of constituent assemblies in transiting nations to democracy was apparent in Russia in 1917. Russia, (the term ‘Russia’ then encompassed nations such as the Ukraine and Georgia) was confronted with a vast array of problems following the fall of the Romanov dynasty in March that year. The Provisional Government’s ill-considered ban on the monarchist Octoberist Party participating in the November 1917 constituent assembly elections and Lenin’s closure of the assembly in January 1918 aborted Russia’s then potential to become a truly great nation.

Had there been a democratically elected Russian constituent assembly, then the potential could have been there of utilizing existing problems as opportunities by drawing up a widely accepted democratic constitution. The positive ramifications of a Russian democracy for the world can be negatively and comparatively measured by the alternate reality and disaster of Russia becoming a Marxist-Leninist dictatorship.

The emergence of a true Libyan democracy would have major historical ramifications because a precedent will be set of having democratically elected governments in an oil rich nation. A major reason why the Arab world has been beset by dictatorship is that the concentration of oil has helped elites to selfishly accrue wealth for themselves and finance security forces to repress their people.

In the Libyan context, Qaddafi (despite his pretensions to being an innovative leader and political theorist) was the epitome of a resource dependant rent seeking dictator. The revolution against Qaddafi was precipitated by his regime’s over-dependence on oil, its siphoning off of oil revenue and falling oil prices. The real potential is now there for Libya to actually be a ‘cutting edge’ nation as an oil rich democracy.

Why Tunisia Will Continue to Be the Beacon of Arab Democracy

With regard to Libya and the ‘Arab Spring’ in general, there has been a disconcerting tendency on the part of the western media to be wary of the spread of Arab democracy on the basis that newly elected governments will be ‘Islamist’ dictatorships. An overwhelmingly Islamic nation such as Libya will invariably adopt a post-Qaddafi constitution which recognises Islam as the official religion. There is also a better than even chance that a future elected Libyan government will be an avowedly Islamic one. It should therefore be appreciated in the west that Islam and democracy are compatible as recent events in Tunisia promisingly indicate.

The Islamist Nahda Party won a plurality of the vote (40%) in Tunisia in the October 24th 2011 constituent assembly elections. That the Nahda Party came first was not only due to the Muslim faith of Tunisians who voted for this party but also because of the Nahda Party’s leader Hamadi Jebali courage in opposing the former dictator, Zine Ben Ali (who ruled Tunisia as president from November 1987 to March 2011).

As hazardous as it is to make predictions, it can be anticipated that the Nahda Party will lead a future Tunisian government as the equivalent of a European type Christian Democratic Party.

A brief overview of Tunisian history indicates that this North African nation a is secular orientated nation in that is opposed to religious leaders assuming political domination. Tunisia as a French protectorate from 1881 to 1956 was exposed to western ideas and culture. Paradoxically, western influence on Tunisia was transmitted through the legacy of the nationalist leader Habib Bourguiba (1903 to 2000).

Bourguiba was a university graduate who had studied in France and founded the Neo-Destour (Constitutional) Party in 1934. Because France ruled Tunisia as a protectorate through the traditional royal structures of the Hussainid dynasty, Tunisian nationalism was manifested in advocacy of modern constitutional governance such as parliamentary rule so that de facto independence could initially be gained. The Destour Party was inspired by the middle class based Wafd (Delegation) Party that was founded in Egypt in 1919. Similar to the Wafd Party, the Destour Party advocated full independence in keeping with the ideals of the new League of Nations.

The Neo-Destour Party established branches outside the capital Tunis where the dominant faction of the Destour Party was based. Even though Bourguiba was imprisoned in the 1930s and then exiled by the French, the Neo-Destour Party’s extensive branch structure ensured that his popular support base remained intact. Presciently, Bourguiba (who was transferred by the Vichy French to Italian custody) refused to collaborate with the Axis as he was always certain of an Allied victory in the Second World War.

Faced with the prospect of an Algerian type of insurrection in Tunisia in 1955, the French released Bourguiba* and granted Tunisian independence in April 1956. The prestige and power of Bourguiba and his Neo-Destour Party were such that in the April 1956 constituent assembly elections, the only opposition that ran were the Communist Party and independents with the latter only inning a small number of seats.

(Bourguiba had been re-arrested in 1952 following his return to his homeland in 1949).

Shrewdly, Bourguiba had formed an electoral front with the nation’s union confederation and with merchant guilds so that there would not be a basis for party formation outside the Neo-Destour Party at the time of the 1956 elections. Bourguiba’s skill at co-option was such that powerful Tunisian monarchists also ran with the Neo-Destour Party in the 1956 elections so that it subsequently came as shock to the royal family in July 1957 when the constituent assembly at Bourguiba’s insistence declared Tunisia a republic!

Members of the Hussainid royal family who wished to maintain their royal status were banished to the relatively remote north eastern town of Manouba where the royal court was allowed to continue. The Tunisian monarchy effectively came to an end when King Muhammad VIII, 1881 to 1962, (who was a skilled locksmith and who as Bey under the French between 1943 and 1956 had consistently supported Bourguiba, often serving as liaison between him and the colonial authorities), abandoned his court to return to Tunis as a low profile private citizen.

The abolition of the Tunisian monarchy severely undermined the prospects for democratic constitutional monarchy in the Arab world. This is because the dominant ruling party was one that had come to power through democratic elections and whose right to govern was not impeded by there being either an overly powerful royal family (the Hussainid royal family believed that there would be a constitutional democratic monarchy under Bourguiba) or an interfering foreign power. The abolition of the monarchy helped clear the way for Bourguiba to establish a de jure one party state.

The establishment of a one-party state in Tunisia was the equivalent of the Wafd Party in Egypt or the moderate nationalist Istiqlal (Independence) Party in Morocco establishing a party dictatorship. The Neo-Destour Party (which successively reconfigured to eventually become the Constitutional Democratic Rally in 1988) was a party with a coherent branch structure which helped Bourguiba to maintain a pulse on the popular mood.

Tunisia’s ruling party contrasted with the Baathist regimes in Iraq and Syria where marginalized elements of society, through connections to the military, seized power to establish brutal dictatorships that were avowedly dedicated to pan-Arab unity. Even as the Tunisian regime became increasingly authoritarian and the egocentric Bourguiba (who was declared ‘president for life’ by the National Assembly in 1975) more detached from reality, the Neo-Destour Party still retained a degree of legitimacy that state sponsored parties such as Nasser’s Arab Socialist Party (ASU) did not have.

For all his faults, Bourguiba always fostered a private sector as a driver of employment and maintained cordial relations with France and the United States while often serving as a bridge between the west and radical left-wing Arab governments. Tunisia also established close commercial and political contacts with European Mediterranean countries such as Italy.

Had Bourguiba really wanted to be a unique Arab leader, he could have utilized the Neo-Destour Party as a dominant ruling party (instead of establishing a one party state) thereby creating the scope for later political liberalization through opposition parties later winning more parliamentary seats. Instead, he established a regime that eventually resembled-a dime-a dozen type Arab dictatorship.

It was as a near absolute dictator that Bourguiba in the 1970s attempted to mollify and ultimately exploit Qaddafi by canvassing unity with neighbouring Libya. The bizarre upshot of this political dalliance was that the Italian military intelligence established links with the Bourguiba regime which help lead to his deposition in November 1987.

For reasons that are still unclear, Qaddafi was tipped off by Italian military intelligence of a plot against him which enabled the dictator to survive a nearly successful military coup attempt in August 1975. Tentative links between Libya and Tunisia in the 1970s and the role of Italian military intelligence in rescuing Qaddafi led the increasingly repressive Bourguiba regime to rely on this foreign military service for assistance to maintain its position against a growing Islamic movement which, by the 1980s, had been thoroughly crushed.

Bourguiba’s success in crushing Islamic opposition (which had gained strength due to the regime’s corruption) rebounded on him when his prime minister, Zine Ben Ali replaced him as president in November 1987. Although the deposition was ostensibly constitutional, (the president was deposed on the basis of his being able to discharge his duties due to senility), Zine Ben Ali was able to seize power because he was a senior officer in Tunisia’s security forces who had served as interior minister from April 1986 to October 1987 and then as prime minister for less than a month until he became president.

Zine Ben Ali seized power with the support of the Italian military intelligence with the apparent connivance of former Italian prime minister (1983 to 1987) and PSI leader, Bettino Craxi. The Ben Ali government was a seeming improvement on the Bourguiba regime because it broadened the scope for political pluralism by permitting opposition parties. Tunisia’s secular inclined majority (approximately 60% of the population) might have accepted Ben Ali’s semi-authoritarianism as a bulwark against Islamism had it not been for his regime’s corruption.

Links between Tunisia’s elite and Craxi were also reflective of the corruption of the Neo-Destour regime. The granting of asylum by Tunisia to the disgraced Craxi in 1994, despite vehement protests from officials of the Italian state, was reflective of the close links between Ben Ali’s regime and Italian supporters of the former prime minister. (Craxi died in Tunisia in 2000 from diabetes). The links between Tunisia’s elite and Craxi were also reflective of the corruption of the Neo-Destour regime. The Ben Ali regime lacked the requisite capacity to crush anti-corruption demonstrations in March 2011 because they were undertaken by its secular base.

The genuine progress that Tunisia has taken toward democracy was reflected by the succeeding interim government allowing the Nahda Party to re-establish itself in Tunisia to compete in the October 2011 constituent assembly elections in which it won a clear plurality. *Nahda Party leader (and new prime minister) Hamadi Jebali is a committed democrat who has recently formed a coalition government with secular parties and supported the election of Mustapha Ben Jafar of the social democratic Democratic Forum for Labour and Liberties as head of the constituent assembly.

These developments augers well for Tunisia to become a democracy and therefore show the way for future ruling Islamist parties in the Arab world to rule democratically. But then again, despite being ruled since independence by two authoritarian regimes Tunisia has had a long standing appreciation of democracy due to the independence struggle been intertwined with the fight for democratic constitutional rule.

Morocco’s ‘Bazaar’ Transition to Democracy

Another Arab nation that also received independence from France* in 1956 was Morocco. By in contrast to Tunisia which could have continued as a democracy, Morocco was in essence a dictatorship when independence was granted but its elite has survived by adopting democratic procedures which are now laying the groundwork for constitutional democratic monarchy in the Arab world.

Another similarity between Morocco and Tunisia at the time that they received independences was that there was a Moroccan equivalent of Tunisia’s Neo-Destour Party, the Istiqlal Party. However, the Moroccan equivalent of a Bourguiba was the Sultan, and after 1957, the King, Mohammed V! His Majesty reigned from 1927 to 1961. During the Second World War, His Majesty refused to sign an anti-Semitic decree and in the 1940s and 1950s courageously advocated Moroccan independence. Even though His Majesty was ‘deposed’ by the French between 1953 and 1955, the Franco regime in Spain continued to recognize Mohammed V as the legitimate sovereign. This recognition was more than token because Spain then occupied northern Morocco.

As with Tunisia, the French decided to avoid an Algerian type rebellion by coming to an accommodation with a pro-western ruler by granting independence. Accordingly, Mohammed V was allowed to return as Sultan in 1955 and full independence was granted to Morocco in February 1956 by France and Spain. Due to His Majesty’s popularity, the powerful Istiqlal Party did not then insist on elections being held, instead agreeing to serve in the cabinet.

The death of Mohammed V in February 1961 saw the ascension of his son as Hassan II. The new king was no way near as popular as his father and parliamentary elections were held in December 1963. Determined not to be swept away by the Istiqlal Party, Hassan II openly campaigned for royal court backed independents in rural areas. Most of these candidates legitimately won (in that there was no tampering with the ballot count) due to the strength of family networks and covert logistical and organisational support from the royal court and the security services.

Hassan II then ruled Morocco as a constitutional monarch who had the right to politically dominate the country through having legitimately won national elections. This balancing act became too much to maintain and the king after 1967 more or less relied upon the repressive skills of General Mohamed Oufkir as Interior Minister. Oufkir seemed to have consolidated his position as strongman when he crushed a near successful republican military coup in 1971.

But the power balance between Hassan II and Oufkir could not be maintained and in 1972 the latter lost his life after he attempted an abortive military coup. His Majesty survived the 1972 coup by feigning being dead so that he could surprise the traitors by unexpectantly rallying loyal troops. The break with General Oufkir (who lost his life during the coup attempt) helped Hassan II reconcile with many of his rural supporters who had previously been alienated from the corrupt Oufkir.

The king gained a degree of popularity amongst his rural base when His Majesty personally led 100,000 strong ‘Green March’ of 100,000 peasants on the Spanish (Western) Sahara in early November 1975. Since independence in 1956, Morocco had maintained cordial relations with the Franco regime despite Spain holding onto the tiny enclaves of Ceuta and Melilla in northern Morocco. Due to ties between Spain and Morocco, Hassan II and *Prince Juan Carlos of Spain through intermediaries arranged for the Moroccan occupation of the Western Sahara.

(*Prince Juan Carlos was then acting head of state and would formally become king on the 22nd of November 1975 two days after Franco’s death).

The Moroccan takeover of Western Sahara was an important victory for the more or less free world against the then Soviet bloc. Two years previously, the Algerian backed Popular Front for the ‘Liberation’ of Seguia el-Humra and Rio De Oro (Polisario Front) had launched a guerrilla war against Spanish administration of the Western Sahara. The Marxist Polisario Front* was also backed by Cuba which not only wanted to extend Soviet influence in the Maghreb (North West Africa) but to destabilize Spain in the immediate post-Franco period by supporting a debilitating colonial war of ‘liberation’.

(*Ironically, residents in the Western Sahara have more actual political rights as Moroccan citizens than what the Polisario Front’s Sahrawi Arab ‘Democratic Republic’ (SADR) as a government in exile has notionally conceded. The Algerian based SADR is still a one-party state that is vaguely committed to adopting multi-party system in the future).

Under the Madrid Accords of November 1975, Western Sahara was divided between Morocco and Mauritania, with the latter receiving the southern third of the territory. Under the Madrid Accords, Spanish investments in phosphate extraction were guaranteed but royalties to Morocco and Mauritania had to be paid. Capitulating to Algerian pressure in August 1979, Mauritania ceded its southern third of the Western Sahara to the Polisario Front. The subsequent Moroccan military success in overcoming the Polisario guerrillas in this part of the territory was the only instance during the Carter presidency (1977 to 1981) where ground that was taken by pro-Soviet forces was regained.

The Moroccan determination to hold onto Western Sahara was not only due to the desire to exploit the valuable phosphate reserves but also to establish an important barrier which prevented a then Soviet-Cuban aligned Algeria from overthrowing the Moroccan monarchy so that Algeria and Morocco could merge. Independent *Algeria’s determination to unite with Morocco was ironic because the bravery with which Algerians fought for independence from France between 1954 and 1962 prompted the French to grant independence to Morocco and Tunisia in 1956 to prevent the outbreak of rebellion in those two then protectorates.

(*Algerian independence would have been granted earlier and a horrific war avoided had it not been for the bloody mindedness of the Pied Noir (Black Foot) who were French settlers that regarded Algeria as part of metropolitan France. Even though the Pied Noir were instrumental in facilitating De Gaulle’s return to power in 1958, he defied them and nationalist army officers to grant Algeria independence in 1962. De Gaulle understandably felt little sense of obligation to former supporters of Marshal Petain who had tried to use him to establish an authoritarian military backed regime in France).

The three quasi-Marxist National Liberation Front (FLN) regimes that ruled Algeria between 1962 and 1992 wanted to unite with Morocco. This ambition was first manifested in 1963 when there was a brief border war between the two nations. (A lasting cease fire in the ‘Sand War’ was mediated by His Imperial Majesty Emperor Haile Selassie of Ethiopia in 1963).

The gravest Algerian threat to Moroccan independence was however internal through the support that the FLN regime in Algiers gave to Ben Barka (1920 to 1965?). Barka was the leader of the National Union of Popular Forces (UNFP) which was a Marxist party that had split from the Istiqlal Party in 1959. The charismatic Barka was backed by communist Cuba and was regarded as a future leader of a possibly pro-Soviet Algerian-Moroccan union. At the very least, Barka was the prime candidate to be president of a Moroccan republic.

The disappearance of Barka in October 1965 in the French capital caused a sensation in France which led to a temporary severance of diplomatic relations between Paris and Morocco. There is little doubt that Barka was murdered but the question remains as to who killed him? It was claimed by French military intelligence that General Oufkir not only instigated the kidnapping of Barka in Paris but personally killed him. This dark and murky chapter in Moroccan history not only removed a key threat to the Moroccan monarchy and nation but also marked the beginning of the ascendancy of General Oufkir which itself was to end in bloodshed in 1972 which Hassan II narrowly survived.

Hassan II’s regime survived after 1972 through a judicious mix of repression and liberalization. The popular Istiqlal Party was allowed to operate relatively freely in the cities so long as it did not challenge the regime’s base in the countryside. Even in the cities, the king established links with traders in the cities bazaars to maintain an urban base.

This base was needed from the early 1980s to the mid 1990s as austerity measures demanded by the International Monetary Fund (IMF) secured needed credit but precipitated sustained urban unrest. Due to the efficiency of the regime’s security services and chronic divisions within the Istiqlal Party and the UNFP that the king had cleverly instigated, the urban unrest never spiralled out of control. The failure of the secular opposition parties to harness social discontent should have precipitated a strong Islamist opposition movement.

That the above scenario did not occur was due to the close links that Morocco’s Alaouite dynasty (which claims to be directly descended from the Prophet Muhammad) has traditionally had with the nation’s religious establishment and practicing Muslims. These links not only helped prevent social unrest generating an Islamist opposition but have also served as a key popular support for the Moroccan monarchy which helps explains its endurance.

Ironically, the inability of the FLN to prevent or effectively handle the rise of political Islamism since 1988 has caused such internal discord that Algeria is now no longer a threat to Morocco. Libya after 1984 receded as a threat to Morocco when these two nations entered into a nominal but still inexplicable union. Why Colonel Qaddafi initiated this union is still unclear and it was not surprising that it was short lived. The undoubted beneficiary was Hassan II because Morocco gained needed financial aid from Libya and there was a temporary but valuable (from a Moroccan perspective) estrangement of Tripoli from Algeria and the Polisario Front.

Hassan II also demonstrated foreign policy skill in promoting peace in the Middle East. This was most vividly conveyed when then Israeli foreign minister, Shimon Peres (who is now Israeli president) publicly, if still relatively discreetly, visited the king in Rabat (the Moroccan capital) in May 1995. In this regard, the king was similar to former Egyptian president Hosni Muburak in that he was a shrewd wheeler and dealer in the Byzantine foreign policy of Middle East politics.

The Moroccan king in contrast to Muburak never took ‘his eye off the ball’ with regard to domestic politics and was singularly successful in sufficiently liberalizing to ensure the smooth succession of his son, Mohammed VI following His Majesty’s death in July 1999. Co-option of the opposition necessary for political liberalization was eventually achieved by Mohammed VI in February 2008 when His Majesty appointed Abderrahmane Youssoufi prime minister.

Youssoufi had been a moderate leader in the UNFP who was shrewd enough to know that a rapprochement with Hassan II was possible following the death of General Oufkir. This moderate leader’s supporters split from the UNFP in 1975 to form the Socialist Union of Popular Forces (USFP) which implicitly acknowledged the legitimacy of the monarchy and of the Moroccan state by participating in the 1993 parliamentary elections. Youssoufi’s appointment as prime minister was tempered by rural based monarchist parties (which were descended from former royal court backed independents) maintaining a parliamentary majority.

The above cited situation that existed under Youssoufi as prime minister between 1998 and 2002 continues under the current prime minister since 2007, Abbas El Fassi. He is a member of the Istiqlal Party which for years was an opposition party. Similar to the position that Youssoufi was in, El Fassi presided over a government in which the rural based monarchist based parties are coalition partners and have a majority in the parliament.

The monarchy’s successful co-option of a potential republican nationalist party, the Istiqlal Party, and of a party with Marxist Algerian FLN roots-the USFP-and maintaining the political allegiance of many, if not most Moroccan Muslims, are remarkable achievements. As a result Morocco has had an authoritarian government that has subtly and pre-emptively liberalized to gain probable majority acceptance that it is difficult to discern at what point the kingdom became (or is) a constitutional democracy.

Morocco will unambiguously become a democracy after elections are held on November the 25th 2011. Constitutional reforms were overwhelmingly approved in a referendum in July 2011 that clearly place executive power with the parliament. The pro-monarchy rural based parties have united into the Authenticity and Modernity Party (PAM) which in turn has coalesced into an eight party electoral alliance called the ‘Coalition for Democracy’. This coalition includes left-wing parties which one might think would not be aligned with the monarchist establishment.

The major rival of the Coalition for Democracy is a democratic Islamist party, the Justice and Development Party (PJD) which recently won the November 25th 2011 election. The PDJ’s election victory not only constitutes the consolidation of democracy but of Morocco’s constitutional monarchy.

The Iranian Republic: Quasi-Democratic Processes without Democracy

In contrast to Morocco, a strategic Middle East nation whose monarchy ignominiously failed to progress to a genuine democratic constitutional monarchy was Iran. The ramifications of this failure now pose a major threat to world peace due to the Iranian republic’s nuclear programme.

Iran’s nuclear programme is probably the most vexing foreign policy challenge that the Obama administration faces due to the real potential for mayhem that will exist if this republic develops a nuclear bomb. It is ironic that the governments and peoples of most Arab countries probably desire that Israel take military action to neutralize Iran’s nuclear weapons capability. Considering the grave domestic challenges that confront the United States, there is a very strong possibility that Israel will soon take stand alone military action. (Israel has already hacked into and disrupted the operation of the computers at the nuclear facilities).

The real and immediate challenges that confront the Obama administration in relation to Iran’s probable nuclear arms programme is to expeditiously assess whether the Iranian republic will quickly and genuinely pull back from its dangerous course of action. If the Tehran regime does not allow the International Atomic Agency Energy Agency (IAEA) to inspect Iran’s nuclear facilities, then the Obama administration will be compelled to support an Israeli military strike against the facilities.

Ascertaining Iranian intentions is a difficult undertaking for the United States. The Iranian republic previously strung Washington out between 1979 to 1981 during the American Embassy hostage’s crisis, thereby effectively styymying the United States’ capacity to effectively operate as a world power during this period. Similarly, American international power was briefly but still substantially undermined when the then Speaker of the Iranian parliament, Hashemi Rafsanjani, brazenly leaked negotiations between the Iranian Republic and the Reagan administration over secret arms sales to Tehran in October 1986.

As Rafsanjani had cynically intended, the ensuing scandal that emerged from the secret leaking of arms negotiations undermined the Reagan administration but not to the extent that Tehran hoped of there being another Watergate ‘scandal’ (sic). This was due to different domestic political dynamics in Washington in the 1980s as opposed to the 1970s.

Despite the domestic fallout from what became known as ‘Iran-Contra’, there was a relative lack of outrage in the United States when the USS Vincennes accidentally shot down Iran Air Flight 655 in July 1988 unfortunately killing 290 civilian passengers on the mistaken premise that this plane was an Iranian air force fighter. Even though the shoot down was a mistake, it was reflective of an American determination to stop the Iranian republic from winning the First Gulf War (1980 to 1988).

Due to the Iranian republic’s previous record of duplicity, discerning the Tehran regime’s policy intentions and the sincerity of their undertakings is fraught with uncertainty. But Israeli intentions are clear: with or without American concurrence, Israel will undertake military action against Iran if this republic develops a nuclear weapons capacity.

Tehran’s leaders should be aware that there is sufficient support amongst American public opinion to support pre-emptive Israeli military strike action against Iran developing a nuclear weapons capacity which will ensure that the United States will eventually support Israel. American support fro Israel will be forthcoming regardless of the United State’s current economic crisis (which is frustratingly self-inflicted due to the failure to raise revenue by temporarily increasing taxes and cutting wasteful spending to reduce the public debt to GDP ratio).

Strategists within Iran’s republican regime may categorize the United States as a ‘paper tiger’ still inflicted by aspects of the so-called ‘Vietnam syndrome’ which caused the ‘Fall of Saigon’ in 1975. This debacle can be directly traced to the American Congress helping divert military aid earmarked for South Vietnam to save Israel when Egypt and Syria launched the Yom Kipper War Israel in October 1973.

President Richard Nixon (‘RN’) was amazed that Indochina ‘doves’ such as Senator Frank Church of Idaho became ‘hawks’ with regard to ensuring that Israel received emergency military aid (which included a special air lift of military supplies) during the 1973 Yom Kipper War. It was a great tragedy that the American Congress, which thankfully rallied to support Israel in 1973, utilized this support as a pretext to deny sufficient military aid to the non-communist states of Indochina.

The Iranian regime might have believed that the United States is a ‘paper tiger’ that since the ‘Fall of Saigon’ in 1975 can be easily humiliated due to a lack of internal fortitude. That may have been true at the time of the hostage crisis between 1979 and 1981 but, had any of the American hostages been killed, then the United States would have launched a full-scale war against Iran and fought until complete victory was achieved. Such a war would have been undertaken regardless of the then existing strategic balance of power and despite the weakened position that the United States was in during the time of the Carter administration.

The United States is a nation that if pushed, will act on the injunction associated with the symbol of the coiled snake: ‘Don’t tread on me!’ This happens when American citizens are harmed or killed by foreign governments or when American territory is directly or indirectly attacked by another country. The American people know not to trust the Iranian republic with a nuclear weapons capacity that this will be the determinant that leads to the United State eventually taking sustained military action against an Iran seeking a nuclear arms capacity.

The relevant point that now needs to be appreciated is that, if Israel launches an attack against the Iranian republic’s nuclear armament capacity, American support (which could be military) will follow if required. President Obama will lose re-election in a landslide if his administration does not support Israeli military action against Iranian nuclear armament. Similarly, a Republican presidential candidate who does not support Israel over this issue will not win the party nomination.

If the Iranian republic does not allow the IAEA access to verify its claims that the nuclear programme is for peaceful purposes, then Israel will undertake military action. This will in turn precipitate a series of events in which the full might of American power against the Iranian republic will be unleashed as part of the course of supporting Israel out of a justified fear that Iranian nuclear weapons will be used against American allies or even the United States. In contrast to Iraq in 2003, where twelve years of sanctions had pulverized the population, there is a viable Iranian middle class that will be more than ready to fill the vacuum if American military action displaces the Tehran regime.

Hopefully, military action against Iran will be avoided. The Obama administration is taking the correct course by urging Iran to allow the IAEA inspection of its nuclear facilities to bolster the prospects for peaceful resolution in this acutely dangerous dispute. Indeed, there is no need for republican Iran to have a nuclear weapons programme because international conflict over this issue could divert the regime by gaining the overwhelming acceptance and legitimacy of its people by continuing with successful economic reform. In contrast to previous recent history, the Iranian republican consolidation will be based upon economic success as opposed to the nation’s military position.

Republican Iran consolidated as a regime during the Iran-Iraq War of 1980 to 1988. Iraq’s Saddam Hussein believed that because of trenchant opposition to Ayatollah Khomeini from former left –wing Islamist supporters had plunged Iran into turmoil, that an Iraqi victory was a certainty. Furthermore, Saddam believed that there was a good chance that the Iranian armed forces, which were then politically distant from the Khomeini regime, would in the wake of military defeat stage a military coup. In fact the opposite occurred.

The Iraqi invasion galvanized working class support for the republican regime which helped Iran fight the war for a further six years after Iraq had been forced out of Iranian territory in 1982. It is true that there was mutual suspicion between the military and the regime but the armed forces were professional in that they focused on prosecuting the war. As the war progressed, the Iranian military became not only more committed to the regime but eventually a key, if not the main, component in the power structure of the Iranian republic.

The original mainstay of the republican regime was the Revolutionary Guards. These guards started as a revolutionary militia which successfully suppressed popular unrest between 1979 and 1980. During the First Iran-Iraq War, the Revolutionary Guards expanded as a force on the war front so that they almost became as formidable a force as the regular army*. The continued prosecution of the war with Iraq became such a priority for the regime that there was an eventual alignment between the ruling clerical establishment and the regular armed forces.

(* A reason that was cited for the Shah, Mohammad Reza Pahlavi’s fall in 1979, was His Imperial Majesty’s penchant for buying expensive foreign armaments, such as the latest jet fighters. Whatever the validity of this criticism, the armed arsenal that the Shah bequeathed at the very least enabled republican Iran to hold off against a better armed Iraq).

Paradoxically, the war was sustained by the Ayatollah Khomeini being pragmatic by appointing Mir-Hossein Mousavi prime minister in 1981. Mousavi, a professional architect by profession, served as prime minister between 1981 and 1989 due to the staunch support of Ayatollah Khomeini. The Ayatollah protected Mousavi due to the prime minister’s success in very capably managing the Iranian economy which enabled Iran to continue to fight against Iraq.

It was due to the advice of another regime pragmatist, then Parliamentary Speaker Rafsanjani, that Ayatollah Khomeini agreed to a ceasefire in September 1988 to ensure the regime’s survival. Although Ayatollah Khomeini’s objective of conquering (or as he saw it ‘liberating’) Iraq from Baathist rule was not achieved, Iran still came out in a comparatively stronger position than Saddam’s regime.

Due to the challenges wrought by the 1980 to 1988 war, Iran often had to make a virtue out of necessity such that there were surprisingly positive legacies from the war. These included: the emergence of a strong non-oil service sector, becoming more innovative in industrial production techniques and the formation of a capable administrative caste of government bureaucrats. Mousavi’s genius as a self-trained economist also helped the Iranian banking sector to thrive despite persistent inflationary challenges. There were (and still are) problems of unemployment and poverty but the middle class in Iran is larger and wealthier than it was under the monarchy.

The unexpected capitalist progress under the Islamic republic was also surprisingly matched by the emergence of a formidable armed forces that now have tremendous political clout. A contributing factor to the Shah’s fall was that His Imperial Majesty from the early 1960s instituted a complex system of officer rotation that ensured his domination over the armed forces.

This elaborate system rebounded on His Imperial Majesty because the armed forces subsequently lacked the cohesion to resist the 1979 Revolution. Due to the de-politicalisation of the armed forces, only the Shah’s most senior officers were executed as most of the lower ranks of the armed forces grudgingly accepted the new regime. Due to their being no wholesale purge of the armed forces, most officers accepted the growth and the power of the Revolutionary Guards on the premise that they would not be displaced by them.

The contemporary symmetry between the regular armed forces and the Revolutionary Guards is derived from their both having considerable state backed investments in the Iranian economy. To maintain their privileged position in Iranian society, the armed forces/ Revolutionary Guards are now aligned with President Mahmoud Ahmadinejad.

Ahmadinejad was elected president of Iran in June 2005 due to the backing of the Ayatollah Ali Khamanei, who became Iran’s Supreme Leader following Khomeini’s death in early June 1989. The subtle but still clear endorsement of Ahmadinejad by Ayatollah Khamanei helped Ahmadinejad win strong working class support. Furthermore, the role of the Council of the Guardians *in engineering the nomination of the mis-trusted Rafsanjani (who was president from 1989 to 1997) as the reformist camp’s presidential candidate also considerably helped Ahmadinejad’s cause.

(*Under Iran’s 1979 constitution, candidates for electoral office, including president, are vetted by the twelve member Council of Guardians which is composed of six religious leaders appointed by the Ayatollah and six jurists appointed by the parliament, the Majalis).

The new president also owed his election to his support base with the Revolutionary Guards. As a result of this support, Ahmadinejad tended to be strongly anti-American and anti-Israel (if not outright anti-Semitic) to help create a justification for Iran having a very potent armed forces. The current dangerous situation with regard to Iran’s nuclear armaments programme is a direct result of the Ahmadinejad / Khamanei component of Iran’s ruling elite entering into an alliance with the armed forces to maintain their power.

Although the Iranian republic’s status as a democracy is questionable at the very least, there were democratic processes in place until the Iranian armed forces and Revolutionary Guards supported the rigging of Ahmadinejad’s June 2009 ‘re-election’. The Revolutionary Guards subsequent repression of wide scale demonstrations, combined with the counter-mobilization of Ahmadinejad supporters, ensured that the pro-reform ‘Green Movement’ was crushed (at least temporarily) by 2010.

Admittedly, the Ahmadinejad government since its 2009 ‘re-election’ has undertaken beneficial economic reform such as ending fuel subsidies in an oil rich nation. But the point is being reached where an economically competent government with a committed and substantial support base (albeit a minority one) is endangering its nation’s domestic and foreign interests with the nuclear programme. Israel understandably will not risk the development of nuclear weapons by the Iranian republic and a military confrontation will ensue which will very probably draw in the United States in due to its deep commitment to its long term ally.

Tehran denies that it is developing a nuclear weapons capability. That being the case, steps can be taken by the Iranian government to allow the IEAE to discreetly inspect the nuclear facilities and to commence a covert dismantling of the nuclear armament programme. The involvement of a trusted third party such as Turkey (which has a democratic pro-Iran Islamist government and a pro-American military) would be an ideal go-between to undertake the delicate mission of dismantling a programme that officially does not exist.

The Iranian republic is at a crossroads with respect to securing a positive and assured future. Iran since and due to unanticipated ramifications of the 1980 to 1988 Gulf War has substantially economically strengthened as a nation. The Islamic republic has therefore made more progress than that which the Shah valiantly attempted – that is, to utilize the nation’s oil wealth to generate strong industrial and service sectors of the economy with extensive infrastructures, such as an efficient transportation system.

These economic achievements of the Iranian republic could be consolidated by forging still stronger peaceful international trading relations to become a fully fledged First World economy with matching high rates of income per capita that are commensurate with an expanded GDP. Persisting with an unnecessary nuclear armament programme that will, at the very least, lead to international trade sanctions, and at worst, military conflict will be tragically counter productive.

The political ramifications of a discreet settlement of the nuclear armament issue would be potentially positive for the Iranian republic. History has shown that unbalanced political systems that hedge with regard to being democracies due to elites having close links to a bellicose military often implode because of the resultant internal contradictions. (1871-1918 Imperial Germany is a vivid case in point).

Republican Iran does (or did until 2009) have democratic processes which have compensated for considerable democratic gaps to the extent of pacifying public opinion. These processes (such as competitive elections between vetted candidates) often vitally contributed to rational public policy making in Iran. Consequently, the Iranian republic is better placed then most authoritarian or semi-authoritarian regimes (such as Egypt) to make a transition to a full democracy.

In contrast to Egypt’s Anwar Sadat’s experiment with constructed pluralism in the 1970s (by having factions/platforms within the ostensibly ruling ASU run against each other as a precursor to their becoming separate political parties), there is more scope in Iran for future party formation that gains public acceptance and legitimacy. Indeed, the leaders of the Iranian republic made a mistake (or perhaps it was intended) of dissolving the then ruling Islamic Republican Party (IRP) in 1987 and banning all political parties.

The *IRP had been Iran’s Dominant Ruling Party (DRP), i.e. a catch all party that had a de facto near monopoly on power. Due to growing factionalism within the IRP, this party, as previously mentioned, was dissolved in 1987 and a ban on all political parties was imposed. Had the IRP been able to naturally split after the end of the Gulf War in 1988 or following Ayatollah Khomeini’s death in 1989, there would have been more natural scope for regime backed parties to form and to compete against each other.

(*In 1981, the IRP was briefly declared to be Iran’s only permitted party).

Instead, the post-1987 ban on political parties paradoxically gave the Council of Guardians (which vetted candidates who now had to run as independents) more power by preventing the development of competing pro-Islamic Republic political parties. Fissures within the ruling elite were still manifested by limited electoral competition but the scope for genuine organic citizen determination of political processes was too compromised.

Despite the ban on formal political parties, the former Culture Minister, Mohammad Khatami won a landslide victory in the May 1997 elections, having run on a relatively liberal platform which appealed to women and young people. Khatami was backed by the informal Khordad movement but his subsequent power as president between 1997 and 2005 was to be mainly formal as opposed to actual. Disappointed expectations during the Khatami presidency led to massive popular unrest in July 1999 which was violently and effectively suppressed.

The utility for the political elite of the formal ban on political parties was evidenced in 2004 when the Guardians Council banned most pro-Khatami candidates from running in parliamentary elections, thereby helping to pave the way for Ahmadinejad’s election in 2005. As previously mentioned, the engineering of Rafsanjani as the avowed reformist presidential candidate in the 2005 elections was also crucial in ensuring Ahmadinejad’s victory.

(Indeed, it was somewhat unfair that Ahmadinejad’s supporters were allowed to form a formal party in 2003, the Alliance of Builder of Islamic Iran, while the reformists have not been allowed to by the Guardians Council. This discrepancy on the part of the Guardians Council was probably due to their wanting to ensure that Rafsanjani could be a front runner presidential candidate).

Permitting Mir-Hossein Mousavi’s 2009 presidential candidacy probably rebounded on the Revolutionary Guards and the armed forces because the mild mannered but respected former prime minister really won the election. Whether Mousavi is really committed to the reformist ‘Green Movement’ that he notionally inspires is an interesting point of analysis.

Presidential elections are scheduled for 2013. It is not beyond the realms of possibility that limited political reforms could be granted which would have major ramifications. These would include allowing the reformist camp to have a legally registered party as (Ahmadinejad does), instituting poll watching procedures to ensure clean elections and allowing a canvassing of contentious issues in the media such as the re-establishment of diplomatic relations with the United States.

Why Iran could be Religious Version of Turkey

Potential blocks with regard to future political reform would probably stem due to opposition from the Revolutionary Guards and the regular armed forces. However, it should not be forgotten that the Turkish military protects (to the point of staging outright military coups as occurred in 1960 and 1980) and has defended the secular institutions of the Turkish republic (proclaimed in 1923 by Kemal Ataturk), even though Turkey now as an elected Islamist government.

In a similar vein, the Iranian armed forces should allow political pluralism to the extent of allowing the election of governments that they do not really support. The constitutional structures of the Iranian republic are such that there is a range of institutions, such as courts, which can enforce the 1979 Constitution regardless of the orientation of the elected government.

It should not be forgotten that Anwar Sadat of Egypt despatched a high powered political delegation to Turkey in 1975 to study Turkish political institutions so that there could have been an eventual transition to a democratic system in his country. Had this Egyptian statesman not been assassinated in October 1981, Egypt might now be a democracy because he was planning to hold clean parliamentary elections in 1982 following Israel’s return of the Sinai Peninsula that year.

The best hope for political reconciliation in Iran is for procedures to be put in place to ensure that transparent elections are held in 2013 so that Mousavi has a fair chance of been elected president in 2013. As a stalwart of the Iranian republic, Mousavi could undertake the political reforms necessary*so that Iranians can partake in their nation’s political life without compromising the fundamental precepts of the 1979 Constitution.

(*Such as legalization of all political parties, or at the very least, a liberalization of registration requirements for political parties).

A transition to pluralism on the path to a pluralist Iranian republic would be of great benefit to the Middle East because the ramifications of the ‘Arab Spring’ will probably see Islamist parties being elected to government or at the very least joining coalition governments. Therefore the example that Turkey has set (and that the Iranian republic could also set) of Islamist parties operating in pluralist political systems would be of great political value to the Middle East.

Syria: Why Iran Should Stop Supporting a Secular Dictatorship

An anomaly of the Iranian republic not supporting pluralist democracy is Syria is that this effectively means that Iran is essentially a family military dictatorship that is ruling Syria under the ostensible auspices of the pan-Arab Baathist Party. If the regime were to fall (which is looking increasingly probable as more courageous soldiers defect to join with the people), then post-Assad Syria will have Islamist parties. Because religious based parties probably will initially have a Sunni-Shia dichotomy it does not make any strategic sense for the Iranian republic to alienate Syrian Shias, who among other communities are opposed to the avowedly secular Baathist regime.

Indeed it does not make any sense for supporters of the Syrian Baathist Party to continue to back Bashar Assad because he has lost the people’s trust due to his failure to take the chances that he had to liberalize his regime to gain democratic acceptance. The Iranian republic could help its cause both domestically and internationally by calling on *Bashar Assad to resign and leave the country.

(*The best option that Bashar could take would be to quickly leave for and take asylum in Algeria as some members of the Qaddafi family did. The Libyan Revolution is a cautionary tale to dictatorial regimes that miss their chances to exit and bequeath a future political base. Had Qaddafi been smarter, he could have made way for a provisional government headed by his son Saif or a temporary regime in which his family’s interests were represented until elections were held).

A post-Assad provisional government could have anti-Baath Shia representatives in it which would be inclined toward cordial relations with Iran. Such a development would not necessarily preclude a provisional government having Baathist Party officials so long as they are supportive of democratic elections taking place.

The international community’s support for Syrian democracy has been moving and impressive. This is particularly so with regard to the Arab League. Smart aleck commentators have made mention of the fact that most member states of the Arab League are dictatorships. This may be the case but political dynamics are changing in the Middle East for the better so that it is not unusual that Arab governments (even if authoritarian) are broadly supportive of the Syrian opposition. Morocco’s domestic transition to a full democracy is being bolstered by this kingdom’s support for the Syrian people.

Because their nation at the cross roads of the Middle East, Syrians have a reputation for being smart. A future democratic Syria or even one that grapples with the complexities of moving to a democracy would establish precedents for other countries in the region to broadly follow with regard to democratization. The impact of Syria on international affairs to date has been manifested by the negative skill with which the Assad regime has almost singularly frustrated the Middle East peace process. The benefits of having a democratic Syria supportive of the peace progress are therefore incalculable.

The Obama administration is fulling an important role by supporting the Syrian people’s struggle by liaising with the Turkish based Syrian National Council (SNC). This council is composed of a range of diverse Syrian opposition groups opposed to the Assad regime. The SNC seems to be focused on co-ordinating opposition within Syria, garnering international support for their cause and formulating a future provisional government that is broadly acceptable to the Syrian people.

The SNC could make discreet requests to countries such as the United States to enforce a no-fly zone over Syria. Such requests should be assessed by external countries according to their national interest and the inherent practicality of delivering on such requests. However, the Syrian situation seems to be developing in a way similar to Libya, that of external support being provided that is necessary and sufficient because it correlates with considered requests from the opposition.

A terrible future scenario for Syria would be similar to what happened in Iraq in 1991 where the Iraqi people could have freed themselves from Saddam had it not been for the conscious denial, at American instigation, of international air support (as distinct from troop support) for the different communities in Iraq that were then fighting for freedom. The current situation in Syria is one where foreign military air support is not required but should not be closed off as an option if the SNC requests it.

Kurdish Freedom can be Secured by Arab Democracy

Another aspect of the current situation in Syria that is eerily similar to Iraq in 1991 is the situation of the Kurdish minority. Kurdish history is replete with the theme of betrayal and abandonment as different foreign powers sold the Kurds out or played different Kurdish groups off against each other. The Assad regime was cynically adept at supporting Kurdish grievances for its own ends against Iraq and Turkey while suppressing the aspirations of Syria’s Kurdish minority.

The Baathist regime in Damascus between the late 1970s and mid 1990s supported the Workers Party of Kurdistan (PKK). The PKK was (and probably still is despite current denials) a Marxist political party which was of value to the Soviet Union in the 1980s when a PPK guerrilla war against Turkey was undertaken. The complexities of this armed conflict are too convoluted and distressing to cogently overview. It is fair to say that, if it had not been for the statesmanship of Jalal Talabani, the Kurds may yet again have been sold tragically short.

Talabani is the founder and leader of the Patriotic Union of Kurdistan (PUK) who out of necessity has been involved in labyrinthine politics involving wheeling and dealing between Kurdish factions and foreign nations to advance the Kurdish cause. His diplomatic skills were invaluable in saving the Kurdish people in Iraq from possible annihilation in 1991 by securing belated foreign support for the establishment of safe havens in northern Iraq.

Within these cramped safe havens, Talabani helped ensure that there was political compromise between the different Kurdish factions/political parties while also providing refuge and courtesy to Iraqi Arab refugees in territory that was still notionally part of Iraq. Talabani was wise enough to realize that the American led liberation of Iraq in 2003 provided the Kurds with the best opportunity of securing their rights by being integral to a future democratic Iraq. Kurdish support at Talabani’s instigation has been crucial to ensuring that genuine progress in Iraq has been made toward democracy to the extent that the Iraqi parliament elected him president in 2005.

Kurdish support in Syria for the opposition raises also questions concerning the future of Kurdish minorities in Iraq, Iran and Turkey. It should be said at the outset that whatever the quality of democracy is in these aforementioned countries, that none of them will make way to tolerate the establishment of an independent Kurdish state. President Talabani will hopefully be able to use his influence to ensure that Kurdish rights are respected throughout the region while fulfilling his obligations as Iraqi president to protect the sanctity of Iraq’s borders and those of bordering nations.

Democracy in Europe is Helping Hungary Overcome The 1920 Treaty of Trianon

The precedent that President Talabani is setting in Iraq will hopefully set a framework for Kurds in neighbouring countries to not only advance their rights as minorities but in doing so promote democracy in countries where they are domiciled to the point of exercising a strong political influence. The Hungarian people since 1989 have been very successful in utilizing the advent of democracy to address modern historic grievances.

The major focus of Hungarian dissatisfaction until the early 1990s were the ramifications of the Treaty of Trianon that was imposed on Hungary in June 1920. Even though Hungary only gained full independence in 1918, this nation was all but dismembered by the Trianon Treaty. Under this treaty over 70% of Hungarian territory was ceded to the successor states of *Austria, Czechoslovakia, Roumania and what was later named the Kingdom of Yugoslavia. These territorial losses saw Hungary lose over 60% of its population.

