Reviewed by Richard Tutin
The ethos that Australian society is one of the most equal in the world has been long ingrained into our collective psyche. Cameron K Murray and Paul Frijters’ assertion that this is no longer the case therefore grabbed my attention. This inequality forms the basis of their thesis that ordinary Australians are being ripped off by powerful people and their networks of mates. Along with the inequality that Australians are suffering is the thought that some of this activity could be termed as being corrupt even though many activities outlined in the book are legal and covered by relevant state and federal legislation.
Murray and Frijters have compiled as long list of business activities such as mining projects, the relationship between big business and governments, the superannuation industry, supermarkets, and private health insurance where they see these networks as working to line their own pockets from the profits they have organised and negotiated in order to maximise their investment while depriving everyone else whom they collectively name as Sam of money that they say is rightfully theirs.
Big business has always had an uneasy relationship with the rest of Australian society. Various governments at all levels have fought, at different times, to make sure that companies headquartered overseas but are doing business in Australia pay their fair share of taxes like the rest of the community. Monopolies, particularly within the telecommunication and supermarket industries, have also been the subject of Royal Commissions and governmental enquiries. Some have been successful while others have produced no worthwhile outcomes. Banking too has been in the news in recent years especially regarding the setting of mortgage interest rates and the associated fees that seem to accompany loan agreements.
Murray and Frijters are right when they say that people have been ripped off by many practices promoted by business and governments over the years. Unfortunately, they move a few steps too far in highlighting some issues while neglecting to mention others such as the power of trade unions that seek to control ways in which public infrastructure projects are managed and costed in order to maximise advantages for them and their members. This has the effect of driving up costs that lead to budget overruns, so projects cost more to complete.
Some thoughts are offered by the authors to counteract these problems. One I found intriguing was the suggestion that citizen juries be established to oversee the appointment of CEOs of statutory bodies and government departments as a means to strengthen their independence and transparency. It would also involve more people in the process of government. This concept is based on how democracy in ancient Athens functioned and would be seen as allowing people to practice some form of civic duty. What is not mentioned though is that ancient Athens had problems in carrying out this duty because eligible citizens would to anything to avoid being on a council where they had to make decisions that could be seen as unpopular.
There are a lot of generalisations in this book. All information given to back the book’s thesis has come from articles and other documents. No direct research through interviews and discussions with people in the field appear to have undertaken.
While alerting people to the propensity of possible corrupt and monopolising practices within society it would have helped if the authors had encouraged the Sams of Australia to take responsibility for their own situations and seek out the best deals for their home loans, electricity needs, communications packages to name a few. The media has been doing this for some time with great effect for some time. Taking responsibility in these ways will ensure that rip-offs as described by Murray and Frijters are managed as well as allowing people to feel that they are not being ignored by big business and governments.
Dr Cameron K. Murray is a Research Fellow in the Henry Halloran Trust at the University of Sydney and an economist specialising in property and urban development, environmental economics, rent-seeking and corruption.
Professor Paul Frijters is at the London School of Economics and was previously Professor of Health Economics at the University of Queensland.
Rigged: How Networks of Powerful Mates Rip Off Everyday Australians
Cameron K. Murray and Paul Frijters
Allen & Unwin
ISBN 978 176106 766 2