(*The cessation of Burgenland to Austria caused a degree of wryly black amusement in some Hungarian circles because this was the only instance of the Allies awarding a territory to a former enemy of theirs based upon the ethnic composition of the region).

A degree of Hungarian redress for the Trianon Treaty has come since 1989 due to the onset of real democracy in the successor states. (Austria which as a long standing post-war democracy that has treated its Hungarian citizens well). The most poignant, powerful and long lasting Hungarian blow against the Trianon Treaty came in December 1989 when demonstrations led by Hungarians in the Transylvanian city of Timisoara precipitated the downfall in Roumania of the hated Ceausescu dictatorship.

The anti-Ceausescu demonstrations in Timisoara occurred when the dreaded Securitate secret police arrive to arrest Rev. Tokes from his residence on the 15th of December. A picket to protect Rev. Tokes was formed not only by Hungarians but also by Roumanians. This defiant picket sparked a general uprising in Timisoara that was supported by the city’s mixed Hungarian and Roumanian communities. Ceausescu badly blundered when he called a central rally in the capital Bucharest on the 18th of December to generate and exploit anti-Hungarian sentiment.

To Ceausescu’s amazement, the crowd who had been dragooned to attend the rally screamed ‘Remember Timisoara!’ which then sparked a violent and widespread revolt against Europe’s most repressive dictatorship. An astounded Ceausescu* and his powerful wife Elena fled the capital and were later captured and executed after a hasty trial.

(* The circumstances surrounding Ceausescu’s fall were a form of poetic justice. In one of the main ghosted biographies that were written for the late dictator, he claimed that he had organised a rally against Carol II in May Day 1939. It was claimed in this fictional account that Ceausescu, as a young communist activist, arranged the infiltration of a hand picked crowd to heckle the king that His Majesty was so unsettled that he was compelled to leave in a huff.

Ironically, opponents within the Ceausescu entourage knowing of the false 1939 story suggested to the dictator that he call a rally in the centre of Bucharest to rally anti-Hungarian sentiment. Although there were defecting Securitate and Roumanian Communist Party (RCP) operatives in the crowd who helped provide the assembled people with the courage to break with Ceausescu, the intensity of their opposition was genuine).

A significant and touching aspect of the 1989 Roumanian Revolution was that a rank attempt to incite racial hatred was crucial in precipitating unity between Roumanians and Hungarians to bring down a detested regime. Indeed it is possible that, without Hungarian and Roumanian co-operation, there may well have been no revolution in 1989.

Due to the previous pervasiveness of the Ceausescu regime’s oppression and the gratitude that most Roumanians felt toward the RCP defectors who were instrumental in overthrowing Ceausescu, it was difficult for Roumania to promptly proceed to a strong pluralist party system that is crucial to democracy. The emergence of the Hungarian Democratic Union (HDU) in the June 1990 elections, as the principal opposition party, was therefore vital in ensuring that a democratic constitution was drawn up. This *republican constitution was overwhelmingly ratified in a referendum in December 1991.

(*In December 1947 a 26 years old King Michael of Roumania was forced at gunpoint to abdicate in December 1947 and depart for exile where His Majesty eventually settled in Switzerland with his wife, Queen Anne of Bourbon-Parma, to live in genteel poverty. Throughout his exile, the king remained aloof from émigré politics.

His Majesty’s main connection to Roumania was through his annual Christmas broadcasts which Radio Free Europe stopped in the 1970s when Ceausescu was the world’s ‘favourite communist’. These radio broadcasts were resumed in 1981 due to the support of the Reagan administration. The king gave great comfort to those who listened to His Majesty by saying in his radio broadcasts that the communist regime would eventually fall and that he subsequently return to Roumania.

The king first tried to return to Roumania in April 1990 after the fall of the Ceausescu regime but was forced back, which sparked demonstrations by mainly elderly Roumanians. His Majesty did return for a one day visit in April 1992 which the government of Ion Iliescu allowed to test the king’s popularity which they knew was growing due to increasing social unrest. After large crowds greeted their king, the Iliescu regime unsuccessfully tried to con His Majesty into running for president to split the opposition vote in the 1992 elections.

When the opposition did win the 1996 elections under Emil Constantinescu, the new government appointed the king ambassador to NATO where His Majesty lobbied for Roumania’s admission to the military alliance and to membership of the EU. In 2000, a deeply unpopular President Emil Constantinescu (who is monarchist sympathetic) declined to run for re-election and his Democratic Convention was annihilated at the polls. Former president Ion Iliescu probably would not have won the run-off in the 2000 elections against the ultra-nationalist Corneliu Vadin Tudor without King Michael’s reluctant but needed endorsement.

Due to the ruling Social Democratic Party’s (PSD) need to keep King Michael on side for the 2004 elections, His Majesty was allowed to permanently return to Roumania in 2001 with some of his former palaces being returned to the royal family. The king now has the official status as a former head of state and has done much to engage with his nation which His Majesty was once forced from. His Majesty has used his improved financial position due to the return of former properties to undertake substantial charity work. The effectiveness of the king’s charity work is such that, opinion polls indicate that while there is 15% support for a reinstated monarchy, over 65% of Roumanians believe that their royal family should have a recognised role in civic society).

The HDU’s impact in contributing to the drafting of Roumania’s 1991 republican constitution helped endow it with a liberal quality which has since helped hold the nation in good stead. The nation’s Hungarian minority have generally been enthusiastic supporters of Roumania joining the European Union (EU), which it did in 2007. The benefit of Roumania’s EU membership for its Hungarian citizens has been that their particular rights and identity have been protected and advanced within an international framework which in turn has helped bolster Roumania’s socio-economic well being and international prestige.

It should be pointed out that Roumania has defied the negative expectation that it could not make such strides in recovering from the disastrous Ceausescu legacy which persists with challenges of there being an underclass that is yet to adapt to a market economy. The reputation of the Constantinescu government (1996 to 2000) is retrospectively being rehabilitated due to an appreciation that this government’s austerity measures helped create an investment and capital base that is now assisting Roumania break with its communist past. The reforms of the Constantinescu government were also crucial in paving the way for Roumania’s entry into the EU.

The Nexus Between International Co-Operation and Domestic Democracy

It is not possible for former communist countries, such as Roumania, to expeditiously overcome all the problems that Marxist Leninist rule bequeathed. However, membership of international organisations such as the EU creates scope for Roumania to address seemingly intractable problems by accessing help on an international basis. The major challenge for all EU nations, particularly the smaller economies within the union, is to ensure that a balance between accessing international support, fulfilling membership requirements and protecting international sovereignty is achieved.

The Arab League is now showing great promise of one day becoming an international organisation in which the economic, cultural and political interests of Arab nations are advanced. This potential is reflected by the League’s support for the Syrian people. Hopefully, the Arab League will one day become as powerful as the contemporary EU by democracy endowing a common sense socio-economic and political purpose in the Middle East that transcends borders. The spread of democracy across the Middle East offers a capacity for minorities such as the Kurds to have their rights protected both domestically and in international forums.

Italy: The Need to Balance International Integration and The Domestic Interest

Post-war Italy was in a situation that future Arab democracies might be in with relation to a possibly revamped Arab League (or Arab Union) which Italy has faced with regard to its EU membership: how to achieve the balance between utilizing the benefits of membership of an international organisation without inadvertedly surrendering domestic sovereignty? This was not an acute challenge for Italy during the Cold War even though the Italian republic had Western Europe’s most powerful communist party.

Indeed, Italy’s political status as a blocked democracy helped keep the DC together as a catch all party and minor parties in coalition, or at least in support, of the ruling party. The June 1983 elections seemed to be the quintessential election result (even though early results indicated a PCI victory which led to celebrations by communists which were ebullient as they were premature) in which the DC garnered 32% of the vote (its traditional base was 30%) and the four centrist parties maintained their respective electoral bases of support. In this regard the 1983 election results vividly indicated the enduring strength of Pentapartito (five party coalition) pattern of government.

The surprising aspect of the 1983 elections was that the PRI defied its drift toward political oblivion by garnering over 5% of the vote. This upsurge in support was due to the prestige that the PRI had gained from their leader, Giovanni Spadolini, serving as prime minister in a DC dominated coalition government between 1981 and 1982. The MSI vote remained constant at 6.8%, which placed this party fourth after the DC, the PCI and the PSI.

A Pentapartito coalition government was formed but with the twist that it was headed by the PSI leader, Bettino Craxi. The PSI leader’s ascension to the prime ministership- a position which he would hold between August 1983 and April 1987, in which he presided over two governments-was due to support from the pragmatic (if not corrupt) wing of the DC led by Andreotti and Arnaldo Forlani.

This inter-party alliance, which was known by the acronym ‘CAR’ that denoted the first letters of the surnames of its three leaders (Craxi, Andreotti and Forlani). The CAR alliance was sufficiently cohesive, that unprecedented cabinet stability was seemingly achieved that had eluded the Italian republic since1953 after De Gasperi scorned the support of the monarchist PNM.

The real reason for the Craxi government’s relative longevity was the coherence of the long standing ties of the Andreotti/Forlani wing of the DC to the PSI, which in contrast to the other centrist coalition parties was bereft of factionalism due to Craxi’s domination of his party. Party corruption usually took the form of the payment of bribes to faction leaders. Bribes were often paid to party operatives at a local government level by contractors to secure tenders and/or gain authorization for building projects.

The dynamics of Italy being a blocked democracy, where the major opposition party was unelectable as an avowedly communist party, ensured the pervasive operation of corruption. Allusions to corruption were made in the press but were never followed through due to the entrenched nature of corruption. The operation of a strong central bank, a technically competent civil services, an excellent employers’ confederation (La Confidustria), a highly unionised workforce (over 60% union membership density), the benefits that Italy gained from being a member of the EU not only ensured that Italy surmounted the corrupt nature of the party system but that considerable economic advancement was still achieved.

Prior to the Craxi coalition, governments were brought down by losing parliamentary votes on key matters such as budget items which were undertaken by secret ballot. The real causes of such votes concerned issue of patronage and due to the confidential nature of parliamentary votes, inner party unity was always maintained because no-one could be certain of who had ‘ratted’. The Craxi government’s amazing success in lasting almost four years was due to the cohesiveness of the CAR parliamentary bloc vote which made it nearly impossible for the parties of the Pentapartito to form a new configuration.

Andreotti’s nemesis in the DC, Amintore Fanfani,* finally managed to bring the Craxi government down in 1987 so that elections were held in June that year. The election results were not that markedly different from those held four years earlier (although the PRI resumed its electoral decline). A succession of Pentapartito coalition governments were formed between 1987 and in 1989 Andreotti returned to the prime ministership to lead a nearly three year long government.

(*As previously mentioned, Fanfani notionally moved from the right of the DC to the party’s left-wing, while Andreotti led a continuing right wing faction as a pragmatic clientistic operation following ‘the opening to the left’ with the admission of the PSI to cabinet in the 1960s).

In a nearly two year interregnum (1987 to 1989), before the CAR alliance returned to power, DC General Secretary Ciriaco De Mita tried to block Andreotti’s return as prime minister. De Mita reluctantly accepted the prime ministership in 1988 because he knew that he that his ‘promotion’ to this would be compel him to give up the position of DC secretary which he considered to be more important than prime minister. This scenario that De Mita feared came to pass in February 1989 with none other than Forlani succeeding the prime minister as DC secretary. With Arnaldo Forlani in as DC it was relatively easy to re-configure the coalition in July 1989 and with Craxi’s support Andreotti became prime minister and held this position until the April 1992 elections.

The Italian republic may have found stability- because the CAR alliance had established a stable system for patronage politics- had it not been for the fall of the Berlin Wall in November 1989. The disintegration of the Soviet bloc caused a corresponding disintegration of a fundamental of Italy’s ‘blocked democracy’, the non-electability of the principal opposition party. The PCI had helped its own cause in July 1991 when this party successfully grappled with the issue that Italians had usually called ‘the thing’, i.e. the party’s name, by officially becoming the Democratic Party of the Left (PDS).

The CAR alliance might have continued its dominance had the DC vote not fallen marginally below its base of 30%. By 1992, the DC was really a conglomeration of nine parties such that the unity of the ruling catch all party was imperilled if its vote fell below the cumulative expected its 30% threshold. The 1992 elections were also noteworthy because the PDS not only failed to supplant a declining DC but its vote fell to 16%! This decline was due to the relative success of the new hardline Marxist breakaway party, Communist Party Re-foundation (PRC) which came fifth with 5.6% of the vote.

The 1992 election results were also a disappointment for the PSI which gained 13% of the vote due uncertainty concerning the PDS’s future. Although the Socialist’s voting base remained intact and they had come third, this party probably lost its best chance of becoming Italy’s second party with the prospect to later win power as an alternate social democratic opposition party. The prospect of the PSI and the PDS later merging was an impossibility due to Craxi’s detestation of the former PCI and their hatred of him.

1992- The Clean Hands Scandal Commences

But, after the 1992 elections, the long term prospects for the PSI became dire due to the outbreak of what became known as the Clean Hands Scandal (‘Mani Pulite’). This scandal in fact collectively referred to a myriad of scandals involving countless instances of corruption by party operatives across the party spectrum*. It was not uncommon for whole city and town councils to resign after having being exposed for corruption and a point was reached that, after 1993, Italy’s prisons were overflowing with criminally charged politicians.

(*The PDS and the MSI were generally exempt from the trauma of the Clean Hands scandal because they had usually been excluded from the politics of patronage.).

The immediate catalyst for the Clean Hands scandal was the Mafia assassinating the investigating magistrate Giovanni Falcone in May 1992. The national outrage that ensued provided another investigating magistrate, Antonio De Pietro, with the impetus to pursue his enquires that became known as the ‘Clean Hands’ scandal.

The assassination of Magistrate Falcone had the immediate political impact of ensuring that Arnaldo Forlani narrowly lost parliamentary election to the presidency in May 1992 because the public revulsion caused by the Falcone assassination resulted in a strong anti-politician sentiment. Consequently, the impeccably honest Christian Democrat, Oscar Luigi Scalfaro, was elected president. Had Forlani been elected president by the parliament thereby securing the continuance of the CAR alliance would have prevented judicial investigations and there would have been no revamping of the Italian party system.

President Oscar Scalfaro’s Courage Founds The Second Italian Republic

The election of Scalfaro as president did not automatically break the power of the CAR alliance as a close PSI ally of Craxi’s, Giuliano Amato(who was free from any taint of corruption) formed a succeeding Pentapartito coalition government in June 1992. However, Prime Minister Amato’s attempt to block further corruption investigations by submitting a decree to President Scalfaro depriving magistrates of their investigative powers led to such a massive public outcry that the prime minister resigned in April 1993.

President Scalfaro’s courageous refusal to sign the decree was crucial in ending nearly fifty years of corrupt rule by party politicians that had commenced with the CLN assuming power following the Allied liberation of Rome in June 1944. Had Victor Emanuel III demonstrated similar courage in 1922 by authorizing the state of emergency to prevent the so-called ‘March on Rome’ ,then Italy would have had the benefits of a democratic constitutional monarchy.

Italy may still have gained the benefits associated with a democratic constitutional monarchy of a stable party system and transparency in the exercise of power had Prime Minister De Gasperi ensured that a fairly conducted referendum on Italy’s constitutional status was conducted in June 1946. Umberto II’s subsequent action in leaving Italy to avoid a civil war also demonstrated that Italy had lost a head of state who would have defended the public good as President Scalfaro did in 1993 by refusing to sign a decree that protected the nation’s politicians from independent scrutiny.

Amato was succeeded prime minister by the former Governor of the Bank of Italy, Carlo Azeglio Ciampi as who formed a non-party technocratic government. The formation of the Ciampi government in April 1993 also marked the end of the rule by party politicians which had commenced when the executive of the Rome CLN assumed power with the liberation of Rome in June 1944. Although no new constitution was introduced, the appointment of the Ciampi government in effect constituted the foundation of Italy’s ‘Second Republic’.

The transition to a ‘Second Italian Republic’ was denoted by political party reconfiguration as opposed to adopting a new constitution. This process commenced in earnest when the DC was routed in local government elections in November and December 1993. The PDS did very well in these local government elections by entering into an alliance with the Greens Party, often providing popular mayoral candidates, most notably Francesco Rutelli, who was elected mayor of Rome.

The runner up in the race for mayor of Rome in 1993 was the MSI leader Gianfranco Fini who used his strong poll showing to transform his party into a ‘post-fascist’ conservative party. Almirante voluntarily retired as MSI leader following the June 1987 elections and helped ensure Fini’s election as his successor. Fini did not have the support of the MSI rank and file to repudiate fascism and he was obliged to make way in January 1990 for the RSI sentimentalist, Pino Rauti.

Rauti’s professed anti-capitalism and opposition to NATO grated with the MSI’s anti-communist middle class electoral base so the party’s vote plummeted in local government elections in Sicily in July 1991 and that he was obliged to make way for Fini’s return as party leader. Under Fini’s leadership, the MSI vote held up as opposed to making new electoral ground. The onset of the Clean Hands scandal helped the MSI nearly double its usual vote in the 1993 local government elections.

Competing Historical Traditions Subtly Revive

The improved showing of the MSI enabled Fini to call a Congress in Rome in January 1994 to form the National Alliance (AN) This conference was the most important attempt since Giolitti’s convening of a party congress in Rome in October 1922 to make the PLI into a secular centre right political party. The October 1922 PLI Congress precipitated anti-Giolitti ‘liberals’ into instigating the fascist ‘March on Rome’. By contrast the January 1994 AN foundation Congress marked the point at which Italian neo-fascism moved toward mainstream liberal-conservatism.

The AN acronym may have been adopted because it was similar to the Italian Nationalist Association (ANI) which was the nationalist conservative party that precipitated the 1922 fascist ‘March on Rome’ due to their connections with anti-Giolitti ‘liberals’. An association with the Italian nationalists emphasized the non-fascist roots of the *Mussolini regime which was subtle but sufficiently distinct to induce MSI stalwarts to move to post-fascism.

The name, the ‘Italian National Alliance’ may also have been adopted for the 1994 Congress to attract conservative anti-fascists because this had been the same name of a monarchist anti-fascist party that had operated in the late 1920s and early 1930s. The first National Alliance effectively came to an end in October 1931 after the poet, aviator and monarchist activist, the amazing Lauro de Bosis, was shot down as he was returning to France, having just dropped anti-Mussolini pamphlets over Rome. From Mussolini’s perspective, liberal monarchist dissidents were not to be tolerated because the PNF regime was too institutionally intertwined with the monarchy.

Contemporary monarchists did attend the 1994 Congress which consequently created the first opportunity for them to viably compete electorally since the demise of the DN in the 1979 elections. The formation of the new AN, was crucial to Silvio Berlusconi winning the March 1994 national elections. Berlusconi’s new party Forza Italia, FI, (which was formed in January 1994) entered into an electoral alliance in the South of Italy with the AN, while aligning with the Northern Leagues (LN) where that party was based (i.e. northern Italy).

Forza Italia’s respective geographic alliances with the AN and the LN were seemingly bizarre because of the stark differences between the respective electoral configuration. The AN, as a substantial continuation of the MSI, was strongly statist and staunchly opposed to any devolutionist reform, which it believed would imperil Italian national unity.

The LN, in vivid contrast to the AN, is effectively a Northern version of the Southern based UQ of the 1940s in that its leadership advocate a minimalist state philosophy to the point of being libertarian. The LN is different from the UQ in that it is not, and never has been an ephemeral electoral grouping manipulated by shadowy forces. The LN was (and is) technically a loose confederation of northern city based leagues. In reality, despite having coherent constituent regional bases, the LN follows the direction of its de facto national leader Umberto Bossi.

Bossi, who comes from the northern region of Lombardy, was first elected to the Italian Senate on a separatist platform in 1987. His attacks on northern taxpayer money going to the south and his implicit anti-migration stance appealed to many middle class northerners who had still voted for the DC or for the centrist parties in the 1987 elections due to the then DC-PCI dichotomy. The post-cold war 1992 national elections saw a surge in support for the LN with swathes of DC voters transferring their support to this electoral confederation.

Berlusconi, 1994: Old Wine in New Bottles

The party that the LN was aligned to in the 1994 elections, Forza Italia, was also an apparent electoral phenomenon. This party, which was named after the chant ‘Forza Italia’ (‘Go Italy’) that football fans invoke when barracking for the national football team (who wear blue, the traditional colour of the House of Savoy) was founded in December 1993 by Silvio Berlusconi. FI was initially based around ‘political clubs’ hastily assembled by Fininvest executives. Although FI substantially ran new politically inexperienced candidates in the March 1994 elections, this new party essentially owed its power to Berlusconi’s connections to the CAR alliance.

Berlusconi was originally a Milan building entrepreneur who established links with Craxi’s PSI in the 1960s. Craxi’s base in the PSI was initially in his home city of Milan which he used to become party leader of the Socialists in 1976 as a compromise choice among that party’s bickering old warhorses. As Craxi ruthlessly consolidated his ascendancy in the PSI, Berlusconi, with the Socialist Party leader’s backing, established the Fininvest media group in 1978.

The CAR ascendancy of the 1980s greatly assisted Berlusconi in transforming Fininvest into a media empire with exclusive control over television and radio stations, newspapers and publishing houses. The fall of the Amato government in April 1993 and the routing of the DC in local government elections seemingly marked the end of the power of the CAR alliance. But the legacy and power of this alliance continued in Berlusconi’s new Forza Italia party which won the March 1994 elections as the major constituent of the Pole of Freedoms (PdL) electoral alliance.

The PdL configuration in addition to the AN, FI and LN also included the Christian Democratic Centre (CCD) and the Union of the Centre (UCC). The CCD and the UCC constituted the respective right wings of the DC and the PLI. The formation of the CCD was politically significant because this undermined the People’s Party’s, (PPI) or Populari to substantially appropriate the CD’s electoral base.

The PPI’s prospects were also undermined by left-wing Christian Democrats who formed the Social Christians Party to run as part of the Alliance of Progressives (AP) which was the rival configuration to the PdL in the 1994 elections. The mainstay of the AP was the post-communist PDS followed by a range of left-wing parties including the Greens, the hardline PDS and incredibly enough the PSI, which had ostensibly repudiated Craxi.

The PdL won the 1994 elections because the FI substantially gained most of the former DC and PSI votes while also benefiting from the strong electoral showings of both the AN and the LN. By contrast, the AP blundered by alienating moderate voters (particularly former DC supporters) by having the PRC within the AP electoral alliance and naively expecting that the discredited *PSI would somehow substantially hold its voting base.

(*The PSI continues in Italy as the ‘New Italian Socialist Party’. This minor party is now aligned to the political right and is dominated by Italian monarchists).

The PPI, which ran in conjunction with the Segni Pact as the ‘Pact for Italy’ came third in the 1994 elections with 15% of the vote. This was a sufficiently strong electoral showing to send a message to the PDS that any future electoral configurations it might form (such as the AP which had garnered 33% of the vote) they would not be able to defeat the right (the PdL which garnered 46% of the vote), unless centre and centre-left Christian Democrats were included.

The first Berlusconi government (May 1994 to January 1995) was less than an auspicious success because the prime minister seemed to be utilizing his position to protect his corporate business interests. Such a perceived self-interest did not go down well with an electorate which were expecting a break from a recent corrupt past. The LN under Bossi refused to join the Berlusconi cabinet but supported the government by helping provide a parliamentary majority.

Sensing widespread public disillusionment with the Berlusconi government, the LN brought the government down at the end of 1994. A new technocratic government was formed in January 1995 which was headed by Lamberto Dini, who had been a senior official of the central bank, the Bank of Italy, in January 1995. The Dini cabinet provided Italy with needed competent and honest government until national elections were held in April 1996.

Fractured Stability: Italy Moves to a Two Political Configuration System

The PDS leadership, learning from the lessons of the 1994 election, dealt the PPI and a swag of micro centre and centre-left DC successor parties and secular centrist groupings into a new centre left configuration that was called the Olive Tree Alliance (L’Ulivo). To bolster L’Ulivo’s prospects for victory, the PRC was excluded from the alliance and Romano Prodi a, former Christian Democrat cabinet minister and chief executive of the IRI, was put up as the Olive Tree prime ministerial candidate.

The PdL went into the 1996 elections as the underdog due to the LN’s refusal to run with this electoral configuration, Berlusconi’s less than sterling previous time as prime minister and high public expectations of a Prodi prime ministership. Although the PdL (which was generally known as the ‘House of Freedoms’) lost the 1996 elections, it did better than expected, winning 37% of the vote, while the L’Ulivo won the elections with 41% of the vote.

The relative narrowness of the 1996 poll was probably due to the fact that it was the first election in Italian history where there was a viable left-right dichotomy. Such electoral divisions are common across the world where there are party divisions broadly based upon labour and capital. Two party systems are also based on a conservative- liberal philosophical dichotomy but these two philosophical opposites can coalesce into a party that is supportive of capital. The 1996 elections did not mark the point at which Italy adopted a two party system but rather showed that there was a move toward the *French party system of having two opposing configurations of parties.

(*The French party system is apparently moving from a two configuration model toward a two party system. The French Socialist Party, the PS, has effectively been a political party since Francois Mitterrand was elected party leader at the 1971 Epinay Congress. The PS has paradoxically consolidated its status as a party since the late French president’s retirement in 1995 by being able to continue on without him.

A consequence of the end of the Chirac – d’Estaing political rivalry is that a stable centre right wing party, the Union for a Popular Movement (UMP) has seemingly been consolidated. However, the UMP is still a hybrid, a political configuration such that it is perhaps premature to categorize France as having a two party system but it can be said that this nation now has the dynamics of one).

To bolster its chances of success the PdL refused to include Pino Rauti’s Tricolour Flame Party in its configuration. In a re-run of the 1973 MSI-DN convention, Fini convened an MSI-AN Congress in January 1995 to dissolve the MSI to thereby transforming the AN into a political party. As at the 1973 convention, Rauti opposed any repudiation of fascism but at the 1995 congress, most MSI delegates voted to enter a new ‘post-fascist’ conservative party.

Rauti subsequently formed the Tricolour Flame Party which garnered less than 2% of the vote at the 1996 polls thereby failing to win a single seat. Despite this party’s paltry vote, it was a determining factor in the PdL losing the April 1996 elections by decreasing this electoral configuration’s aggregate vote.

1996 to 2001, Olive Tree Rule: Setting the Scene for EU Integration

The Prodi government was effectively a coalition between the old Christian Democratic centre left/left and the post-communist PDS. For the former communists, it was the first occasion that they had been in cabinet since 1947 and the very first time that they were in a position of relative political dominance. The major objective of the Prodi government was to integrate Italy into the EU by having Italy join the Eurozone by 2002. Austerity measures were undertaken to meet Euro entry requirements. Even though these austerity measures caused a degree of mild social discontent, there was sufficient bi-partisan support to support Italy to achieve the objective of Eurozone entry.

The objective of Eurozone entry and integration into the EU remained the overriding objective of the ruling Olive Tree alliance despite internal divisions. Non-Italians who took a cursory interest in Italian politics during the 1996 to 2001 period may have thought that Italy was continuing with the usual pattern of political instability with frequent changes in government. In actual fact, the parliament running its full five year (1996 to 2001) term dominated by two electable distinct ideological blocs was crucial to Italy having future political stability.

The major problem with the Prodi government was internal because elements within the PDS wanted to establish their party as the dominant left party rather than establish a future centre-left party with a strong post-DC component. In October 1998, the parties of the PdL supported a no-confidence motion that was moved by the continuing communist PRC.

Although most PDS parliamentarians voted against the no-confidence motion in the secret ballot, they probably tacitly supported it so that a fellow party member could be prime minister. This scenario was plausible because the no-confidence motion was moved by Fausto Bertinotti who was in effect the leader of the pro-PDS faction within the PRC.

The Olive Tree candidate to be Prodi’s successor was Massimo D’ Alema and he received a one vote margin from the parliament to become the new prime minister. *D’ Alema was a member of the PDS and it is certain that members of the post-DC centre left and former centrist parties in the Olive Tree alliance (possibly including future ministers in the new government) voted against his confirmation in the secret parliamentary ballot.

(*D’ Alema was the first prime minister of a NATO and EU country of Western Europe to head a government who was a former communist).

It was still a positive development that D’ Alema won the confidence vote because it helped keep the centre-left (including post DC components) within the Olive Tree alliance so that PDS would eventually merge into a future democratic centre-left party. The probability of this scenario was also increased because there were already substantial numbers of Catholics who had joined the PDS at the discreet urging of Italian clergy. The prospects of such a consolidated future centre-left party were increased by Romano Prodi graciously supporting the D’Alema cabinet which governed for two years between October 1998 and April 2000.

The precarious political position of the D’ Alema government put pay to any notion that the PDS be bolstered to become the dominant centre-left party. To maintain unity within the Olive Tree alliance for the May 2001 elections, D’ Alema made way as prime minister for Giuliano Amato. It was incredible that Amato would again fulfil an important transitional role.

D’Amato (as mentioned previously) had first become prime minister in June 1992 as an honest PSI stalwart who had the backing of the CAR alliance. He had almost irredeemably tarnished his reputation in 1993 by supporting a presidential decree that would have shielded Italy’s politicians from investigation. *President Oscar Scalfaro’s incredibly courageous refusal in April 1993 to sign the decree resulted in Amato’s wise decision to consequently resign thereby ending nearly fifty years of corrupt party rule in 1944 with the CLN and consolidated with the rigging of th referendum to make Italy a republic in 1946.

The second D’ Amato government (April 2000 to May 2001) established the political dynamics for the Olive Tree alliance maintaining unity for the May 2001 elections. The transitionary prime minister had already taken honest non-Craxi supporters from the PSI into the PDS to enhance future prospects to create a future democratic centre- left party. The Olive Tree alliance moved to advance its immediate prospects for election victory by running Francesco Rutelli as its leader in the 2001 elections.

Rutelli had commenced his career with the libertarian *Radical Party, had later joined the Greens Party and was elected mayor of Rome in 1993 in an electoral alliance dominated by the PDS. Even though Rutelli held social policy positions that were not in keeping with the Catholic social teachings, there was an amicable rapprochement between him and elements of the Italian component of the Catholic Church in terms of ‘agreeing to disagree’ that both knew were bound to help create a future centre-left party.

(*The republican left wing of the PLI split away in 1957 to form the Radicals. This new twentieth century party claimed antecedence from the Radical Party which had been an anti-clerical parliamentary party in the nineteenth century with republican tendencies).

There was too much apparent division between the post-communist PDS and post-DC constituents within the Olive Tree alliance that the PdL narrowly won the May 2001 elections with 45% of the vote as opposed to their main aforementioned opponent with 43% of the vote. The post-DC and secular centrist components (including Rutelli) within the Olive Tree had strengthened its position within the alliance by forming a configuration within a configuration: Democracy is Freedom (‘La Margerita’). Although the Olive Tree alliance had lost the 2001 elections, this alliance had in effect become a two-party coalition thereby establishing the groundwork for a future full party merger.

The victorious PdL in contrast to the Olive Tree alliance did maintain the dynamics of a stable political party such that the Berlusconi achieved the incredible accomplishment of being the first Italian prime minister to serve an uninterrupted five parliamentary year term!! Despite this achievement, Italy was internationally derided as an odd, if not unstable, country. This was due to the clear conflict of interest between Berlusconi’s business empire, constant battle with the courts and the intense but still good natured rivalry between a discernable left and right which often staged public rallies.

Due to the political polarization that characterised the second Berlusconi government (2001 to 2006), the 2006 elections were again a closely poised affair characterised by amazing alliances between seemingly implausible allies. The four major components of the PdL (FI, AN, LN and the UDC-UCC) declined to merge into a single party but extended their alliance to include another four parties, two of which were avowedly neo-fascist, one being dominated by the Mussolini family and the other not.

Similarly, the main constituents of the Olive Tree alliance (the PDS and La Margherita) did not merge into a single party but formed an electoral alliance with nine other partes called, L’Unione. The constituent members of L’ Unione encompassed still more centre left micro parties (some of which had CD roots), communist and Greens parties as well as an anti-Mafia and a pensioner’s party. This expanded electoral configuration helped the broad left to keep up with the Berlusconi led right.

L’Unione ultimately had the edge over the PdL because it was led by the widely popular former prime minister, Romano Prodi. In a masterstroke, Prodi came up with the idea that party members of the Olive Tree alliance hold an American style primary to elect the prime ministerial candidate for 2006 elections. Although primaries are inappropriate in a parliamentary system because they undermine party branch democracy, this was then an excellent one-off idea because it would help forge a sense of common party that could later be used to form a future democratic centre- left party.

It was almost a foregone conclusion that Prodi was selected to be the Olive Tree leader for the 2006 elections. His professorial type persona so contrasted with Berlusconi’s seedy image that undecided voters went with L’Unione in the again closely contested election, with the PdL garnering 45% of the vote to the Berlusconi led right’s 42% of the vote. An unexpected determinant of victory in these elections was the vote of overseas Italians with postal votes from Australia being decisive.

The second Prodi government (2006 to 2008) was similar to the first such government and to the intervening Berlusconi government in that the major policy focus was on achieving economic and political integration into the EU. The major political problems of the second Prodi government were essentially similar to the first: the role of continuing communists (i.e. the PRC) in undermining a government led by a post DC centre left politician. The PRC manifested its hatred of Prodi over the deployment of Italian troops in Afghanistan which set the scene for the prime minister’s fall from power in January 2008, although he stayed on as caretaker prime minister until May that year.

The major positive domestic achievement of the Prodi government was the foundation of the Italian Democratic Party (PD) in October 2007. This new party was essentially a merger between the PDS and the parties of the Daisy alliance. The prospects for success for the new party were also enhanced by the PD entering into the anti-corruption party, Italy of Values (IvD) which was founded and led by the former crusading magistrate, Antonio Di Pietro.

Although the PD is factionalized (which Italian political party isn’t?) the democratic structures that the party has in place should ensure party unity and effectiveness. There are ideological divisions within the PD between the secular post-PDS and the post-DC factions but the institutionalized power of the rank and file within the PD deprive faction leaders of the capacity to break away to form new parties. It is a tragedy that only is now one of Italy’s two major parties is genuine social democratic party when opportunities were missed in 1922 and in 1946.

The advance of political moderation within the Italian polity was reflected in the results of the April 2008 elections when, for the first time since 1921, no extremist parties were elected to parliament. Avowedly communist and neo-fascist parties failed to win any seats as did the Greens (who stupidly ran with the continuing communists) because many of their members had wisely entered the PD. For the centre-left of the post-DC, the 2008 elections must have been very satisfactory because of the apparent demise of the hard left*.

(*Hopefully the government of Mario Monti, or another successor technocrat government, will successfully serve until scheduled parliamentary elections are held in 2013 so that extremist parties will not have an electoral base to re-enter parliament. The problem with Signor Monti serving as prime minister is that he is a technocrat who happens to be driven with a super sense of purpose to integrate Italy into the EU when that objective might not now be an appropriate priority in the context of the GFC.

Utilizing the GFC as the opportunity to consolidate Italy into the Eurozone should be measured against the criterion of whether this is conducive to facilitating capital formation for Italian banks so that they can spur urgently needed economic growth.

Former president (1999-2006) and technocratic prime minister (1993-1994) Carlo Ciampi, who is now a Senator for Life at ninety, is probably too old to lead another technocratic government. But hopefully Ciampi will be involved in advising the new government and helping bring in officials, who will prioritize capital formation as opposed to devising austerity measures that are socially unviable due to the GFC. As a former Governor of the Bank of Italy (1979 to 1993), in addition to the other cited positions that His Excellency has held, Ciampi has the requisite political and financial connections to help the Monti government (or another technocratic government) pursue a more lateral policy direction when further Italian integration with France and Germany via the EU may not be what is required in the critically important short- to-medium term).

European integration, since the French government adopted the Delors Plan in March 1983, has been orientated toward achieving economic integration via currency union and a central European bank. The viability of such European integration is practical to the extent that there is Franco-German co-operation. To date, the Benelux countries of Belgium, the Netherlands and Luxembourg have benefited from Franco-German backed economic integration. This has been due to the relative geographical proximity of Benelux countries to each other and to France and Germany, strong industrial capacity, an economically powerful banking sector and (with the exception of Luxembourg) seafaring and port access that is conducive to international trade.

The above cited sources of comparative trading and financial advantage to France, Germany and the Benelux countries are not necessarily transferable to other EU nations with reference to the overviewed combination. Therefore, while a consolidation of the Eurozone and an overriding European Central Bank may be laudable medium- to-long term objectives they should not be immediate priorities for other EU nations in the current context of the GFC.

That is not to say that a financially threatened nation such as Italy should not undertake austerity measures (i.e. spending cuts and tax increases) to cover existing debts but long term austerity is not viable for socio-economic reasons. Italy has a strong industrial base, a high rate of private savings and an excellent banking sector that, combined with financial support from the IMF and/or Japan, there is necessary scope for sufficient bank capitalization to save the Italian economy.

It would therefore be ill-advised for either Germany or France to now push European economic integration that will deny EU nations such as Italy the flexibility to raise (and later repay) the capital they need to facilitate and sustain needed economic activity, employment growth and international trade).

As satisfying as the demise of the continuing communists must have been to the new PD, they still lost the 2008 elections. This was despite the fact that the PD and the PdL garnered nearly the same vote, with both gaining an impressive 37% of the vote. Berlusconi had the advantage though because the LN ,by campaigning as a distinct party, garnered 8% of the vote by appealing to a particularist party base which might not have voted for the PdL per se. As a result of the LN winning the balance of power, Berlusconi was again able to form a new government.

The only really undetermined variable of the 2008 election was that a viable post-DC party (which also includes distinct secular elements), the Union of the Centre (UdC) which won a respectable 5.5% of the vote. The UdC is a seemingly orientated toward entering into an alliance with new party that Fini formed in 2010, the Future of Freedom (FLI).

The PdL itself made the paradigm shift toward becoming a political party when Berlusconi and Fini announced in February 2008 that their respective parties would form a joint election ticket (which was still known as the PdL) for the next elections, which they did. The process of party formation was seemingly completed in March 2009 when the PdL formally became the People of Liberty Party.

In contrast to the PD, the PdL is not a democratic party. This not surprising, because Berlusconi had previously been able to get away with running his FI party without a democratic structure due to his wealth, the logistical and human resource support of his Fininvest Corporation and because most party members adored him.

Paradoxically, the ‘post-fascist’ AN was more democratic than the FI which has actually benefited Berlusconi. This is due to most former AN members who went into the PdL being more supportive of Berlusconi than of Fini. This was because Fini is secular orientated and his stances on issues such as abortion have antagonised former AN Catholic members who are now in the PdL. It may seem strange that disillusioned Catholics are supportive of Berlusconi but this is primarily derived from their ingrained hostility toward Fini.

Fini is probably as politically brilliant as his late mentor Giorgio Almirante was and he has had displayed the same skill in leading a party that he is essentially ideologically at odds with in regard to party rank and file’s outlook and expectations. The AN leader-having previously taken his party from neo-fascism to post-fascism in 1995 and could have helped create a liberal-conservative party encompassing secular and Catholic tendencies. This could have occurred by Fini by filling the vacuum within the PdL that would have followed (and perhaps has occurred) after the mercurial Berlusconi inevitably exited from politics.

A New Fini Led Political Configuration ?

Instead, Fini broke with the PdL in July 2010 to form the FLI. Perhaps the foundation of the FLI is part of Fini’s grand plan to create a new centre-right political party. The FLI is open to an alliance with: Bossi’s LN, (whom most former AN members in the south despise), the Movement for Autonomies (MPA), which is a Sicilian equivalent of the LN and the Alliance for Italy (API), which was founded and led by Fini’s former arch-rival, Francesco Rutelli. As previously mentioned, it also seems that secular elements within the UdC (which are descended from the defunct PLI) are orientated toward supporting a new Fini led electoral configuration.

The creation of a new secular Fini configuration may not be a positive political development because it is bound to be dominated by personal factions which will not subordinate their power to a rank and file based party (as the PD is) that is greater than the total sum of its parts. An exclusively secular based centre-right party in Italy cannot be a major competitor for power in Italy because an effective exclusion of Catholics would too greatly diminish its popular base.

It would be a political and social-economic advance for Italy if a centre-right party had a complementing Catholic component (as the PD does) to facilitate different ideas and approaches. Such internal differences can eventually be subordinated by a broad pluralist political dichotomy of capital versus labour within a democratic pluralist framework. Such a division can help drive ideas and political diversity so that national elites can downgrade the value of labour to help them selfishly gain control of resources according to a win-lose approach as is now being attempted in Australia.

Is Australia OK? – Not Really

Australia is a nation that, in the midst of the world’s precarious financial position, is downgrading the value of employment/ labour according to a win-lose rent-seeking approach. Incredibly, this transition is being undertaken at the worst possible time in the context of the GFC. The transition to Australia’s devastating rent-seeking future now depends upon the introduction of a carbon tax and the transition to a super profits tax regime for the mining sector that lopsidedly benefits the three big mining companies and inter-party political interests that support them.

Because of this tax’s very destructive impact the real objective of the two year carbon tax is to destroy a swathe of businesses and thus help pulverize the secondary sector of the economy so that there will be an overdependence on minerals exports. The necessary undermining of the secondary sector of the Australian economy will be facilitated by having the carbon tax run for the two years needed to transition to a rent -seeking economy and not beyond because Power interests such as conglomerate industrial unions and business corporations erroneously believe that, by their having representation on the boards, and/or input of funds into Sovereign Wealth Funds (SWFs), their economic and political power will be entrenched.

The 2008 GFC provided economic and political rent-seeking strategists with the pretext of engineering an over-dependence on the mining sector by squandering the nation’s budget surplus by unnecessary stimulus packages that supposedly averted mass unemployment but have in reality created the ground work for this terrible socio-economic blight. Probably no other nation in economic history has gone from having no public foreign debt to having a debt equalling 25% GDP in less than three years!

Serious questions have to be asked as to why the ALP is pursuing such a detrimental course of action. The rent-seeking elements within the ALP correctly believe that they can win an early federal election which will probably be called in September or October of 2012. The carbon tax will take effect in July 2012 and there will be a massive raft of financial compensation for millions of Australians in the form of tax concessions and direct rebates.

Such electoral bribes may win the ALP an election next year but the cost will eventually be too high and Labor’s electoral base will rightly take out colossal retribution against the party that is suppose to defend and advance their interests. The increased public foreign debt that will accrue from the electoral bribes will only compound Australia’s future economic woes as a rent-seeking nation.

Treasurer Wayne Swan will use the terrible economic situation that the carbon tax will plunge Australia into to press for the adoption of an extensive super profits tax regime from the mining sector and the subsequent adoption of SWFs. Swan has dispensed with the pretence that, having also taken the budget into deficit in record time, he can achieve his ludicrous promise of returning the budget to surplus in 2013.

In the 2012 campaign the federal Liberal leader Tony Abbott (whose continued role as opposition leader is crucial to the coalition supporting rent-seeking) in the 2012 campaign will accurately but disingenuously decry the carbon tax and denounce the compensation assistance as wasteful. This in turn will allow the ALP to run a scare campaign that substantial financial aid will be denied to Australian families if Abbott wins the election. Millions of economically vulnerable Australians will vote Labor due to the ALP scare campaign which will probably ensure that the government is returned or at the very least ensures that the ALP retains its voting base.

Even if Abbott ‘loses’ a second consecutive election for the coalition, he will have a base to continue as Liberal leader due to the apparent vehemence with which he will denounce the carbon tax. The opposition leader, having warned the people of the severe economic ill effects of the carbon tax and that the compensation package will effectively be a case of ‘robbing Peter to pay Paul’, will be more than well positioned to win the next federal election after 2012. The mega landslide that Abbott will eventually win against the ALP could be on a scale similar to the 1993 Canadian elections when the ruling Progressive Conservatives were reduced to two seats! Consequently, Abbott will be in a position to ideologically transform Australia to his specifications.

The disastrous ramifications of the carbon tax will hit the ALP so hard that this party will be confronted with a rout of 2011 New South Wales electoral proportions during the 2012 to 2015 term. In an attempt to ensure the ALP’s survival, the federal government with Abbot’s support will bring in ‘regionalization’ (sic) by which states will eventually be dismembered. This can be facilitated by constitutional recognition of local government-or even traitorous state governments (such a Barry of O’Farrell’s coalition government in New South Wales) ceding GST revenue to new regional local government bodies-that could alternatively be established by state legislation.

(The O’Farrell government is already showing signs of undermining the system for charging mining royalties in New South Wales).

ALP rent-seekers assume that, by proceeding to ‘regionalization’ (sic,) they can take refuge in new powerful local government authorities where factional party interests can more directly exercise concentrated power. It is true that ALP factions will be able to exercise more direct power at an enhanced local government level. But for the Labor Party to remain viable, it has to have trade union membership.

The continuance of trade unions will be threatened by a future Abbott government. The political theatre seen previously this year (2011) at the Liberal Party’s Federal Council when Abbot led it be known that he had voted for Liberal Party president, Alan Stockdale to provide him with a one vote winning margin was politically significant because it marked the re-entry onto the political scene of the defeated candidate Peter Reith.

Reith will never re-enter parliament and probably not hold elected office in the Liberal Party. Bu this does not concern Reith because he has a critical mass of supporters in the Liberal Party and in business and employer associations and academia that are now gaining a sense of co-ordination and critical direction from Reith’s effective return to political public life to pursue an anti-union/ anti-employee agenda.

These Reith- inspired industrial-political networks will have the necessary capacity to effectively advise an Abbot government on how to pursue de-unionising strategies. Considering decreased employment levels due to the legacy of a carbon tax and the disrepute that the ALP will be held in, particularly by their former voting base, it will be an accomplishable task by an Abbott government to destroy Australian unionism.

The Minchin Model: The Way of the Future?

The ideological settings and direction of a future Abbot government will not be primarily determined by Peter Reith but by former Liberal Party South Australian Senator Nick Minchin. He has always considered himself to be a ‘conservative’. It is true that there is probably no senior Liberal who has as developed an ideological outlook and sense of strategic capacity to achieve his objectives as Minchin but his ‘conservatism’ is of a win-lose category when it comes to employee rights.

The former senator may not be conversant with ‘voluntarism’ but an Abbott will bequeath an Australian version of this concept that conforms to Minchin’s ideological outlook. In the British context, voluntarism has referred to the utilization of shop-steward-led rank and file unionist activism. Voluntarism has also had a long standing American meaning as it has referred to individuals and communities enhancing the public good without government involvement.

It is probably the American version of voluntarism that might have inspired Minchin. But Minchin’s type of voluntarism entails a society in where there is not only minimal state involvement but an accompanying minimization of full time employment. It goes without saying that that there is no scope for unions if an Abbott government establishes a Minchin inspired ideological regime.

‘Voluntarism’ in a Liberal Party context has already been manifested by Minchin advocating a primary system of pre-selection under which party branches would be at best an optional extra. An absence of party branches-or a denial of their role to pre-select candidates and meaningfully contribute to the formulation of party policy-will lead to party oligarchy which will consolidate the power of rent-seeking elite.

The prerequisites for a Minchin model are already being set by the ALP. The ill-effects of a carbon tax in pulverizing businesses in the secondary sector of the economy will consolidate patterns of precarious employment. Ultimately, the power of capital under a Minchin paradigm will prevail in an economy where there are low levels of full-time employment.

‘Capital’ under a Minchin model will refer to the power of big corporations, as opposed to small and medium sized businesses. The carbon tax will have already done the job for rent-seeking Liberals in ensuring that capital defers to big business by having destroyed small to medium businesses over the two years of the tax’s anticipated operation. It will be big corporations that will be represented on SWFs along with industrial conglomerate unions (which will eventually be dispensed with from SWFs) and it will be through these funds that economic and political power in Australia will be determined.

The consolidation of Australia’s future rent-seeking elite will also be engineered by having economically vulnerable Australians politically activated to support Tea Party type parties: i.e. in avowedly social conservative political parties/organisations that by focusing on social issues divert supporters from protecting and advancing their economic and industrial interests.

The hatred that too many economically vulnerable Australians will have toward the ALP and the Greens due to the ill-effects of the carbon tax will help drive the so-called ‘True Believers/ Howard Battlers’ either to the coalition or to *Lasch type parties, such as the purported Democratic Labor Party (DLP). There is a distinct, social conservative voting base in Australia that can be harnessed by ‘conservative’ strategists to ensure that the ALP at the very least does not regain power for a very long time. This could mean that the ALP will eventually have to reconfigure into a new party and it is plausible that the hard left of the Labor Party could eventually split and merge with the Greens.

(*Christopher Lasch, 1932 to 1994, was an American political scientist who recognised the inherent social conservatism of the lower middle class and working class people. So-called ‘conservatives’ who appreciate Lasch’s insights have debased these insights by deliberately manipulating the voting of many economically vulnerable people to the detriment of their actual economic and industrial interests).

The operation of a Lasch political strategy has already been manifested by the activities of the ‘conservative’ Sydney based radio broadcaster Allan Jones. He was the keynote speaker of the anti-carbon tax rally/truck convoy in Canberra in August 2014. Although this rally was deemed by federal government ministers and the media to be a failure due to relatively low attendance, in fact this August rally was a complete success for the Minchin Liberals.

The relatively low numbers who took part in the August rally helped instil a sense of security in ALP parliamentarians to proceed with the carbon tax while helping establish a sufficient base for an avowedly socially conservative protest movement to expand after the carbon tax is passed. Frustratingly, Minchin Liberal backed organisations, such as the purportedly pro-state rights Samuel Griffith Society, will generate popular support over issues such as the maintenance of state mining royalties and protection of agricultural land from mining. However, anti-state premiers such as Barry O’Farrell will deliberately canvass such issues to both bolster pro-state organisations and to prepare the groundwork for rent-seeking.

Even without the Minchin Liberals effectively applying a Lasch strategy, the ALP is already helping to facilitate the Minchin model by adopting a carbon tax. Indeed, Minchin previously helped set the scene for the carbon tax when his climate change scepticism was utilized by him and his supporters to help depose Malcolm Turnbull as Liberal leader in late 2009. High powered political skill was displayed by the Minchin Liberals in deposing Mr. Turnbull. A manifestation of this skill was the way in which coalition front bencher Joe Hockey, a supposed supporter of the then opposition leader, split the Turnbull party room base to crucially ensure Abbott’s stunning victory.

As shameful as Malcolm Turnbull’s deposition was, (particularly because the opposition leader had secured prior party room approval to negotiate an ETS with the Rudd government), it was sinister that the Minchin Liberals colluded with the Greens to precipitate a change in Liberal Party leader. Although Minchin is a climate change sceptic, the Greens leader Bob Brown is a climate change cynic. This is reflected by the fact that, even after Mr. Turnbull was deposed, an ETS still could have been passed into law had the Greens supported the necessary legislation in the Senate. The passage of such legislation would have subsequently precluded the introduction of a carbon tax.

The Greens blocked the ETS legislation so that the current carbon tax law (which will take effect in July next year) could be passed. The profound political and economic change that the carbon tax will cause for Australia may substantially advance the power of the Greens but the socio-economic ramifications may latter rebound on them. The economic destruction that rent-seeking will bring will result in decisions being made that environmental treasures such as Kakadu National Park have to be mined out of economic necessity. But, then again, whoever said that the hard left of the Greens were ever genuine environmentalists?

If the hard left of the Australian Greens were really genuine environmentalists, then they would have supported an ETS similar to New Zealand’s which is genuinely giving the environment the benefit of the doubt. As a matter of economic and indeed environmental justice, it is wrong to tax producers who lack the capacity to lower their carbon emissions-which is what a carbon tax will do. An ETS is fairer and potentially more effective than a rent-seeking carbon tax because large emitters, who do not have the capacity to reduce their carbon emissions, can buy carbon credits from producers that achieve carbon reductions, thereby leading to a net decrease in carbon emissions.

But then, rent-seeking is inherently unfair because it is by definition concerned with gaining more pieces of the pie for existing stakeholders rather than growing the pie. Australia might have struck the balance necessary to insulate against rent-seeking had there been a synthesis between the positive aspects of the Costello legacy and the positive achievements of the Rudd-Gillard government.

The positive aspects of the Costello legacy were that Australia’s foreign debt was paid off, a new non-inflationary revenue stream was created via the GST and far-sighted prudential controls helped ensure that the service sector of the economy was strong. These positive accomplishments of the Howard-Costello era were counter-acted, to the point of negation, by its draconian anti-employee industrial relations agenda as manifested by the Work Choices (sic), 2006 Act and by then Prime Minister John Howard’s relentless anti-states agenda.

The election of the Rudd ALP federal government in October 2007 could have ushered in a golden age for Australia. An abundant surplus was bequeathed and there was a total absence of public foreign debt. The passage of the Rudd government’s Fair Work Australia legislation in 2009 re-introduced a pluralist industrial relations system along with the prospect of increased economic activity being engineered through union/employee involvement in enterprise bargaining.

But Australia’s golden age was not to be because the rent-seeking elements in the Liberal Party that had politically destroyed Howard have worked in collusion with similar elements in the ALP to coerce the Gillard government into ultimately pursuing a rent- seeking agenda. This is despite the acute dangers of rent-seeking to the Australian economy in the context of the GFC. The recent passage of the carbon tax through parliament is testament to the strength of such inter-party collusion in pursuit of gaining political and financial control of Australia’s mineral resources which will destroy the nation economically but politically help clear the way for the adoption of the Minchin model.

That the Minchin model will eventually apply to Australia is a virtual certainty due to the 2011 parliamentary passage of the carbon tax. As a result of the legislation, Prime Minister Gillard will be erroneously regarded in the future as a political leader who sold her nation out. If history was accurate, an overview of Julia Gillard’s leadership would indicate that her actions were positive when she was in control of circumstances. This was evident, when as deputy prime minister, Julia Gillard instigated the passage of the Fair Work Australia legislation in 2009 which re-established a pluralist industrial relations system after the coalition’s anti-employee Work Choices (sic) 2006 legislation. As education minister, Julia Gillard also left a positive mark by promoting transparency in school assessment thereby providing students in government with the leverage to receive quality teaching.

By contrast, Tony Abbott will be regarded as a maverick leader who eventually earned the people’s trust to win government by relentlessly resisting detrimental socio-economic policies such as the carbon tax. The reality that Abbott was crucial in compelling Prime Minister Gillard to adopt rent-seeking policies, such as the carbon tax, will probably never be apparent.

Tragically, Abbott will not only have secured the facilitation of detrimental policies that he avowedly opposed but will still reap the colossal political benefits of their application. Due to the ALP’s subsequently weakened position, a Prime Minister Abbott will have the requisite skill and capacity to remould Australia in accordance with the Minchin model.

A defining aspect of ‘voluntarism’ under the Minchin model will be that rank and file membership branch democracy will be at best an optional extra. Having crucially helped set the scene for the Minchin model by passing the carbon tax, the ALP is now contemplating to effectively dis-empower its membership at a branch level by moving to a plebiscitary/primary system. Such a transition might seem an advancement of party democracy but the reality will be that a minority of members will vote when mobilized to do so by factional heavy weights, thereby consolidating a transition to organisational oligarchy.

The down grading of ALP party branch democracy will help a new party oligarchy exercise power at a new regionalized tier of government as state governments are dismembered after the Labor Party wins re-election in 2012. For reasons that have already been outlined, the shift to ‘regionalization’ (sic) will also be conducive to political oligarchy and rent-seeking.

It is true that party democracy in the ALP is wanting but such inadequacy is symptomatic of a broader malaise- the lack of rank and file commitment to party branches. People have to be prepared to give up time and effort to participate in party branches. Why would citizens join ALP branches if member pre-selection rights (which are exercised in conjunction with central panels with union representation) are to be denied?

These issues of ALP structural reform will be vigorously debated at the Labor Party’s 2012 Conference (which could be moved forward to 2011). Whether more people will join ALP branches and participate are determinants that can not be engineered from above. But the ALP needs always to be there as a branch based party so that people can join the Labor Party if a Work Choices industrial type regime is inflicted on a long term basis. At the very least, the preservation of a branch structured Labor Party will provide a framework for later involvement in politics to resist rent-seeking.

The soon to be held ALP National Conference will debate the issue of uranium sales to India which could be the trigger to re-activate a Gillard-Rudd leadership struggle. The point that leaders of the ALP will hopefully appreciate is that since election to government in 2007, they have in one way or another been manipulated both inside and outside their party toward pursuing a rent-seeking agenda that will eventually clear the way for the adoption of an anti-labour Minchin model. Let the next ALP National Conference be the point at which the Labor Party breaks free from the confines of an external agenda being foisted on it instead of taking another step in consolidating rent seeking.

The Need for Positive Creative Destruction

‘Creative destruction’ is certainly in vouge because technological change is now destroying more jobs than it is creating. The socio-economic ramifications of this lag in the context of the GFC could inaugurate creative destruction that (in contrast to Schumpeter’s positive conceptualization) will actually be very destructive. The need for nations to have viable socio-economic and political systems that are aligned to societal needs and expectations is particularly acute in the context of the contemporary GFC.

Russia is the prime example of a nation that almost adapted to the need for change in 1917 but failed to do so with devastating consequences for the world. Similarly, Italy almost transitioned to a viable political and socio-economic regime in 1922 but was diverted by the rise of fascism. Ironically, whether Italy in 2011 continues to forge its own destiny might help determine if other countries such as the United States, Australia, Britain and Japan, if not the world can develop systems that provide a framework for effective re-adaptation in the context of the fundamental challenge of the GFC.

Dr. David Bennett is the Director of Social Action Pty Ltd.

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 were promising in that they seemed to establish the basis for a democratic constitutional monarchy for when His Imperial Highness formally ascended the throne. 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 to 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 the 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 was the only civilian member on the council. He representes 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 and 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 Great 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 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 that 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 that concealed who really exercised power. To have a constitution that 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, that the monarch receives diplomats and represents Japan abroad as a matter of protocol. 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 suffered.

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 that 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 that 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 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 Japanese 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 that 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 in 1974 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 displaced 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 that 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 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 that 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 that 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 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 that 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 later 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 presupposes 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 SeekingT

The overall danger concerning the emerging debate over a carbon price (tax) is that assumptions (or misassumptions) that 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 hardline 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 preselections 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 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 hardline 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 expence 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 hardline 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 expence 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 expence 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 co-ordinating 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 discernable 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 Cental 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 Muburak 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 utilzed govenment 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 Muburak as his successor. As it was, Muburak assumed the presidency following Sadat’s 1981 assassination. For all the opprobrium that is now attached to Muburak, it is forgotten that he once seemed on track to gain national acceptance as leader by initially undertaking democratic reforms.

President Muburak 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 Muburak’s children who were then non-political).

The May 1984 parliamentary elections were a masterstroke on Muburak’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 Muburak 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 Muburak 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 Muburak not used his political skills to establish a de facto life-long one-man presidential rule. By 1990, President Muburak 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 Muburak 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 Muburak. 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: Muburak Strays from the Sadat Objective

After President Muburak 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, Muburak 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 Muburak’s*. No mass outpouring of social unrest against Muburak 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 Muburak’s rule began to resemble that of Saddam Hussein or Hafez Assad of Syria. Rigorous press censorship was imposed in which Muburak 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 Muburak’s personal consolidation of his power, the NDP essentially became a personal vehicle of the president’s. In keeping with other ‘republican’ Arab rulers, Muburak began to groom his second son Gamal as his successor. The Muburak 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 Muburak 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 Muburak regime became notorious among Egyptians for maintaining covert detention centres. The resort to illegal detention by the police was symptomatic of Muburak’s reliance upon the police as his source of personal power.

(*An independent judiciary under Muburak 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 Muburak’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 Muburak because was never in a position to stack out the officer corps with fellow clansmen. Muburak really came to power in 1981 when he inherited the leadership of the professsionally 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 Muburak 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 Muburak.

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 Muburak. 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 Muburak was tragically avoidable. The corruption of Muburak’s increasingly personalized post-1990 regime began to catch up with him with the onset of economic stagnation by 2004/2005. Muburak 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.

Muburak 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, Muburak and his family have been arrested and are now facing trial.

Muburak 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 Muburak 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 Muburak who in turn could have left his mark on history by paving the way for a civilian successor.

As it is, Muburak’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. Muburak achieved this while still engineering Egypt’s return as a leading member of the Arab world by re-joining the Arab League in 1989. Muburak’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 Muburak. The NDNP is arguably an artificial political party as the successor to the former apparatus of the Muburak regime but this new party stands to gain a genuine voting base in rural Egypt as the custodian of the Sadat and Muburak’s regimes safeguarding Nasser’s very beneficial land reform legacy*.

(*Furtehrmore, 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 Muburak 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-Muburak 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 Oxymorons: Syria’s Moderate Hardline Foreign Policy

In foreign policy terms, the Assad regime was a ‘moderate’ hardline 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 that 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’ hardline 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 hardline 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 hardline 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 Barrack 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, Barrack 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 limit 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 that 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 that 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 that 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 Dolfuss 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 increditbly 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).

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 hardline 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 Director of Social Action Australia Pty Ltd.

Australia has one of the world’s highest standards of living. Income per capita is high and the level of social security is admirably extensive. Indeed, the quality of life (which is not measured alone by economic indices) that Australians enjoy is arguably the best in the world. This nation has had phenomenal prosperity since the export of Merino wool in the 1800s which and the gold rushes of the 1850s.

The crucial dynamic that has facilitated Australian prosperity has been the impact of primary resources underpinning the nation’s international trading position ensuring that domestic goods and services generate local employment. The resultant strength of the domestic economy has consistently enabled Australia to ride out falls in demand for primary exports, be they agricultural produce or minerals.

Current moves (2011) to make Australia reliant upon sovereign wealth funds (SWF) as the future principal determinants of economic activity now imperil the nation’s continuing economic viability. The imposition of a super profits tax regime upon the mining sector (and possibly the banking and finance sectors) also threatens to consolidate a shift to a neo-mercantilist economic “rent seeking” economy that will be fatal for Australia. (The exorbitant cost of the NBN is also being used to facilitate a transition to a “rent seeking” paradigm by indebting Australia so that SWFs will have to be used in the future).

Pressure from the Australian Greens to introduce a carbon tax carbon and disingenuous opposition on the part of the Abbott Liberals is part of political stratagem to facilitate a shift to a neo-mercantile economic “rent seeking” economy. To place in context the gravity of the socio-economic stakes at issue, an overview of Australian economic history and political development is undertaken.

Why the Balance between the Primary and Secondary Sectors of the Australian Economy Must be Maintained

The danger for Australia being over dependent upon the primary sector was vividly illustrated when this continent was plunged into its worst ever economic crisis in the 1890s following a brief international collapse in wool prices. The ramifications of this catastrophe helped precipitate federation in 1901. The adoption of an Australian system of arbitration in the 1900s provided the Australian union movement with a future capacity to grow and to secure wage increases and employee entitlements.

The establishment of tariffs was integrally connected to the development of local industry and employment. Immigration in the 1900s continued to bolster local demand which encouraged the growth of commerce and industry that in turn bolstered the credit worthiness of Australian banks because there was a viable market to lend to. This crucially contributed to economic recovery from the 1890s Depression.

The next economic depression that adversely affected Australia was the Great Depression of the 1930s. However, the effects of this depression were partly lessened by many Australians utilizing family connections to move to the countryside where there were stable food sources and intermittent employment. The onset of the Second World War in 1939 increased production levels which eventually lifted Australia out of economic depression after the war ended in 1945.

The initiation of the Snowy Mountains Hydroelectric Scheme and massive post war immigration by the Chifley Labor government (1945-1949) were vital in sustaining economic recovery because they expanded the nation’s Gross Domestic Product (GDP) and in generating employment. Less beneficent policies of the Chifley government were its attempts to nationalize the banks and gratuitously maintain war time rationing controls. Returned soldiers, their wives and immigrants to make a fresh post-war start were stifled by the Chifley government’s statist direction.

Economic Balance Facilitates Prosperity

The election of the Menzies coalition government in December 1949 was a vital positive turning point in Australian history because this new government supported small to medium business sectors as the drivers of economic activity and employment. The coalition government also gave vital support to the manufacturing sector by providing tariff protection to domestic Australian industry.

Instead of attempting to regulate the economy by state planning controls that would have undermined the nation’s productive capacity, the Menzies government applied a Keynesian approach to engineer demand and influence inflation levels. Keynesianism was most famously and successfully applied in the credit squeeze of 1960-61 in which fiscal and budgetary levers were used to dampen demand thereby, lowering inflation.

The Menzies government’s role in facilitating economic and employment growth was noteworthy in that there was no attempt to stifle the arbitral award system which helped ensure that employees reaped the benefits of economic prosperity. The Menzies era reflected an approach to liberalism which was predicated upon arbitration and employment generation.

The Role of Industrial Arbitration in Maintaining Economic Balance

The rationale behind arbitration was that wages should be as high as economically feasible to help bolster employment levels and social cohesion. The major proponent of this approach was the Australian statesman Alfred Deakin who in alliance with the then Labor Party leader John Watson, helped pioneer the passage of the Conciliation and Arbitration Act 1904 (the 1904 Act).

The 1904 Act facilitated the introduction of arbitration whereby industrial tribunals - through the granting of industry wide awards - established pay and conditions for employees after hearing respective employer and union submissions. The handing down of the landmark Harvester Judgement in 1907 by Justice Sir Henry Bourne Higgins established the benchmark that a minimum wage should be such to enable workers to support their families. The operation of arbitration also helped prevent industrial conflict. This system of industrial relations allowed relatively small craft based unions (which often lacked industrial muscle) to effectively represent employees who might otherwise have missed out from the benefits of a market economy.

Economic Rationalism Challenges Australia’s Economic Balance

An opposing approach to Australian liberalism (which is now in the ascendant) is that wage levels should be suppressed as much as possible and the entitlements that employees could access should be restricted because paid labour is conceptualized as a business impost. Ironically, this approach did not become viable for neo-liberal elements within the Liberal Party in the 1980s until the Hawke ALP government (1983-1991) floated the Australian dollar, removed investment restrictions to allow capital inflows, commenced tariff reductions, introduced enterprise bargaining and undertook micro-economic reform.

The economic reforms of the Hawke government – which were continued by the ALP government of Paul Keating (1991 to 1996) - gave legitimacy and credence to advocates of free trade within the Liberal Party. The two competing approaches to Australian liberalism were fought out in the early 1900s in reference to the issue of protection versus free trade and their respective political proponents, Protectionist leader Sir Alfred Deakin and Free Trade leader Sir George Reid. The triumph of Deakin over Reid ushered in a protectionist economic paradigm for Australia that lasted from the 1900s to the early 1980s.

Ideological neo-liberals since the 1980s have been critical of the Menzies government for maintaining tariff protection. The argument that they have proffered has been along the lines that tariff protection created artificial levels of employment by artificially propping up non-productive elements of the economy. This line of reasoning also maintained that protectionism insulated Australia from the rigors of international competition and was only sustainable due to demand for Australian primary products such as wool.

The most damming indictment by Australian neo-liberals on the right and Whitlamites on the left was their assertion that protectionism promoted “rent seeking”. “Rent seeking” is where revenue from a surplus production/extraction is manipulated for the economic and political benefit of those in power. The proposed carbon tax is actually a form of “rent seeking” because revenue from such a tax could be directed to a Sovereign Wealth Fund (SWF) for the benefit of the business and/or political interests (including industry unions) of those who officially manage such a fund.

Critics of the Menzies government erroneously asserted that “rent seeking” had been facilitated by protectionism because resulting employment levels were artificially underpinned by international demand for Australian primary produce at the expence of inherently productive economic activity. This perspective also maintained that protection was a form of taxation because the cost of the tariff was passed onto the consumer.

The economic policies of the Menzies government in the 1950s and the 1960s were actually the antithesis of “rent seeking”. This was because protectionism then helped foster the growth of small to medium business sectors of the economy by providing them with an actual capacity to be viable and subsequently generate employment. Not only were employment generating industries fostered but the Menzies government’s respect for industrial arbitration helped ensure that wage earners gained the benefits of economic growth and commercial activity.

The Menzies government also promoted the viability of the agricultural and mining sectors by making international trade deals, the most notable of which was a trade treaty with Japan in 1957. Up until the 1980s, Australia was usually in trade surplus with its major trading partners.

Whether the challenges posed to Australia by changing international economic and trading trends necessitated a shift to a neo-liberal paradigm will not be analysed but rather their socio-political impacts because they could now determine if Australia now goes down the precipe of “rent seeking”. Before the 1980s what later became known as ‘economic rationalism’ was advocated in the 1960s by the federal Liberal Party backbencher Bert Kelly. Kelly’s support of free trade was courageous because it was the exception to the rule. But be that as it may, there were substantial political ramifications associated with a shift to economic rationalism that are now placing Australia on course to becoming a “rent seeking” nation and first became evident under the Whitlam government.

Whitlamism: The First Threat of “Rent Seeking”

The future free trade orientation of the Whitlam ALP government (1972 to 1975) was apparent when Whitlam, the then opposition leader in the 1960s, declared himself to be a ‘Rattigan Man’. This was in reference to Alf Rattigan who was the head of the Tariff Commission in the 1960s and 1970s.

The standard narrative of what in Australia became known as economic rationalism commences with Rattigan defying the powerful Country Party leader and deputy prime minister (1958 to 1971) John Mc Ewan by advocating free trade as opposed to Mc Ewan’s ‘protection all round’. It was under Whitlam that the Tariff Board was converted in 1973 into the Industries Assistance Commission (IAC). The role of the IAC was to help ensure that industry became internationally competitive instead of applying tariffs to protect Australian primary and secondary production.

The gauge of the Whitlam government’s unworthiness was the almost equidistant degree to which it was the polar opposite of the Menzies government. In contrast to the Menzies government which ensured that its protectionist policies were effective by supporting the business sector, the effect of the Whitlam government’s free trade policy direction was to cause high inflation and high unemployment.

The free trade orientation of the Whitlam government was illustrated when it suddenly announced a dramatic 25% tariff cut in July 1973! Whatever the inherent theoretical merits of the 1973 tariff cut, its practical ramifications were destructive. Local industry and businesses were not able to adapt to this sudden tariff cut. Massive increases in government spending combined with government support for steep centralized wage increases caused inflation to rise to double digit figures.

The inflationary impact of wage rises adversely eroded business and middle class acceptance of the arbitration system (which business had helped usher in, in the 1900s) and this unfortunately contributed to a shift in the Liberal Party toward an anti-employment perspective in which labour was considered an encumbrance toward economic progress. Any social dividends that might have been gained from the Whitlam government’s increased spending in health, education and the arts were cancelled out by the inflationary impact of the government’s industrial and macro-economic policies.

The Whitlam government was also the opposite of the Menzies government in that it threatened the viability of Australia’s crucial mining sector. Tariff protection had attracted foreign investment to assist in establishing a viable mining sector in the 1950s and 1960s which in turn assisted in establishing an invaluable export source and foreign exchange earner. The appropriate balance between attraction of foreign investment and national economic dividends was struck by company taxes and mining royalty payments. Probably the most important factor that the Menzies government secured was to create a stable investment environment by promoting social and economic stability.

The Whitlam government by contrast threatened the mining sector with its so-called attempt to ‘buy back the farm’. Between December 1974 and October 1975 the Minister for Minerals and Energy Rex Connor attempted to illicitly and illegally raise funds for the government to buy substantial parts of the mining sector from foreign and domestic mining companies. Connor’s hair brained scheme was pure “rent seeking”. Instead of using revenue raised via mining taxes to benefit the nation, the Whitlam government was attempting to gain state control over a vital sector of the Australian economy.

The objective of such a policy was to help ensure the economic and political dominance of the state by controlling the mining sector under a new ownership regime. In such a context, any other group that was not part of the power elite could eventually have been dispensed with, such as the role of Australia’s middle class in generating economic activity and employment.

The merciful end of the Whitlam government in November 1975 saw the confirmation in office, by a landslide vote, for the Malcolm Fraser led coalition in December that year. The Fraser government restored coherent economic policy following the disastrous Whitlam interlude. Due to the inflationary impact of left-wing metal unions deliberately instigating a wages outbreak in 1982 and the major ill-effects of the drought, the Fraser government lost office in 1983.

Retention of the Fraser government in the 1983 election could have seen the continuance of traditional practice (which the Whitlam government’s “rent seeking” had challenged) of Australia achieving a high standard of living by achieving a balance between generating jobs in the services sector and safeguarding the wealth generation derived from the primary sector via exports.

Corporate Power Threatens the Economic Balance: ALP Rule
From 1983 to 1996

The election of the Hawke ALP government in March 1983 resulted in Australia moving to a free trade neo-liberal socio- economic paradigm. The neo-liberal ramification of the Hawke and Keating governments (1983 to 1996) was that full time employment became an optional extra in relation to desired public policy outcomes. The major socio-political consequence of the ALP’s time in power during the Hawke-Keating era was that there was a concentration of corporate power via union amalgamation and the involvement of big business groups (such as the Business Council of Australia, BAC) in facilitating major reforms, such as the introduction of enterprise bargaining in the late 1980s.

A very detrimental legacy of the Hawke era was that union amalgamation eliminated worthwhile smaller craft based unions. It is therefore untrue that the hard left of the SL of the ALP did not substantially gain from the Hawke government because they secured a concentration of power via union amalgamation. The concentration of power that emerged in the 1990s between emergent left wing industry unions and the business corporate sector endowed the Hawke-Keating government (Keating formally became deputy prime minister in 1990) with the power to undertake economic reform that was often detrimental to people’s standard of living.

Adverse social conditions, such as increased unemployment, small to medium business bankruptcies and effective de-industrialization of parts of the nation’s manufacturing sector were reflective of the erosion of the traditional balance between the primary and secondary sectors of the economy wrought by economic rationalism during the Hawke-Keating era. Due to the social dividends of the Accord and the free market radicalism of the coalition (as well as internal divisions within the Liberal Party) Hawke won elections in 1987, and 1990 that he should have lost.

The Gillard government will have to decide as an ALP government if it will go down a “rent seeking” path or attempt to ensure that the fundamentals of a mixed economy are retained. A mixed economy in the Australian context has usually referred to a balance being struck between the private and public sectors. Due to the current “rent seeking” threat a mixed economy can now be taken to refer to the balance between an employment generating domestic sector and a primary resource exporting sector.

But if Australia’s hard left (encompassing left wing industry unions, the Greens and associated left wing social movements) support a carbon tax that destroys a mixed economy they will be the ultimate ‘useful idiots’. They do not realize that the effective destruction of the domestic economy will ultimately clear the way for corporate mining interests to dominate an Australian “rent seeking” economy. The current useful idiot in the Gillard government who represents the hard left’s interests in facilitating a transition to “rent seeking” is the Climate Change Minister Greg Combet.

Appropriately enough Combet has been touted by Hawke as future ALP leader and prime minister. Combet is a former senior official with the hard left Maritime Union of Australia (MUA) and is a former secretary of the ACTU. This senior minister is now in a position similar to Hawke’s former role as a go-between for big business and powerful left wing union bureaucracy in facilitating political and economic restructuring that consolidate will their respective power.

How and Why “Rent Seeking” Threatens Australian Unionism

The Hawke government in the 1980s established the current groundwork for the current threat of “rent seeking” by facilitating union amalgamation. The passage of the Industrial Relations Act 1988 (the 1988 Act) set in place processes whereby unions could amalgamate. As a result of union amalgamation union membership plummeted because union members were alienated by their craft based unions being swallowed up into industrial conglomerate unions. The shift toward part time employment that came as a result of tariff reductions and cutbacks in industry assistance further contributed to de-unionisation.

A potentially positive impact of the 1988 Act was that it introduced enterprise bargaining where work conditions could be formulated on a workplace basis with employee input. The possible dividend for Australian union organisations of engaging with rank and file members by having an organising strategy is still however to be fully realized. Indeed the potential for union renewal by pursuing an organising strategy that engages union rank and file members may be a foregone opportunity because of the adverse effect of “rent seeking” in undermining the employment generating capacity of the local sector of Australia’s domestic economy.

Newly amalgamated unions established and administered union industry superannuation funds. This 1986 reform was not in itself a negative policy development because there were social democratic ramifications of potentially securing retirement for sections of the population that might not otherwise have been covered. An associated rationale justifying compulsory superannuation was that unions would invest their members’ funds to provide them with sufficient funds for their retirement which would also help ease the burden on the pension system.

In the current context the quality of the management of the superannuation funds and the extent to which financial dividends will flow to members varies from one union fund to the next. The overall impact of compulsory superannuation in helping wage earners achieve a secure financial retirement is yet to be fully analysed in a contemporary context.

Sovereign Wealth Funds: The Neo-Mercantile Vehicles for “Rent Seeking”

A potentially negative “rent seeking” impact of compulsory superannuation is that such investment funds could (if federal law was changed) be pooled with government, union and private industry funds to finance SWFs to bail out a future cash strapped Australia. Such government, union and corporate funding arrangements in SWFs could undermine the viability of the private sector as the prime generator of employment and wealth.

At the very least moderate elements within the New South Wales branch of the Liberal Party can maintain their position at a state level by opposing a carbon tax. Without a revenue base from a carbon tax SWFs will not viable and this will deny Premier O’Farrell a prerequisite he needs to introduce ‘regionalization’ (sic) in New South Wales. The situation that the Liberal Party finds itself in, particularly in its New South Wales branch, is similar to the challenge that Sir Robert Menzies faced in ensuring that the power of big corporations did not gain control over the nation’s political right wing.

The Tragedy of the Santamaria Tradition

It should also be pointed out that the first major occurrence of corporate Australia undermining the nation’s right wing was with regard to the social democratic right of the Australian union movement as represented by the Federated Clerks Union (FCU). This outcome was due to the Catholic layman and polemicist Bartholomew Augustine, B.A, (‘Bob’) Santamaria purging the industrial wing his organization, the National Civic Council (NCC), in 1982. The Santamaria Purge was vital in enabling the SL of the ALP to wrest of control of the FCU in the 1980s.

The FCU was a union that represented and drew its support from white collar employees who might otherwise not have been involved in Australian unionism. The FCU vitally supported other moderate craft based trade unions such as the Victorian Affiliated Teachers Union and the Manufacturing Grocers Union. The clerks’ union was led by the late John Maynes who had won control of the union from the Communist Party of Australia (CPA) in the 1940s. John Maynes was associated with Santamaria who had helped establish the Catholic Social Studies Movement (‘the Movement’) in the 1940s under the auspices of the Australian Bishops’ Conference.

The Movement fulfilled an important role in fighting communism in Australian unionism from the 1940s until the early 1980s. This then Catholic lay organisation helped motivate and give ideological direction to Australian Catholics who became involved in their unions at a workplace level to fight against communist infiltration. These Catholics were derisively called ‘Groupers’ by anti-Catholic sectarian Australians. (However, most Groupers eventually accepted this label with pride).

Due to the 1915/1916 ALP Split, Australia was for a time riven by Protestant- Catholic sectarianism. This sectarianism was later manipulated by the CPA by their linking up with anti-Catholic elements within the union movement and the ALP to instigate the purge of the ALP following the illegal 1955 ALP Conference in Hobart. This purge became known as ‘The Split’ and it resulted in the formal founding of the Democratic Labor Party (DLP) in 1957. Another ramification of the Split was that the Catholic Social Studies Movement formally separated from the Catholic Church to become the National Civic Council (NCC) in early 1957 which was naturally led by Santamaria.

The NCC under Santamaria’s leadership fulfilled an important role in providing a sense of ideological and policy direction to both the DLP and to Grouper led unions. However in the late 1960s and 1970s, key members of the DLP and moderate union leaders detected an underlying hostility on Santamaria’s part toward their political and industrial work. Indeed, Santamaria encouraged leaders of the DLP to close up their party after it lost federal parliamentary representation in 1974. Santamaria subsequently encouraged the DLP to wind up and in 1978 a party conference vote was taken in which a majority vote was taken to close the party.

The constitutional legality of this conference was questionable because the constitutional two-thirds majority required to close the DLP was not achieved. Party stalwarts such as Frank Mc Manus and John Mulholland continued to help lead a post - 1978 DLP. Despite this, Santamaria and NCC operatives erroneously claimed that they had started the DLP and closed the party up.

Considering Santamaria’s real attitude toward the DLP, with the benefit of hindsight, it should not have come as any surprise to leaders of the NCC’s industrial wing when he purged them in 1982. Santamaria had approached Gerald Mercer and Jim Hewat, who were leaders of the NCC’s industrial wing, in 1980 to establish separate offices. Between 1980 and 1982 negotiations, were undertaken in good faith by leaders of the NCC’s industrial wing with Santamaria and his supporters to divide the organisation’s assets so that the two groups could go their separate ways.

An agreement that the industrial wing receive a third of the NCC’s funds to go their own was agreed. It therefore came as a shock to members of the NCC’s industrial/union section when they were expelled at a stacked conference of that organisation in 1982 and when their Melbourne offices were later raided that year and occupied by Santamaria operatives on a public holiday in November that year.

Throughout the two year period leading up to the 1982 Santamaria Purge, the NCC’s president’s supporters put out the message that they wanted to establish a new and stronger industrial wing of the NCC. It did not make logical sense that those leading the way in the NCC to disengage from the industrial sphere would therefore establish a new NCC industrial wing.

A terrible ramification of the 1982 Santamaria Purge was that it diverted the incumbent FCU Queensland state branch from an election campaign which was consequently lost to the Socialist Left (SL) of the ALP. Due to SL control of the FCU’s Queensland’s branch, Lindsay Tanner was able to eventually gain control of the Victorian branch in 1988 which was consolidated in 1991. This occurred when senior members of FCU’s national office did a deal with Tanner that effectively thwarted a Grouper ticket from winning FCU Victorian branch elections that year (1991).

Grudging respect should be granted to Tanner for the tenacity with which he gained control of the FCU. However, the ramifications for Australian unionism were horrendous. The so-called social conservatism of the FCU under John Maynes’ leadership was aligned with the union’s white collar membership base which was predominately focused on workplace issues as opposed to trendy left-wing social causes. As a result of the Groupers losing control of the FCU, smaller craft based unions were denied the support that they had previously had from the clerks union to resist union amalgamation. As a result of union amalgamation, there was a massive decline in union membership in the 1990s.

The de-unionising consequences of Tanner’s takeover of the FCU (which now lingers on as a division of the Australian Services Union (ASU) with less than 10, 000 members) included bolstering part-time and casual employment in the Australian workforce. Santamaria’s tragic role in undermining the FCU fell into a pattern of where his supposed social Christian inspired actions actually led to neo-liberal outcomes in which the interests and rights of wage earners were actually undermined.

The NCC’s fortnightly magazine Newsweekly in the early 1980s avowedly decried the loss of the FCU to the SL while omitting Santamaria’s previous role in undermining John Maynes’ position. In his Point of View column within Newsweekly, Santamaria later articulately warned of the undemocratic threat of union amalgamation under the processes stipulated in the 1988 Act. The eloquence with which Santamaria wrote against the threat to union amalgamation belied the fact that he had tragically sabotaged moderate unionism by previously purging the NCC’s industrial wing.

A manifestation of Santamaria’s tragic duplicity was his public support for the re-affiliation of four Grouper unions to the ALP in 1984, knowing that such support would make their re-affiliation all the more difficult. Dr. Frank Knopfelmacher’s (a then prominent anti-communist intellectual who died in 1995) support in the media for the re-affiliation of the four so-called Grouper unions to the ALP was crucial in thwarting Santamaria’s attempt to prevent their re-admission.

The 1982 Santamaria Purge did not necessarily harm the NCC president organisationally in the long term. This was because the Santamaria wing of the NCC kept most of the organisations’ finances in the aftermath of the 1982 purge. Disengagement from Australian unionism enabled Santamaria to invest funds which gained substantial returns that have since underpinned the NCC’s financial viability regardless of its donor base.

A broad insight into the NCC’s financial arrangements was provided when The Australian newspaper provided some detail of a split within the post-Santamaria NCC (Santamaria died in February 1998) in 2005. Limited press coverage of the 2005 NCC split indicates that the organisation is itself “rent seeking”, albeit in a relatively successful context.

Santamaria’s appreciation of the utility of investment funds was not lost on him and he often advocated in his weekly ‘Point of View’ column in The Australian newspaper that the nation should move toward a savings based economy that was supposedly similar to Singapore’s and Japan’s. An Australian savings based economy however would essentially mean a transition to a social credit approach to economic policy which would be “rent seeking” par excellence in an Australian context.

Why Social Credit Policies are Conducive to “Rent Seeking”

A social credit policy approach is where the state controls and manipulates the value of money to engineer economic prosperity. This philosophy has been associated with social Christian teaching and as such is purportedly distributionist and decentralist. As an ideological approach, social credit does not regard labour as necessary if finance capital can be successfully invested and subsequent high returns productively utilized.

There is nothing notionally wrong with the concept of social credit except that great care must be taken as to who controls how finance capital is utilized. In the early 1990s, Santamaria publicly expressed his admiration for Sir Arvi Parbo, the then head of Western Mining, later known as WMC, (which is now part of BHP-Billiton). WMC executives such as Ray Evans supported the NCC front group - the Council for the National Interest (CNI).

Despite Santamaria’s avowed wariness of big business and supposed hostility to finance capitalism, his real political relevance to Australian politics in the 1990s was through the CNI providing a network for corporate executives to parlay their influence into the Liberal Party. Consequently, the NCC’s public policy positions could change according to the desires of big business. The NCC later changed its tentative republic stance of 1991 to support Australia retaining its constitutional monarchy.

Newsweekly had previously given qualified support to Australia becoming a republic after a motion was passed at the ALP’s 1991 federal conference in Hobart (historically terrible occurrences happen when ALP conferences are held in the Tasmanian capital) that a referendum be held on Australia’s constitutional status by the turn of the twentieth century! The NCC’s adoption of a monarchist stance reflected the political objectives of big businesses interests who were then utilizing the CNI and Australians for Constitutional Monarchy (ACM) for their political interests.

WMC executive Hugh Morgan became a supporter of ACM which was founded in 1992, (ACM’s board initially included Dame Leonie Kramer who had also served on the board of Western Mining). ACM has been used by big business and corporate mining interests to promote their interests within the Liberal Party. This is a reason why ACM does not have actual voting members but rather supporters, as voting rights are reserved for its senior leaders. As a result ACM can promote policies such as a ‘Crowned Republic’ (sic) without the necessity to obtain prior approval of its enrolled supporters.

Both ACM and CNI became linked to political networks (within the Liberal Party) that became components of the party’s ‘conservative’ wing. Future senior ‘conservative’ Liberals such as Tony Abbott and Kevin Andrews were both avowed admirers of Santamaria who had links to the NCC. Both Abbott and Andrews later adopted anti-employee and anti-union stances when they were Employment and Workplace Relations Ministers. (Abbott held this federal cabinet portfolio between 2001 and 2003 and Andrews between 2003 and early 2007). Their appointments to this key cabinet position was all the more amazing because Santamaria had been loyally supported by sections of the Australian union movement from the 1940s until his 1982 purge. Even after this purge, Santamaria still claimed to be pro-union.

Therefore Abbott’s reputation as a maverick who stands by his principles regardless of the consequences of popular opinion may not be merited. Abbott’s connections to the NCC enabled him to establish links with the corporate mining sector which could serve as a guide to his political actions in supporting this sector becoming more politically and economically powerful at the expence of the nation’s interests.

The Positive and Negative Ramifications of Economic Rationalism

The Australian corporate mining sector’s political and economic power and its future political strategy can be traced back to the Hawke era. Bob Hawke became prime minister in March 1983 on a platform of ‘consensus’ in which he claimed he would end discord between the union movement and the business community. The corporatist approach of the Hawke government provided it with the necessary scope to initiate fundamental economic rationalist reforms. The positive and negative ramifications of this reform are analysed because they could well set the framework for Australia to become a “rent seeking” nation.

The benefits of economic reform by the ALP during the 1983 to 1996 period were: an internationally competitive Australian dollar, the introduction of enterprise bargaining (with an underpinning safety net) and a stronger banking sector resulting from allowing capital inflows and outflows into and out of Australia. The Hawke also government promoted international free trade by being instrumental in establishing international trade networks such as the Cairns Group. However, Australia moved away from a position of trade surpluses with most of its trading partners in the1980s and 1990s. This negative trend in Australia’s trading position did not seem to perturb the Hawke and Keating governments.

These two ALP governments were however enthralled by their allowing the entry of foreign banks into Australia. The entry of foreign banks compelled local banks to become more internationally competitive, even if the domestic dominance of local banks ultimately remained intact. (Foreign banks did not displace Australian banks in a domestic context due to the Australian banks being too well entrenched). In relation to financial reform the ALP did introduce compulsory superannuation in the 1980s which potentially offered the prospect of facilitating financial retirement security for wage earners.

However a major problem with economic management during the Hawke-Keating era (1983 to 1996) was that no concerted attempt was ever seemingly made to stop Australia’s public sovereign debt rising to unacceptably high levels. There was also an over-reliance on increasing interest rates to dampen inflation which created tremendous burdens for small business and for Australian farmers. The negative impact of tariff cuts causing unemployment levels to rise, and the associated social costs, were not adequately addressed by either the Hawke or the Keating governments.

Although low inflation was achieved by the Hawke and the Keating governments unemployment levels were too high as these respective governments seemed to welcome the shift to part-time and casual employment. The rise in unemployment in the south east state of Victoria, due to tariff cuts in the 1990s threatened its traditional manufacturing sector seemingly reflected a bloody mindset on the part of the federal ALP.

Had it not been for the public’s reservations concerning the then federal coalition, the ALP probably would have been voted out in a landslide in the 1987, 1990 and 1993 elections. (The ALP undoubtedly would have lost the March 1993 election had it not been for the super neo-liberalism of then federal opposition leader, Dr. John Hewson).

The apparent stubbornness of the Keating government in not addressing public concerns regarding unemployment and high interest rates contributed to the coalition’s landslide election victory in the March 1996 federal election. This election victory probably could not have been achieved had the then Liberal leader John Howard not re-assured the electorate that his government would be for all Australians (‘For All of Us’). This subliminal reference to Hawke style consensus was simultaneously an oblique criticism of the corporatism under the ALP in which the interests of big business and big unions seemingly predominated at the expence of the broader public interest.

The promised benefits of economic rationalism under the Howard government (1996 to 2007) in raising people’s living standards were seemingly achieved in the latter part of coalition rule between 2002 and 2006. This was ironic because the Howard government was a neo-liberal regime which sought to create an employers’ labour ‘market’ by driving wages down and facilitating the continued expansion of casual and part-time employment.

The unexpected longevity of the Howard government was two-fold. Firstly, the rise of the One Nation Party under Pauline Hanson siphoned off votes from the ALP to secure Howard’s improbable October 1998 election victory. This extremist party’s electoral appeal encompassed blue collar workers who were afraid that a returned ALP government due its previous neo-classical economic rationalism would harm their economic interests.

One Nation also drew its vote from rural and regional communities. The major problem for the coalition concerning One Nation was that many National Party voters transferred their support to this new party. Indeed, had the ALP not preferenced the National Party in October 1998 federal election, the junior coalition the National Party would have lost most or all of its seats to One Nation!

The second major reason for the coalition’s longevity in federal office was its ultimately effective running of the economy. From the time it first assumed office, the Howard government was dedicated to retiring foreign public debt which was a major economic impost. The major successful economic reform of the Howard –Costello era was the introduction of the GST in June 2000.

The GST was an eminent success because a new revenue stream was created by taxing at a consumption level. Fears that the GST would have an inflationary impact did not eventuate because manufacturers could recoup charges on production. The inherently regressive nature of a GST was mitigated due to the Australian Democrats using their balance in the Senate to exempt food from the GST. Furthermore, because Australia does not have as wide socio-economic discrepancies of many nations that have Valued Added Taxes (such as South Africa*), the Australian GST did not become as regressive as was originally feared.

(*VAT/GST taxation regimes have been introduced in countries where elites are indifferent to high unemployment. Revenue can still be raised despite high levels of precarious employment by applying indirect as opposed to direct taxation. If Australia becomes a “rent seeking” nation the GST will be used to raise revenue due to the nation’s domestic economic base being undermined).

The benefit of the new GST revenue stream being transferred to Australian states was that other federal funds were freed up to pay off Australia’s public foreign debt. The benefits of the mining boom were also harnessed by Australia having transparent federal corporate taxes for mining rights that were measurable. Therefore, corporate company tax derived from the mining boom could be reliably calculated and applied to pay off the nation’s public foreign debt.

The inflow of revenue to states from mining royalties enabled them to undertake public spending that had a multiplier effect of boosting employment by contributing to the expansion of the nation’s Gross Domestic Product (GDP). The size of a nation’s GDP is the prime indicator of a nation’s economic well-being and strength. GDP is the monetary value of a country’s goods and services and income produced in an economy. The economic rationalism of the Howard-Costello era was eventually positive because Australia’s GDP expanded and this consequently facilitated employment growth.

The Howard government’s achievement in paying off the nation’s public foreign debt led to a substantial easing in interest rates that took the pressure off small business so that this vital sector of the Australian economy was an important generator of employment. Employment growth in itself had a multiplier effect which contributed to further employment growth. *The general success of the Howard-Costello government’s economic policies was that after 2005, there was virtual full employment with employers often struggling to recruit employees due to a labour shortage!

(* Criticisms of the neo-liberal component of the Howard government’s employment policies are undertaken later in this article).

The benefits of having a floating exchange rate also became apparent under the coalition. The easing of interest rates due to public foreign debt being paid off bolstered the value of the Australian dollar on the international money market. The dividend of the ALP government floating the Australian dollar in 1983 is now being reaped during the mining boom. This is because mining trade transactions are undertaken in Australian dollars which has increased the currency’s value and its subsequent purchasing power.

Criticism can be potentially made that a higher Australian dollar*makes Australian exports less competitive because of the currency’s increased value. But this potential draw back is not yet a problem for Australia because of high international demand for the nation’s primary products such as minerals.

(*The Australian dollar is currently the sixth most valuable in the world. This is an incredible feat for an internationally medium sized economy).

Because the Howard government had previously formulated and applied prudential controls, the Australian banking and financing sectors were amongst the safest in the world when Global Financial Crisis (GFC) broke out in October 2008. The resultant credit worthiness of Australian banks was crucial in insulating the real estate and small business sectors of the Australian economy.

The former coalition government’s economic achievements (which were apparent after it lost office during the 2008 GFC) were such that a case could have been made for its retention. However, the ideological disposition of this former government was a neo-liberal one. This was manifested by the passage of the Workplace Relations Act 1996, (the 1996 Act) and the passage of the Work Choices (sic) legislation in late 2005.

The 1996 Act notionally provided for freedom of association by establishing individual contracts between employers and employees called Australian Workplace
Agreements (AWAs). The introduction of AWAs followed on from the Keating government’s 1993 Reform Act that had introduced non-union enterprise bargaining. The problem with the 1996 Act was that, in reality employees without bargaining power could be compelled to sign AWAs which denied them the benefits of union enterprise bargaining agreements (EBAs). The award ‘simplification’ that the 1996 Act provided was similarly intended to remove the award safety net for Australian employees.

The only redeeming aspect of the 1996 Act was that, due to the amendments of the Australian Democrats, the Australian Industrial Relations Commission (AIRC) retained its central role in the industrial relations system. Consequently, award simplification was undertaken by the AIRC but it did not undermine the integrity of the award system because a safety net was maintained. The Howard government therefore seized the opportunity, when it gained a working Senate majority following the October 2004 election, to pass the ‘Work Choices’ (sic) legislation in 2005.

This legislation effectively eliminated the award safety net by utilizing the corporations power of the Australian constitution as the source of industrial relations power instead of the *interstate powers of the Australian constitution. The corporations power of the constitution provided a legal framework that denied unions and/or employees the right to negotiate basic entitlements or to access them.

(*It is a pity that the abuses of the ‘Work Choices’ legislation (sic) did not lead to a wider appreciation of the crucial importance of maintaining for the public good the constitutional and financial integrity of Australian states).

The other major problem concerning the Howard-Costello era in relation to labour was that there was never a concerted attempt to generate full employment or at least promote greater job certainty. To be registered as ‘employed’, it is necessary in Australia to only have one hour or more of paid work a week. Indeed the one hour of paid employment a week remains the current official measure for officially being employed. For the sake of accuracy and to establish the scope for future social action, a broader definition more realistic measure of what constitutes employment should be adopted.

The former Howard government’s neo-liberal approach to employment - in which labour was considered to be an impost as opposed to a source of competitive advantage - denied it the scope to replicate the Menzies government’s stupendous achievement of achieving genuine full employment. Thankfully, the potential now exists for the promotion of full-time employment due to the passage of the ALP’s Fair Work Australia (FWA) legislation in July 2009.

This legislation established a Fair Work Australia industrial tribunal which now utilizes the corporations power to protect employee rights by introducing new practices such as good faith bargaining. The scope for union enterprise bargaining under FWA could lead to union renewal and with it the scope to achieve full employment. Employers can utilize enterprise bargaining so that their employees become a source of either competitive by contributing to the formulation of EBAs. Union industrial officers could negotiate EBAs that incorporate employee ideas that improve a company’s commercial position while ensuring that employees share in the benefits. Such an approach could actually advance the interests of semi-skilled and non-skilled labour whose interests are more often than not overlooked.

Although the neo-liberalism of the Howard-Costello era in relation to employment relations is thankfully gone (for now), it is up to the Australian union movement to adopt an effective organising strategy that engages with its actual and potential membership. As important an advance as FWA is, it should be appreciated that there is a danger that a powerful industrial relations tribunal becomes a ‘one stop shop’ that facilitates de-unionisation by rendering unions as obsolete third parties to the employer-employee relationship.

The above scenario should be avoided because union participation, by both union officials and rank and file members, in industrial relations via enterprise bargaining can facilitate the complementary objectives of full-time employment (or enhanced employment security) and the increased productivity necessary to deliver improved employment conditions.

As terrible as industrial relations was during the Howard-Costello era, the overriding economic (and even social) achievement of this period was that a balance was still struck of fostering a complementary relationship between an employment generating goods and services domestic sector of the economy and the minerals export sector. This balance between the primary and secondary sectors of the Australian economy has been a long standing one going back to the first exports of Australian wool in the early eighteenth century from the colony of New South Wales.

Why a Carbon Tax will convert the Costello Economic Legacy into “Rent Seeking”

What distinguished the Howard-Costello era from the Hawke-Keating government was that the former coalition government restored the balance between the primary and secondary sectors of the Australian which had been undermined by economic rationalist reform. Whether the Hawke and Keating ALP governments or the Howard government should take ultimate credit for the economic reforms (or even if these free market reforms were really ever necessary) are contestable points of analysis. The essential point that should be appreciated is that the critical balance between the primary and secondary sectors crucial to Australia’s economic survival is now imperilled by a carbon tax or by the prospect of moving to a super profits mining tax regime.

A carbon tax is different from a GST because it will be a heavy impost on production which will subsequently be inflationary. Too much of Australia’s domestic energy production at both industrial and consumer levels is carbon based. The result will be that a carbon tax will automatically drive up prices that will not only be inflationary but will severely undermine Australia’s international trading position by making vital exports such as iron ore too expensive.

The Australian Greens and elements of the press are disingenuously claiming that there will be a transition to new ‘green’ industries that will create new jobs and export markets. Australia does not have the industrial capacity to create new export markets to compensate for the trade disadvantages that will come from undermining carbon based primary exports. SWFs could well be cynically constructed to create new green industries but their capacity to actually create new employment will be at best an optional extra because the utilization of these funds is to facilitate “rent seeking”.

Analysis of contemporary Spain shows that government engineered attempted transitions in a domestic economy to ‘green’ industries cause steep unemployment and dangerously challenge a nation’s financial credit worthiness without any discernable environmental benefit. The Spanish experience has also demonstrated that government coercion in facilitating the development of green industries (such as solar panel production) undermine existing industries and services to the extent that this kingdom’s overall financial credit worthiness has been very adversely affected.

The cruellest aspect of current moves to convince the public to accept a carbon tax is that the government’ and the Greens’ claims that there will be compensation for the carbon tax that will actually improve people’s financial situation while achieving lower carbon emissions. Going by the experience of the Building the Education Revolution (BER), the pink bats scheme, the madcap ‘cash for clunkers’ project and the current profligate National Broadband Network (NBN) roll-out, it is inevitable that the administration of a compensation programme for the carbon tax will be too unwieldy to be viable.

Professor Ross Garnaut’s 2008 report on how to achieve C02 emissions was predicated on the assumption that the pricing of carbon would cause consumers and producers to reduce their carbon emissions. The ultimate indictment of a carbon tax however will be that this new tax will not substantially reduce carbon emissions*because there is an absence of viable low carbon production alternatives. Consequently there will be insufficient scope for coerced reduced carbon consumption to lead to meaningful lower C02 emissions.

(*Australian carbon emissions constitute approximately 1% of the world’s C02. In this context, it is unnecessary for Australia to adopt a carbon tax because its potentially positive scientific impact will be negligible and unnecessary until carbon reduction schemes are adopted by major carbon emitters such as mainland China).

Even when there has been a capacity to utilize lower carbon alternatives, Australian consumers have so far being unenthusiastic about making the transition. The capacity to convert cars to gas has been available in Australia for over thirty years. Gas is substantially cheaper than petrol but consumers still overwhelmingly prefer petrol to gas. This preference for petrol is reflective of the predominant Australian mindset that, no matter how expensive this fuel is, it is an essential commodity that will be persevered with.

Furthermore, if petrol falls under a carbon tax, how will it be possible to compensate all (or a substantial proportion) of Australian motorists? Any financial compensation for motorists would still be off-set by the inflationary impact of the carbon tax on petrol. In the improbable event that consumers were compensated for the carbon tax, this would be counter productive because the incentive to change consumer behaviour will be lost.

The question that subsequently arises is how can substantial tax cuts as compensation for the carbon tax eventually be funded when government revenue sources will eventually be depleted? The carbon tax will destroy jobs and the productive components of the economy as well as adversely affect Australia’s trading position. For all the hype being generated by the media to compel Prime Minister Gillard to introduce a carbon tax, she will not be able to avoid the electoral retribution that will be meted to the ALP for introducing such a fundamentally flawed tax.

The issues concerning the challenge of substantially altering consumer behaviour via a carbon tax are reflective of the fundamental problem in relation to effective Australian climate change policy – the lack of government financial support for carbon reducing alternatives. In Queensland, underground coal seam gasification is producing a fuel that is substantially lower in C02 content than regular petrol while being considerably cheaper. Similarly, a new bio mass production technique has been scientifically developed that produces an economical ethanol fuel which emits a lower rate of carbon.

If consumers are to move away from carbon sources, then there have to be viable non-carbon alternatives. The focus of government policy should therefore be to finance scientific research and provide tax breaks to manufacturers who develop non-carbon alternatives. This form of industry assistance should be undertaken instead of undermining existing carbon production processes and products via a carbon tax when there will be no consequent reduction in C02 emissions.

The fundamental reason why low carbon industries will not be supported before applying a carbon tax (and why such a tax cannot be successfully applied in Australia) let alone have a positive environmental impact - is the negative and selfish motivation behind the carbon tax and a super profits mining tax regime. The underlying political and economic objectives behind introducing both a carbon tax and a super profits mining tax are to undermine Australia’s domestic economy in relation to the generation of goods and services so that SWFs will be the future determinant of economic power in Australia. This objective is shared - by elements of - the coalition that are connected to big business corporations (including the big three mining companies), by left wing industry unions affiliated to the SL of the ALP, the Greens and by elements of the right of the ALP that are linked to the *AWU.

(*The AWU, as its name suggests, is an all encompassing trade union. In the 1990s a swag of craft based unions such as the Federation of Industrial Manufacturing and Engineering Employees (FIME) were swallowed up into the AWU in which they eventually lost their identity. Amalgamations of craft based unions into the AWU were de-unionising because former members of superseded unions did not transfer their support to ‘their’ new union. This non-transferral of allegiance was partially due to a failure (or reluctance) on the AWU’s part to arrange new internal structures that accommodated superseded craft unions because their former officials too often lacked sufficient industrial and political clout to protect the rights of their members within the AWU framework.

To be fair to the AWU this union has often fulfilled an important role in representing employees in precarious sectors of the economy. The AWU has also often prevented left wing amalgamated industry unions such as the Construction, Forestry, Mining, Energy Union (CFMEU), from gaining membership coverage due to employer preference for the AWU. Left wing industry unions are currently not opposing AWU coverage which could be setting the scene for configurations of management boards of future SWFs).

Economic Pulverization in the Guise of Carbon Reduction

The economic and social destructiveness of a carbon tax in pulverizing the domestic non-mining sector will create an overdependence on the mining sector. A transition to a super profit mining tax regime (which was a policy of the defunct Communist Party of Australia, CPA) will facilitate the necessary arrangements for revenue to be directed into SWFs that will be created in the future. SWFs are investment pools of government money that can also include funds from other sources, such as private industry.

The idea behind SWFs is that, by their going into astute investments, there will be positive long term financial dividends. A SWF can be directed to a specific aspect of the economy to engineer a specific socio-economic outcome in lieu of regular government spending. Substantial contributions from corporations and/or union industry super funds into SWFs via joint ventures could determine the future composition of management committees for these funds.

The rationale underpinning a SWF is sound so long as there is an absence of selfish political interests. Trading nations, such as Singapore, have effectively utilized SWFs. But Singapore and Japan are not endowed with natural resources so they must, and do take great care, to ensure that the money that the state raises for investment purposes actually advance their trading and commercial position.

Reference in the Australian press has been made to the SWF successfully established in Norway derived from funds from that kingdom’s off-shore oil revenue. Norway is a smaller nation than Australia with a focus on a particular natural resource. It has therefore not being possible in Norway for shadowy corporate investors and political interests represented in union industry super funds to establish an unaccountable financial domination via their equivalent SWF.

Due to the overriding political factors in Australia behind introducing a carbon tax and adopting a super profits regime for the mining sector, money for SWFs could eventually overwhelmingly come from mining revenue via a Resource Super Profits Tax (RSPT). In such a context, Australia will consolidate a transition to being a “rent seeking” economy reliant upon fluctuations in commodity prices for economic survival.

It is plausible to envisage a future scenario in which Greens leader Senator Bob Brown waxes lyrical about creating a new SWF for a sector of the economy that the carbon tax has destroyed. In such a context, Senator Brown could make assurances that, out of the immediate economic and social destruction, the situation would actually be improved by creating a new SWF for the adversely affected sector of the economy. The probable outcome of a newly created SWF would be to enhance the particular political and economic power of the interests represented on the management board of the newly created fund.

Why a Mining Super Profits Tax Regime is “Rent Seeking”

Crucial to making SWFs the determinants of economic and political power in Australia is facilitating a transition to a super profits mining tax. Because super profit taxes apply after expenditure it is plausible that large international corporations will be able legally to minimize their tax threshold. This can be facilitated by mining corporations shifting the formal location for tax purposes and by establishing legitimate but non-measurable revenue flows within a global economy.

Under a super profit mining tax, the scope is there to establish the above mentioned taxation arrangements. This in turn could deprive Australian companies of the capacity to rely on the ebbs and flows of international trade to have a bargaining capacity to sell at a higher market price.

Another real danger of Australia adopting a super profits tax regime for the mining sector is that mining companies outside the big three (BHP-Billiton, Rio Tinto and Xstrata) will not have the economies of scale and international connections to minimize their taxes. The most prominent potential victim of a transition to a super profits mining tax is the iron ore producer Fortescue Metals led by its director and CEO, Andrew (‘Twiggy’) Forrest. The transition, from an encompassing RSPT to a Mining Resource Rent Tax (MRRT) that was announced by Prime Minister Julia Gillard just after her assumption of office, was welcome in a relative context to the extent that the latter tax is limited to iron ore.

The operation of an MRRT may provide an initial revenue windfall that creates later momentum to transit to an attempt to reintroduce an RSPT so that the three big mining companies can eventually establish a tripartite monopoly in the mining sector. This could eventuate due to the smaller mining companies being unable to compete because they lack the economies of scale and the international business connections to legally minimize their taxes.

Is should also be pointed out iron and ore is not a scarce commodity in an international context. China and Brazil (which in different ways are “rent seeking” economies) have untapped iron ore deposits. Consequently countries such as these with iron ore deposits could eventually displace Australia as major exporters of iron ore if the Gillard government proceeds with either a carbon tax or an MRRT.

The big three mining companies may be secretly supportive of the later introduction of an RSPT (which is why an MRRT is currently in place) so that an eventual transition to a “rent seeking” economic system can eventually be facilitated. Having a super profits tax regime in place for the mining sector will enable revenue to go into SWFs.

Strategic considerations concerned with facilitating future “rent seeking” could be a reason why the CEO of BHP- Billiton*, Marius Kloppers, recently (February 2011) called for the introduction of a carbon tax. This support for a carbon tax by Australia’s biggest company raises the question why some big Australian manufacturers really support the introduction of a carbon tax? Could it be that a carbon tax would help them eliminate smaller sized competitors or to allow them to have representation on the management boards of future SWFs? Australia is therefore confronted by the dangerous paradox that, while the mining boom lasts, (which will probably be for five years), there will be acute pressure from powerful economic and political interests to engineer a transition to a “rent seeking” economy.

(*As previously mentioned canvassed opposition by AWU National Secretary Paul Howes to a carbon tax could be a reflection that BHP-Billiton possibly opposing this tax due to the damage that it will inflict on Australia’s international trading position).

Instead of utilizing the financial windfall from the mining boom to negatively restructure Australia’s economic foundations (via a carbon tax and a super profits mining tax regime), the revenue raised from corporate taxation on mining should be used to pay off the nation’s sovereign foreign debt. It would be an absolute tragedy if the traditional benefits that Australia has enjoyed because of the balance between having a strong employment - generating goods and services sector and a predominately primary export revenue - generating sector was to be squandered during the current mining boom.

Politicians Should Mean What They Say and Say What They Mean

The big three mining companies, their respective allies in the two major parties and the Greens must therefore not be allowed, through either a carbon tax or a super profits mining tax, to facilitate a transition to a “rent seeking” economy via the utilization of SWFs. In the context of the national importance of Australia avoiding a super profits mining tax, it was interesting to note that, in February 2011, the federal coalition Treasury spokesman Joe Hockey seemingly supported in principle a super-profits tax.

Hockey criticised Prime Minister Gillard for supposedly forgoing $60 billion in annual revenue by dropping the proposed RSPT for a MRRT in response to a twenty-eight million advertising program spent by the mining companies just prior to Julia Gillard becoming prime minister. This was a peculiar criticism on Hockey’s part because it implied support for a super profits mining tax regime.

Hockey’s criticism of Prime Minister Gillard’s dropping of an RSPT is also noteworthy because Tony Abbott had previously declared that he would fight against this proposed tax. Surely senior Liberal federal politicians would have tentatively welcomed the move from an RSPT to an MRRT as a step in the correct direction. But then again Hockey’s dark horse candidacy actually cost Turnbull the Liberal Party leadership in late 2009 even though Hockey was supposed to be a stalwart Turnbull supporter. Given these precedents, should Hockey’s avowed opposition to a carbon tax be taken at face value?

The story that was put out by Malcolm Turnbull’s opponents was that he had negotiated an ETS without prior Liberal Party room approval. This was not the case! The then Liberal leader had been careful to secure his party’s support for negotiating an ETS. Malcolm Turnbull was actually deposed at the instigation of the party’s Sydney based ‘conservative’ faction because of his support for state rights and his attempts to make major changes within the Liberal Party’s party organization.

Malcolm Turnbull attempted internal party administrative changes so that he could not be sabotaged from within when he went to the next federal election. The scenario that confronted Australia as Mr. Turnbull attempted to assert his authority was that of a re-elected Rudd government proceeding to dismember Australian states in collusion with anti-state “rent-seeking” elements within the Liberal Party at federal and state levels.

It is also interesting to note that after Malcolm Turnbull’s deposition, the previously devised bi-partisan ETS still went to the Senate where it was defeated because in addition to the coalition, the Greens voted against it. This was not really surprising because the wider and actual reason why elements within the Liberal Party deposed Malcolm Turnbull as leader was to ensure that a re-elected ALP government brought in a carbon tax so that SWFs would be the future determinant of economic power in Australia. In this context, the Abbott Liberals were just as hypocritical as the Greens who defeated an ETS for “rent seeking” motivations despite avowedly different reasons.

How Climate Change Policy is be abused to Facilitate “Rent Seeking”

An ETS is a centrally administered program that seeks to curb carbon emissions via an industry wide cap. There is a degree of flexibility with regard to an ETS that an encompassing carbon price cannot have. Formulating and applying an ETS would still be a formidable undertaking. Even with a co-ordinated approach under an ETS to regulate carbon emission, there will still be wide scope for economic, social and, ironically enough, environmental disruption.

The most promising ETS currently in the world is the one that the European Union (EU) is proceeding with. This ETS is still a work in progress, and as such, it is too early to tell if the European version will be effective as a carbon reducing mechanism or as a model which demonstrates the inherent viability of an ETS. (Problems concerning allocation of carbon credits are bedevilling the operation of the EU’s ETS).

But the EU (in contrast to Australia) has broader, long standing economic inter-continental mechanisms in place to potentially implement an effective carbon reducing ETS. Australia, by contrast, currently does not have the necessary scientific infrastructure, the requisite economic strength as a medium manufacturing nation and the trade capacity as a predominately primary exporter, to devise and implement an effective carbon reducing ETS, let alone devise one that does not cause fundamental social and economic dislocation.

An argument will be advanced that Australia should proceed with either an ETS or a carbon tax for moral reasons. However, it is next to impossible to devise an effective ETS or carbon tax when its avowed proponents, i.e. senior members of the Greens Party and elements of ALP, are more concerned with establishing revenue for future SWFs. To establish the fundamentals for a “rent seeking” economy, it was (and still is and will be) necessary for an Australian federal government to introduce a carbon tax (a far more reliable and efficient revenue source for SWFs than an ETS) and a super profit mining tax regime.

The ALP federal parliamentary caucus’s reservations in 2010 concerning the abrupt way that Mr. Rudd unveiled the RSPT undermined his leadership. AWU components within the federal ALP who were already disillusioned with Mr. Rudd’s supposed autocratic leadership style linked up with those in the federal caucus who were alienated from the then prime minister due to their reservations concerning the proposed RSPT.

It is a tremendous pity that Julia Gillard, on becoming prime minister, compromised with Treasurer Wayne Swan by agreeing to an MRRT to replace the proposed RSPT instead of dropping super profits regime for the Australian mining sector altogether. This concession, which included the establishment of the Argus Committee representing the interests of the big three mining companies, creates future scope for re-introducing an RSPT.

To ensure that the new Gillard government did not establish an independent direction that deviated from the predetermined course of moving Australia to a “rent seeking” future, the new prime minister was therefore compelled by internal forces within her party and elements of the media to call an early federal election for the 21st of August 2010. As the 2007 federal election had shown, inter party collusion can result in change of office. The 2010 federal election had the same dynamic of inter party collusion but this time the objective was to ensure that a minority ALP government was returned so that a carbon tax and a super profits mining tax regime could be introduced.

Establishing A “Rent Seeking” Paradigm for a Future Abbott Government

Because it would have been impossible for an Abbott government to introduce either a carbon tax or a super profits mining tax, the objectives of the Abbott camp were to allow the return of a minority ALP government to introduce these pre-requisites for a “rent seeking” economy. Respective bulletins, on the ABC’s Lateline and Landline programmes before the August 2010 federal election was called, prophetically canvassed the prospect of rural/regional independents holding the balance of power after the election.

There was, (similar to what John Howard endured during the 2007 election) internal sabotage within the ALP campaign with very damaging internal leaks being made in the middle of the campaign. However, the “rent seeking” elements within the two major parties did not intend Prime Minister Gillard to lose the 2010 election but rather place her in a politically vulnerable position so that a carbon tax could later be introduced.

The dynamics for pressuring the prime minister to implement “rent seeking” measures are in place with the three regional independents and a Greens MP holding the balance of power in the Australian federal parliament. The pressure for the prime minister to go down the dangerous “rent seeking” road will increase after the Australian Greens assume the balance of power in the Senate from the first of July, 2011. However, the prime minister has manifested independence and determination with regard to protecting the nation’s genuine national interests since the 2010 federal election.

How and Why Viable States are Essential Barriers to “Rent Seeking”

The prime minister’s recent (February 2011) agreement with the Australian states, ending the GST clawback with regard to health funding, is a case in point of Ms. Gillard’s independence and determination. The May 2010 health agreement was essentially a federal grab of state GST revenue aimed at eventually phasing out states as part of establishing a “rent seeking” economy. Internal weaknesses concerning how clawed back state GST revenue would have being devolved for the purposes of hospital funding would probably have led to a massive wastage of expenditure similar to the BER.

The new February 2011 health agreement jointly devolves federal and state health funding to local hospital networks to ensure that hospitals actually receive increased funding. The provision under the 2011 agreement for a ‘my hospital’ website (similar to the ‘my school’ website that Ms. Gillard established when she was previously education minister) to monitor how local hospital networks administer federal/state funds must ensure sufficient transparency for the benefit of patients and hospital staff.

The involvement of the states in the February 2011 health agreement raises the broader point concerning the importance of states in safeguarding Australia against “rent –seeking”. Australian states, in contrast to some American states, do not have histories that invoke a strong sense of contemporary local identity*. However, states have been a mainstay of Australian history since federation in 1901 as they were six colonies until the welcome advent of federation.

(*The Australian post-war politician who was the major exception to this national orientation was Sir Johannes (‘Joh’) Bjelke-Petersen, premier of Queensland between 1968 and 1987. Sir Joh even deliberately engendered a sense of state patriotism for electoral purposes. This premier’s allegiance to Queensland undoubtedly superseded his loyalty to Australia. Indeed, at Sir Joh’s funeral in April 2004, this New Zealand born Danish speaking migrant to Australia had previously insisted that his coffin be draped by the Queensland state flag. This was not surprising because, as Queensland premier, Sir Joh had ferociously resisted any extension of federal power that he believed encroached upon his state’s constitutional sovereignty or financial viability.

The other major Australian politician who fought for states rights was Sir Henry Bolte (who was a personal friend of Sir Joh’s), premier of Victoria from 1955 to 1972. Sir Henry never deliberately sought to engender an overt sense of Victorian patriotism but he was vigilant in safeguarding what he regarded as Victoria’s constitutional rights, even to the point of clashing with his friend and political ally, Sir Robert Menzies when he was prime minister of Australia (for a second time) between 1949 and 1966).

Most Australians probably do not regard their particular state as reference point for a rival local patriotism that challenges their sense of national identity. Although this is a positive probable reality, overt attacks by federal politicians on states or advocacy that they be abolished would probably engender negative local reactions because state based patriotism tends to be a latent but still powerful sentiment.

For the above reason, the Howard government and anti-state elements within the successor ALP federal governments of Kevin Rudd and Julia Gillard have surreptitiously attempted to phase out Australian states by trying to seize important state services and/or assets such as public hospitals. Naturally, such power grabs have been portrayed by political hacks as being in the public good (‘ending the blame game’) so that Australian citizens would be ignorant of the wider centralization agenda being foisted on them.

Support for Australian states tends to be non-ideological because they have been mainstays of Australian political history and the nation’s two major political parties have always taken part in state elections with the objective of winning power. Ironically, two ostensibly ideologically opposite governments, the Whitlam government (1972 to 1975) and the Howard government (1996 to 2007) were similar in their determination to replace states with a new regional tie of local government.

This similarity was really not that surprising because these two governments were eventually both beholden to political forces supportive of “rent seeking”. It would be the respective failure of Whitlam and Howard to rein in these “rent seeking” forces that caused their respective dramatic but deserved falls from power.

Just as opposition to Australian states can transcend party lines and ideological divisions, support for states can also exist across these aforementioned divisions. Advocates of state rights have often been portrayed as reactionary conservatives who support states to utilize them as barriers to socio-political change. But the existence of Australian states has been crucial to facilitating social democratic outcomes. This has been because state institutions have been (and are) above commercial and power considerations.

Australia’s Anti-Rent Seeking Political Tradition

The service function of states was inherited from the time before 1901 when they were colonies. It was vitally important that colonial legislatures, courts and bureaucracies were service orientated because this was crucial to enabling former convicts and later gold rush migrants to positively contribute to the development of social, economic and political structures.

The granting of a democratic suffrage* by the colony of Victoria in the 1850s led the way for the other Australian colonies to avoid the pitfalls of “rent seeking”. This was because an extensive voting suffrage deprived landowning elites (‘the squiretocracy’) in the colonies of the capacity to dominate and shape embryonic public institutions following the population explosion that came with the 1850s gold rushes.

(*Albeit a then male only suffrage was then granted in the Australian colonies. However the colony of South Australia was the first place in the world to grant women the vote in the 1890s).

The quality of colonial democracy was advanced by the formation of craft based trade unions, the election of trade union endorsed candidates to colonial parliaments and a free press which was often radical. Colonial politicians, particularly those from a union background, were generally honest and lateral. It was therefore not surprising that the colony of Queensland in the 1890s led the world by having the first ever social democratic government!

The tradition of high quality governance and public policy continued after federation in 1901 up until the Whitlam government’s election in late 1972. The 1904 Conciliation and Arbitration Act (the 1904 Act) - and Justice Sir Henry Bourne Higgins of the Arbitration Commission delivering his land mark 1907 Harvester decision guaranteeing the extensive application of a minimum wage - were further positive barriers against “rent seeking”. The positive impact of such barriers against “rent seeking” was contingent upon public policy protecting the value of exports of the primary sectors of the economy and upon the goods and services component of the domestic economy generating high employment levels.

“Rent Seeking”: The Essence of Neo-Whitlamism

The first real post-federation threat of the introduction to a “rent seeking” economy came with the Whitlam government’s steep tariff cut of 1973, its inflationary policies undermining local industry and, most dangerously of all, its ludicrous attempt to buy mineral resources with illicitly borrowed international loans coming mainly from petrodollars. Establishing federal government control over mineral resources was the key to having a “rent seeking” economy because economic and political power would predominately be derived from who exclusively controlled this vital sector of the Australian economy.

The “rent seeking” ramifications of the Whitlam government’s policies it adopted probably would have pulverized the middle class and hit hard the economically vulnerable. Had the Whitlam government lasted longer then what it did it could have achieved its objective of exclusively controlling the lucrative mining sector. Consequently the state* could have dominated the manufacturing and service sectors of the domestic economy while undermining the export value of the nation’s agricultural sector. Elements of the hard left now delude themselves that a similar scenario will occur through future SWFs.

(The ‘state’ in this context refers to the sovereign public authority of Australia as a nation state).

The overseas financing arrangements (‘petro dollars’) that the Whitlam government covertly attempted to arrange created the danger of Australia losing the scope to be internationally competitive in its trading relations. The Whitlam government’s tentative arrangements with Baathist Iraq to sell uranium to that regime were reprehensible enough but the Bagdad regime’s role as a financier of petro-dollars could have given this dictatorship secure access to uranium to develop a nuclear bomb.

The Whitlam government’s orientation toward engineering a transition to a “rent seeking” economy was also reflected by its policy direction of phasing states. The constitutional and financial viability of states were institutional barriers against levelling Australia out so that “rent seeking” could be foisted on the nation.

A Viable Domestic Economy is an Important Barrier to “Rent Seeking”

The financial and industrial reforms of the Hawke and Keating ALP federal governments also posed a danger of facilitating “rent seeking” due to the dramatic impact of tariff cuts and financial deregulation challenging the capacity of the domestic manufacturing, rural and service sectors of the economy to adapt. The over-reliance by these two governments on fiscal policy, such as sustained high interest rates, challenged public fortitude in the late 1980s to the 1990s.

The erosion of the domestic economy’s goods and services sector - and high sovereign foreign debt levels under the Hawke and Keating governments - had potential “rent seeking” ramifications because an over reliance on primary exports (including minerals) was created. The arguable saving grace of these two federal ALP governments was that social dividends were gained by its Prices and Incomes Accord (the Accord) with the Australian Council of Trade Unions (ACTU).

But even this above mentioned benefit was ultimately contestable because the Accord helped facilitate union amalgamation which contributed to steep de-unionisation in the 1990s. Another contributing factor to de-unionisation was the expansion of part time and casual employment which came from financial deregulation and tariff cuts restricting domestic industry. Undermining a nation’s employment capacity is conducive to “rent seeking” because there is a corresponding shift to revenue from extractive industries due to a substantial reduction in the domestic goods and services sectors of the economy.

During the Howard-Costello era, there was a promising move away from the dangers of “rent seeking”. As previously mentioned, the overall positive impact of the coalition government was a balance between the goods and services sectors of the domestic economy and of the primary exports. Consequently by the late 1990s the Howard government reaped the benefit of economic reforms of the Hawke-Keating era because the federal coalition achieved a balance between the primary and secondary sectors of the economy. This balance was facilitated by the federal coalition government paying off public foreign debt and creating a new non-inflationary revenue stream via the GST which was, in the main, productively utilized.

The Howard – Costello Era: The Nexus between an anti-Employee Agenda and “Rent Seeking”

The fundamental problem of public policy during the Howard-Costello era was that a harsh anti-employee/anti-union approach to industrial relations was pursued. There was a still a considerable gap between the respective interests of labour and capital because there was extensive casual, part-time and precarious levels of employment.

Had a genuine attempt been made during the Howard-Costello era to generate full time employment, a case could have been put in favour of the federal coalition’s continuance in office. Unfortunately, this was beyond the bounds of possibility because the Howard government retained a fixation on weakening employee rights by adopting a stridently anti-union agenda. This federal government’s anti-employee orientation was most notoriously manifested by the 2005 passage of the ‘Work Choices’ (sic) legislation. High levels of employment (albeit too much of which was part-time and casual employment) and low inflation alleviated public concern regarding the Howard government’s anti-employee direction.

Therefore, even with ‘Work Choices’ (sic), it must be admitted that the Howard government probably would have held on to office in 2007 had it not been for internal sabotage due to a desire to abolish states and ultimately facilitate a shift to a “rent seeking” economy. Howard paradoxically undermined his own cause due to his hostility towards states. He did not realize that anti-state elements within both the coalition parties and the ALP would link up to bring the coalition government down in 2007, so that a transition to a “rent seeking” economy could be made by introducing ‘reforms’ such as super profits tax on mining.

Despite Howard’s anti-states agenda the positive fiscal inheritance that his government bequeathed to the incoming Rudd-Gillard government - combined with the new government’s social democratic orientation - could have made for a golden age not experienced since the second Menzies government. Although the Rudd government did not serve a full parliamentary term its outstanding positive achievements were:

- replacing ‘Work Choices’ (sic) with FWF,
- repeal of mandatory detention for refugees,
- apology to indigenous children who were removed from their
families,
- introduction of transparent evaluation processes which gave economically disadvantaged primary and secondary students leverage teaching quality.

(Furthermore, Kevin Rudd as prime minister gave Australia a distinct advantage in foreign policy due to his knowledge of international relations and rapport with world leaders).

The Forces of “Rent Seeking” Advance

The first fatal misstep of the Rudd government was its dramatic increase in public foreign debt resulting from its stimulus packages following the advent of the GFC in October 2008. Although the first stimulus package was arguably necessary, the subsequent packages were definitely not required. This lack of financial rectitude was also evidenced by the excesses of the BER and the pink bats fiasco which could well go into negative Australian legend.

The worst of the Rudd government’s excesses were the chalking up of a foreign public debt of over $90 billion and a blow out in the budget deficit due to profligate spending. This financial deterioration was all the more reprehensible because the Rudd government had inherited zero foreign public debt and a budget surplus! Culpability for this state of affairs rests with Wayne Swan, who is incontestably the worst ever Australian federal treasurer. Swan’s actions are reprehensible because they are leading (and are probably intended to lead) the way for Australia having a “rent seeking” economy.

Fortunately, the demand for Australian mineral exports is underpinning Australian prosperity as manifested by low inflation and high employment (albeit with levels of casual and part time employment that are too high). The long term viability of the domestic economy is ultimately dependent upon the strength of the Australian dollar, upon local demand for Australian produced goods and services and upon the credit worthiness of Australian financial institutions. Simply put, if the purchasing power of the Australian dollar erodes due to burdensome foreign public debt, the above mentioned factors necessary for a sound economy will eventually evaporate.

Wayne Swan has promised the Australian people something for nothing by saying that the problems of the budget deficit can and will be solved by application of the MRRT. By implication, there is an implicit assumption on Swan’s part that more revenue can and should be raised by again moving to a RSPT. For reasons (that have been previously detailed), a super profit regime is ill-advised because it broadens the scope for multi-national corporations to exploit their international connections to minimize tax, thereby creating an unfair advantage over business rivals.

The current maintenance of an MRRT (which is still detrimental to the Australian economy) in lieu of a RSPT and the prime minister’s laudable decision to forgo the GST clawback in relation to the so-called ‘health agreement’ of May 2010, was probably conceded in return for the federal government imposing a carbon tax.

Julia Gillard and the Carbon Tax: Winning the Battle but Losing the War

The prime minister’s rhetorically brilliant defence of her government’s endorsement of a carbon tax in parliamentary debate in February 2011 could well be regarded as the point at which her government actually lost its way. Therefore, the political dynamics of the February 2011 sitting of federal parliament require analysis.

The government’s minority position led it to engage in wedge politics in relation to Australian multi-culturalism. ALP parliamentarians attacked Tony Abbott’s parliamentary secretary, Senator Cori Bernardi* of South Australia, for his comments on Islam. Had Abbott come to Senator Bernardi’s defence ideological divisions within the Liberal Party between moderates and ‘conservatives’ could have come to the fore to challenge party unity. Abbott brilliantly countered by avoiding the multi-cultural issue by instead focusing on the issue of a carbon tax, thereby ensnaring the prime minister in the trap of articulately advocating in parliament a tax policy that could ruin the ALP.

(*Senator Bernardi is at the fore of applying the Lasch strategy on behalf of the ‘conservative’ faction within the Liberal Party. The Lasch strategy in an Australian context is applied by avowed conservatives consciously cultivating the support of economically vulnerable people to shift their support away from the ALP by appealing to their social conservatism while undermining their actual economic interests.

The anti-carbon tax rally (March 23rd, 2011) in Canberra was a manifestation of the Lasch strategy par excellence. This rally was addressed by Tony Abbott before demonstrators who waved vitriolic placards in which they attacked the prime minister. Such demonstrators are currently considered to be extremists but when the ill-effects of the carbon tax take effect they will become the vanguard of a viable populist right wing movement.

Such a movement could siphon millions of ‘battler’ votes from the ALP to either the coalition parties or a populist right wing party such as One Nation or the purported DLP. Indeed the former One Nation leader, Pauline Hanson, who almost won election to the New South Wales upper house, attended the March 23rd rally. Hanson claimed that the state election result was a repudiation of the two major parties.

This analysis of Hanson’s was incorrect because the Greens vote still did not rise above 10% of the popular vote and the coalition parties won the bulk of votes from the ALP. But if a carbon tax is introduced the potential will be there for a new populist movement, which Hanson might be part of, to snare stalwart ALP votes. The coalition parties might lose some votes to a new populist movement but the political dynamics will be such that the aggregate advantage will remain with the Abbott Liberals).

If a new populist movement becomes viable because the ALP adopts a carbon tax the tragedy for its supporters will be that their socio-economic interests will be greatly harmed while the respective backers of Abbott and Senator Brown exercise economic and political power through SWFs. With a carbon tax causing substantial (if not massive) future job losses, the political environment will be polarizingly conducive to both a right wing populist movement (which pro-Abbott political operatives will ensure they always ultimately control) and the Australian Greens. Consequently, the present priority for the Gillard government must now be to drop the proposed carbon tax and the proposed MRRT.

By the Gillard government dropping any notion of either a super-profits mining tax or a carbon tax political leaders such as Abbott and Senator Brown know that they will be deprived of the necessary revenue stream to underwrite future SWFs. Already, the manifestations of collusion between the Abbott Liberals and the Greens are apparent with both respectively guaranteeing passage of a corporate tax cuts and passage of the MRRT legislation.

For public consumption, Abbott and Senator Brown will each denounce the respective policy positions of the other with regard to company tax cuts and introducing an MRRT. The current machinations are already reflective of a paradigm shift to a “rent seeking” economy. Company corporate tax cuts will later serve to increase a future dependence on SWFs by diminishing existing government sources of revenue.

But it will be the Gillard government that will be the ultimate dupe by facilitating a new “rent seeking” framework that will destroy the moderate elements within the ALP and the Liberal Party. The impact of a carbon tax in destroying employment generating industries will further deplete government revenue sources - company and individual taxes - while simultaneously creating a revenue stream for SWFs. People should therefore be aware that when politicians speak about ‘the people’ gaining a share from a super profit tax regime that it will really be a shadowy “rent seeking” elite.

The need for the public to be wary of political chicanery was amiss when it came to analysing recent New South Wales state politics and such negligence should not be repeated with regard to recent and future developments in federal politics.

Why the Gillard Government Must Avoid the New South Wales Scenario

If Julia Gillard is to avoid becoming an ALP federal equivalent of Kristina Keneally, then she will have to stop both an MRRT and a carbon tax. If she achieves these two inter-related objectives, the prime minister will hopefully succeed where Morris Iemma unfortunately failed: securing the ALP’s capacity to avoid being engulfed by a detrimental pre-formulated political strategy aimed at pulverizing the Labor vote.

Whatever the merits of electricity privatization, it was a pity that someone as decent as Morris Iemma failed to implement this policy because this failure assured the ascendancy of the “rent seeking” elements within the New South Wales ALP. These elements deliberately pulverized their state party branch to lay the current groundwork for the future dismemberment of New South Wales as a state by the new state coalition government led by Premier Barry O’Farrell.

The new O’ Farrell government will invoke the acute financial mess that New South Wales is in to later introduce its version of ‘regionalization’ (sic). This will set the dangerous precedent for ‘regionalization’ (sic) to be undertaken by other state governments with the belated support of a coerced Gillard government. This scenario is similar to the political pattern that previously occurred in New South Wales when the state coalition allowed the Iemma to win re-election in March 2007 and when the O’Farrell led opposition blocked electricity privatization in September 2008.

Any benefit that Premier Iemma might have gained from winning the 2007 state election, that the New South Wales ALP deserved to lose, was undermined by the state council of the state union movement, Unions New South Wales, opposing electricity privatization in 2008. The Iemma government still passed legislation in the state’s lower house of parliament to privatize state electricity due to the determination of then New South Wales Treasurer Michael Costa. However the Barry O’ Farrell led the coalition prevented electricity privatization by voting with ALP dissidents in the upper house.

Denied the capacity to effectively remedy New South Wales parlous financial position without revenue from electricity privatization Premer Morris Iemma resigned in September 2008, to be succeeded by a then relatively unknown Nathan Rees, who in turn was succeeded by Kristina Keneally as premier in December 2009. These leadership changes which were engineered by Sussex Street (the Sydney ALP state headquarters that is dominated by the Right faction) - exhausted public acceptance of the post-2007 ALP state governments thereby substantially contributing to the state coalition’s 2011 landslide victory.

The wryly amusing aspect of the 2011 election rout of the New South Wales ALP is the widespread misperception that the power of the perpetrators of the state ALP’s incredible regression has been extinguished. The election of John Robertson as the new New South Wales opposition leader is testament to the continuing power of those who are responsible for the state ALP’s rout by previously opposing electricity privatization.

A major foe of Robertson’s within the Iemma government was Michael Costa. The former state Treasurer was a neo- liberal within the Carr and Iemma state governments. However, Costa was the major figure within the New South Wales ALP who could have placed his party on a financial and political course that might not have secured re-election in 2011 but at least helped avoid the recent castrophic election result. The essentially self-inflicted decimation of the New South Wales ALP has now set the scene for union and party power brokers to achieve the pre-2007 objective of ‘regionalization’ (sic), albeit under the auspices of a state coalition government.

The installation of Kristina Keneally as premier did save the state ALP from virtual annihilation and this was reflected by the party winning over twenty seats (albeit in a lower house with ninety-three members). Had the ALP won fifteen or less lower house seats, then the party name brand might not have been sufficiently strong to partake in the spoils of future ‘regionalization’ (sic) that the O’ Farrell government is now planning. A ‘regionalized’ (sic) New South Wales will set the scene for the future dismemberment of other Australian states.

The recent March 2011 New South Wales election result is reflective of the fact that the Australian people are currently not inclined toward political extremes on either the left or the right. The Greens Party only scraped in to win two lower house seats and its below expectations performance illustrates that the electorate at present is generally wary of allowing this extremist party into government by electing them to lower house seats. However, the Greens will have a greater capacity to convert their power on a localized level to link up with left wing industry unions that are with the hard left of the ALP. This will in turn alienate many mainstream Australians from the ALP who could well go over to the coalition parties or a rightwing populist party.

The pulverization of the ALP will probably not disturb the party’s hard left (in probable alliance with the Greens) which will envisage having economic and political power via connection to SWFs. But ALP strategists should be aware that a political leader as shrewd as a future Prime Minister Abbott will ensure through populist measures that the ALP does not retake the massive ground that it will lose due to a carbon tax. Already Prime Minister Gillard is losing her major political asset – the trust that many Australians have in her.

When the nation economically and socially regresses due to the imposition of a carbon tax the ALP’s federal voter base will correspondingly erode similar to the New South Wales 2011 election result. Ms. Gillard’s will be too distrusted to make up the ground because she broke her promise before polling day that a carbon tax would never be introduced if her government was returned. Consequently a plebiscite on the issue of introducing a carbon tax is now the only way that Prime Minister Gillard can maintain faith with the Australian people while allowing the ALP to see what is before it in terms of possible future voting patterns.

Giving the Environment the Benefit While Avoiding “Rent Seeking”

The fundamental problems that a carbon tax poses to the Gillard minority government are reflective of a series of adept political manoeuvres by “rent seeking” elements within the two major political parties and the Greens. Therefore, the litmus test for confronting the extreme danger of introducing a carbon tax (or ‘pricing’ of carbon) is how to counteract “rent seeking”.

Prime Minister Gillard is someone who does have the nation’s genuine interest at heart but the success or failure of her leadership will hinge upon stopping “rent seeking” in relation to climate change policies. There is scientific controversy (to say the least) concerning the validity of human induced global warming, but the environment should be given the benefit of the doubt. If government climate change policy is genuinely undertaken with scientific objectives at the forefront, then the traditional balance between the primary and secondary sectors of the Australian economy could be retained and “rent seeking” avoided.

With regard to the issue of reducing carbon emissions, which the carbon tax is supposed to address, the interests of the Australian environment could actually be advanced if the Gillard government established a federal Environmental Protection Agency (EPA) to co-ordinate with existing state environmental protection agencies and the CSIRO to develop non-carbon alternatives that will actually lower carbon emissions. Such a development would not only help the environment but save the nation from adverse economic and social impacts of a carbon tax while thwarting the application of SWFs.

The major gap in relation to current government climate change policy is the mis-assumption that Australian consumers and industry can make a transition to green alternatives when these alternatives do not currently exist. The situation that the Gillard government is therefore confronted with in relation to a carbon tax is akin to the profligate NBN: the absence of a proper cost benefit analysis. The real focus of the government should currently be on undertaking an objective and credible cost- benefit analysis of a carbon tax to assess its socio-economic and environmental impacts.

Consideration will hopefully be given by the Gillard government establishing an impartial federal environmental protection authority to undertake a genuine cost-benefits analysis of a carbon tax, of an ETS or of putting environmental controls in place to actually lower carbon emissions. An important function of such a federal environmental authority could also be to assist in promoting alternatives to currently high carbon emitting processes.

There is a danger that a future federal environmental authority could become a vehicle for “rent seeking”. Unscrupulous politicians could utilize such an authority to impose prescriptive policies to regulate industry and consumer behaviour to the extent of destroying the existing socio-political order so that safeguards against “rent seeking” can be removed.

As with the fiasco concerning the NBN, lessons can be applied to potentially remedy the situation, in this instance with a future federal environmental protection agency avoiding the dangers that the Murray Darling River Basin Authority (MDBA) poses to the viability of communities that live in the Murray Darling Basin. The MDBA was established as a federal government statutory authority in 2007 by the Howard government to ensure the environmental protection of the basin area in Victoria, Queensland, South Australia and New South Wales.

Unfortunately, there are elements within the ALP (similar to the Greens) which would like to see the MDBA buy back water rights in order to destroy rural and regional communities so that a more economically and socially homogenous society is created. Even though the recent floods have currently endowed the basin states with more than sufficient water for irrigation purposes, the danger still exists for the MDBA to be utilized by unscrupulous political forces.

The ALP should be aware that, as with the proposed carbon tax, if the MDBA is abused to wreak economic and social destruction, then many talented Australians will give of their time and energy not only to see that Labor is voted out but that the party stays out of office. Tony Abbott’s recent (February 2011) reference to Sir Robert Menzies being the friend of the motorist when he opposed petrol rationing is indicative that the opposition leader appreciates the contemporary relevance of history.

The imposition of a carbon tax on petrol (which the Greens advocate) could well provide the critical mass necessary for the Liberals to maintain a long term political ascendancy. In contrast to former Liberal leaders such as Dr. John Hewson, Tony Abbott has a broader understanding of history and of political strategy to provide him with the capacity to maximize the political advantage that results from socio-economic changes.

Future ALP culpability for economic and social destruction via either a carbon tax or unfair denial of water irrigation rights in the Murray Darling Basin will provide Abbott with the trust and credence as a prime minister to pursue populist policies that really consolidate “rent seeking”.

Genuine Federal-State Co-Operation can save the Environment and Stop “Rent Seeking”
The 2010 election victory of a coalition government in Victoria led by Ted Baillieu has provided irrigators of the Murray Darling Basin in all four states a reprieve from the threat of the “rent seeking” left in the ALP and the Greens. The new Victorian government has utilized its membership of the *Murray Darling Basin Ministerial Council (MDBC) to voice its concerns on behalf of irrigators and surrounding communities to advocate that the MDBA decrease its buy - back of water.

(*The MDBC is composed of the federal minister for Water and five ministerial counterparts with responsibility for water from the four affected states and the ACT).

If a federal equivalent of an Australian environmental protection agency were to be created, it would hopefully provide a coordinating role for the excellent state based environmental protection agencies that are in place. In contrast to the MDBC, a future federal environmental protection agency should reflect and respect the sovereign constitutional power and role of states.

Representatives of the respective environmental state protection agencies* could serve on a new federal body but without usurping the roles of the long standing state environmental protection agencies. Furthermore, support from state Liberal Party governments for a federal environmental protection agency would counteract the political polarization that would be needed to facilitate a “rent seeking” transition.

(*State environmental protection agencies have previously devised scientifically viable ideas in regard to irrigation practices such as inserting plastic pipes from rivers to crops because water storage in plastic pipes can reduce water evaporation by up to 40%. This failure to implement an effective and scientific rational idea is reflective of the similar gap in relation to climate change policy and reference to reliable state agencies. Unfortunately, financial analysts who are advising avowed supporters and opponents of a carbon tax are not being remiss in formulating future SWFs).

Genuine federal-state co-operation (as manifested by the outstanding February 2011 health agreement) could be engineered by a voluntary interchange of state and federal powers in relation to environmental matters. Representation on the management board of a federal environment protection agency will hopefully encompass a broad cross section of community concerns with representatives from unions, from big and from small business, from farmers’ groups and from environmental groups.

An important role of such a federal environmental protection agency could be harmonization of environmental laws and codes of conduct. Hopefully, one role of a federal protection agency would be to actually promote the development of carbon industrial and consumption alternatives. Because Australia approximately emits 1% of the world’s C02, time would be on the nation’s side to support such a transition without necessarily or immediately pricing/ taxing carbon.

Australia’s International Competitive Advantage in Climate Change is its Scientific Research and Development (R&D)

If a tax/price is to be imposed on carbon, then the charge should be as a fine for pollution on industry for breaching scientifically set carbon emission levels. Carbon emission levels should be set by a future federal protection environmental agency (in conjunction with state environmental protection agencies) to avoid scope for “rent seeking”. Environmental agencies (state and federal) should also undertake research and development (R&D) into non-carbon alternatives to address the current gap.

The social and economic costs of destroying Australia’s coal industry would be too high particularly because the potential environmental gains cannot be secured in the context of an absence of an international agreement on carbon emissions. However, revenue raised from corporate taxation on coal mining could be allocated to developing lower or non - carbon alternatives without undue job loss or disadvantaging Australia’s trading position in the intermediate period.

Australia is a low carbon emitting nation that can due to the breadth of available research expertise lead the way when it comes to developing tackling human induced climate change. The Commonwealth Scientific and Industrial Research Organisation (CSIRO), established in 1926, is one of the world’s leading, if not the world’s leading, scientific and research agencies. However, CSIRO and the nation’s state environmental protection agencies are currently grossly under utilized in addressing human induced climate change or in developing new carbon reducing alternatives.

The absence of an impartial and independent federal environmental protection agency is a tremendous pity because Australian history has shown that successive, independent bureaucracies, be they colonial, state or federal, have been important checks against self-aggrandizing would - be elites. Non-bureaucratic state institutions such as courts and industrial relations commissions have similarly fulfilled a vital role in protecting the common good.

Since the colonial era, impartial and honest bureaucracies have served the nation well in preventing domestic and foreign interests from establishing concentrated economic and political control*. The great challenge in Australian politics is having politicians and members of the public involved in ensuring that impartial institutions and associated processes are again utilized to thwart “rent seeking” in relation to climate change.

(*The current threat that the Coles supermarket chain poses in eliminating rival local dairy producers by selling its milk at a substantially lower rate is reflective of the Australian paradox: a nation with ample natural resources and space but with a comparatively small domestic market sometime necessitating intervention by statutory authorities to actually protect market competition and employment generation).

The Fork in the Road: Will Australia Go Down the Fatally Dangerous “Rent Seeking” Path?

Australia is now at the cross roads as to whether the ALP Gillard government will safeguard the traditional balance - between the primary and secondary sectors of the Australian economy - that has usually countered “rent seeking”. The greatest social and economic cataclysm that confronted Australia since European settlement in 1788 was the 1890s Depression. The balance between the two major sectors of the economy was restored by Australian federation, by renewed immigration, by the establishment of Australian industrial arbitration and by a first class banking sector with appropriate prudential controls.

If Australia becomes a bankrupt nation with a domestic economic sector incapable of generating sufficient employment and a decent standard of living due to the introduction of a carbon tax, the dark irony of this outcome will be that those who will benefit from the ensuing social and economic morass will continue to thrive by their connections to SWFs and finance credit lines- such will be the reality of a future “rent seeking” nation. Australia will therefore finally become a nation where its natural resources are converted from being a source of economic power and prosperity into a source of economic and social power by a new self-seeking “rent seeking” elite at the expence of a pre-existing common good. At the very least justice and equity demands that the Australian people be allowed to vote in a plebiscite on the issue of whether a carbon tax should be introduced.

Dr. David Bennett is the Director of Social Action Australia Pty Ltd.

The failure of the west to provide military aerial support to the Libyan people will probably deprive them of a once in a lifetime opportunity to regain their freedom that was stolen from them by Colonel Qaddafi in 1969. ( If the Obama administration insists upon obtaining prior UN authorization to take military action the administration could at least institute the immediate strafing of the Qaddafi regime’s military positions to send a message to the dictatorship not to take further military action againist its people. The strafing option would at least provide urgent relief to the Libyan people and encourage the option of a negotiated political settlement). The reasons why the west must support the Libyan people are outlined in this article by Dr. David Bennett.

The current situation (March 2011) in Libya is appalling because the people of that nation will probably fail in their attempt to free themselves of the Gaddafi regime due to the refusal of the United States and the democracies of the European Union (EU) to provide air support to the rebels*. The mistakes that United States made in Iraq in 1991 have poignant resonance to the contemporary situation in Libya. Had the American led coalition provided air support to cross-communal opposition in early 1991 Iraq probably would have become a democracy in the 1990s. Iraqi exile opposition groups (including Iraqi monarchists) had managed to assemble an alternative provisional government in the Syrian capital, Damascus, in late 1990, to hold the country together until democratic elections were held.

(*The situation is now that bad due to west’s previous failure to provide military aerial support that aerial support for the rebels in holding Benghazi will be required instead of just establishing a no-fly zone).

Ironically the Iranian and Syrian regimes were probably half secretly relieved that the 1991 revolt was crushed by Saddam because as much as these two regimes loathed him they were still weary of Iraq becoming a democracy. Had the United States led coalition supported the Iraqi opposition in 1991 not only would the 2003 invasion have been averted but considerable good will toward America on the part of the Iraqi people would have been generated.

Support for Iraqi democracy was not a strategic calculation for the administration of George H Bush (1989-1993). The peace dividend from the American led liberation of Kuwait was that Yasser Arafat’s Palestine Liberation Organization (PLO) was virtually forced to attend the Madrid Conference of 1992 which paved the way for the signing of the Oslo Peace Accords on the White House Lawn in September 1993 that led to the creation of the Palestinian authority.

Arafat was compelled to take part in negotiations with Israel because American leverage was bolstered by the 1991 liberation of Kuwait. Arafat’s colossal ingratitude to the Kuwaitis by acquiescing to the Iraqi invasion of Kuwait in August 1990 led to the Arab Gulf states threatening to cut off from the PLO unless it entered into American sponsored negotiations with Israel. The Arab Gulf states were prepared to support this peace process because they knew that without the American-led victory in Kuwait Saddam would have threatened the entire gulf region.

A future democratic Libya will substantially contribute to peace in the Middle East because democracies do not go to war against each other. Even in the very improbable event that democracy does not eventuate a post-Gaddafi Libya it is still unethical to allow the Libyan regime to massacre its people which it is already showing signs of preparing to do so.

It is ironic that a dictator such as Qaddafi who has preached anti-American revolutionary rhetoric is now confronted with a popular revolt by his own people that will probably be crushed due to American inaction. The last time the United States took military air action in Libya was in April 1986 when military targets were bombed. This military action was undertaken in response to the Qaddafi regime’s involvement in bombing in 1985 of a nightclub in Berlin patronized by American military service personnel.

Unfortunately civilians lost their lives as an unintended consequence of the 1986 American bombing of military targets in Libya. Now that Libyans are losing their lives in opposing Qaddafi the United States has a golden opportunity to show the Libyan people that America has never been against them but rather their dictatorship.

The 1986 bombing did have the effect of Qaddafi curtailing his support for international terrorism to the extent that until the February 2011 revolt his regime had found a surprising degree of international respectability. This was despite the fact that 270 people (flight passengers, crew and civilians in the Scottish village of Lockerbie) were killed after two Libyan secret service agents blew up Pan Am Flight 103 in December 1988.

Given the foreign and domestic excesses of the Qaddafi regime most Libyans are now not anti-American. This is evidenced by people in Free Libya expressing their expectation (which is probably a forlorn hope) that the United States and EU nations, such as Britain and France, will provide military aerial support to the rebels. Indeed some Libyans are now fondly recalling the role of the Allies in liberating them from brutal Italian colonial rule in early 1943. It would be very tragic if the Libyan people become genuinely anti-American because the United States failed them in their time of need.

Furthermore, an American failure to support the Libyan people will also alienate many Egyptians (who should be voting in democratic elections in September this year) and people in Arab countries from the United States. Most Arabs believe that the United States is at best ambivalent about democracy in the Middle East because of a desire to secure a dependable supply of oil. However irrational this assumption may be it could ultimately be vindicated by subsequent American and European abandonment of the Libyan people.

The United States also has a moral obligation to support the Libyan people in 2011 because Washington had discreetly supported Qaddafi’s September 1969 military coup military coup against King Idris (1890-1983) while His Majesty was out of the country. This very unfortunate support for the 1969 coup was due to American alienation from King Idris because His Majesty had insisted that the United States eventually close its Wheelus Military Air Base. (The American mistake in supporting King Idris’s ouster in 1969 became apparent when Qaddafi abruptly closed down this air base in June 1970).

Contrary to popular Libyan opinion it was King Idris who had discreetly made prior arrangements with the Americans for them to close down their Wheelus Military Air Base. The pro-western king’s quiet insistence that the American remove their military presence was derived from His Majesty’s desire that Libya be free from all foreign forces which had been in the country since the Italian invasion of 1911.

If the Libyan people do ever regain their freedom they will hopefully favourably remember King Idris. During King Idris’s reign (1951 to 1969) the three historical regions of Libya, (Cyrenaica, Tripolitania and Fezzan) were administratively united in 1963 thereby fostering needed national unity. In 1949 the future king (who was then the emir of Cyrenaica) helped thwart a proposed de facto 1949 Anglo-French-Italian division of Libya under the aegis of a ten year United Nations mandates for these three nations respectively ruling Libya’s three regions.

The most important legacy of King Idris’s reign was the utilization of revenue from the American lease of the American Wheelus Military Air Base in Libya to re-commence oil exploration in 1959. The subsequent discovery of oil led to Libya eventually becoming a wealthy nation. The king was careful to encourage foreign investment so that the oil extraction could be professionally undertaken. To ensure that no one region of Libya benefited from oil extraction at the expense of another (in stark contrast to the recent years of Qaddafi’s rule) King Idris instituted the previously mentioned local government reforms of 1963.

King Idris’s major abuse of power was that His Majesty banned political parties after the February 1952 parliamentary elections following Libyan independence in December 1951. The 1952 elections were won by royalist independents backed by the king’s Senussi religious brotherhood and Bedouin clans. The only remotely organised political party at this time was the Tripoli Congress Party which as its name suggested was based in the capital.

The Tripoli Congress was the major representative group for Tripolitania Province at the United Nations authorized May 1951 Conference held to establish an independent Libya. This conference was attended by an equal number of representatives from Libya’s three provinces. These delegates designated Emir Idris of Cyrenaica as king of a new united independent Libyan kingdom.

The delegates from Tripolitania supported Emir Idris as king of a united Libya to prevent a return of Italian rule in their province. Those delegates representing the Fezzan region at the 1951 Conference came predominately from Bedouin clans who were keen to end the French UN mandate of their province which had constituted a de facto attachment to French ruled Algeria.

The banning of the Tripoli Congress Party (which was affected by deporting its major leaders) helped ensure that parliament lacked the coherence to govern the country because of the absence of a party system. The frequency with which King Idris engineered changes in government also undermined the scope for Libya to develop a stable parliamentary system crucial to the operation of a democratic constitutional monarchy. Furthermore the king’s botched attempt to abdicate from abroad created the confusion that was crucial in allowing Qaddafi to seize power in 1969.

However King Idris’s achievements in gaining Libyan independence, forging national unity and his nation becoming an oil producing country by insisting that oil exploration be undertaken are accomplishments that can never be denied His Majesty. The king’s regime by comparative political standards (with the possible exception of pre-1975 Lebanon) then and after was probably the most democratic in the Arab world. Had the 1969 coup not occurred Libya might have become a fully democratic constitutional monarchy.

The Libyan royal family greatly suffered as a result of Qaddafi’s coup. The worst abuse that they endured was a mob ransacking their house in 1984 and forcing them to live on a rudimentary dwelling on a Tripoli beach. For reasons that are difficult to decipher (which is often the case with Colonel Qaddafi whose seemingly inexplicable actions always end up contributing to his holding onto power against the odds) the Libyan royal family was allowed to depart for Britain in 1988. In Europe the Libyan royal family has been accepted by the royal courts, such as King Juan Carlos’s of Spain.

The current royal claimant (since the death of Crown Prince Hasan in 1992) to the Libyan throne, Prince Muhammad Al- Senussi, has emphasised that his priority is to help Libya become a constitutional democracy. The role that Libyans are fulfilling in courageously rebelling against Qaddafi is inspiring and reflective that the Libyan people should never have been caricatured as uncritical supporters of their republican dictator who is as ruthless in eliminating Libyans at home as he was of Libyan exiles and of foreigners by supporting international terrorism.

The international respect that the Libyan royal family now has and the fact that they too have suffered as the Libyan people have will hopefully allow them to return to fulfil an important role in a post dictatorship Libya. Widespread usage of the pre-1969 flag during the 2011 revolt is a promising sign that the memory of King Idris and the Libyan royal family will be well regarded if they eventually return to live in Libya.

However the prospects of Libya again becoming free are near impossible unless there is prompt foreign military aerial support for the revolt. The Libyan people have never forgotten that Haiti’s unexpectant and defiantly courageous change of vote at the United Nations in 1949 provided the one vote margin necessary to defeat the Bevan-Sfroza Plan that would have thwarted Libyan unity and effectively perpetuated foreign rule.

Hopefully, if the Libyan people again become free, they will always remember that Australian Foreign Minister Kevin Rudd called for military aerial support to help them. France and Britain* are also distinguishing themselves by trying to gain international support for a no-fly zone. (A no-fly zone is probably now no longer viable due to international delay in helping the Libyan people. International military air action against Qaddafi’s ground forces is now needed if the situation is to be redeemed).

(*The British foreign office has traditionally being pro-Arab since Lawrence of Arabia helped lead an Arab rebellion against the Ottoman Turks during the First World War).

France’s action in diplomatically recognizing the Libyan transitional authority representing the Libyan people is reflective of the principled emphasis that the Sarkozy government has consistently placed in supporting human rights around the world. Indeed many Algerians still remember the courage with which President De Gaulle defied the military and the powerful nationalist right to grant Algerian independence in 1962.

Many Arabs were thankful to the United States (a notable exception was an ungrateful President Gamal Nasser of Egypt) for its refusal to support the 1956 Anglo-French invasion of Egypt following Nasser’s nationalization of the Suez Canal. The United States still maintained cordial relations with Israel despite Israeli participation in the abortive Anglo- French invasion of Egypt. The dividend of American support for Egypt in 1956 came in the 1970s when President Anwar Sadat effectively aligned his country with the United States to sign the Camp David Peace Accords of 1979 with Israel.

It remains an open question if the Libyan people will be thankful to the United States. Secretary of State Hillary Clinton has ‘talked the talk’ about supporting the Libyan people but she is still to ‘walk the walk’ with regard to taking practical action. President Barak Obama is a brilliant rhetorician but there is a major gap between rhetoric and reality in regard to the president’s fine sounding words being followed up by military action that is supportive of the Libyan people.

Indeed it is better that the Obama administration refrain from the hypocrisy of fine sounding rhetoric concerning Libya if the administration has no real intention of providing military air support. For all the future verbal and written skill that will be displayed by senior officials of the Obama administration in excusing their abandonment of Libya the historical reality will not be negated in the future as a major American foreign policy failure in both moral and realpolitik contexts.

The Obama administration’s denunciation of Qaddafi and his family could conceal the administration’s underlying reluctance to provide military support. This is because verbal denunciations of the Libyan regime by foreign governments only disinclines Qaddafi and his family from departing into exile. Furthermore from Qaddafi’s perspective why should he go into exile if his regime is in a military position to prevail over the Libyan people?

With regard to the Qaddafi family it should be admitted that Qaddafi’s second son and probable heir, *Saif Qaddafi is intelligent, if not brilliant. His first class political skill has been manifested by his previous success in helping Libya gain international respectability that was once thought to be impossible. In contrast to Hosni Muburak of Egypt’s son Gamal, there was a preparedness on the part of most Libyans to accept Saif as his father’s successor for an intermediary period because he was believed to be a political liberal.

(* Saif sent a message of condolence to Queen Fatima’s funeral in October 2009. The exiled Queen Consort died at the age of 98 in the Egyptian capital of Cairo. Her Majesty, in contrast to her austere husband, was a witty and cosmopolitan personality who normally left a lasting impression on people she met. Libyans who remember their monarchy more often than not do so because they re-call the personality of Queen Fatima and Her Majesty’s personal kindness. It was not surprising that Her Majesty later became a symbol of hope and courage to many Libyan exiles).

When the revolt initially broke out in Libya in February 2011 it would have been smarter for Qaddafi to have made way for his son as his successor (‘Guide of the Revolution’). As his father’s successor Saif was well positioned to have called a political conference of political factions (including opponents of the regime) to establish a provisional government with a Qaddafi component within it. Saif could then have led a Qaddafist party in future elections and in doing so protected his family’s interests in a future democratic Libya.

Instead Saif moved to secure his position as his father’s heir against rival siblings by denouncing the revolt in a televised national address. Saif’s rambling bellicose speech to the nation was virtually a dare to the Libyan people to rise up by warning them that the regime would wreak havoc if they did so. The Libyan people responded by rebelling because they had nothing to lose.

In the early stages of the revolt it seemed that the regime would fall. However Qaddafi shrewdly and brutally first focused on securing the capital Tripoli by using foreign mercenaries to subdue the city. Having done so, the regime is now using better trained and armed troops to march out from the capital to crush the revolt against enthusiastic but mainly amateur volunteers. Tentatively (due to trepidation of provoking a foreign military response) the regime is now using air power to crush the revolt.

The Libyan military is not as strong as what Saddam’s military was in 1991 in Iraq but the underlying dynamic is still the same - an absence of foreign air power to allow a popular revolt to be crushed by a trained army. The only real difference with regard to Iraq in 1991 is that it will take longer for the Qaddafi regime to militarily prevail so that it will be more embarrassing for the international community to stand by as the revolt is crushed.

A strategy that is now probably being employed by foreign leaders is that of expressing verbal moral support for the rebels and making international military aerial support conditional on gaining international authorization from the United Nations and/or the Arab League. Diplomatic temporizing provides world leaders with the necessary alibi to excuse their failure to militarily assist the Libyan people.

Even though the Arab League has just called for a no-fly zone it has done so at a point when this option will probably not save the Libyan people. The current situation in Libya is similar to the situation in Iraq in 1991. In Iraq the first Bush administration enforced a no fly zone in Iraq in 1991 at the point when Saddam’s regime could crush the revolt in the Shiite areas of Iraq without resort to air power. The only beneficiaries of a no fly zone were the Kurds who were thankfully able to establish enclaves along the Turkish border which up until the 2003 American led invasion were a beacon of hope to Iraqi Arabs.

The current beacon of hope to Libyans is rebel held is the city of Benghazi. The residents of this city will undoubtedly put up a strong and bloody defence but it will be to no avail due to their lack of adequate weapons and air power. As the regime approaches Benghazi the international community will make give verbal indications of providing aerial military support but ultimately refrain from doing by invoking international wrangling as the pretext.

After the revolt is crushed, Saif, having secured his position as his father’s successor, will make conciliatory domestic and diplomatic gestures so that threatened international sanctions can be averted. The Qaddafi regime has probably already done exclusive deals with particular customers to access Libya’s oil wealth in the future. Such customers will in turn exercise their political and business leverage to ensure that threatened international sanctions against a Qaddafi ruled Libya never take effect.

The problem with a western betrayal of Libya is that there is going to be a wave of political liberalization in the Middle East. Ironically, anti-American sentiment will be manifested in democratic elections throughout the region if the Americans fail to support a people who have rebelled against a regime that has history of anti-Americanism !

If the United States wishes to secure its position in Libya it should support the Libyan people in establishing a democracy. Valuable steps that the United States could take to support a future Libyan democracy would include promptly linking up with the British and the French to provide the Libyan rebels with air support. The option of a no-fly zone has probably passed due to previous military in action by the international community.

If international aerial support is provided to support the people of Benghazi then the Qaddafi regime will be obliged to negotiate with the rebels to avoid a permanent division of Libya. Negotiations are a plausible option to create a viable interim government because most Libyans have a strong sense of national identity. However those now living in Free Libya do not want to national unity at the price of again being ruled by Qaddafi.

Saif Qaddafi can redeem himself by representing his father in negotiations at a political conference to form an interim government to rule a united Libya until national elections are held. There would probably have to be an international force deployed in Libya to enforce the authority of the interim government. Such an international should be composed of troops from the African Union (AU) and the Arab League but under a United Nations command to safeguard Libya’s territorial integrity. It would be imperative that no American or European nation participate in a multi-national force due to Libyan sensibilities regarding western colonialism that go back to the Italian invasion of Libya in 1911.

The viability of a Libyan interim government and the deployment of an international peace keeping force is now however dependent upon prompt military aerial support from the United States and EU nations. Too much time and too many Libyan lives have been lost due to the previous western refusal to provide military aerial support. A continued failure to do so (regardless of the articulate reasons that will be advanced) will be correctly regarded by most Arabs as a sign of western indifference if not western hostility to Middle East region becoming democratic.

Western nations are understandably reluctant to become embroiled in a possible Libyan quagmire due to events in Afghanistan and Iraq. But the crucial difference is that the political dynamics in Libya are conducive to an interim government without the involvement of western troops. All that is needed is for the back up of western aerial power and Arab League diplomatic involvement to form an interim Libyan government.

Eerily enough the situation in Libya is similar to Iraq in 1991 where had the people on the ground received western military aerial support an interim Iraqi democratically inclined government could have been formed. Although the overwhelming majority of Iraqis are now relieved that Saddam’s rule has ended there is probably still an understandable Iraqi reticence to feel full gratitude toward the United States due to the American failure to support them in 1991. Hopefully such a scenario will not be repeated in Libya.

The Need to Provide Libyan Freedom Fighters with International
Aerial Support

Foreign military action has undoubtedly saved the people of Benghazi from being massacred by Qaddafi’s troops, be they Libyan or paid foreign mercenaries. For this the leaders of the EU, the United States and leaders of medium powers, such as Australia’s foreign minister, Kevin Rudd deserve praise.

The problem now is that Qaddafi is well positioned to hold onto western Libya to perpertuate a permanent division of his country. Already the Libyan dictator is reputated to have met with representatives from Russia, mainland China and India to offer them exclusive access to oil reserves in western Libya. In return for this access being granted these aforementioned nations are being asked by Qaddafi to use their influence to oppose internatioanal aerial support for Libyan rebels on the ground.

In dividing Libya Qaddafi will undo one of King Idris’s major achievements, peacefully achieving national unity. (The other major achievement of His Majesty’s reign was in perservering with oil exploration).

There is contemporary media coverage in the wake of the establishment of a no-fly zone is that Libya will become a quagmire because there are a myriad of tribes and clans. In actual fact Libya has a strong sense of national identity. This was forged in the 1920s and early 1930s by the rebel leader Omar Mukhtar who represented Emir Idris’s interests while he was exiled in Egypt. The 1931 execution of Omar Mukhtar by the Italians generated a strong Libyan sense of national identity without which Libyan independence and national unity could not have been achieved in late 1951.

International aerial support has probably secured the survival of Free Libya in the nation’s east. However the Libyan rebels will not be able to liberate the rest of their nation without international aerial support. The Qaddafi’s regime’s forces are predominately composed of paid foreign mercenaries who are mainly African. There is a smaller Libyan component led by Qaddafi’s close relatives which is adequatley trained and very well armed. Until the establishment of an international no-fly zone Qaddafi’s forces were sufficiently strong enough to crush the rebellion in the east and would have occupied all of Libya had it not been for international aerial intervention.

It should not be forgotten that there was also a major rebellion in the Libyan capital of Tripoli that Qaddafi could not have crushed without the use of foreign mercenaries. Aren’t the people of western Libya also entitled to live in freedom? If Qaddafi is allowed to stay in power in western Libya he will do everything he can to continue to wreak havoc to make his nation into the epitome of a failed state.

To avoid the self-fulfilling prophecy of international aerial support creating a quagmire, military air support should be extended to supporting the rebels on the ground so that they can liberate western Libya. There are two positive scenarios that should eventuate if this military support is provided.

The first is that the Qaddafi regime will fall because international aerial support for the rebels will enable them to liberate their capial and ensure national unity.

The second scenario is that the Qaddafi regime will be compelled to attend an international conference on Libya in which a new interim Libyan government can be formed. This scenario will be similar to NATO aerial intervention in Bosnia which led to the 1995 Dayton Ohio Conference that virtually ended the Bosnian ‘civil war’ (sic). The problem with the Bosnian precedent was that it initially enabled the three factions to consolidate their hold on territory that they respectively held.

To avoid a Dayton scenario an international conference on Libya must produce an impartial interim government whose effectiveness can ultimatley be measured by its success in organising democratic elections. Other key deteriminants of interim government effectiveness will be forging a *professsional army, releasing all political prisoners and ensuring freedom of movement throughout the country to safeguard Libya’s territorial integirity.

(* Establishing a new army will not be that overly difficult because the canny Qaddafi had previously scaled backed the army to avoid a coup).

Foreign military aerial support for the rebel freedom fighters will create the necessary leverage to ensure that the Qaddafi regime attends an international conference to form a new interim national government until national elections are held. Cavets to encourage the regime’s particiapation in an international conference could include granting Qaddafi and his associates immunity from prosecution for agreeing to a political settlement in which a new interim government is formed.

(If an international conference on Libya it will hopefully avoid the Afghan scenario in which the Bush administration restored the Afghan royal family (the ‘Rome Group’) to power in 2001 because of nostolgia for the Afghan monarchy amongst many Afghans. Instead of organising democratic elections which might have resulted in a reinstatement of a constitutional monarchy the deposed Afghan royal family supported the establishment of a self-serivng executive presidential republic which they have since corruptly benefited from).

If the Qaddafi regime refuses to make way for a new interim government formed at international conference then international aerial support should be provided to the rebel freedom fightes so that they can liberate all of their country. The scenorio that must be avoided for both moral and strategic reasons is to allow a subversive Qaddafi regime to linger on in western Libya.

Qaddafi is not a Mad Dog But a Desert Fox

The greatest mistake in assessing Colonel Qaddafi is to underestimate him. As incredible as it seems, the odds are now that he will probably hold onto power in western Libya due to his skill in exploiting international divisions and uncertainity as to how to use military power to support the Libyan people. (Qaddafi could now even re-conquer eastern Libya).

It should not be forgotten that the military coup that a then twenty seven year old Captain Qaddafi led in September 1969 was brilliantly executed due to the skill with which troops were deployed, senior officers suddenly arrested and key communications centres seized. Qaddafi’s skill as a trained signals officer enabled to plan and therefore to lead the coup.

Because he seized power with such relative ease Qaddafi was paradoxically threatened with the prospect of himself falling victim to a future military coup. Indeed, Libya under Qaddafi became a coup prone nation, but with the important qualification that the Libyan dictator developed a particular skill in crushing coups. The coup attempt of August 1975 came the closest of all the previous and subsequent military coup attempts to toppling Qaddafi. The 1975 coup was instigated by six of the twelve officers that had led the 1969 coup and subsequently formed the ruling Revolutionary Command Council (RCC). The failure of the 1975 coup effectively ended any notion of a collective military leadership and Qaddafi’ s personal power has since been effectively absolute.

Whatever is Qaddafi’s overall mental state, he is bi-polar in a political context. When he is power is unassilable Qaddafi is often indulgently eccentric, erratic and at times even humourous. But when his personal power is threatened Qaddafi has an incredible capacity to objectivley analyse a situation, evaluate his strengths against the strengths and weaknesses of his opponents so that he can subsequently take action to maximize his position to the point that he always snatches victory from the jaws of defeat.

The current 2011 rebellion is a case in point of Qaddafi at his diabolical ‘best’ (sic). Qaddafi had previously sensed trouble which resulted in him scalling down his army to its most reliable elements to prevent a successful militry coup. When demonstrations broke out in Libya in February 2011 Qaddafi caused a widespead rebellion by having his security forces shoot peaceful demonstrations. At this junctue it seemed that Qaddafi had miscalculated because this violent repression precipitated a widespread nationwide rebellion.

It was at the point at which Qaddafi was confronted by demonstrations that were extensive (probably even more than what Hosni Mubarak had been confronted with in Egypt in a comparative context) that Qaddafi displayed his well honed but brutal survival skills. Lacking the capacity to hold eastern Libya Qaddafi utilized foreign mercenaries and a well trained and loyal component of his reduced army to initially focus on brutally crushing the revolt in eastern Libya. Having crushed the revolt in this part of Libya (where there was no foreign media) Qaddafi sent his small but well equipped army to crush the rebellion in the west of the country.

The major problem that confronted Qaddafi in western Libya, was (and still is) that the foreign media had entered free Libya and as such were in a position to film the advance of his troops and report atrocities they witnessed, such as shelling of civilian positions. To avoid the slaughter that would have eventuated had Qaddafi’s forces re-conquered western Libya the United Nations (UN) authorized an international no-fly zone.

The creatation of a no-fly zone by western military aerial action has saved Libya’s second biggest city of Benghazi from being taken by Qaddafi’s troops and probably rescued its inhabitants from being massacred. Although Qaddafi’s military facilities in western Libya (including his headquarters in the capital) have been hit hard by international aerial bombing the Libyan dictator knows that this military action has not really changed the capacity of his military to continue their advance into eastern Libya.

The Libyan dictator will make as much mileage as possible out of the bombing of western Libya, including the unfortunate and unintended loss of civilian life, to create international unease and division regarding the bombing campaign to create a no-fly zone . Indeed once a no-fly zone is established due to the obliteration of Libyan air power, Qaddafi will exploit this seeming defeat of his, to create the momentum for the international aerial military campaign to cease while he continues his successful ground offensive.

Already the Libyan dictator is successfully stalling for time as his regime circulates false rumours that there is going to be a military coup against him in the capital. The dictator believes that world leaders will subsequently recoil from making the appropriate military action to secure either a political settlement or regime change by falling prey to wishful thinking that the aerial bombing campaign will precipitate a military coup.

Qaddafi knows that the main game for him in eventually prevailing is to exploit international indecision and division so that his regime can retake as much territory as possible. The failure of the international aerial campaign to stop the regime’s military advance on the ground will understandably cause division among allies that will imperil the later enforcement of a no fly zone. In fact, if the international aerial campaign refrains from supporting Libya’s rebel freedom fighters then the regime will prevail.

The question that subsequently emerges is what is to be done? The Obama administration has acted honourably by creating the no-fly zone to save human lives. However the Americans are clearly reluctant and uncertain as to how to next proceed in Libya. The French and the British however are not uncertain because they are committed to the the objective of securing an eventual transition to a Libyan democracy.

The aerial military campaign should be placed under French command within a NATO framework because France has a fundamental commitment to achieving democracy and human rights in Libya. American support will still be very important if the aerial military campaign is to precipitate regime change in Libya. This change could be affected by the Americans providing NATO with spy satelite film of Libyan regime troop movements so that they could be targetted by the NATO led allies if the Qaddafi regime refuses to compromise.

If effective foreign military aerial support actually targets Libyan regime ground troops then the rebel freedom fighters will undoubtedly prevail due to the support of far superior fire power. At the very least such a focused utilization of military aerial power could compell the regime to negotiate a political settlement at an international conference on Libya.

Qaddafi should not be dismissed as irrational. Qaddafi is very astute when it comes to the exercise of both political and military power. This dictator will only make concessions when his power is threatened or he realizes that his capacity to gain concessions for him and his family are jeopardized. Therefore even a declaration by foreign powers that UN Resolution 1973 provides them with the scope to assist the rebel freedom fighters by either military aerial support or the despatch of foreign ground troops could be sufficient to force Qaddafi to make way for a compromise interim government. Arrangements for legal immunity for Qaddafi and his children (some of whom could take part in post-regime politics) would be conducive to securing a needed political settlement.

However caution is required with regard to making optimistic predictions with regard to Qaddafi because he has a knack of making his adversaries believe what they want to believe and then getting his own way. A case in point was Qaddafi ostensibly curbing his support for terrorist activities abroad following the American bombing of Libya in April 1986. However the cowardly dictator waited until President Reagan had about a month to serve to instigate the Lockerbie outrage in December 1988 in which 270 people lost their lives.

The sanctions imposed on Libya after Lockerbie economically hurt that nation. But Qaddafi successfully bided his time not only to eventually fend off the sanctions but to make his international position even stronger than what is was before Lockerbie ! Some-one as astute as Qaddafi is well positioned to turn the success of the international military aerial campaign to establish a no fly zone into the point at which his regime consolidates its position on the ground against the rebel freedom fighters. Adroit use (or threatened use) of military aerial power will hopefully allow the international community to snatch victory from the jaws of victory on behalf of the Libyan people as opposed to Qaddafi snatching victory from the jaws of defeat.

Qaddafi is Snatching Victory from the Jaws of Defeat

The rebel freedom fighters were on the brink of taking Qaddafi’s home city of Sirte and possibly of liberating Tripoli until NATO withheld its air support. Despite recent military reverses, due to foreign aerial power, Qaddafi has still refused to compromise. The dictator has correctly calculated that UN authorization for foreign aerial support for the rebel freedom fighters would lapse after his capacity to conquer the east of Libya had been thwarted. As a result, Qaddafi has resumed offensive military actions which could still turn the tide in his favour.

Qaddafi is too shrewd to make concessions until he is actually forced to. At the very least the rebel freedom fighters should be given aerial support to liberate Sirte. The liberation of Sirte combined with NATO publicly keeping open the option of providing the rebel freedom fighters with aerial support to liberate Tripoli could well compell the regime to commit to a ceasefire and/or to attend an international conference (which is tentatively being organised in London) to form an impartial interim government.

However it must be reiterated that Qaddafi will not make the concession of a cease fire unless NATO aerial support for the rebels military action in liberating Sirte is provided. An unpalatable but necessary concession that the international community will have to make to secure Qaddafi’s departure is a public and legally binding undertaking that neither he nor his family members will be prosecuted if they depart Libya.

If the Qaddafi family do leave Libya the regime’s supporters could be left in temporary control of Tripoli. Regime supporters could then send delegates to an international conference to participate in the formation of a new impartial interim government that would re-unite Libya and hold democratic elections.

A precondition for allowing the regime to temporarily hold the capital would be the release of all political prisoners and granting political freedom to Libyans who are not now in free Libya. It should not be forgotton that the people of Tripoli were just as courageous as those in the east of Libya in rising up against the Qaddafi dictatorship. Because the Qaddafi regime concerntrated first on crushing the revolt in the capital, the people in the east of the country were able to free themselves from the dictatorship.

The rebel freedom fighters have not forgotton their debt to their compatriots in the capital and are attempting to liberate them despite adverse military odds. These odds would not be adverse for the freedom fighters if NATO aerial support is provided to vitally help achieve the liberation of Sirte.

The people of the Arab world will not accept legalistic reasons and rationales by the west for abandoning the Libyan people when they are at the cusp of their liberation. Democratic elections are fortunately on the way in many Arab countries. If the west does not now continue to support the Libyan people by aerial back up then extremist political parties may do well in future democratic elections throughout the Middle East due to a loss of western credibility.

Democratic elections in the Middle East will probably result in the election of avowedly Islamist parties to power. This will not be a neccessarily a negative development because such governments could be the equivalent of Christian Democratic governments. A pre-condition for such outcomes is the maintainence of political pluralism. Having fought mightily for democratisation it will be very difficult for forces of depotism to assert their dominance over peoples who have secured their political freedom.

(Most Iranians in early 1979 rallied to support the Ayatollah Khomeini on the misassumption that he was a Gandhi type figure. Had elements of the security forces not defected to Khomeini he would not have been able to have subsequetnly imposed a dictatorship on his people.

If the armed forces are professionally led before and after democratic elections it will be too difficult for new dictatorships to subsequently emerge).

The only democratically elected Islamist government in the world is in Turkey. The Turkish government will hopefully support the removal of the Qaddafi regime as part of supporting democracy in the Middle East becasue the future elections of Islamic democratic governments will substantially ease political tensions in Turkey.

For there is to be a future democratic Libyan government the formation of a succesful interim government in Libya is an imperative. To avoid the Somalia scenario of anarchy (that has occured after the fall of General Siad Barre in 1991) an international conference on Libya must be expeditiously organised.

An international conference on Somalia (which included Somali factions) formed a formal government for this important east African nation, but this provisional government’s formal ‘authority’ has just being that, formal. It is virtually impossible to form a viable interim government if anarchy is allowed to set in or if there is a protracted war. It is in vacuums such as these in Muslim countries, tha Al-Qaeda emerges as a potent military force, as has been the case in Somalia.

An international conference on Libya under the sponsorship of the Arab League could help form a viable and effective interim Libyan government. The prerequisites for a successful international conference on Libya are there. Most of that nation’s diplomats have fortuanately broken with the regime. There is also a critical mass of Libyan emigres who are passionate about bringing democracy to their homeland. Talented members of the Qaddafi regime are also available to make a valuable contribution to such an international conference and to serve in a subsequently formed interim government to ensure that retribution and reprisals do not take place.

Most interim or provisonal governments are often lacklustre affairs that are overlooked by history. Major exceptions were the interim/provisional governments of Hector Garcia-Godoy in the Dominican Republic between 1965 and 1966 and the caretaker government of Governor-General Sir Paul Scoone in Greneda between 1983 and 1984. These governments were eimently successful because they ensured democratic elections were held and that the winning party actually took power. (In a future democratic Libya, office will probably be won by a coalition of parties).

Libya is a nation that has undergone (or more to the point is undergoing) a national trauma due to Qaddafi’s continuance in power. There consequently will be sufficient good will on the part of the Libyan people toward a succeeding interim government that is committed to democracy. The intermediary tasks of forming a professional army, establishing an impartial justice system (also ensuring that a possible amnesty is abided by) and safeguarding Libyan sovereignty and territorial integrity will be substantial, but not insurrmountable, challenges for the interim government so long as it is sincere and determined.

Determination and sincerity on the part of foreign powers will also be neccessary if the Qaddafi regime is to be eased out and the groundwork established for a Libyan democracy. The Libyan people have demonstrated sincerity and determination in fighting to remove Qaddafi. But removing Qaddafi is not the solution to the problem, but rather a crucial step in the correct direction - the direction and solution being that of democracy.

Stop the Carnage in Libya !

The refusal of NATO to provide the rebel freedom fighters with military aerial cover beggars belief ! As a result of this abandonment the Qaddafi regime has managed to rapidly retake ground in western Libya, that by the beginning of next week (if not earlier), Benghazi could fall. There is talk of the Americans and western countries arming the rebel freedom fighters. Why prolong the fighting and possibly create long pyschological war scars in Libyan society?

Instead NATO should cut to the quick by bombing advancing regime forces. This will be more difficult to do because regime troops have formed smaller fighter units and are not using tanks. But aerial
military action can still be undertaken by using satelites to target the bombing of regime combat troops. Indeed the only military action that NATO should now be undertaking is to target those combat troops to incapicate the regime’s aggressive miliary capacity.

As terrible as it is to admit, the Qaddafi regime has a valid point, in that the boming of western Libya has no military or political purpose to it. The NATO bombing campaign is probably having the effect of alienatating Libyans in the west of their country while endangering the people in the east who are not receiving the support that they desprately need and deserve.

NATO aerial bombing of Qaddafi regime combat troops will stop their advance. This will relieve the necessity of untrained rebel freedom fighters risking their lives by fighting against better trained and better armed opponents. A NATO military air campaign against its ground forces will compel the regime to agree to an immediate cease fire and commit to attending an international peace conference to form an impartial interim government that will conduct future free elections.

If the Qadaffi regime does not concede to the above mentioned commitments then NATO should resume aerial bombing to an extent that it induces the regime to make the necessary pro-democracy concessions. Had NATO aerial assistance been previously forthcoming to the rebel freedom fighters in their atttempt to liberate Sirte then the regime would have been compelled to agree to an immediate cease fire from which point a political settlement could have been reached.

There has also been lurdicrous speculation that Al-Qaeda have links to the rebel freedom fighters. This is abosulute rubbish! The rebel freedom fighters have spontaneously assembled and are heroically fighting on ad hoc basis. If they lose because they are abandoned by NATO then Al-Qaeda will have a capacity to move into Libya amongst the remnants of the freedom fighters. Furthermore Al-Qaeda would have a viable recruiting ground because the Libyan people will have been justifiably embittered by their abandonment by the west.

An analysis of Al-Qaeda strategy indicates that this network moves into countries in which there is anarchy and societal breakdown. Western mishandling of the military-political situation in Libya will create the fertile conditions necessary for Al-Qaeda to pursue its usual strategy. A western mishandling of the situation in Libya will generate anti-Americanism across the Arab world which could convert a desire for democracy into support for new anit-western authoritarian political movements. An irony of an American failure to support democracy in the Arab world will be that there will be consequent anti-Americanism in countries, such as Libya, because the west did not support regime change against anti-American dictatorships!

Since the time of his American backed coup in 1969 coup, Qaddafi has being anti-American. This anti-Americanism was principally derived from Qaddafi’s belief that the United States was the major barrier to him becoming the leader of a future pan-Arab state. Qaddafi had attempted to mislead Gamal Nasser into believing that he (Qaddafi) was a young naive ruler who looked to the Egyptian president as his mentor. It was Qaddafi’s intention to unite Libya with the United Arab Republic (as Egypt was officially known between 1958 and 1971) so that he could eventually succeed Nasser as ruler of a new Arab state.

Nasser’s premature death in 1970 and the succession of Anwar Sadat as the new Egyptian president put pay to Qaddafi’s ambition to rule a post-Nasser Egypt*. Qaddafi later still attempted to create a super Arab state with himself as ruler by plotting coups in the region or attempting to bribe other Arab rulers into entering into a union with Libya.

(*President Sadat’s gracious act of granting asylum to King Idris and Queen Fatima in Egypt in 1974 was a signal to Qaddafi to desist from trying to create and rule a newly merged country).

Frustrated by a lack of success in creating a Pan Arab state Qaddafi has also attempted to forge pan African unity. Despite causing havoc in African countries, such as Chad, Qaddafi has had more success in promoting African unity. He has established close links to the Kingdom of Toro which is a part of Uganda that, at a federal level, is a republic. The transformation of the Organization of African Unity (OAU) into the more productive and cohesive African Union is probably Qaddafi’s major positive historical achievement.

Qaddafi’s commitment to African unity is probably reflective of his broader belief (or frustration) that he is a great leader without a great nation to lead. To make his mark in the world as the ruler of Libya Qaddafi supposedly abolished government in 1977 to create a ‘State of the Masses’. In reality the 1977 reforms represented the point at which, a by now personalized military dictatorship, institutionalized as a permanent regime.

The post 1977 regime was supposedly a manifestation of Qaddafi’s ideology, ‘The Third Universal Way’. This is an avowed alternative to capitalism and communism. The major political innovation of Qaddafi’s philosophy for Libya has been the creation of local ‘Popular Congresses’ which are are similar to neighbourhood committees. Qaddafi maintains that his philosphy facilitates ‘real’ direct and on going democracy through these local ‘Popular Congresses’.

At worst these ‘Popular Congresses’ were (the extent to which they are currently functioning in western Libya is unclear) similar to communist Cuba’s now redundant Committees for the Defence of the Revolution in that they monitored, if not controlled people’s daily lives. Alteternatively these committees did actually allow Libyans a degree of latitude to voice their grievances and to have a limited say in running the country. Sometimes there were competitive elections within local Popular Congresses to send delegates to a General Popular Congress which served as the equivalent of a national legislature.

The Chairman of the General Popular Congress effectively served (or still serves) as Libya’s head of state and the Secreatary of the General Popular Congress is the equivalent of prime minister. The General Popular Congress ‘elects’ committees for different areas of national policy and the chairmen of each of these committees effectively serve as cabinet ministers.

Qaddafi’s role in the structure of the world’s only avowedly anarchist state is that of ‘Guide’ of the Revolution, having previously been the ‘Leader of the Revolution’. The Libyan dictator actually takes the greatest offence at being called a dictator. For Qaddafi it is pleasing to his sense of personal sef-conceptualization that his power is derived from public respect for his intellect.

However contestable Qaddafi’s sources of political legitmacy he is objectively considered to be one of the leading poets and writers in the contemporary Arab world. The regime has at times supported the arts and Qaddafi has often allowed the General People’s Congress to decide important decisions, such as a national economic stimulus package, after robust debate.

But only a fool would really believe that Gaddafi has not been, and is not a dictator. The system that Qaddafi devised did however allow for a time to have a safety valve for popular opinion and a gauge to sense the popular mood. At the time of the fortieth anniversary of his coup in September 2009 Qaddafi should have discerned by the surly apathy toward him that the Libyan people had enough of his regime to the point that many Libyans considered him to be insane.

Qaddafi may be eccentric but he is not insane. As mentioned previously, Qaddafi (or smart officials within the regime) ultimatley used the 1988 Lockerbie terrorist bombing to strengthen the regime’s international standing to a position that it was stronger than what is was before the outrage. In a domestic context Qaddafi’s major political success was that he had seemingly secured acceptance amongst a majority of the population of his son, Saif, as his successor.

Saif’s relative popularity was derived from the widespread belief that he could influence his father to act rationally and was himself responsive to other people’s ideas and criticisms. As intelligent as Saif probably is, his father is actually no fool. As such Qaddafi is not someone who makes concessions unless he has to. When the February 2011 revolt broke out Qaddafi shrewdly paced himself to crush the revolt and probably would have carried out a massacre in eastern Libya had it not been for foreign military aerial intervention.

It is now really disturbing that despite the previous success of western airstrikes that Qaddafi is now well positioned to crush the 2011 revolution when all that is needed for the rebel freedom fighters to prevail is targetted aerial military action against the regime’s ground troops. The recent NATO failure to provide air support has provided Qaddafi with the capacity which he will exploit to brutally re-assert his control.

An option that Qaddafi did not exercise (because he knew that he did not then have to) was have Saif step in as a mediator between him (i.e. Colonel Qaddafi) and his people. Had this then occured Qaddafi could have secured his family’s interests in a post regime Libya. To preempt his son fulfilling such a mediating role Qaddafi probably compelled Saif to violently denounce the revolt.

If NATO undertakes judicious military action by incapaciting the regime’s ground troops then Qaddafi may opt for the Saif option. This option could be undertaken from a position of relative strength if a cease fire takes effect with the regime still holding Tripoli. The regime has smart young operatives who could effectively represent the regime’s interests at an international conference to form an interim government.

The local ‘Popular Congresses’ have bequethed the Qaddafi family with a viable support network that they can utilzie to garner a respectable vote in future free elections that would secure their interests in a post-regime Libya. Such an outcome will allow Qaddafi’s political heirs to, among other things, continue to fight to ensure that the Colonel has an honoured place in Libyan history.

Due to Qaddafi’s superb sense of realpolitik he probably does not care how he is remembered by history just so long as he holds onto absolute power. But if there is considered, effective and lateral foreign military aerial support for Libya’s rebel freedom fighters then Qaddafi will be compelled to make way for an impartial interim government. If Qaddafi were to do this then there will be greater scope for his ideas to live on as a dynamic in the politics and in the culture of a democratic Libya.

The irony of the above democratic scenario is that it is reliant upon foreign miliatary intervention enabling the Libyan people to determine their future by forcing Qaddafi to put their interests ahead of his own. But if Qaddafi successfully reprssses his people or Libya becomes an Al-Qaeda haven as a failed nation state it will have been due to the failure of the west to help the Libyan people in their time of need.

Will Misrata be Libya’s Srebrenica ?

Libya would now be free had NATO air strikes been more focused against Qaddafi regime combat troops. This is particuarly the case with regard to the western city of Misrata, the nation’s third largest city. The people of Misrata demonstrated incredible courage in rising up against Qaddafi and in subsequently freeing themselves.

However if Misrata falls there will be an acute danger that Libya will be partitioned into a western and an eastern Libya. There may be foreign powers that secretly favour such a scenario so that they can gain access to Libyan oil. In this context there might be foreign interests that would desire that the Gaddafi regime retake Misrata because it is located in Libya’s north west. Therefore the prospects for a partitioned Libya will be undermined if the nation’s second largest western city (after Tripoli) remains as a part of a free Libya.

Air strikes against regime positions have provided a limited degree of protection to the people of Misrata but the situation is still dire. It is a mystery as to why there have not been more focused NATO air strikes to save the people of Misrata from been massacred. The fact that Misrata has not (at the time of writing) fallen to Qaddafi troops is due to the heroism of its population in resisting the assault against their city.

The massacre that took place in July 1995 in Srebrenica in Bosnia in which the Serb Bosnian army deliberately killed an estimated 8,000 Bosnian Muslim males was not only horrendous due to the loss of life but also outrageous because the massacre was avoidable. This was because the United States and NATO waited too long to save Srebrenica by bombing surrounding Serb military positions. The belated American/NATO response by bombing Bosnian held Serbia came as a surprise to the former communist regime in Belgrade who believed (despite, or perhaps because of, insipid rhetoric by western leaders) that the west was too indifferent to help the Bosnian Muslims.

The Qaddafi regime however has a more astute sense of the orientation of international leaders than the previous regime in Belgrade that had. Qaddafi knows that western leaders desire a political settlement without having to commit to military action. Therefore the regime is circulating rumours that two of Qaddafi’s sons are trying to broker a deal with the west and/or the Arab League so that there is a cease fire and an eventual political settlement.

As a result of the Qaddafi regime’s disinformation campaign NATO bombing is not being adequatley focused on incapacitating the regime’s military combat capacity. The violent struggle that is currently under way in Misrata is therefore unfortunately favouring the regime because the full force of NATO airpower is not been utilized. Should Misrata fall there will undoubtedly be a massacre of that city’s inhabitants that will be worse then the 1995 Srebrenica massacre.

A Misrata massacre will terminate any prospect of a temporary negotiated settlement by way of a new provisional government being formed because the Libyan political context will become too polarized. There may well be an enhanced bombing of western Libya by NATO as a response to a Misrata massacre. But Qaddafi will use the intensity of the bombing campaign to agree to a cease fire so that he can hold onto western Libya. Cosmetic political changes on the part of Qaddafi’s sons will later be undertaken so that a western Libya to gain sufficient international respectability to sell oil.

The public meeting that Qaddafi recently had with representatives from India, Russia and mainland China was a signal to the dictator’s supporters that he will have guaranteed buyers of oil rule a truncated Libya. Qaddafi’s erstwhile supporters should appreciate that three aforementioned nations already have satisfactory oil supply arrangements that will negate their buying substantial amounts of Libyan oil in a Qaddafi ruled western Libya.

If Qaddafi is allowed to partition Libya then people throughout the Arab world will correctly blame the west. Such an outcome will be ironic because many Arabs, particualry Egyptians, could consequently vote for anti-western parties due to the failure of NATO and the United States to help the Libyan people bring down a regime that was (and is) noted for its anti-Americanism.

Even if Qaddafi holds western Libya it will only be a matter of time before the people there will revolt as they did in February 2011 until brutal counter action (including the use of foreign mercenaries) in early March crushed the rebellion the west. However the social and economic cost for Libya will be too high because the nation will not have the needed social stability to be a substantial oil supplier.

For moral and strategic reasons the focus of NATO air power must be on incapacitating Qaddafi troops so that they cannot re-take Misrata. The moral component of such an action would be to stop a massacre of thousands of women, children and men. Such foreign aerail military action saved Benghazi residents from being massacred and similiar aerial military support will save the people of Misrata from destruction. The moral case for effective military support to save the people of Misrata is self-evident.

The strategic reasons for providing effective aerial support to the people of Misrata are also compelling. For practical purposes a signal will be sent to Qaddafi that he cannot partition his country because the second largest city in western Libya will continue to be free of the regime. In such a context the regime diplomats abroad will have the leverage to pariticipate in meaningful negotiations with the Benghazi based Transitional National Council to form an effective provisional government that will secure national unity and conduct democratic elections.

If the Gaddafi regime were to actually initiate and abide by a ceasefire while it is in a relatively strong military position then it would gain substantial political capital. Therefore figures associated with the regime (including Qaddafi family members) could have a hand in forming a new provisional government, ensuring that legal immunity arrangements are arrived at and having a capacity to participate in future democractic elections.

Liberating Libya

Qaddafi at present (April 2011) is remaining true to past form by refusing to make any concessions. Since his 1969 coup the Libyan dictator has shown a skill in adapting his capacity to match the position that he is actually in. The previous scaling back of his military to being a smaller force directly controlled by both family members and close supporters is reflective of Qaddafi exercising this skill.

The current strategy of using small mobile units to fight the rebel freedom fighters to avoid NATO air strikes is also a manifestation of the regime’s capacity to adopt a strategy that accords with the actual situation. Qaddafi is effectively utilizing what support he has to mobilize rallies to preclude the possibility of there being a negotiated settlement which would compel him to make way for a provisional government.

Qaddafi is intelligent enough to know that his long term position is not viable. The determination of the rebel freedom fighters combined with NATO air support will eventually ensure that the Qaddafi regime will fall. The tragedy of the situation is that thousands of lives could be lost in the process of liberation. It is therefore to be hoped that NATO will adopt an expeditious approach in assisting the rebel freedom fighters.

There are capable officers (who were once belonged to Qaddafi’s army) who are now serving in the rebel army. Coordination between NATO and the Transitional National Council (TNC) should ensure that foreign military air support addresses any shortfalls in the military strength on the part of the rebel freedom fighters. The coordination process between NATO and the TNC’s army probably now entails the latter providing weapons and possibly training to the rebel freedom fighters. Even the temporary despatch of foreign ground troops (until the rebel freedom fighters can permanently hold the city) to save Misrata should not be discounted.

Debate within NATO as to how much support should be provided to the rebel freedom fighters can be resolved according to the following criterion: that NATO military support is commensurate with the objective of facilitating the rebel freedom fighters liberating Libya. Confusion in military strategy usually occurs when there is uncertainty as to what the political objective of a military option is.

The joint letter recently (April 2011) signed by the presidents of the United States and France and the prime minister of Great Britain denouncing the Qaddafi regime reflects that the political objective of the NATO military option is, or thankfully is becoming that of, regime change in Libya. The transition to this objective of regime change has partially been caused by Qaddafi’s refusal to negotiate a political settlement.

The objective of regime change is not the solution to Libya’s problems but rather an important part of the solution, the solution being that of Libya becoming a constitutional democracy. Foreign military support in helping the Libyan people overthrow the Qaddafi regime can be consolidated by assisting a post- Qaddafi Libya become a constitutional democracy. Hopefully the same mistake will not be made in Libya as was made in Afghanistan where the world unfortunately lost interest in a post-communist Afghanistan following the fall of its communist regime in February 1992.

Had the Northern Alliance regime, which immediately took power following the fall of the communist regime, prioritized organising elections then political conflict in Afghanistan could have been resolved at the ballot box instead of via continued fighting. The failure to transition to the paradigm of electoral politics resulted in civil war continuing in Afghanistan which precipitated the rise of the Al-Qaeda aligned Taliban in the mid-1990s.

The American led liberation of Afghanistan in 2001 following the September 11 terrorist attacks led to the installation of Hamid Karzai as leader following the Bonn Conference of December 2011. The various steps that were subsequently taken to confirm Karzai as leader of Afghanistan do not warrant being detailed because the dye was cast with regard to him becoming Afghan leader as a result of the Bonn Conference.

At the December 2001 Bonn Conference the United States supported Karzai as Afghanistan’s new leader because he was the candidate of the ‘Rome Group’, which was composed of supporters of exiled King Zahir Shah, who was then domiciled in the Italian capital. Members of the Afghan royal family (the Barakzai family) and their associated networks became, and still are, a key base of support for the Karzai regime.

Unfortunately the Barakzai family supported Afghanistan becoming a presidential republic so that they could advance their financial interests by being integrated into the nation’s executive leadership. This was despite strong monarchist sentiment in Afghanistan. Monarchist sentiment was evident when spontaneous demonstrations broke out following the final withdrawal of Soviet troops across Afghan refugee camps in Pakistan in February 1989 which called for the reinstatement of His Majesty Zahir Shah as king. These demonstrations took place in defiance of the guerrilla leaders who controlled the camps for whom a reinstatement of the Afghan monarchy was, to say the least, an optional extra.

The prospects for Libya becoming a democracy are better due to the spontaneous nature of the revolt that there is a focused determination on the part of the Libyan people’s part that a post-Qaddafi Libya be a democracy. A vital step in both bringing Qaddafi down and helping ensure that Libya becomes a democracy will be holding an international conference to form a provisional Libyan government.

In contrast to the 2001 Bonn Conference that produced the Karzai regime a Libyan conference would hopefully form a provisional government whose members would be forbidden from taking part in national elections to confirm themselves in power. Indeed history indicates that foreign military interventions (in the Libyan context foreign ground troops need not necessarily be deployed, although this option should not be ruled out if the TNC specifically requests it in Misrata) are ultimately successful if provisional governments organise and conduct democratic elections. This was the case in the Dominican Republic.

Not only had the Dominican Republic had next to no experience with democracy since its independence in 1844 but the country had lived under the absolutist and petty rule of Generalissimo Rafael Trujillo from 1930 until his assassination in 1961. There was a democratic election in 1963 but the successful candidate, Juan Bosch, was later deposed that year. An attempted loyalist coup ostensibly aimed at restoring Bosch to power led to an American led invasion of the Dominican Republic in 1965 because this revolt was supported by Communist Cuba.

There were international howls of protest concerning the American led invasion of the Dominican Republic but democratic elections were held the following year, 1966. These elections were successfully conducted because the Americans installed a respected diplomat, Hector Garcia Godoy as provisional president. The American led Inter-American Peace Force composed of member states of the Organization of American States (OAS) operated effectively between 1965 and 1966 because this force took its orders from Provisional President Garcia- Godoy.

The Godoy government was effective because it was impartial and also because it had a means of enforcing its power via the Inter-American Peace Force. Dominican patriotic sensibilities were assuaged because most people were aware that the occupying forces were under the authority of a neutral government whose major purposes were to hold democratic elections and then transfer power to a resulting elected government. President Godoy himself was a canny and cool character who defused many a crisis during his interrogatory period in office.

The American led invasion of Iraq in April 2003 was not as successful as the Dominican Republic’s liberation because a provisional Iraqi government was not quickly installed. As previously mentioned the American led of liberation of Kuwait in early 1991 would have been a comprehensive success had the United States supported Iraqi revolt that ensued.

Promisingly, the different Iraqi political factions assembled in the Syrian capital Damascus in December 1990 to form an impartial provisional government to hold the country together until democratic elections could later be held. Syrian backed Iraqi Baathists within a new post -1991 provisional government could have provided protection to members of Saddam’s wing of the Baathist Party to help ensure that they did not transition to form a base of a future military resistance.

The American led invasion of 2003 encountered major problems following the liberation of Baghdad in April that year because Major-General Jay Garner was dismissed as head of the interim governing authority (the Office for Reconstruction and Humanitarian Assistance) in May for calling for an expeditious transfer to a new Iraqi provisional government. Instead power was transferred to a Coalition Provisional Authority (CPA) headed by the former American Ambassador Paul Bremer.

The cause of peace and good governance in Iraq would have been better served had power being quickly transferred from Major-General Garner to an Iraqi equivalent of a canny Hector Garcia-Godoy. Had this occurred there might have been Iraqi disquiet concerning the presence of foreign troops but this would have been counteracted by the reassurance that an Iraqi government was still in overall charge. Instead Iraqi sovereignty was vested in an American controlled transitional authority. Whatever the inherent merit of CPA policies (such as de-Baathisation) the thirteen month Bremer interlude (May 2003 to June 2004) was a disaster because anarchy prevailed due to Iraqi alienation that naturally ensuring as a result of direct foreign rule.

The truth is that the Bush administration always intended to impose direct American rule on Iraq so that American oil companies could gain control of Iraqi oil. This objective was achieved and helped provide the Bush administration with the fortitude to endure the bloody guerrilla insurgency that ensued because of the imposition of direct foreign rule and the abrupt dismemberment of the former regime.

The ensuing vacuum enabled Al-Qaeda and an underground Baathist movement to move to cause havoc. The American led occupation of Iraq withstood the terrorist onslaught due to the support from Shiite clerical leaders who have links to the Iranian regime. They ironically gave their support to the American led occupation due to their realization that for the first time since Iraq was founded in 1921 that Shiite majority would be in a position to be in power. Bremer therefore ceded power to a Shiite dominated Iraq Interim Governing Council which in turn held democratic elections.

The fact that Iraq is now becoming a viable democracy is due to the support of the Kurdish minority who appreciate that the best hope to protect their rights is within a democratic Iraq. Progress toward genuine Iraqi democracy has been reflected by more equitable oil royalties being negotiated, progress toward federal devolution, a free press and the development of an independent judiciary.

The progress that Iraq has made toward democracy that has been achieved has been undermined because of the previous American decision not to quickly make way for a democratically inclined Iraqi provisional government. Consequently Iraqi politics will be based on ethnic allegiances as opposed to ideological orientations. Furthermore, while the impact of the consequences (i.e. the removal of Saddam and the later development of a democracy) of the American led invasion of Iraq will be appreciated by Iraqis they will probably never appreciate the imposition of direct foreign rule and the chaos that this produced.

In the Libyan context the formation of an impartial provisional government dedicated to holding democratic elections is an imperative if the NATO military action is to have any real meaning by facilitating a positive outcome, i.e. a Libyan democracy. The defection of former Libyan Foreign Minister Moussa Koussa creates the scope for an international conference to be held to form a democratically inclined Libyan provisional to both conduct elections, to command a multi-national military force and maintain Libyan sovereignty during a period in which there is a military presence. (An important task of a provisional Libyan government would be to protect Libyan sovereignty over its oil reserves).

Even while Qaddafi remains in power holding an international conference to form a new government should be held to help isolate the Libyan dictator. An important function of such a conference would be to help determine the composition of an international military force to enforce the will of a new Libyan provisional government.

Although Qaddafi will probably refuse to send representatives to such a conference he should be given the opportunity to do so that supporters of his could participate in a new provisional government to protect the Qaddafi family until elections are held. It is an understandable demand of the Libyan opposition that the Qaddafi family (or Qaddafi at the very least) be banished into exile. However, if a provisional government is formed then Qaddafi members would not be allowed to participate in such a government for to do so would preclude their participation in a future democratic election. Because the Qaddafi family would probably want to participate in democratic elections to establish a political base so that they can at the very least remain domiciled in a democratic Libya they would probably accept their exclusion from a future provisional government.

Because of his present military advantage Qaddafi probably sees no utility in ceding power to a provisional government to ensure his family’s participation in future democratic elections. But Qaddafi’s military position will eventually crumble due to the determination of the Libyan freedom fighters, coordinated NATO air strikes plugging the gaps with regard to challenges that the rebels are confronted with and foreign military and logistical support that will be provided to Qaddafi’s opponents.

Qaddafi needs to be as politically smart as what Roh Tae Woo of the Republic of Korea (ROK, i.e. South Korea) and Ferdinand Marcos of the Philippines were in making concessions that eventually secured their position in the long run. In June 1987 the ROK’s outgoing dictator Chun Doo Wan held a sham convention of his Democratic Justice Party (DJP) to anoint Roh Tae Woo, another retired army general, as his party’s presidential election.

Due to the ROK’s then system of directly electing delegates to a presidential college the ruling DJP’s presidential candidate was assured of an election victory. Roh’s nomination precipitated major riots which the Chun regime could have crushed but the cost would have been too high because the ROK’s trade based prosperity would have been imperilled.

As the DJP presidential candidate Roh cleverly called on the government to introduce direct presidential elections. The executive of the DJP similarly ostensibly acted independently passed by passing a motion supporting direct presidential elections. President Chun’s action in conceding direct presidential elections was a vital dynamic in allowing Roh to legitimately win the 1987 presidential election due to the general perception that he had acted independently of Chun.

In the case of the Philippines the immediate catalyst of President Ferdinand Marcos’s fall from power in February 1986 was due to his abortive attempt to purge his second cousin General Fidel Ramos. Without General Ramos’s support President Marcos could not have imposed martial law in September 1972 and maintained a dictatorship despite considerable opposition. President Marcos still undercut Ramos’s position in the military to ensure his wife Imelda’s succession to the presidency.

When Imelda’s key ally in the military, Armed Forces Chief of Staff General Fabian Ver, uncovered a planned attack on the presidential palace as part of a military coup led by Defence Minister Juan Ponce Enrile. President Marcos on discovering the plot set a trap for Enrile to crush the coup. The dangerous aspect of President Marcos’s counter move was that he decided to seize the chance to purge General Ramos even though he was not a party to the coup. Had Marcos kept Ramos on side in crushing the Enrile coup then the Philippine president could have remained on course to merge his KBL party with the covertly regime aligned ‘opposition’ UNIDO party (whom Corazon Aquino was forced by political circumstances to very reluctantly run with for president) to secure his family’s interests under a parliamentary form of government.

Marcos lost power because he took the gamble of his life by attempting to purge Ramos. Enrile discovered at the very last minute that a trap had been set for him and in a desperate attempt to save himself appealed to Ramos to join him in revolt. The general would not have done so had Marcos not decided to purge him. Even after Enrile and Ramos had publicly broken with Marcos the president was still in a position to crush them and re-impose martial law.

For Marcos to have crushed the revolt thousands of demonstrators who had turned out in Manila to support the revolt would have been massacred, the professional elements within the military pulverized and the political situation polarized to the extent that the communist New People’s Army (NPA) would have taken power twelve to eighteen months. The opprobrium attached to the Marcos family for massive corruption (as represented by Imelda’s shoe collection) would have been even more intense then what it have become. The Marcos family therefore would have been hard pressed to found asylum abroad let alone to have later re-entered Philippine politics.

To avoid the above scenario that President Marcos publicly overruled General Ver on television when he appealed to the president to crush the revolt by swift military action. President Marcos’s action not only endeared him to many Filipinos but it allowed him to effectively align himself to General Ramos whom he had initially attempted to purge. The next four years of Corazon (‘Cory’) Aquino’s six year presidency (1986 to 1992) were wracked by attempted by military coup attempts that the president was obliged to secure General Ramos’s election to the presidency in 1992 because his support had been crucial in crushing the previous coup attempts.

Because most of the nation’s political clans left Marcos’s KBL party to enter the newly formed, LDP which was founded as the nation’s new ruling party in 1988, Ramos was unable to win the LDP presidential nomination in November 1991. The upshot was that President Aquino was compelled to allow Imelda Marcos and Marcos’s chief economic crony Eduardo (‘Danding’) Cojuangco (who was also the late Cory Aquino’s cousin) to run for president May 1992 to split the LDP vote so that Ramos could win the presidency. Even though Danding and Imelda ‘lost’ the 1992 presidential election their participation facilitate their re-entry into Filipino politics so that they could subsequently maintain their financial and business interests.

The above overviews of Korean and Philippine politics is instructive of how dictators can secure their later political positions by ceding power when the advantage is apparently with them. If Qaddafi wishes to avoid a Ceausescu scenario of fighting to the death and forfeiting any prospect of a political bequest the Libyan dictator should review his approach of losing everything by fighting for everything.

Nonetheless when Qaddafi’s military and political position does weaken there are traps to avoid that the dictator may well set. A possible game that the regime may be playing is to intimate that it is willing to negotiate while it fights on to destroy the rebel freedom fighters. Intimating a preparedness to negotiate allows the regime to raise doubt on the part of foreign powers to support the rebel freedom fighters.

Furthermore it is imperative that there is no definite linkage between an international conference forming a provisional Libyan government and continuing foreign assistance to the rebel freedom fighters. Military assistance to the rebel freedom fighters and foreign support for the TNC must continue until a provisional government is formed along with a viable international military force to enforce such a government’s authority so that democratic elections can be conducted.

A trap that Qaddafi could attempt is to concede to the deployment of an international force to perpetuate a division of Libya. Qaddafi could attempt to exploit his political connections to President Jacob Zuma to attempt to ensure that an African Union (AU) military force enables the regime to hold onto the territory that it holds. The South African Defence Forces (SADF) are too professional to allow Qaddafi to manipulate their presence in Libya to secure his power. Still, great care will have to be taken to ensure that a professional international force is deployed not only so that democratic elections are held but (in contrast to Cambodia in 1993) that the results of the elections are actually adhered to.

The Libyan dictator may think that due to the ancient division of what is now Libya into Tripolitania, Cyrenaica and Fezzan that he can rule part of a truncated nation. This will not be the case because the people of Free Libya in Cyrenaica know that they could not have won their initial freedom had Qaddafi not had to withdraw his troops and foreign mercenaries from their region to crush the revolt in Tripolitania and Fezzan. Furthermore it should be appreciated that the determination of the rebel freedom fighters to bring Qaddafi down is in keeping with the Libyan nationalism that was forged in the late 1920s and early 1930s in the heroic revolt led by Omar Mukhtar.

As the exiled Emir Muhammad Al-Senussi’s representative in Cyrenicia during the revolt, Omar Mukhtar’s legacy endowed the emir with sufficient prestige to subsequently become king of a united Libya in late 1951. Indeed the strength of Libyan nationalism was apparent in the latter 1940s when the Libyan people opposed the partition of their country into its three historical regions under the Bevan-Sfroza Plan. As previously mentioned Haiti’s vote in the United Nations was crucial in defeating a de facto re-imposition of European colonial rule.

It is therefore fitting that Haiti’s experiences in throwing off a dictatorship be taken into account when reviewing the current Libyan situation. In September 1994 the very unpopular three year military dictatorship led by then Haitian military commander General Raoul Cedras was confronted with the prospect of an American invasion of Haiti. General Cedras shrewdly made a deal with former National Security Adviser and National Chairman General Colin Powell and the then Chairman of the Senate Armed Services Committee and Senator Sam Nunn of Georgia in which Cedras acquiesced to the American occupation of Haiti on the brink of an American invasion of Haiti.

General Cedras’s acquiescence was shrewd because American troops instead of arresting the Haitian army general and his cohorts were obliged to provide them with protection against a hostile population. Cedras and his military associates could therefore have remained in Haiti to participate in the 1995 elections because they were enjoyed UN protection. This was not to be the case because the second shrewd action on General Cedras’s part was for him and his close associates to depart into exile in October 1994 to live off the massive wealth that they had siphoned off during their three years in power.

Haiti’s de facto 1991 to 1994 military regime had been a sultanistic one and as such Cedras could not have formed an electorally viable political party or eventually build an alternative anti-Aristide political base. Former Haitian ‘President for Life’ Jean Claude Duvalier (‘Baby Doc’) who misruled Haiti from 1971 to 1986 as successor to his father Francois Duvalier (‘Papa Doc’) who was tyrant from 1957 to 1971 returned to Haiti in January 2011 to take in Haitian politics. Baby Doc may appropriate an anti-Aristide political base due to the personal strength of his French-Italian partner Veronique Roy who has deluded herself that the Duvaliers were (and are) the champions of Haiti’s poor.

The point to savour with regard to analysis with Haiti is that it demonstrates that figures associated with sultanistic regimes can be politically viable after they have fallen. A sultanistic regime is one whose overwhelming purpose is to enrich the dictator and his or her close supporters. Sultanistic regimes generally do not have a solid base of support. Their support bases, such as they are, are usually confined to the dictator’s ethnic/regional group or are derived from popularity that a dictator obtained due to a fleeting political success.

Sultanistic regimes normally fall when broad inter-ethnic and/or inter-class alliances are formed against the dictatorship. A classic example of sultanistic regime was the Somoza family dictatorship in Nicaragua between 1933 and 1979. The Somoza family dictatorship fell as a result of a popular broad based insurrection in which support for the regime dwindled to the soldiers of a still formidable National Guard who could still not overcome popular resistance.

Amazingly the Sandinista National Liberation Front (FSLN) and the Constitutional Liberal Party (PLC) are now Nicaragua’s major parties despite (or perhaps because) of their respective corrupt histories. The PLC by ambiguously and alternatively fulfilling the role of an opposition party and an allied junior party during the Somoza era was and is identified with that regime. Even though the PLC is one of Nicaragua’s two major parties the Somoza family have still not being able to return to Nicaragua due to popular hostility because they stubbornly tried to hold onto power by military means.

The Qaddafi dictatorship has generated into a sultanistic regime because power and wealth is now overly concentrated power with the Qaddafi family. Unusually this degeneration has initially served Qaddafi well because he managed to form a formidable new army led by his family that is effectively assisted by well paid foreign mercenaries. In contrast to the Somoza family regime the Qaddafi dictatorship has had sufficient strength to crush the revolt and would have done so had it not being for NATO military intervention. Indeed without continued NATO military support the Qaddafi regime can still prevail.

Sultanistic regimes tend to be non-ideological but they do not necessarily need be non-ideological. The Qaddafi regime ideologically commenced as a nationalistic one with strong socialistic tendencies. These nationalist and socialist tendencies were evidenced by the regime’s closure of foreign military bases, the expulsion of the Italian community and most importantly the nationalization of the Libyan oil industry in 1971. This last action enabled Qaddafi to finance improvements in the nation’s standard of living which probably generated popular majority support for his regime.

Majority support for the Qaddafi regime has now clearly ended. There is still probably minority support for the regime as there are Libyans who, based on Qaddafi’s past successes in raising the standard of living, take his avowedly anarchist philosophy (‘The Third Way’) seriously. As such a Qaddafist type part could possibly poll well in a democratic election and even become part of ruling coalition. These prospects are now diminishing as the regime violently clings to power.

Ideologically the Qaddafi regime claims antecedence from the Omar Mukhtar, even though this Libyan patriot was a stalwart supporter of Emir Idris. Nevertheless, contested historical controversy can be a viable dynamic in a nation’s contemporary politics. Who can legitimately claim Omar Mukhtar’s mantle could become a matter of keen political dispute in a democratic Libya. However if Qaddafi persists in clinging to power he may become an Arab version of Somoza with the historical mantle of Rodolfo Graziani, the brutal Italian Governor of Libya who had Omar Mukhtar executed in 1931.

Misrata and the ‘Chindits’ Option

The litmus test as to whether Qaddafi will militarily prevail or make way for a democratically inclined provisional government will be determined in the battle for Misrata. If Misrata falls to regime troops (which are predominantly foreign mercenaries) then the population of that city will probably be massacred. This will not only be a terrible loss of human life but such an outcome will enable the Qaddafi regime to hold onto the west of the country because Misrata is a key western city.

Regime apologists/propagandists will claim that no massacre took place but Libyans in the east of the country will know better and understandably refuse to enter into any negotiations to reach a political settlement, thereby solidifying the permanent division of Libya, unless foreign fecklessness is such that a blind eye is turned to Qaddafi reconquering the western Libya.

Considering the relative lack of outrage in western countries toward the regime’s excesses it is not an unreasonable supposition on Qaddafi’s part that he could get away with massacring communities who previously opposed him. When Indonesian backed East Timorese militias massacred their fellow countrymen in October and November 1999 with the plausible threat that the majority of East Timor’s population would be killed left wingers in Australia understandably took to the streets to demand that the neo-liberal Howard government take military action to save East Timor*.

(To its credit the Howard government’s threat in 1999 to take military action to rescue the people of East Timor did actually save the situation. Australian peace keeping troops were subsequently deployed to help secure East Timor’s independence. Even though the Howard government’s actions saved East Timor - in contrast to the Whitlam government which betrayed the East Timorese in 1975 - the left never gave the former coalition government the positive recognition that it deserved for rescuing East Timor).

If a right wing dictator such as the late Augusto Pinochet of Chile massacred (or had threatened to massacre) his people there would have been massive demonstrations around the world. But in the case of Libya there are no discernibly substantial demonstrations denouncing Qaddafi or calling on help for the Libyan people. Indeed, the American, British and French governments are seemingly anxious that if they increase military assistance to the rebel freedom fighter or deploy ground troops to rescue the people of Misrata (and only Misrata) then there will be outcry of opposition in their home countries with ‘anti-war’ demonstrations being held.

British Prime Minister David Cameron has however has conveyed a reluctance to despatch ground troops to Misrata for fear of there being a domestic backlash following the deployment of British combat troops in Afghanistan and Iraq. However it can be said that had foreign troops being deployed in Rwanda in 1994 to save its Hutu minority (an estimated 800,000 of whom were killed in a four month period in 1994) from being exterminated that no-one in France or the United States could have plausibly objected on humanitarian grounds*. Consequently the question must be asked as why and how could there be valid opposition to British or French troops being deployed in Misrata if they are actually needed?

(*As it was the Rwandan Patriotic Front (RPF) thankfully prevailed. Had this not been the case it is too frightening to contemplate if foreign troops would have been sent to save the situation).

The British prime minister has declared his sympathy for the Libyan people but only offered to provide ‘non-lethal aid’ to the rebel freedom fighters. Such self-imposed limitations of support embolden Qaddafi to persist in using cluster bombs against the people of Misrata! Even official regime spokesmen have emphatically denied that cluster bombs are being used in Misrata. This is more than their being disingenuous but a calculated attempt at plausible denial so that there can be a fall back option for a cease-fire and a consequent political settlement.

Someone as tactically and strategically brilliant as Qaddafi knows that if he can get a way with taking Misrata and massacring its inhabitants any prospect of a negotiated settlement will be thwarted. Under such a terrible scenario Qaddafi will appreciate that he will be able to hold onto absolute power in western Libya with the distinct prospect of his retaking all of eastern Libya. This outcome will not only be disastrous for the people of Libya but detrimental to western interests because Arab opinion will be justifiably alienated from a negligent west.

Ideally it would be best if either an African Union (AU) or Arab League (AL) force is quickly despatched to Misrata (and only Misrata) with NATO support to save its inhabitants. However time is of the essence with regard to rescuing Misrata. The current dilemma with regard to this city is that NATO air power is ineffective due to the mobility of lightly but lethally armed regime troops.

Considering that time is now of the essence the British and French should consider the ‘Chindits option’. This military option was utilized in the Burma campaign by Anglo-Indian forces (‘long range penetration units’) landing in enemy held territory and being supplied by air. The Libyan context is different in that Misrata is not ‘enemy territory’ but Chindits principles are still applicable: that of a mobile force being despatched to hold valuable territory and possessing the capacity to make an expeditious withdrawal when required.

In the Misrata context an Anglo-Franco withdrawal would occur when either rebel freedom fighters and/or AU/AL moves into the vacuum. The equivalent of a contemporary Anglo-Franco Chindits unit(s) would probably confront a predominately foreign mercenary force that is only motivated to fight when certainty of victory is near assured, as is the contemporary situation with regard to Misrata.

President Obama has said that Qaddafi’s days in power are numbered due to the success in sequestering 35 billion American dollars of the dictator’s personal fortune. This is an important victory because Qaddafi may be deprived of some of his capacity to pay his troops. There is however an implicit assumption, if not commitment, on President Obama’s part that American military aid will be sent to the rebel freedom fighters to ensure their victory.

But victory for the rebel freedom fighters may come too late for the people of Misrata. Furthermore it morally wrong to unnecessarily prolong the agony of the Libyan people by having rebel freedom fighters engage in bloody combat over a prolonged period of time which could be shortened by foreign military support.

The major sources of Qaddafi’s military strength are foreign mercenaries (whom the regime is apparently still in a position to pay) and troops drawn from the Warfalla, Maghara and Qadhafa clans, the last mentioned being Qaddafi’s clan. These aforementioned clans do not have the requisite military strength or inclination to oppose foreign combat troops.

The commitment of these clans to the Qaddafi regime is derived from their now being its administrative backbone and having subsequent access to wealth and patronage. These clans also fear that they would disproportionately suffer if Qaddafi was to fall. But even if Qaddafi were to military prevail, the long term ascendancy of these clans would be threatened by an oil embargo that would be imposed on an internationally ostracized Libya.

Effective Anglo-Franco military assistance by utilizing the ‘Chindits’ option in regard to saving the people of Misrata would be beneficial on two levels. Firstly, it would send a practical message to the three support clans that some of their talented members should support the establishment of and participate in a post-Qaddafi provisional government of national unity.

The second advantage of the ‘Chindits’ option would that it will be conducive to a prompt military withdrawal so as to avoid an Afghan or Iraqi quagmire. This will particularly be the case because a ‘Chindits’ option is by definition confined to a prescribed area of operation for a limited period of time.

The ‘Chindits’ option or approach was primarily devised by a brilliant and an unorthodox British General, Orde Wingate (1903 to 1944). General Wingate fulfilled a key role in liberating another former Italian ‘colony’, Abyssinia (as Ethiopia was then known) between 1940 and 1941. General Wingate was understandably appalled at an initial British reluctance to restore full sovereignty to Ethiopia’s Emperor Haile Selassie who was a personal hero of the general’s. General Wingate did help ensure that full Ethiopian independence was promptly restored that his North African military campaign became a political success.

Unfortunately, Haile Selassie’s reign did not end successfully with His Imperial Majesty’s being deposed in 1974 and probably murdered in a regicide in January 1975. For all the Emperor’s impressive achievements His Imperial Majesty allowed sycophants to cut him off from reality so that he lost perspective as to what his actual situation was.

Whatever Qaddafi’s failings he has never lost his sense of realpolitik. The Libyan dictator therefore will only cede power if and when circumstances warrant it. At present military situation is such that Qaddafi will not cede power to a provisional government of national unity due to western uncertainty as to how to effectively apply military power.

If the situation was to change due to a contemporary Anglo-Franco application of Chindits military option not only would Misrata be saved but Libya would be spared a protracted civil war that could alienate potential Arab good will toward the west as the Middle East moves towards democracy. The achievement of democracy is not an impossibility in nations or regions that have not traditionally enjoyed this form of government.

Since 1994 post-apartheid South Africa has been an example of how democracy can flourish in a nation that did not have a genuine democratic tradition and which still has deep ceded economic and social problems. The South African achievement is partly due to the remarkable leadership of Nelson Mandela who served as post- apartheid South Africa’s first president between 1994 and 1999. It is therefore now fitting that Mandela is rightly regarded as one of history’s great statesmen.

Probably the most admired African in the twentieth century before Nelson Mandela was Emperor Haile Selassie due to his dignity and heroism in opposing the Italian invasion of his country between 1935 and 1936. The late Emperor may still receive eventual historical vindication but Nelson Mandela’s positive place in history is assured.

Even President Mandela’s decision to receive Qaddafi in the South African president’s last days in office did not besmirch his integrity. For Nelson Mandela it was impossible to ostracize Qaddafi because he had been such a stalwart supporter of South Africa’s liberation struggle. It would therefore be appropriate if Qaddafi were to go into exile that his exile is a South African one because this would help synthesize this nation’s past historical and contemporary roles in advancing democracy. By granting Qaddafi asylum South Africa would be honouring a national leader who supported their struggle for freedom while helping his people achieve their freedom.

But for South Africa to be of assistance in helping the Libyan people to achieve their freedom it may be necessary for countries such as the United States, Britain and France to provide military assistance to the Libyan people. Democracy and freedom are desired outcomes and those who commit to supporting people and nations who suffer under oppression achieve liberty have a moral obligation to honour their verbal undertaking with effective action. Fulfilling moral obligations also have practical and strategic ramifications in this globalized world.

Why the Al- Qaeda Red Herring must not become a Self-Fulfilling Prophecy in Libya

Specific American NATO military air support against Qaddafi regime artillery and troops in the vicinity of Misrata must be praised because it has helped avoid a humanitarian catastrophe. The action of American Senator John Mc Cain in recently (April 2011) visiting Misrata in the midst of the fighting was courageous and moving. The Mc Cain visit is hopefully reflective of the intention of NATO (with specialized American backup) to provide the Libyan rebel freedom fighters with sufficient arms, training and air support to liberate all of Libya if Gaddafi refuses to make way for an impartial democratically inclined provisional government.

It should be emphasised that in a military context Misrata is still not fully secured. The Qaddafi regime has resorted to sophistry by claiming that it has withdrawn its troops from Misrata in favour of ‘tribal’ troops resident in the surrounding area. The troops that are continuing the attacks on Misrata are regime soldiers and foreign mercenaries who are now dressed in civilian clothes. That the regime continues its attack on Misrata despite recent military reverses due to NATO air support by using mobile units is reflective of Qaddafi’s calculated refusal to concede unless the situation actually warrants it.

Previous events in Libyan history, such as his successes in crushing countless military coups, reflect that Qaddafi’s contemporary defiance is not bravado but a realistic assessment of his capacity to impose his will and/or master a challenging situation. The Libyan dictator knows that the real test that confronts NATO is not only that of providing continuing aerial support to the rebel freedom fighters but also of arming and training the rebel freedom fighters so that they can use Misrata (which is in geographical proximity to the Libyan capital) as their base to liberate Tripoli.

To prevent NATO countries from undertaking the necessary sustained military support to the rebel freedom fighters the Qaddafi regime is cunningly raising the spectre of Al-Qaeda. Disturbingly, foreign media are giving credence to the nonsense that a weakening of the Qaddafi regime corresponds with a strengthening of Al-Qaeda. Not only is this assessment incorrect but the opposite may well be the case unless the rebel freedom fighters are helped by NATO on a sustained and co-ordinated basis.

Al-Qaeda is a military network which thrives in a vacuum as was illustrated in Afghanistan. The first really effective Al-Qaeda affiliate was the Taliban which took power in Afghanistan in 1996. The Taliban emerged as an organization in 1994 after the Soviets withdrew from Afghanistan in 1989 and the communist regime fell in February 1992. Due to internecine factional fighting within the post-1992 mujahideen
governments Afghanistan fell into a state of anarchy which subsequently enabled the Taliban to take power in 1994.

The Taliban basically emerged from Quranic schools along the Afghan-Pakistan border due to the backing of Pakistan’s superb military intelligence, the Inter-Services Intelligence (ISI). Due to the ISI’s own strategic objectives (which were not, and are not, always shared by successive governments in Islamabad) Pakistani military intelligence sought to exert its power through the Taliban. Indeed the American led fight against the Taliban in Afghanistan is still being undermined by elements within the ISI having links to this Al-Qaeda affiliate.

Due to the American led intervention in Afghanistan since 2001 it has become fashionable to assert that the more or less free world bungled by supporting the Afghan mujahideen because this set the scene for Al-Qaeda. In actual fact the problems that emerged in Afghanistan were due to the Americans and Europeans not maintaining close links with the post-communist Northern Alliance government in 1992 to encourage and support it holding democratic elections.

Osama Bin Laden had established guerrilla operations against the Soviets in the 1980s which initially and ironically supported by his home country, Saudi Arabia. (Saudi support for Bin Laden in Afghanistan was ironic because his ultimate aim of taking power in Saudi Arabia by destroying the royal House of Saud is now apparent) Bin Laden and what became his Al-Qaeda organization is distinctive for advocating the re-establishment of modern-day Caliphate in which Muslim countries re united into one Islamic state.

Having taken power in Afghanistan in 1996 the Taliban provided Bin Laden with a base for Al-Qaeda’s worldwide operations. The September 11th 2001 terrorist outrages were undertaken on the basis that if important headquarters such as the World Trade Centre in New York or the Pentagon in Washington were bombed then the West’s financial and defence capacities would be substantially impaired. This relatively simplistic approach not only demonstrated Al-Qaeda’s top-down mindset but also illustrated their methodology of creating chaos as a prelude to taking power.

Al-Qaeda has established viable operations in nations where anarchy is in the ascendant. A glaring example of the application of the Al-Qaeda model has being contemporary Somalia. This organization has also established operations in Yemen by linking up with remote tribes but Al-Qaeda has failed to establish an urban base of support which is a key political power source in that Gulf nation.

There are Libyan operatives within Al-Qaeda but the Qaddafi regime effectively closed Libya off from the rest of the world that this organization does not have a base in that country. Furthermore the Libyan people are too well-educated that they are not receptive to Al-Qaeda’s interpretation of Islam or its absolutist aims. Furthermore having lived under Qaddafi’s repressive rule the Libyan people are not be prepared to exchange one tyranny for another.

As simplistic as Al-Qaeda’s approaches are with regard to engineering anarchy this co-ordinated network has been meticulous in establishing organizational structures in the wake of a breakdown in law and order. In the Libyan context the anti-Qaddafi freedom revolt has been too spontaneous for Al-Qaeda to hi-jack the rebellion because it has no organization on the ground. However if there is a complete and sustained break down of law and order in Libya then Al-Qaeda could have the potential to link up with remote tribes to possibly constitute an effective fighting force.

Al-Qaeda could infiltrate operatives into Libya from The Sudan, Chad and Niger but the territorial terrain is too sparsely populated and inhospitably isolated to pose a threat. The Egyptian military have effective control along the Libyan border that an Al-Qaeda cannot infiltrate Libya. The Tunisian-Libyan border is also secure from Al-Qaeda infiltration because Tunisia is too cosmopolitan a nation for this network to have established a viable base of operations from which to infiltrate.

Potential Al-Qaeda opportunities for infiltration into Libya by sea are presently too difficult to undertake due to the American naval presence in the Mediterranean Sea in the Gulf of Sidra and along the Libyan coast. Furthermore, Al-Qaeda cannot utilize the port cities of Benghazi or Misrata as springboards to enter Libya because the people and governing authorities of these cities are too grateful to NATO.

The military situation may be inhospitable for Al-Qaeda to establish military operations but the ultimate protective guarantee against an Al-Qaeda presence is to prevent that Al-Qaeda strategic objective being achieved – anarchy. By NATO providing the TNC with military and logistical support to maintain a viable army this governing authority can prevent the possibility of Al-Qaeda from moving into the void that it needs to establish military operations in Libya.

The TNC has the support of the people of Free Libya because it is pursuing an objective that they are overwhelming supportive of – that of removing Qaddafi from power. The insistence of the TNC (which clearly reflects the desire of the people living in Free Libya and probably those still ruled over by the regime) that Qaddafi leave the country as a precondition to negotiating the formation of a provisional government may seem intransigent.

The seemingly elaborate ‘Jamahiriya’ edifice that Qaddafi has constructed is actually based a round himself. Libyans know that if Qaddafi physically departs into exile that the regime will lose its co-ordinating capacity that holdover officials will be open to accepting a new provisional government that will protect them.

Due to his centralized role within the regime Qaddafi is not cawed by the popular revolt but actually emboldened to crush the rebellion. It is therefore wishful thinking on the part of foreign governments to believe that Qaddafi will be overthrown by defectors within his entourage.

The challenge therefore will be for the principal NATO countries of the United States, Great Britain and France that are hopefully at the forefront of removing Qaddafi from power to commit to supporting the rebel freedom fighters to achieve this objective. NATO is in a position to help arm and train the TNC’s brave embryonic volunteer army. Rebel freedom fighters can be trained and armed in Benghazi and then shipped to secure Misrata. This port city can in turn serve as a base from which to despatch a NATO trained and equipped army to liberate Tripoli.

Due to Qaddafi’s intransigence a march from Misrata to Tripoli could be bloody. To avoid a protracted war focused NATO air support will be required to incapacitate Qaddafi’s ground troops so that there can be an expeditious rebel march on Tripoli. Because Qaddafi is actually militarily skilled he will know that NATO air and logistical support will be sufficient to enable the rebel freedom fighters to eventually win victory. If this is to be the case Qaddafi (and key members of his entourage) will be faced with the prospect of deciding whether to cede power to a provisional government or fighting to the death. The latter option will be a challenge for the Qaddafi regime because there are too many ultimately unreliable paid mercenaries fighting for his regime.

If NATO does opt to provide the Libyan rebel freedom fighters with effective assistance Qaddafi could well cede power to a provisional government and go into exile. If Qaddafi insists on staying on in Libya the TNC should be open to such a scenario on the strict condition that an international force is deployed to enforce the authority of a new provisional government.

Paradoxically, such an international force would provide protection to former regime officials and supporters from arrest or retribution in for an intermediary period until democratic elections are held. If the Qaddafi regime does have a substantial degree of genuine support this could be parlayed into electoral leverage so that figures associated with the regime can fulfil a political role within a post-Qaddafi Libya.

Alternatively, if Qaddafi knows that NATO will not provide the rebel freedom fighters with necessary and sufficient support he will maintain his military advantage by holding the territory to perpetuate the division of Libya. Such western indifference will lead to a counterproductive malaise in the Middle East because failures of Arab nations to make transitions to democracy will be conducive to facilitating failed nation states and more war in a resource vital part of the world.

Dr. David Bennett is the Director of Social Action Australia Pty Ltd.

The fall of South Vietnam was the inevitable consequence of America’s failure to provide the support it committed to President Nguyen Van Thieu. Thieu’s death in September 2001, raises the question: will America commit herself to winning the war on terrorism and supporting the promotion of democracy as part of the process of supporting nation building? These questions have a pressing and relevant urgency because the recent US 2006 congressional results could precipitate an abandonment of the Afghan and Iraqi peoples similar to the one that occurred to the peoples of Indo-China in the 1970s as a result of congressional action.

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With growing international pressure for the United States to disengage from Afghanistan and Iraq, an overview of Izetbegovic’s life is therefore warranted. This is because these two nations face the distinct prospect of an inter- communal bloodbath occurring similar to what had previously happened in Bosnia if they are abandoned by the international community. This biography of Alija Izetbegovic written by David Bennett originally appeared in the November 2000 edition of Serendipity.

Alija Izetbegovic: Integrity in the Face of Evil

Bosnian Tragedy

Between 1992 and 1995 the world was shocked by the cruel and senseless war in the former Yugoslav republic of Bosnia-Hercegovina in which over 300, 0000 lives were lost. During this period, for the first time since Hitler’s Third Reich, a systematic policy of ethic genocide - ‘ethnic cleansing’- was pursued in Europe. The primary victims in this instance were Bosnia’s Muslim majority. This evil policy was actually orchestrated by then Serb - and later rump Yugoslav - president, Slobodan Milosevic as part of his strategy to maintain the dominance of Serbia’s post- communist elite. The Bosnian war was further complicated by the involvement of Bosnia’s Croat Defence Council (HVO), which acted as a surrogate for neighbouring Croatia’s late president, Franjo Tudjman. The North Atlantic Treaty Organisation’s (NATO) deplorable reluctance to militarily intervene at an earlier stage to end Serb - and to a lesser extent Croat - aggression against Bosnia was an indictment against both the United States and the European Union (EU) to fully overcome the legacy of the Vietnam War Syndrome. This mindset spuriously maintains that military involvement in the affairs of another nation is inherently wrong, immoral and therefore doomed to failure.

The man who led Bosnia through its 1992-1995 nightmare, and who until recently led its Muslim community, was the writer and lawyer, Alija Izetbegovic. By examining Izetbegovic’s personal and historical role in the former Yugoslavia, the Bosnian war and its aftermath, an example of a leader emerges who has maintained his integrity. He was able to do this by tenaciously persevering in his vocation of forging a multi-ethnic nation in the face of overwhelming odds.

In trying to come to grips with the horrors of the 1992-1995 Bosnian war there has been a tendency to categorize them- and by extension to excuse the failure to militarily intervene- as the explosion of repressed ancient and uncontrollable ethnic rivalries which defy rational resolution. Such a perspective is an inaccurate one because much of the history of the former Yugoslavia (1918-1992) was one in which most of its political leaders deliberately forewent the opportunities that arose to forge a nation that was based on equality and democracy, to selfishly consolidate their own power. This was done by manipulating inter-ethnic rivalries. Alija Izetbegovic as a political leader has been an exception to this leadership pattern.

When Izetbegovic was elected head of the Bosnian presidency at the end of 1990, he along with Macedonian President Kiril Gilgorov attempted sincerely, if naively, to ensure the Yugoslav federation’s continuance in a more devolved form. This attempt was unfortunately sabotaged by Slobodan Milosevic. He feared that Yugoslavia’s continuance would have resulted in the election of a federal anti-communist government. Such a development probably would have fatally undermined Milosevic’s authority within Serbia. The Serb leader’s subsequent determination to create a ‘Greater Serbia’ meant that Izetbegovic had no choice but to lead Bosnia-Hercegovina out of Yugoslavia in March 1992 and inevitably face Milosevic’s bloody wrath.

Due to Alija Izetbegovic’s taciturn personality he has often come across as something of an enigma to both international observers and to Bosnians. Even amongst Bosnia’s secular inclined Muslim majority, Izetbegovic has stood out as an exception to the rule because he is a practicing Muslim. He is also the only political leader of former Yugoslav republic - until Milosevic’s recent fall - who had never been a communist. Izetbegovic’s public life has been dedicated to forging a sense of identity for Bosnia’s Muslim population, who had often been previously wracked by an inter-communal division with many Bosnian Muslims identifying themselves as either Croats or Serbs.

In attempting to foster a sense of a distinct Muslim Bosnian ethnic identity, Izetbegovic has also striven since he came to office in 1990 to maintain a multi-ethnic state (or what he defines as a ‘citizen’s state’) based on equality between Bosnia’s Croats, Muslims and Serbs. The paradoxical dynamic in establishing multi-ethnic Bosnia has been for its Muslim population to gain a clear ethnic identity as Muslims, so that Bosnia-Hercegovina can maintain itself as a de jure independent state and subsequently avoid the fate of being portioned between Croatia and Serbia.

Bosnia within the Interwar Kingdom of Yugoslavia

Bosnia’s strategic value was most notoriously illustrated in June 1914 when the heir to the Austro-Hungarian throne, Archduke Franz Ferdinand was assassinated in the Bosnian capital Sarajevo, by a Serb chauvinist which precipitated the outbreak of the First World War. With the Austro-Hungarian Empire’s defeat and subsequent disintegration in November 1918, Bosnia became a part of the new Kingdom of Serbs, Croats and Slovenes (which after 1929 was officially called Yugoslavia) under the Serbian royal family, the Karageorgivics.

Alija Izetbegovic’s historical role model was the leader of Bosnia’s Muslims during the inter-war period, Mehmed Spaho. His party, the Yugoslav Muslim Organisation (JMO), entered into an alliance with Monsignor Anton Korosec’s Slovene Populist Party to constitute the unitarian kingdom’s third force. This alliance exercised an important political influence by judiciously playing various ethnically based political parties off against each other during the kingdom’s parliamentary phase in the 1920s.

In the aftermath of the fatal wounding of the Croatian Peasant Party’s (HSS) leader, the charismatic and mercurial Stephan Radic during a parliamentary debate, King Alexander imposed a royal dictatorship in January 1929. This dictatorship attempted to artificially create a sense of nationhood and unity by vigorously promoting ‘Yugoslavism over tribalism’. Bosnia’s Muslim’s particularly resented the royal dictatorship because it deprived the JMO of its political clout and abrogated the Habsburg’s generous 1909 statute that had guaranteed the Bosnian Muslim community’s autonomy. Ironically, the resentment against King Alexander’s dictatorship was such that it facilitated a degree of inter-communal goodwill between Bosnia’s Muslim, Serb and Croat communities.

The royal dictatorship effectively closed off domestic avenues for authentic and legal democratic opposition. Consequently exile groups, such as the Croatian ‘Utasa’ (‘Uprising’) became a majority threat to the kingdom due to the patronage that it enjoyed from irredentist Italy and Hungary, which along with Albania and Bulgaria had territorial designs against Yugoslavia. Having concentrated so much power in his hands, King Alexander’s assassination in October 1934 in France on a state visit by a Macedonian terrorist in the employ of the Utasa came as a profound shock to Yugoslavia.

Prince Paul’s Regency: Uneven Political Liberalization

Until the late King Alexander’s son, Peter II assumed his majority in 1941 his prerogatives were to be exercised by his second cousin, Prince Paul. His regency ushered in a period of uneven political liberalization. Following partially fair parliamentary elections in May 1935 a new ruling political party was formed, the Yugoslav Radical Union (JRZ). Spaho and Korosec took their respective political groups into this new party. The withdrawal of the Serbian Radical Party from the JRZ in 1936 subsequently enabled the Korosec/Spaho bloc to become the dominant power group within the governmental JRZ.

In February 1939 the Korosec and Spaho seemed to have consolidated their political dominance when they helped engineer the downfall of the pro-Axis premier Milan Stojadinovic as he attempted to establish his own personal fascist dictatorship. Unfortunately for Bosnia’s Muslim community, Prince Paul utilized Stojadinovic’s downfall as an opportunity to reach a compromise with the HSS’s able leader Vladko Macek concerning Croatian autonomy. The granting of Croatian autonomy was a positive first step, but the problem was that the process of devolution was not extended to all communities within Yugoslavia. The regent sought this accommodation with the HSS in order to bolster national unity as Europe approached the outbreak of war.

The Sporanzum (The Understanding)

The ensuing negotiations were finalized in August 1939 with the conclusion of the ‘Sporanzum’ or ‘The Understanding’ which resulted in the creation of a Croatian Banovina (or Governorship). Macek’s subsequent appointment as vice-premier made him the second most powerful political figure in the kingdom after the regent.

The Sporanzum was a diaster for Bosnia’s Muslims because half of Bosnia-Hercegovina was given to the Croatian Banovina without any recognition of Bosnian Muslim rights. The 1939 Cvetkovic/Macek boundary along which Bosnia was divided later became the blue print upon which Serbia’s Milosevic and Croatia’s Tudjman covertly agreed to partition Bosnia between them. This reconciliation between Serbia (represented by Prince Paul) and Croatia (represented by the HSS) therefore set the precedent which illustrated how Serbo-Croatian could be fatal to Bosnian Muslim interests, as Izetbegovic was later to experience.

The Sporanzum paradoxically aroused Serb resentment and throughout 1940 there was agitation for a Serb Banovina (which is analogous to English agitation for home rule in Britain). Serb hatred toward Prince Paul was manifested in March 1941 when a group of Serb military officers led by Air Force General Simovic used the regent’s very reluctant adherence to the Axis Tripartite Pact as a pretext to stage a coup in the name of King Peter II. The new Simovic cabinet, which retained the Bosnian Muslim, Croat and Slovene ministers from the preceeding Cvetkovic cabinet, re-affirmed its adherence to the Pact.

Nonetheless, an infuriated Hitler refused to accept assurances from the Simovic regime and ordered the invasion of Yugoslavia. Within ten days of the Axis invasion the kingdom was dismembered. Macek courageously refused to the German offer to ‘lead’ the Italo/German occupied “Independent State of Croatia” (sic) (The NDH) which was subsequently led by the bestial Utasa leader, Anton Pavelic.

The Second World War: Bosnia’s First Bloodbath

Bosnia-Hercegovina was incorporated into the NDH. Although a section of the JMO initially collaborated with the NDH, they were soon to be disillusioned. The precedent of ‘ethnic cleansing’ was started by Pavelic with his Utase committing horrific massacres against Bosnian Serbs, Jews, Gypsies and anti-fascist Croats. It was from the mountains of Bosnia that thousands of Serbs fled that Josip Bronz Tito’s communist partisans first emerged. Due to its mountainous terrain and central location that Bosnia became the strategic and bloody battleground in which guerrilla fighting took place in Yugoslavia during World War II. The withdrawal of Germany’s better military units to fight Soviet Union helped create a vacuum, which led to the complicating factor of a civil war between the communist Partisans and the predominately Serb royalist Cetniks which were led by Draza Mihailovic.

Bosnia’s Muslim population bore a disproportionate brunt of the bloodbath not only because Bosnia was a major theatre of war but also as they were specifically targeted by the various combatants. Many Muslims - but not the entire community as such- were persecuted and targeted for liquidation by Pavelic’s NDH. Because there were Bosnian Muslim units who fought under the Germans both the Partisans and Cetniks took reprisals against Muslim civilians. Nonetheless there were Muslims that fought under Tito, who in a masterstroke created the Anti-Fascist Council of National Liberation of Yugoslavia (AVNOJ) in November 1943. The AVNOJ brought non-communists into Tito’s camp. By recognizing the national rights of groups such as Macedonians and Montenegrins, Tito was able to significantly extend his guerrilla network on a nationwide basis. Bosnian Muslim families such as the Pozderac family that fought with the Partisans were later to gain positions of wealth and power in Tito’s future nomenklatura. Although there were instances of Cetnik units that were not under Mihailovic’s control killing Bosnian Muslims, a small minority of them threw their lot in with the Cetniks.

The Young Muslims

Throughout the hostilities of World War II the Izetbegovic family remained in the relative safety of Sarajevo. Izetbegovic entered a horticultural college before transferring near the war’s end to study law at Sarajevo University. Due to the Bosnian Muslim population’s lack of a coherent political organization in the wake of the JMO’s disintegration and the horrendous carnage wrought by the war on Bosnia’s Muslims, a group of Muslim students and youth, including Izetbegovic, founded the Sarajevo based Young Muslims. This organization sought to defend the interests of Bosnian Muslims and it enjoyed German support to the extent that they shielded it from Pavelic’s murderous wrath. With complete military victory achieved by Tito in May 1945 he unleashed a year long bloodbath in which between 100,000 and 250,000 people, including the courageous Draza Mihailovic, were butchered.

Although the Young Muslims was a cultural organization, it did not escape post war communist persecution due to its religious character and its toleration by the German occupation authorities. A twenty-one year old Izetbegovic was subsequently arrested and tried as a Young Muslim activist who had edited the journal, ‘Mujahid’. He was sentenced to three years in prison. Released in 1947 as a first time offender, Izetbegovic returned to his law studies. This period was to improve invaluable to Izetbegovic because it established his niche within the ad hoc stream that subsequently centred round the defunct Young Muslims and the minority of Bosnia’s practicing Muslims in the communist era.

Tito’s Yugoslavia
The promulgation in January 1946 of a Soviet style constitution gave republican Yugoslavia a federal framework. This federal structure was negated by the fact that the Yugoslav Communist Party actually possessed the fulcrum of power, it at least recognized the legal de jure rights of Macedonia and Montenegro as official republics of Yugoslavia. The regions of Vojvodina and Kosovo, due to Serb sensibilities, were eventually accorded the status of autonomous republics, not within Yugoslavia, but within the Yugoslav republic of Serbia.

Bosnia-Hercegovina, along with Croatia, were formally accorded the status of fully fledged republics within Yugoslavia, despite Serb designs on those regions. Inspite its official republican status Bosnia was actually under Serb domination. This was because most of this republic’s top administrative and party posts were held by Serbs. Up until Izetbegovic’s election to office in late 1990- despite the Tito regime’s later political liberalization- Bosnia remained the most ideologically doctrine, repressive and corrupt of the Yugoslav republics.

Tito’s support for the communists during the Greek Civil War (1946-1949) and his subsequent advocacy of a Balkan federation resulted in the pathologically suspicious Stalin expelling Yugoslavia from the communist bloc in 1948. The Soviet tyrant took this action because he feared that such a federation would threaten his power. A stunned Tito reacted by swiftly purging the party of its pro-Soviet elements and by launching an intensive collectivization program to demonstrate his ideological bona fides. But from 1953 onwards, after accepting western financial loans, Tito embarked upon a skilful liberalization program in which the Communist Party’s (renamed the League of Communists, LCY, in 1953) power was diluted with regard to it encroaching on people’s lives without forgoing its overall political power.

With the onset of political liberalization, Yugoslavia was opened to western tourists (who brought in hard currency) and Yugoslav citizens were allowed to work abroad as guest workers in Western Europe, thereby sending back valuable remittances. A variant of Marxist economic theory was subsequently developed that became variously known as the ‘Yugoslav Road to Socialism’ or ‘Market Socialism’ in which economic planning was theoretically devolved to workers’ councils and limited private property rights were recognized. This ‘Market Socialism’ was actually underwritten by western loans and primarily administered by and for the benefit of the families of the LCY’s nomenklatura or ‘New Class’.

Another policy innovation of Tito’s was his ‘non-aligned’ foreign policy that was adopted in the 1950s. Yugoslavia subsequently established close links with Third World nations. Because many of these countries were Muslim it consequently became an advantage in Yugoslavia in the 1960s to be an ethnic - as opposed to a religious Muslim- in order to obtain postings in the Yugoslav diplomatic corps.

Titoist Devolution
The most significant domestic ramification of Tito’s non-aligned foreign policy was the official recognition that was granted to Bosnia’s Muslims as a distinct ethnic group in 1971. In that year, an ethnic Bosnian Muslim, Dzemeral Bijedic, was appointed federal prime minister. Due to Bijedic’s influence with Tito, a number of ethnic Bosnian Muslims joined Tito’s entourage and this ethnic group subsequently became the predominant group within Bosnia’s LYC leadership in the 1970s. Most Bosnian Muslims to this day believe that Bijedic’s death in an airplane crash in 1977 was engineered by Serb chauvinists. It is quite plausible, that had Bijedic lived, that because of his political stature, he, and not Izetbegovic, would have led a post Yugoslav Bosnia.

Tito’s purging in 1966 of his heir apparent and security chief, the Serb Alexander Rankovic represented a crucial turning point in effectively devolving power to the republics away from Rankovic’s personal Serbian faction within the LCY.

Throughout the 1950s and 1960s, despite the onset of limited political liberalization, Izetbegovic played no political role as he concentrated on his legal career. He later served as an administrative official with Bosnia’s railways and as a director of the PUT construction firm. Nonetheless Izetbegovic still stood out as one of a minority of Bosnian Muslims that actually practiced his faith and consequently forewent the enhanced career opportunities that would have come his way had he joined the LCY.

The Power of Ideas: The 1970 Islamic Declaration
In 1970 Izetbegovic wrote a treatise entitled The Islamic Declaration: A Programme for the Islamization of Muslims and Muslim Peoples (The Declaration). This treatise was not distributed at the time. It effectively advocated a unity between Islamic teachings and culture. As such, it attacked the notion that one could be an ethic Muslim without being a believer.

The Declaration obliquely attacked Tito’s cult of personality and the philosophical basis of Marxism. (For good measure, Izetbegovic who is an Ottoman Empire sentimentalist criticised the coercive thrust of Kemal Ataturk’s Turkish republic). The Declaration made no mention of Yugoslavia or Bosnia-Hercegovina and its advocacy of a linkage between culture and religion has been misrepresented by Izetbegovic’s political opponents as Islamic fundamentalism.

In 1976 Izetbegovic published his book, Islam Between East and West and this book was followed in 1981 by another book of his, Problems of Islamic Revival. The 1976 book is more important than The Declaration because it gives a clearer perspective on Izetbegovic’s actual political beliefs and philosophies. Noel Malcolm in his book, A Short History of Bosnia reviewed Islam, Between East and West in the following terms by writing that Izetbegovic “tried to present Islam as a kind of spiritual and intellectual synthesis which included the values of Western Europe. The book contained some eloquent praise of Renaissance art (including literature) and European literature; it described Christianity as ‘near union of supreme religion and supreme ethics’; and it also had a special chapter praising Anglo-Saxon philosophy and culture, and the social-democratic tradition. No fundamentalist could have written that.”

One Step Forward, Two Steps Back: Yugoslavia’s 1974 Constitution

In 1974 Tito ushered in a new constitution to fully take effect on his death, indeed the primary aim of the new constitution was to ensure that Yugoslavia survived Tito’s death. The 1974 constitution established a system whereby the top government and party positions were to be rotated between the different republics in order to ensure that no one ethnic group predominated. The republics were also given certain veto rights over federal government decisions. Tito unfortunately squandered a golden opportunity that came with the adoption of the new constitution to elevate Kosovo and Vojvodina to the status of fully fledged republics of Yugoslavia.

The Yugoslav dictator’s adamant refusal to envisage a future multi-party state meant that constitutional power would be balanced within the framework of the nomenklature’s interests as opposed to the overall good of the peoples of Yugoslavia. A multi-party framework would have complemented the devolution that the 1974 constitution facilitated and could well have ensured Yugoslavia’s survival.

With Tito’s death in May 1980 his framework of a decentralised authoritarian (as opposed to totalitarian) state was put into effect. Post- Tito Yugoslavia became the only communist country up until the late 1980s where a national parliament could successfully block government legislation. However this exercise of political sovereignty by a legislature did not denote political liberalism but rather that federal MPs were beholden to the leaderships of their republics. While the LCY nomenklature was prepared to openly air its policy differences within a legal context, it was determined to crush anyone that challenged its overall authority and privileges. Alija Izetbegovic was to gain Yugoslav wide prominence as someone that challenged the post-Tito political status quo.

Izetbegovic’s Emergence as a Dissident in Post-Tito Yugoslavia

Izetbegovic and eleven of his acquaintances were placed on trial in 1983, accused of plotting to establish an Islamic state after circulating copies of The Declaration in Sarajevo. The real sensibilities that Izetbegovic had aroused with the authorities were actually revealed when the defendants were charged with advocating a multi-party state. Izetbegovic’s trial was the most important of the post-Tito period because it exposed the actual repressive nature that underlay an avowedly ‘liberal’ communist state.

Sentenced to fourteen years imprisonment (later reduced to eleven years on appeal) Izetbegovic spent five years in the Foca Prison until he received an early release in 1988. As a petty slight Izetbegovic was consigned to the section which held hardened prisoners. (Those prisoners who protected Izetbegovic during his imprisonment were later released by him and given positions within the Bosnian army regardless of their ethnic background). Izetbegovic’s unflagging faith and stoic nature enabled him to successfully endure the rigours of prison life. This subsequently gave him the strength and fortitude to face the horrendous political future that lay in store for him when he was released.

Multi-Party Elections

With the decaying of communism throughout Central and Eastern Europe in the late 1980s it became apparent to the peoples of Yugoslavia that a one party state could not be sustained. In March 1989, a Bosnian Croat, Ante Markovic, was appointed federal prime minister and he attempted to steer Yugoslavia toward a multi-party future. The prime minister launched the Alliance of Reform Forces (subsequently known as the Reform Party) in July 1990 as he took on his nemesis, Serbian President, Slobodan Milosevic. The Reform Party enjoyed strong support in Bosnia and it stood a good chance of taking office in that republic when elections were held there in late 1990.

Alija Izetbegovic reactivated the latent Young Muslim network and recruited contemporary young Muslim academics, such as Dr. Haris Silajdzic and Dr. Erup Ganic to found the Democratic Action Party- the Stranka Demokratske Akcije- (SDA) in May 1990. This party was- and still is- exclusively Muslim, although its membership is notionally open to all Bosnians. The SDA’s support was initially confined to Bosnia’s minority of practicing Muslims.

From Milosevic’s perspective a Reform Party victory had to be sabotaged at all costs because its inter-communal focus would probably make it more difficult to instigate a ‘Bosnian Civil War’ as a prelude and pretext to partitioning Bosnia between Serbia and Croatia. In July 1990 with the covert backing from Milosevic, an avowedly anti-communist party, the Serb Democratic Party (the SDS) was founded. This new party’s leadership was initially drawn from figures that had been briefly imprisoned in the 1980s due to their involvement in the Agrokmerc business scandal. The SDS stressed its alleged anti-communism by invoking- and subsequently disgracing- the memory of Draza Mihailovic. Ironically, this party stressed its supposed ethnic tolerance by inviting Izetbegovic to its founding Congress as its guest of honour.

The strong support that the SDS garnered amongst Bosnia’s Serbs caused many Bosnian Croats to shift their support to the nationalist Croatian Democratic Union (HDZ) which had won power in neighbouring Croatia in June 1990. Because Bosnia’s Croats and Serbs were shifting their support to ethnic parties, most of Bosnia’s secular inclined Muslims subsequently transferred their support to the SDA. The strength of this de facto tripartite alliance was illustrated in November 1990 when its respective candidates to seven person collegiate presidency (respectively composed of two Muslims, two Croats, two Serbs and one general representative) easily defeated the candidates from the former communist parties and those from the secular inter ethnic parties. Following the December 1990 parliamentary elections in which the ethnic parties again easily won, with the SDA gaining a plurality, the presidency convened and elected Izetbegovic as its president. A new three party coalition (composed of the SDA, the HDZ and the SDS) cabinet was formed and Izetbegovic’s then personal friend, Momcilo Krajisnk of the SDS elected parliamentary Speaker.

Gathering War Clouds

From Izetbegovic’s perspective the 1990 elections were highly satisfying because Bosnia’s three constituent ethnic communities- especially its Muslim community- had asserted their identities within a seemingly cooperative anti-communist framework. Having acquired office, a naïve President Izetbegovic attempted to devise a more devolved constitutional framework in which Yugoslavia could continue in a con federal form to which Bosnia could still belong. Unfortunately Milosevic was determined to engineer revolts by ethnic Serbs in Croatia and Bosnia in order to create a ‘Greater Serbia’. The SDS instead of being an anti-communist force was in fact a Trojan Horse/surrogate for the post-communist Milosevic to achieve his territorial ambitions and subsequently maintain his power in Serbia.

In July 1991 a successful revolt by Serbs in the Krajina region of Croatia, which along with Slovenia had recently seceded from Yugoslavia, occurred. This revolt was covertly organised by the Yugoslav Military Intelligence and it was actually carried out by the Serb dominated Yugoslav People’s Army- sic (JNA). The Krajna ‘revolt’ was supported by the Bosnian SDS, which now demanded a con federal Bosnia. Having seen Milosevic sabotage his plan for a further devolved Yugoslavia, a wiser Izetbegovic now realized that a federal Bosnia would provide Milosevic with the cover to bring whatever territory that the SDS claimed as part of a de facto ‘Greater Serbia’. In October 1991 a very acrimonious parliamentary debate, which was filmed, between Izetbegovic and the SDS leader Dr. Radovan Karadzic (a psychiatrist by profession) the SDA/HDZ majority rejected SDS calls for a federal Bosnia and passed a sovereignty law under which Bosnian law took precedent over Yugoslav law. The SDS’s reaction was to withdraw from the coalition government, parliament and presidency. Ominously the JNA proceeded in November 1991 to disarm the Bosnian Territorial Defence Force.

Bosnian Independence and the Onslaught of Ethnic Cleansing

For Izetbegovic however a point of no return had been reached in which for Bosnia to have remained in Yugoslavia would have meant remaining within an inhospitable Greater Serbia. An independence referendum was subsequently held in March 1992 in which the voters were asked if they endorsed the establishment of an independent multi-ethnic Bosnia-Hercegovina. Due to an SDS backed boycott, supported by JNA obstruction, only Muslims, Croats and those Serbs in Sarajevo that were able to vote took part in the independence referendum in which 99% voted for independence with a turnout of 63%.

Karadzic predictably refused to recognise the result and from the JNA stronghold of Banja Luka proclaimed a ‘Serb Republic of Bosnia-Hercegovina’. Those JNA units that were based in Bosnia cosmetically transformed themselves into the Army of the Serb Republic (VRS) and disingenuously adopted the trappings of the Serbian Orthodox Church. However most of the VRS’s officers, such as its commander, General Ratko Mladic were former LCY stalwarts who were covertly financed and supplied with arms by the Milosevic regime. The VRS was supported by various Serb paramilitary death squads, the most notorious been the ‘Tigers’ which was led by the late and unlamented ‘Arkan’.

Having established itself as a nominally independent force, the VRS launched a savage artillery bombardment on Sarajevo on April 6th 1992 as Serb paramilitaries attacked the capital. Fortunately the JNA Sarajevo garrison inexplicably declined to support the attack - a minority of the garrison later joined the new Bosnian army which was a chaotic combination of lightly armed police reservists and the SDA militia, the ‘Green Berets’- were able to successfully repulse the attack on the capital. In May 1992 Izetbegovic and his daughter and close confidant, Sabina were seized by the JNA’s Sarajevo garrison as they returned from an international conference on Bosnia. The newly formed Bosnian army reacted quickly by surrounding the barracks, which gave them the leverage to secure the president and his daughter’s release in return for JNA garrison’s safe passage out of Sarajevo.

This new army’s success was in part due to the directions they received from former gang leaders, some of whom Izetbegovic had established a connection with from his period in prison. These leaders possessed an intricate knowledge of the capital’s labyrinth of back streets and alley ways and therefore were able to secure most of the capital for the government. Within a month of its attack on Sarajevo the VRS controlled 70% of Bosnia. Actual government control of Bosnia was confined to a small triangle bounded by Sarajevo, Tuzla and Tranik in central Bosnia. The remaining territory that was not under VRS control was held by the allied Bosnian Croat army, the HVO in the west in Hercegovina, which had repulsed the Serbs.

The second major miscalculation the Izetbegovic made (the first was his former implicit alliance with the SDS) was his assumption that western military intervention would be promptly forthcoming. The European Union (EU) would not support NATO intervention without United States leadership. Unfortunately the Bush administration’s foreign policy ‘experts’- such as National Security Adviser Brent Scowcroft- were infected with the ‘Vietnam Syndrome’. Consequently they selfishly refused to undertake military intervention abroad unless it was vital to the United State’s economic interests (such as the Gulf War in 1991). While a relatively small and ineffective United States Protection Force (UNPHOFOR) was subsequently deployed in 1992- which would eventually number 44, 0000- the international community refrained from assisting Bosnia as an international arms embargo was imposed on all the combatants, thereby principally benefiting the well stocked VRS.

Due to its shortage of manpower, -the VRS approximately numbered 80,000- General Mladic pursued a strategy in which the VRS seized territory by blitzkrieg. To hold the taken territory and minimize VRS casualties, the practice of ‘ethnic cleansing’ and siege warfare was applied. ‘Ethnic cleansing’ involved massacring non-Serb civilians, rape and generally forcing people from their homes. For all the verbal eloquence with which western leaders denounced Serb aggression they offered no practical military assistance to Bosnia. Even though Bill Clinton as a presidential candidate vocally deplored the Bush administration’s inactivity with respect to Bosnia, his Vietnam War complex manifested itself as president when he vetoed a congressional bill that would have lifted the arms embargo against the Bosnian government.

In negotiations at the various international conferences sponsored by the EU or the Council for European Security and Co-Operation Alija Izetbegovic was often treated with contempt because of his reluctance to capitulate. Ironically, Serb intransigence such as Karadzic’s refusal to accept the Vance/Owen Plan in 1993 (which would have divided Bosnia into ten cantons) enabled Izetbegovic to avoid endorsing agreements that would have sanctioned Serb dominance.

Izetbegovic’s Precarious Military and Political Situation

Izetbegovic’s major achievement following the proclamation of Bosnian independence was to have retained control of most of Sarajevo- part of the eastern sector of the city fell to the VRS- so that he could claim to be the legal head of state for all of Bosnia. The foundation of the Army of the Republic of Bosnia-Hercegovina (ARBH) in 1992 from the police force, the Green Berets and former city gains was another substantial achievement because it gave Bosnia a fighting chance with regard to ensuring its survival. Under the brilliant command of General Rasin Delic (a former JNA officer who had defected) the ARBH became a flexible organisation that was able to wage hit and run operations against the VRS. Due to the initial support that the ARBH received from the HVO in 1992, western Bosnia (i.e. Hercegovina) remained free from VRS control. In October 1992 however fighting broke out between the ARBH and the HVO. In April 1993 the Bosnian HDZ, led by Mate Boban, with Croatian President Franjo Tudjman’s discreet support declared the establishment of a secessionist Croat ‘Herce-Bosnia’.

In September 1993 the political/military situation reached a nadir for Izetbegovic when the HVO entered into a political alliance with the VRS and the Bosnian president’s major political opponent within the Muslim community, Firket Abdic. Abdic established the self-declared ‘Autonomous Province of Western Bosnia’ as he entered into an alliance with Boban and Karadzic. Izetbegovic reacted to these ominous developments by dismissing the HDZ ministers (including Prime Minister Mile Akmadzic) and appointing Dr. Haris Silajdzic, the scion of one of Bosnia’s most prominent Muslim families as the new prime minister in 1993.

The new Silajdzic cabinet won inter-ethnic popular support within the besieged Sarajevo in late 1993 when it launched a military offensive that destroyed the HVO, extortionist criminal gangs and the Mujadeen militia that were operating in the capital. Because much of the ARBH was composed of Muslim refugees from ‘ethnically cleansed’ areas they subsequently fought with a ferocious determination against the HVO in western Bosnia that the regular Croatian army, the HV, was obliged to intervene in November 1993 to save the beleaguered HVO from military defeat. Fortunately because President Tudjman was susceptible to western pressure he forced a reluctant Boban to conclude a ceasefire with the ARBH and to enter ‘Herce-Bosnia’ in March 1994 into the newly created Muslim-Croat Federation. This new entity existed within the paradigm of the Bosnian state and Prime Minister Silajdzic concurrently served as prime minister of the new federation. The formation of this federation meant that Izetbegovic and Silajdzic had effectively staved off a Croatian attempt to de facto annex the western part of Bosnia. Consequently the ARBH was free to concentrate on countering Serb aggression.

Internal Divisions within the Bosnian Government

Within the Bosnian government controlled territory a split emerged between the secular nationalists and Muslim hardliners with Izetbegovic straddling the middle. On the one hand was a hardline Islamic faction led by Vice-President Ejup Ganic which was supported by General Delic, who brought in most of the ARBH officer corps into the SDA to constitute a powerful party faction. Alternatively, Prime Minister Silajdzic and most of his cabinet advocated a multi-ethnic state.

Although Izetbegovic has succumbed to Islamic hardline pressure to officially recognize Bosnian Muslims as a distinct ethnic group- ‘Bosniacs’ - he refused to declare a Bosniac republic. To have done so would have legally destroyed Bosnia-Hercegovina as a multi-ethnic state and thereby legitimized a Serb-Croat partition. Consequently Izetbegovic refused to dismiss the Croat and Serb members of the Bosnian presidency, such as the courageous Serb, Mirko Pejanovic, that he had unilaterally appointed to replace the departed SDS and HDZ representatives.

Prime Minister Siladzic became a trenchant critic of Izetbegovic’s over reliance on his Muslim power base and unconstitutional refusal to rotate the presidency after December 1991 onto the Croat and Serb members of the collegiate presidency. However Siladzic grudgingly appreciated that Izetbegovic’s stature was such that only he could effectively check Muslim hardliners. For the Ganic/Delic bloc dared not move against ‘Deedo’ or ‘Grandpa’ as Izetbegovic is affectionately known to most Bosnian Muslims.

Belated NATO Intervention

In July 1995 the supposedly ‘safe areas’ of Srebrencia and Zepa fell to the VRS which resulted in the massacre of over 8000 Muslim men. Meanwhile the VRS launched an offensive to take the western enclave of Bihac with the support of Muslim troops loyal to Adbic. During this crucial stage US congressional pressure led by Republican Senate leader Bob Dole to rescind the arms embargo against the Bosnian government reached a crescendo. At this vital juncture Croatia launched a blitzkrieg offensive to retake Krajina. Meanwhile a wary Izetbegovic arrived in the Croatian capital Zagreb to negotiate an alliance with Tudjman. Due to the bloody noose that Croatia received from the ARBH in 1993/94 and the international disrepute that the Serbs were held in, the canny Tudjman calculated that he could maximize his influence in Bosnia by entering into an alliance with its government.

On August 12th 1995 a successful joint Bosnian/Croatian military offensive was launched to which relieved Bihac and consequently consigned Abdic to political oblivion. At the same time the VRS launched a barbaric mortar attack on a busy Sarajevo marketplace. The international uproar was such that the Clinton administration was compelled to launch massive NATO air strikes against VRS positions in Bosnia which subsequently gave the advantage to the Bosnian/Croatian military offensive. Consequently by mid-October 1995 VRS control of Bosnia had been rolled back from 70% to just under 50%. Despite this (or perhaps) because of this shift in military fortunes in favour for the Bosnian government due to NATO bombing, American pressure compelled Izetbegovic to take part in an international conference on Bosnia to determine its future.

The Dayton Conference

In contrast to Czechoslovakia’s ill-fated President Eduard Benes-whom Izetbegovic has compared himself to-he was not effectively excluded from the conference that decided his nation’s fate. The November 1995 American sponsored negations on a post-war Bosnia were held at the Wright Patterson Air Base outside Dayton, Ohio. Izetbegovic utilized his status as a chief of state to maximum effect so that he could hold his own against Tudjman and Milosevic who represented and negotiated on behalf of the respective Croat and Serb interests in Bosnia. The Bosnian government delegation was itself wracked by division between the Ganic and Siladzic factions. Meanwhile Izetbegovic had to contend with negotiating with the Milosevic and Tudjman (whom the Bosnian president wryly described as a choice between Leukaemia and having a brain tumour). Furthermore the talks’ American mediator, Richard Holbrooke subjected the Bosnian government delegation to sleep deprivation as he attempted to bully Izetbegovic into accepting the terms as he dictated them.

Izetbegovic’s reaction to this challenging environment was to cut off from his delegation- except for his protégé, the former Bosnian ambassador to the United Nations, Muhamed Sacibrey- and unilaterally negotiate with Milosevic and Tudjman as much as possible without Holbrooke. Shrewdly realizing that Milosevic and Tudjman were ‘control freaks’ that wanted to control their satraps, Izetbegovic convinced them that they could do this by using their influence within the context of a federal de jure Bosnia-Hercegovina. Although Izetbegovic had indignantly rejected the a federal solution in 1991, he realized that the subsequent deployment of a 60,000 NATO led Implementation Force (IFOR) would in effect prevent Bosnian Serb and Croat attempts to join up respectively with either Croatia or Serbia.

Crucially the Dayton Accords (in contrast to the Paris Agreement of January 1973 that facilitated the US abandonment of South Vietnam and consequently led to that nation’s destruction) sanctioned the continued deployment of foreign troops. This development was crucial because it would ensure that the political framework established by the Dayton Agreement would be broadly adhered to by the parties.

Post Dayton Politics

The Dayton Accords divided Bosnia into two ‘entities’, the Muslim/Croat Federation, constituting 51% of Bosnia-Hercegovina and the predominately Serb Puplika Srpska (RS) covering the remaining 49% of the territory. These two ‘entities’ in turn existed within a de jure Bosnia-Hercegovina, which has a loose federal government, bicameral parliament, judiciary and three person presidency (representing the nation’s three constituent communities). Internationally supervised elections were to be held in September 1996 to facilitate the creation of the Dayton mandated political institutions.

With the signing of the Dayton Accords Izetbegovic adopted a two-pronged approach. On the one hand he moved to consolidate his position within the Muslim community and the areas under his direct control, while simultaneously stressing his renewed commitment to inter-communal reconciliation and national unity by encouraging Bosnia’s Serbs and Croats to operate within the Dayton framework. Izetbegovic accordingly purged the pro-Iranian elements within the ARBH in return for extensive American military aid while also retiring the non-Muslim elements within the army. Former communist bureaucrats were dismissed and antiquated Titoist taxation policies were rescinded as external financial aid flowed into the Muslim-Croat Federation. A substantial gain for Izetbegovic and a reward for his compliance with the Dayton Accords was the VRS’s withdraw from most of eastern Sarajevo.

In the landmark September 1996 elections Izetbegovic fended off a valiant challenge from former Prime Minister Siladzic to be the Muslim representative on the new three person presidency. Many of Siladizic’s secular inclined Sarajevo Muslim supporters pragmatically shifted their support to Izetbegovic in order to strengthen the overall Bosniac position within the post-war Dayton framework. The 1996 post-war Bosnian elections were similar to the 1990 multi-party elections in that they resembled an ethnic census because its ethnic communities voted overwhelmingly along ethnic lines. Ironically a Bosnian Serb splinter party allied to Milosevic, the ‘Union for Peace and Progress’ (sic) siphoned votes away from the SDS’s Momcilo Krajisnk. This was done to ensure that Izetbegovic chaired the three person presidency during its first term (1996-98) during which the Dayton framework would be implemented.

The geographical split that has occurred in 1997 in the RS’s leadership between those Serbs based in Banja Luka in the west loyal to Dr. Biljina Pavsic and the Karadzic clique based in Pale in the east has been a very positive development. This is because this split has spawned a critical mass of Serbs who are prepared to operate within the framework of Bosnia-Hercegovina as a de jure nation state. Dr. Pavsic, a genuine anti-communist, has remarkably transformed herself from been a ruthless advocate of ethic cleansing to a strong proponent of reconciliation and general adherence to the post Dayton political arrangements.

Within the Muslim-Croat Federation a renewed SDA/HDZ alliance (despite a brief outbreak of fighting in Mostar 1996) against the secular/inter-ethnic parties should ensure that the federation will survive for the immediate future. Furthermore, there has been a discernable, but limited progress with regard to internationally supervised repatriation of the victims of ‘ethnic cleansing’.

The SDA’s defeat in local government elections this April this year by the EU backed Social Democratic Party ( a reconstituted post communist political party) in the Muslim-‘Bosniac’ area resulted in Izetbegovic announcing in June his resignation from the presidency which took effect in October this year. The election of secular and/or inter-ethnic ideological parties could potentially inject the republic’s Dayton created institutions with a unifying focus.

Ironically the Serbian branch of the SDA enjoys strong support in the predominately Muslim Sadzak region within Serbia proper. The Serbian SDA is currently aligned to the broad anti-communist alliance that recently brought Milosevic down. It remains to be seen if the Serbian SDA will exercise any influence over Yugoslavia’s new president, Vojislav Kostunica, an avowed monarchist. The new Serbian leader may well emulate Izetbegovic’s approach of seeking solutions to seemingly intractable questions based on law and due process.

Izetbegovic’s Beneficial Legacy

While the politics and history of the Balkans region can be classified as volatile, it would be unethical to categorize the horrific bloodshed that occurred in Bosnia as inevitable because of pent-up ethnic rivalries. This is because the carnage was deliberately and calculatedly engineered by Milosevic and his post-communist cohorts. In this context, both as a leader of a nation and one of its communities that were the primary victims of aggression, Izetbegovic stands out because he did not utilize the turmoil that confronted him to also become brutal of forsake his humanitarian outlook.

Alija Izetbegovic’s life, both political and personal, is testament to the fact that consistency is the key ingredient to the virtue of integrity. In this respect Izetbegovic is very similar to West Germany’s late former leader, Konrad Adenauer. Similar to Adenauer, Izetbegovic displayed exceptional courage by defying a dictatorship and in subsequently leading the nation after the tyranny had ended. Such a comparison is apt because Izetbegovic has never been an Islamic fundamentalist but rather the Muslim equivalent of a Christian Democrat.

Having suffered imprisonment for his faith and later advocacy of multi-party democracy it should not have come as a surprise that Izetbegovic did not subsequently abuse his power when he came to office. This is because for him, power is not an end in itself, but rather a means of achieving the objectives of forging a distinct Muslim identity within a tolerant inter-ethnic state. By persevering in the pursuit of this inter-related objective, Izetbegovic demonstrated that the key to ethical leadership is to strive for outcomes based on altruistic principles and not to allow the ensuing travails, no matter how horrific, to destroy the integrity of those principles.

Dr. Bennett is the Convenor of Historical and Current Affairs Analysis (HCAA), Editor of Social Action Australia Pty Ltd and the International Liaison Officer of the Australian Monarchist League (AML).

Bibliography/References:

Neil Balfour and Sally Mc Kay

Paul of Yugoslavia: Britain’s Maligned Friend

(Hamish Hamilton: London, 1980)

Ante Cuvalo

Historical Dictionary of Bosnia and Hercegovina

European Dictionaries No 25

(The Scarecrow Press: Lanham MD and London, 1997)

David A Dyker and Ivan Verwoda (Eds)

Yugoslavia and After: A Study of in Fragmentation, Despair and Rebirth

(Longman: London and New York, 1996)

John R. Lampe

Yugoslavia as History: Twice there was a Country

(Cambridge University Press 1996)

Noel Malcolm

Bosnia - A Short History

(McMillan: London 1994)

Mark Pinson (Ed)

The Muslims of Bosnia-Hercegovina

(Harvard University Press: Cambridge Mass, 1994)

Sabrina Ramet

Balkan Babel: The Disintegration of Yugoslavia from the Death of Tito to the War of Kosovo

(Westview Press Oxford, 1999)

Robert Thomas

The Politics of Serbia in the 1990s

(Columbia University Press: New York, 1999)

Encyclopaedia of World Biography: Volume 8

(Gale Research: Detroit, 1998)

KLA Ideology, Leadership, Objectives, Fundraising

Alija Izetbegovic Ideological Biography

Balkan Research Centre

http://www. Kosovo.net/kla/07/html

The Genesis of the Conflict Between Muslims and Croats in Bosnia-Hercegovina

http: //www.ceidom.org,/pubikacijre/dossier/ergo/ooo/genesis.html

The End of the Izetbegovic Era: Where is the SDA Heading?

http://www.balkanpeace.org/cib/bos/bosil/bosis.stml

Bosnia News Report- Is Fundamentalism A Threat in Bosnia? http://www.bosnet.org/archivebosnet. W.3 archive 19502/msg00184.html.

Goodbye to a Muslim Hero

Http://www.iviews.com

Introduction
The Bush administration’s resolve to commit the United States to the task of nation building in a post Taliban Afghanistan and post Saddam Iraq will be a gauge as to whether the United States has fully shaken off the destructive legacy of the so-called ‘Vietnam Syndrome’. This psychosis holds that American involvement and/or sustained military intervention in the affairs of another country is inherently wrong and subsequently doomed to failure. As a result of the Vietnam Syndrome, the Ford administration’s capacity in 1975 to effectively aid South Vietnam was thwarted. Consequently the South Vietnamese people suffer under totalitarian, Communist rule to this day.

The important role that the Reagan administration fulfilled in laying the groundwork for the United States’ victory in the Cold War is all the more impressive when one considers that the Vietnam Syndrome is still to be fully expunged from the American psyche. This was evident when the first Bush administration failed to consolidate its military victory in Kuwait by taking out the regime of Iraq’s Saddam Hussein. This failure on the part of the first Bush administration not only meant that Saddam continued to pose a regional threat, but that the Iraqi people continued to suffer under his tyranny.

The outbreak of relatively small anti-military demonstrations in New York and Western Europe opposing military action against Afghanistan’s Taliban regime in the wake of the 11th September 2001 terrorist outrages were as disturbing, as they were disingenuous. Later opposition to the United State’s action of leading an international coalition to liberate Iraq in 2003 and ensuing occupation aimed at helping to support the establishment of an Iraqi democracy demonstrate that the legacy of the Vietnam Syndrome are still to be fully expunged from the American psyche. Do critics of American intervention appreciate that the Afghan and Iraqi peoples will suffer if they return to living under a dictatorship due to a failure of America to support nation building which is committed to fostering democracy? The answer is that these opponents do not care, just as the opponents of the United States involvement in Vietnam did not really care or understand about the suffering that a communist victory would - and did – inflict on the peoples of Indo-China.

It is therefore ironic that the September 2001 terrorist attacks were followed closely by the death, on 29th September 2001, of a major figure of the Vietnam War, former South Vietnamese president, Nguyen Van Thieu. Due to the mythologies which underpin the Vietnam Syndrome, the complexities and objectives that the United States faced in attempting to forge a viable South Vietnam are now generally overlooked. Therefore it is not surprising that Thieu’s death received scant media coverage. Due to the Vietnam Syndrome’s residual affliction, questions of whether or not the United States should commit itself in the long term to nation building in Afghanistan and Iraq have arisen. It is in this context that an appraisal of Thieu’s role in the Vietnam War is appropriate.

Nguyễn Văn Thiệu’s Early Life
Nguyen Van Thieu was born into a moderately prosperous, hard working peasant family in Central Vietnam’s Phan Rang Province in December 1924. (Because he considered it to be more astrologically auspicious, Thieu claimed that he was born on the 5th of April 1923). As with nearly all Vietnamese, Thieu was galled at the prospect of France resuming its colonial rule over Vietnam at the end of World War II. He accordingly joined Ho Chi Minh’s communist Viet Minh guerilla forces. Within a year of joining them, Thieu broke with the Communists and fled to Saigon because he was disgusted by their 1945-46 terror campaign against non-Communist Vietnamese nationalists.

Thanks to the patronage of a wealthy uncle Thieu entered a Merchant Marine Academy in 1947. In 1949 due to the communist victory in China France grudgingly conceded the establishment of a ‘Vietnamese Free State’ headed by the former Vietnamese Emperor Bao Dao. This concession was made by the French in order to gain the support of anti-communist Vietnamese nationalists. Between 1950 and 1954 thousands of Vietnamese served in the National Army for fear of a communist victory and in the hope that Vietnam would eventually gain full independence from the French.

As an anti-communist nationalist, Thieu transferred from the Merchant Marine Academy to a Military Academy in Dalat and upon graduation was commissioned as an officer in the National Army. Following the Viet Minh’s victory at the battle of Dien Bien Phu over the French in 1954, colonial rule came to an end. Vietnam was divided into a communist state in the north and a non-communist state in the south. Thieu served as an officer in the new South Vietnamese Army which upon the proclamation of a republic in October 1955 was re-named the Army of the Republic of the Vietnam Nation (ARVN). As an ARVN officer, Thieu received further training in the United States and gained a reputation as a cautious, calculating but effective commander in South Vietnam’s fight against the northern-backed Viet Cong communist guerillas.

Thieu and the 1963 Coup
While Thieu admired South Vietnam’s autocratic president, Ngo Dinh Diem for his courage in forging a South Vietnamese state against the odds between 1954 and 1956, he resented the president’s over reliance on his family at the expense of accessing the strata of available nationalist talent.

A political campaign launched by the Buddhist monk Thich Tri Quang in May 1963 galvanized much of South Vietnam’s Buddhist community against Diem. Due to US media misreporting, the misperception took hold amongst American public opinion that President Diem was discriminating against Buddhists. Accordingly the Kennedy administration threatened to sever military aid to Diem unless he cut off from his brother Nhu.

Knowing that an American aid cut off would be fatal to South Vietnam, Colonel Thieu reluctantly joined a group of officers led by General Doung Van Minh -’Big Minh’ - who overthrew Diem in a bloody military coup in November 1963. It was Thieu who led the successful attack on the presidential palace. With the success of the coup, Diem and his brother Ngo Dinh Nhu were subsequently murdered on Big Minh’s probable instigation. The shock of the Ngo brothers’ murders was so profound for Thieu, that it unfortunately affected his personality. Thieu subsequently became paranoid, distrustful and suspicious in his general dealings with people. As President, Thieu would become notorious for his reluctance to issue precise orders to subordinates and for placing a higher premium on loyalty than ability.

Because the late President Diem had unfortunately concentrated too much power in his hands, the President’s demise created a power vacuum. Between 1964 and 1965 a breath taking spasm of coups and counter coups, which were either led by, for or against General Nguyen Khanh plunged South Vietnam into turmoil. It was during this period of chronic political instability that the United States sent more aid and advisors to help the South, undertook a bombing campaign against the North and directly committed American troops to South Vietnam, with the number reaching over 500,00 by 1968. The influx of the American military was not only due to the South’s chronic political instability, but it was also in response to the commitment of units of North Vietnam’s regular army, the Vietnam National Army, (NVA) into South Vietnam. They gained entry into the conflict by utilising an ingenious network of secret jungle trails that meandered through Laos and Cambodia and into South Vietnam, called the Ho Chi Minh Trail.

Thieu’s Political Emergence
General Thieu initially kept aloof from the cycle of coups and counter coups until he teamed up in February 1965 with the Commander of the South Vietnamese Air Force, Air Vice Marshall Nguyen Cao Ky to banish General Khanh into exile. After the provisional civilian Suu/Quat government imploded due to northern/southern rivalry within the Cabinet, Thieu and Ky stepped into the void by forming a new military junta in June 1965. Thieu assumed the post of Chief of State while Ky took the position of Prime Minister. Ky’s control over the air force enabled him to crush any coups that were launched against the new regime.

The crushing of a Buddhist backed civilian - military revolt in Central South Vietnam in 1966 effectively ended the political turbulence that had ensued in the aftermath of President Diem’s demise. While a strong anti-war movement was emerging in the United States at this time, the majority of American public opinion still backed military involvement in Vietnam. This support reflected the continued prevalence of post World War II internationalist idealism at this time amongst the American public. Furthermore, the fair conduct of balloting (in which Communists and neutralist sympathizers were barred) in elections to a constituent assembly held in September 1966 to draw up a new constitution boded well with regard to the positive aspects of nation building that the United States was supporting in South Vietnam.

The promulgation of a new South Vietnamese constitution in April 1967 however precipitated a split between Thieu and Ky, because both wanted to run for president. Up until this point, the personality differences between the introverted and calculating Thieu and the flamboyant and dynamic Ky were considered to be beneficial because they seemed to balance each other out. Although Ky was in the stronger position, he agreed to give way to Thieu and run for Vice President. This surprising concession on Ky’s part was made because the ARVN’s senior officers believed that Thieu as a southerner would be more acceptable to the public than Ky, who was a refugee from the North. Furthermore, the senior officers concerned intended to continue to continue to rule the country by having Ky head a secret military committee which would covertly rule the country. As part of the political deal between Thieu and Ky, the latter was empowered to name a post election Cabinet.

Thieu Becomes South Vietnam’s President
Contrary to assertions by sections of the US media at the time, the conduct of the balloting in South Vietnam’s September 1967 presidential election was generally fair. The Thieu/Ky slate won with a 35% plurality of the vote because the other nine competing civilian candidates could not match its capacity to extend government patronage into village hamlets. Elections to the National Assembly held in October were also conducted fairly. Due to the absence of a strong party system the legislature however lacked the necessary cohesion to challenge the executive branch.

The NVA/Viet Cong’s surprise Vietnamese New Year Tet Offensive of February 1968 in which attacks were launched on urban centers was both a military disaster and a brilliant political success for Hanoi. The Tet Offensive was a military failure for the communists because they lost thousands of soldiers and also because civilians in the cities declined to rally to their support. Furthermore, Communist massacres of civilians during the month whilst they held the city of Hue was a warning to the South Vietnamese people of how ruthless the Communists could be. On the other hand, the shock to the American public that the Tet Offensive caused - compounded by US media misreporting which exaggerated the extent of the offensive - commenced the fatal process by which the majority of Americans began to turn against supporting military involvement in Vietnam. For Thieu, an unexpected dividend of the offensive was that a number of powerful officers loyal to Ky were killed. This development coupled with US Ambassador Ellsworth Bunker’s staunch support for Thieu enabled him to effectively politically neuter Ky and consequently render the secret military committee redundant.

The Nixon Administration and US Disengagement
While Thieu was inaccurately portrayed by both the US media and anti - war critics as an American puppet, his last minute decision in October 1968 to announce his government’s boycott of US sponsored peace talks with Hanoi probably clinched Richard Nixon’s narrow election victory over the Democrats’ Hubert Humphrey.

The Nixon administration was viciously attacked during its first term (1969 to 1973), by ‘anti-war’ demonstrators for resolutely refusing to immediately and unilaterally withdraw US troops from South Vietnam. From July 1969 the Nixon administration commenced a phased withdrawal program of American troops called ‘Vietnamization’. Under this plan, the ARVN would progressively fill the vacuum resulting from allied troop withdrawals.

The new US administration also took political initiatives to help bolster South Vietnam as it commenced its process of disengagement. Due to American prodding the representatives of various groups in the National Assembly in 1969 were brought into the Cabinet and a pro-government bloc was formed called the National Social Democratic Front. Furthermore a very successful agrarian reform program was commenced in April 1970 which received American funding and technical assistance. This ‘Land for the Tiller’ program markedly improved the lot of South Vietnam’s peasantry and thereby considerably expanded Thieu’s support base. The formation of village based militias called ‘Popular Forces’ in January 1970 also bolstered the Thieu regime’s military standing, as did the development of the ‘Miracle Grain’ strain of rice.

Nonetheless the Thieu regime failed to take measures and initiatives during the period of US withdrawal which might have strengthened South Vietnam. In contrast to Chiang Kai-Shek’s Chinese Nationalist regime on Taiwan, Thieu failed to build up a local arms manufacturing industry. Furthermore Thieu neglected to follow the example of his South Korean counterpart Park Chung Hee in establishing a congressional lobbying operation in Washington to help secure the continuance of US aid. Thieu’s failure to take initiatives in these two areas would eventually prove fatal to South Vietnam.

The spread and intensity of the US’s ‘anti-war’ movement, particularly amongst university students and academia, during the period of America’s phased withdrawal threatened South Vietnam’s long term viability, as did the bias of the US media. In August 1970 South Vietnam held senatorial elections. The fact that one the senate tickets that Thieu backed went down in these elections received relatively little US media coverage. By contrast Thieu’s unopposed re-election in October 1971 received saturation coverage in the US media because it seemingly confirmed its caricature that South Vietnam was a corrupt military dictatorship.

The One-Man Presidential Election
Critics of Thieu’s unopposed re-election in 1971 ignored the fact that he had raised the standard necessary to qualify to run as a presidential candidate in order to avoid a rerun of the 1967 presidential election in which a multitude of presidential candidates competed. Both Big Minh and Vice - President Ky eventually qualified to run, but declined to in order to embarrass Thieu. (Big Minh may have withdrawn from the race in return for Thieu naming his friend, Tran Van Huong as his running mate).

While Thieu’s re-election was unopposed, the US media generally ignored the fact that in the preceeding legislative elections held in September, only 40 National Assembly incumbents were returned, 22 of which were members of the opposition. US media commentators also negated the context that the South Vietnamese press was amongst the freest (up until February 1975) in South East Asia and that the Thieu regime generally gave its political opponents, including neutralist advocates of a coalition government with the NLF, the latitude to express their opinions.

By late 1971 the Viet Cong insurgency had been broken due to the success of the US military intelligence ‘Phoenix’ program in which the ARVN/Popular Forces focused on securing village hamlets. Consequently the Vietnamization program was on course for successful completion in 1972. In Easter that year however, North Vietnam in a major strategic shift launched a conventional invasion of South Vietnam across the 17th parallel, which marked the border between the two Vietnams.

The North’s 1972 Easter Offensive
The success of the Vietnamization program was demonstrated by the ARVN’s capacity to withstand the full might of the North Vietnamese invasion. By late November 1972 the ARVN, with US air support, had successfully countered the invasion. Throughout the period of conventional combat in 1972, the US media generally neglected to report the heroism with which the ARVN fought.

Unfortunately the Hanoi regime retained its uncanny ability of converting military failures into political advances. Between 1970 and 1972 the Nixon administration’s National Security Adviser, Dr Henry Kissinger, engaged in secret talks with Le Duc Tho, who was a senior member of North Vietnam’s Politburo. Up until October 1972 Tho had dogmatically insisted upon Thieu’s removal and the formation of a coalition government - including the Viet Cong’s ‘Provisional Revolutionary Government’ (PGR) as a precondition for reaching any political settlement.

In October 1972, Tho suddenly dropped his demands for Thieu’s removal and the formation of a coalition government and ostensibly agreed to an internationally monitored cease-fire. Tho also consented to Kissinger’s proposal for a tripartite National Council for Reconciliation and Concord, which would be composed of representatives of the Thieu regime, the PGR and and an ill defined Neutralist ‘Third Force’ which would help supervise elections as part of a post war political settlement in South Vietnam.

The fatal mistake which Kissinger made in endorsing Tho’s proposal was that it made no provision for the withdrawal of over 140,000 NVA troops that were based in jungle sanctuaries in South Vietnam along the Cambodian/ Lao border. Therefore, at the point at which the United States was about to militarily disengage from South Vietnam the North Vietnamese would be in a position to maintain a significant component of their army in the South. By utilising the Ho Chi Minh Trail, North Vietnam would be able to supply its military and subsequently increase its troop levels in South Vietnam.

US-South Vietnamese Estrangement

Thieu therefore initially refused to be a party to any agreement which did not facilitate the withdrawal of North Vietnamese troops. Relations between Washington and Saigon between October and December 1972 seriously deteriorated over the issue of the continued stationing of North Vietnamese troops in the South following a cease-fire agreement. During this period Nixon and Kissinger placed intense pressure on Thieu to capitulate on this issue. Due to Thieu’s intransigence, Nixon even sent the South Vietnamese President a letter in November 1972, in which he obliquely warned him that he might share the same fate as Diem, unless he sanctioned the continued presence of NVA troops in the South.

During this tense stand-off period between Washington and Saigon, the US media, which had previously portrayed Thieu as an American puppet, now lambasted him as the obstacle to reaching a peace settlement. Believing that they had successfully engineered a fatal rupture between Washington and Saigon, the Hanoi leadership badly miscalculated by breaking off negotiations with the United States.

Nixon courageously countered by ordering the massive Christmas 1972 bombing of industrial and military installations in North Vietnam and the mining of Haiphong harbor. The aim of the bombing resumption was to force both Hanoi and Saigon to accept a cease-fire agreement. By bombing North Vietnam, the Nixon administration sent a powerful message to Thieu that any communist violations of a cease-fire agreement would be effectively countered by massive American retaliation. Although the United States sent over one billion dollars in military aid to South Vietnam in late 1972, in order to head off a congressional aid cut off, the Nixon administration simultaneously threatened to sever any future aid to South Vietnam unless Thieu agreed to the political settlement that it had negotiated with North Vietnam.

While the Nixon administration’s approach in its dealings with its ally were heavy handed, it should not be forgotten that had Thieu not agreed to the political settlement, the newly elected US Congress probably would have cut off any future aid to South Vietnam when it convened in January 1973. Furthermore the outbreak of massive anti-war demonstrations in the United States and the intense international condemnation of the December 1972 bombing campaign exhausted the Nixon administration’s political capacity to sustain military action beyond January 1973.

The 1973 Paris Agreement
The January 1973 Paris Peace Accords formally ‘ended’ the Vietnam War. But this formal cessation of hostilities was just that - a formality. The reality was that the Paris Peace Accords were an expedient by which the principal participants could obtain their respective immediate objectives. For the United States the Paris Agreement facilitated the final withdrawal of its troops from South Vietnam and the repatriation of its prisoners, both of which were achieved by March 1973. In the case of the Thieu regime - the party which had the most to lose and the least to gain from the negotiating process - the Paris Agreement left it in place because it did not facilitate the establishment of a coalition government which included the PGR. From Hanoi’s perspective the fundamental concession that it gained was the continued stationing of its troops in South Vietnam in jungle sanctuaries along the Ho Chi Minh Trail.

Therefore none of the parties to the Paris Agreement were under any illusions that it would end the fighting. The real issue was whether or not the United States would continue to adequately support South Vietnam with military aid, or provide it with air support in the event of a military crisis. No sooner had the Agreement been signed than regular NVA troops and supplies re-commenced coming down the Ho Chi Minh Trail.

The massive - and congested - influx of NVA military conveys streaming down the Ho Chi Minh Trail provided the United States with a golden opportunity to fatally incapacitate North Vietnam’s military capacity by undertaking a short and sharp bombing campaign. Richard Nixon would later regret his failure to order the bombing of the Ho Chi Minh Trail in April 1973. This was because by the end of that month, his political authority to protect South Vietnam had been fatally undermined because of the onslaught of the Watergate scandal (sic).

US Congressional Sabotage
Taking advantage of President Nixon’s erosion of power, the US Congress legislated in 1973 to undermine presidential foreign policy prerogatives. Under the November 1973 War Powers Act, a US President was compelled to obtain prior congressional approval for military action abroad. Legislation was also passed in 1973 which specifically prohibited any further US bombing in Indo-China. In August 1973 the US Congress took the tragic step of forcing a halt to American bombing of Khmer Rouge held sanctuaries in eastern Cambodia, thereby laying the groundwork for those genocidal guerillas to take power in April 1975.

The US Congress also passed legislation in July 1974, which placed a cap on the level of aid that could be sent to South Vietnam. This action was quite superfluous, because Senator Edward Kennedy was already successfully leading the campaign to deny South Vietnam military aid. Consequently President Thieu was forced to fight a ‘poor man’s war’ because South Vietnam lacked the ammunition and the supply of spare parts to adequately counter communist aggression. Furthermore an appalling double standard in the US media’s reporting of post-agreement fighting emerged in which South Vietnam was portrayed as violating the cease-fire by responding to NVA/Viet Cong aggression. Due to this mis-reporting it became even more difficult for South Vietnam to obtain military aid from the US Congress. Therefore Thieu’s previous failures to establish either a professional lobby group in Washington or a local manufacturing arms sector were thus proving to be fatal to his country.

Another ‘justification’ that the US Congress invoked for blocking aid to South Vietnam was the allegedly dictatorial nature of the Thieu regime. This analysis was flawed because between 1974 and 1975, a vibrant civic culture emerged which gave to substance to the democratic processes that were stipulated in the 1967 constitution.

The Democracy Party and Thieu’s Political Consolidation
Up until Richard Nixon’s resignation in August 1974, Thieu was able to maintain his political dominance within the context of South Vietnam’s political scene. In response to North Vietnam’s 1972 invasion, the National Assembly granted Thieu the right to rule by decree for six months in June that year. Due to the strong prospect in 1972 that a political settlement might stipulate elections in 1973 in which the political wing of the PGR - the National Liberation Front (NLF) - could participate, Thieu signed a decree regulating the registration of political parties. Under this decree political parties had to demonstrate that they had a nationwide membership and basis of support. Consequently Thieu was able in December 1972 to compel the various groupings that had constituted the pro-government bloc in 1969 (the National Social Democratic Front) in the National Assembly to coalesce into his newly launched Dan Chu (Democracy) Party.

To consolidate his hold over the new party and in order for it to meet the registration requirements, Thieu compelled many public servants to join it. The chief organizer of the Dan Chu Party was Nguyen Van Ngan, who was an intensely shrewd political operator. As a former Viet Minh cadre, a quirk of Ngan’s was that he promoted the use of the term ‘comrade’ in party circles!

In keeping with the objective of developing a political organisation that was on a par with the communists, all South Vietnamese political officials below the rank of cabinet minister were obliged to attend Spartan ideological training camps. Attendance at these camps was an integral component of Thieu’s ‘Administrative Revolution’, which he launched in 1973. The aim of this ideological campaign was to stimulate initiative amongst civil servants and draw them closer to the needs of the people.

The Dan Chu-backed Senate candidates swept to an easy victory in the August 1973 senatorial elections. In January 1974 the South Vietnamese Senate amended the constitution to allow Thieu to seek a third term and extended it from four to five years. To expand Thieu’s support base for the October 1975 presidential elections the Dan Chu Party backed candidates that had strong followings in provincial and city council elections that were held in July 1974. These successful candidates were then formally recruited by Thieu into the Dan Chu Party and expected to establish party branches from which candidates for the National Assembly would be pre-selected for the October 1975 elections. This development in turn alarmed the sitting National Assembly Dan Chu Party members who had been drawn from the groups that had made up the superseded National Social Democratic Front because they feared that they would be dislodged.

Political Reform: Thieu Fails to Go All The Way
Unfortunately Thieu’s commitment to fostering grass roots support did not extend to reforming the upper echelons of the military and of his regime. Most of the members of Thieu’s Cabinet were indolent and/or corrupt. Thieu tolerated and supported these Cabinet ministers because he generally valued loyalty above ability. Similarly, Thieu stubbornly held onto non-performing ARVN officers because of his paranoid fear of falling victim to a military coup.

Instead of revamping his administration, Thieu relied on a clique of capable and honest officials centered on his cousin Hoang Duc Nha (who was known as ‘the Dauphin’), which included South Vietnam’s brilliant young Minister for Economic Development and Planning, Dr Nguyen Tien Hung. Under Hung’s direction hundreds of thousands of displaced refugees were successfully resettled, as were thousands of urban slum dwellers who had been hit hard by the economic contraction caused by the withdrawal of allied troops. The Planning Minister and the Finance Minister, Chau Kim Nham was responsible for South Vietnam avoiding an economic implosion due to cuts in US aid and in ensuring that the nation remained self-sufficient in rice.

It was also under Hung’s direction that South Vietnam began to explore the prospect of exploiting potential oil reserves in the South China Sea. The expectations arising from the possibility of reaping an oil bonanza raised naïve expectations within the Thieu regime that they had found a panacea, which would save the country. (China’s action of expelling an ARVN garrison from the Spratly Islands in January 1974 extinguished this hope).

While Thieu may have relied upon these talented select senior officials to sustain his regime, he nonetheless prevented them from building a power base, which could threaten him. Furthermore, Nha - similarly to Diem’s brother Nhu - was hated by the Americans because of the role that he had played in 1972 in refusing to accept the terms of a political settlement as Kissinger had dictated. In contrast to Nhu however, Nha sought to remove ineffective officials and replace them with people of ability. For this reason Nha was cordially hated by much of the ARVN’s senior ranks and Cabinet ministers, particularly his bete noire, the prime minister, General Tran Van Khiem.

Nixon’s Resignation - Thieu’s Power Begins to Unravel
Richard Nixon’s resignation in August 1974 was a political disaster for Thieu and its ramifications sharply accelerated the process of South Vietnam’s disintegration. President Nixon’s personal support for Thieu had been a vital dynamic in maintaining his political ascendancy. This was because South Vietnam’s ultimate survival hinged upon American support. Even while President Nixon was politically hamstrung by the Watergate affair and South Vietnam subsequently hemorrhaging because of the congressionally induced cut backs in military aid, the Hanoi regime was still very wary about exploiting its military advantage. This apprehension arose from North Vietnam’s fear of incurring President Nixon’s wrath.

The negative political repercussions arising from Nixon’s resignation were not long in coming for Thieu. In September 1974, a Diemist priest, Father Tranh Huu Thanh launched a political campaign against Thieu under the banner of the ‘People’s Anti-Corruption Movement’. Ironically Father Thanh soon joined forces with the late Diem’s former nemesis, the Buddhist cleric, Trich Tri Quang. Due to economic discontent caused by high inflation and unemployment rates arising from OPEC oil price hikes of 1973, thousands of people flocked to the anti-Thieu rallies. Father Thanh called on Thieu to resign in favour of his elderly civilian Vice President, Tran Van Huong, in order to ensure that a fair ballot occurred in the presidential elections scheduled for October 1975.

Thieu’s critics in the US Congress cited the outbreak of anti-Thieu demonstrations as a further justification for their denying South Vietnam any further military aid. These so-called liberal democrats overlooked the fact that Thieu did not respond to this unrest by either clamping down on dissent or by censoring the opposition press, which was helping to fuel the demonstrations. Indeed on the 1st of October 1974, Thieu made a national broadcast in which he offered to resign. Thieu’s American critics seemed oblivious to the fact that under him the latitude existed for dissent to be expressed and the scope for further democratic development to expand. By contrast a takeover of South Vietnam by the North would - and did - irrecoverably destroy this democratic potential.

In January 1975 the majority of Dan Chu Party legislators led by the Speaker Nguyen Ba Can defected to Premier Khiem’s camp to support his presidential candidacy in the October 1975 elections. They made this shift because they were alienated from Thieu due to his desire to remove them in an effort to re-invigorate the ruling party. The following month opposition National Assembly Deputies coalesced to form the Social Democratic Alliance. This new opposition configuration enjoyed the backing of the Peoples’ Anti-Corruption Movement and it devised a pre-selection process aimed at ensuring that its eventual presidential candidate enjoyed broad grass roots support.

Because of opposition within the ARVN, Thieu did not have the option that President Park Chung Hee of South Korea and President Ferdinand Marcos of the Philippines had exercised in 1972 of suspending the Constitution. The ARVN itself was also resolutely opposed to staging a military coup for fear of plunging the nation into political turmoil that it could ill afford due to its precarious military position.

Consequently the pre-conditions existed in early 1975 for South Vietnam to hold a competitive and democratic presidential election scheduled for October that year. Thieu’s best hope of winning re-election was to appeal to the peasants that had benefited from the earlier ‘Land to the Tiller’ agrarian reform program. It was also noteworthy that the NLF/PGR played a negligible role in fomenting the anti-Thieu unrest of 1974-1975. At the time of Saigon’s fall in April 1975 there were an estimated 200 NLF activists in the capital.

North Vietnam’s 1975 Dry Season Offensive
The NLF/PGR’s lack of political support did not unduly perturb Hanoi, which had always regarded the non-communist elements within it as ‘useful idiots’. Indeed the South Vietnamese political situation was a subsidiary issue for North Vietnam because the bulk of its army by late 1974 had moved into the South through the Ho Chi Minh Trail. It was therefore only a matter of time before the communists exploited their military advantage.

North Vietnam’s Dry Season Offensive, which would destroy South Vietnam, commenced in March 1975, when regular NVA troops took the strategically valuable provincial city of Ban Me Thuot. The fall of this city was a disaster for South Vietnam because it was the linchpin, which underwrote the ARVN’s military position in the Central Highlands region. Due to US congressional cutbacks, South Vietnam lacked the military capacity to effectively counter the North’s full-fledged offensive. Therefore Thieu resorted to drastic action by deciding to abandon the less populated Central Highlands region and focus on holding the nation’s populous coastal cities and the fertile Mekong Delta region.

Thieu’s decision to abandon the Central Highlands was strategically sound because it offered South Vietnam its best hope of survival by enabling the ARVN to conserve its strength and hold onto the more populous and defensible parts of the country. Unfortunately the execution of the retreat was inept. Because the families of ARVN personnel tended to live in the barracks, they also tried to flee, thereby fatally undermining the execution of an expeditious withdrawal. As a justified panic set in amongst the general population of the Central Highlands about being abandoned to the communists, hundreds of thousands of civilians cluttered the highways, thereby sabotaging an effective evacuation. The NVA took advantage of this unfolding debacle by shelling the columns of retreating refugees. As a result of this botched retreat the ARVN began to implode as the well armed NVA expanded its offensive.

Thieu was himself partly responsible for the ARVN’s disintegration because he created confusion by failing to issue clear-cut orders to officers in the field during the retreat. However the deeper cause of the ARVN’s implosion was Thieu’s policy of placing a higher premium on loyalty than on ability. Therefore the NVA was able to take Danang and Hue with relative ease, because of the incompetence of General Dan Van Quang. By contrast, the outnumbered and outgunned ARVN garrison at Xuan Loc, held out heroically against the NVA due to the courage of its commander, General Le Minh Dao. Furthermore it was often difficult for the ARVN to effectively fight when it lacked the ammunition to do so because of US congressional aid cuts.

The tragedy of the ARVN’s patchy performance during its rout by the NVA in March/April 1975 was that it demonstrated that the South Vietnamese army possessed the capacity to fight effectively when it was properly led. Therefore Thieu’s failure (or reluctance) to purge the ‘dead wood’ from both his regime and the ARVN was all the more reprehensible because there was a talent pool from which he could have drawn. The botched retreat from the Central Highlands illustrated that while Thieu was intelligent enough to know what had to be done; his paranoia unfortunately stopped him from appointing the right people to carry out his orders. Ironically, despite Thieu’s suspicious nature, he failed to discover that the communists had successfully infiltrated the highest echelons of the ARVN’s military intelligence.

South Vietnam’s Collapse and American Callousness
It was noteworthy that the 1975 images of masses of civilians fleeing before the NVA’s advance, did not elicit any empathy on the part of American public opinion or an accompanying appreciation that most South Vietnamese were opposed to a communist takeover. Senator Ted Kennedy is still proud to this day of the role that he played in blocking emergency military aid to South Vietnam, even though the Vietnamese people are currently suffering under totalitarian rule. Senator George McGovern even opposed granting asylum to South Vietnamese refugees wanting to flee to the United States.

Even as South Vietnam was collapsing in 1975, the United States was still in a position to win the war for that country. This was because the rapid advance by the NVA left the bulk of it open to obliteration by a short and sharp US B-52 aerial bombing campaign. Thieu sent US President Gerald Ford an urgent cable (which was actually drafted by Dr Hung) requesting that the United States honour its promise to protect South Vietnam by undertaking such a bombing campaign. If such a campaign was short enough, it might have circumvented US congressional restrictions. The United States’ capacity to save South Vietnam was sabotaged, due to the cumulative effects of anti-war agitation, media mis-reporting and the consequent shift in US public opinion against their nation taking military action abroad.

The Fall of Saigon
Thieu’s political stocks correspondingly deteriorated with the South’s military situation. Although former Vice President Ky was a Buddhist, he received strong support from many Catholics, northern Vietnamese refugees and the hard right of the Dan Chu Party for him to take over the disintegrating nation. These militantly anti-communist power blocs looked to Ky as the man to effectively resist the NVA’s onslaught. Alternatively there were political figures that looked to Big Minh to save the nation by forming a coalition government with the PGR before the NVA reached Saigon. In order to facilitate Thieu’s departure Hanoi cynically waded into these political machinations by announcing its willingness to negotiate a political settlement on the condition that Thieu was removed from the scene.

Deprived of any capacity to hold onto office, Thieu resigned as president on the 21st of April. He adamantly refused, however, to make way for either Ky or Big Minh and handed over the remnants of South Vietnam to Vice President Huong. The only substantial power that rested with President Huong was to decide whether to make a last ditch stand by selecting Ky as his successor or surrender by choosing Big Minh. President’s Huong’s friendship with Big Minh resulted in the transitional president naming him as his successor. After serving less than two days as president, Big Minh (who was suspected of having Communist agents in his entourage) unconditionally surrendered Saigon and the rest of South Vietnam to North Vietnam on the 30th of April 1975.

Justified Bitterness - Thieu’s Resignation Speech
In his televised resignation speech on April 21st, Thieu tearfully denounced the United States for failing to honour its secret undertakings to assist and protect South Vietnam in return for his having been a party to the Paris Agreement. Although Thieu was in an emotionally unstable state when he delivered his resignation speech, he nonetheless helped salvage his reputation amongst many South Vietnamese by arguing that the ultimate culpability for South Vietnam’s defeat lay with the United States’ failure to come through for its ally.

Nguyen Van Thieu’s Exile
Denied entry to the United States, Thieu first took refuge in Taiwan. While he shared his host’s anti- communism, Thieu might have felt uneasy about living in Taiwan because he had previously toyed with the idea of establishing diplomatic relations with mainland China as a means of fatally undercutting Hanoi. At any rate, Thieu moved to Surrey, England in 1979. There he purchased a mansion, which he dubbed the ‘White House’ and went by the alias ‘Mr. Martin’. (This was the surname of the last US ambassador to South Vietnam, Graham Martin).

Although the funds that Thieu lived off in exile were probably misappropriated, his greed was not of kleptomaniac proportions which placed him on a par with some, such as the late dictator of Zaire (now the Democratic Republic of the Congo), Joseph Mobutu. Thieu eventually sold his mansion and moved to a flat in London. The former leader rarely granted interviews and declined to write his memoirs. He was interviewed however for one of the best television documentaries on the war, Vietnam: The 10,000 Day War. His interview for this documentary series was very valuable, because it provided a South Vietnamese perspective on the war.

Émigré Politics
In 1980 Thieu formed a clandestine émigré organisation called The National People’s Revolutionary Organisation (NPRO). This organisation did not make its existence known until 1986. In that year, a front group of the organisation the Vietnamese Lawyer’s Campaign Committee for the Restoration of the 1973 Paris Agreement was launched in November 1986. This committee was headed by Law Professor Vu Quoc Thuć. The committee he chaired asserted that South Vietnam’s continued legal existence was ensured by the 1973 Paris Agreement and that the Republic of Vietnam’s sovereignty resided in the person of Nguyen Van Thieu. It was ironic that Thieu’s emigré supporters invoked the Paris 1973 Agreement so that their leader could maintain his legitimacy as a president amongst Vietnamese exiles, when the Thieu regime had been such a reluctant participant in the Paris talks.

In 1990 Thieu moved to Boston, USA. Shortly after his arrival Thieu made a speech which, in accordance with the NPRO’s policy, advocated that Vietnamese refugees return to their homeland with a gun and overthrow the communists. Coincidentally, in 1990, Vietnam’s communist regime uncovered and pre-emptively crushed underground cells intent on taking military actions.

As was the case with many Vietnamese refugees Thieu was naturally elated by the fall of communism in Eastern Europe and the subsequent break up of the Soviet Union. In a 1992 interview that was featured prominently in the Boston Globe, Thieu predicted his return to power. This forlorn hope was the major subject of discussion that Thieu had with loyalists when they came to visit him. In an attempt probably aimed at facilitating his re-entry into Vietnamese politics, Thieu unsuccessfully offered himself as a prospective go-between in trade talks between the Clinton administration and communist Vietnam. (If Vietnam ever does manage to free itself from communist rule, this will probably occur as a result of a domino effect in the event of China’s communist regime falling).

The Vietnam Syndrome and the 11th of September
The fall of Saigon in 1975 was the worst defeat that the United States suffered during the Cold War. Although this defeat has been negated by the collapse of the Soviet bloc, the Vietnamese people continue to suffer under communist rule. Similarly while President George W Bush may identified in his 2002 State of the Union Address identified Iraq, Iran and North Korea as an “Axis of Evil”, these regimes should not only be eliminated because they threatened (with the latter two continuing to threaten) international security, but also because they brutally repress their own citizens. In this context, the tragedy of the Vietnam Syndrome is the effect that it still has on the American psyche in influencing the United States against taking military action abroad and from committing itself to promoting democracy by assisting in nation building.

If the world is to become a safer place in which human rights are respected, then democracy must be promoted. The facilitation of this outcome often requires focusing on the historical and political dynamics of a particular country. If the United States is to successfully meet the challenges that have arisen as a result of the 11th of September terrorist attacks, then it will have to overcome the effects of the Vietnam Syndrome. In this context Nguyen Van Thieu is an important historical figure because he was the leader of a nation which the United States failed to rescue. For the sake of the future of democracy and human rights around the world, the United States should not allow the legacy of the Vietnam Syndrome (which is self-fulfilling failure to a collapse of will) to continue.

Dr. David Bennett is the Director of Social Action Australia Pty Ltd.

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