WEBINAR 1: GLOBAL CHALLENGES - Technology, Inequality and Democratic Decline: Is Australia at Risk?

Shireen MORRIS & Andrew BALL

11 November 2020

Throughout human history, technological advancements have buttressed the expansion of modern, representative democracies. Yet in recent decades, the ever-quickening pace of technological change is propelling stable democracies in chaotic new directions. It is a key factor facilitating democratic decline, and Australia is not immune. Though Australia is rightly considered a healthy and stable democracy, many underlying drivers of democratic decline are increasingly present.

Three entwined trajectories present cause for concern. First, technology-enabled automation, globalisation and market liberalisation are propelling job polarisation and inequality. Second, these forces may facilitate political polarisation and declining trust in political institutions that fail to address the concerns of those left behind. Third, technology is directly disrupting Australian political discourse and culture, amplifying discontent, disinformation and polarisation.

Technology, Job Polarisation and Inequality

Since the 1980s, a new fault line has emerged between the educated, wealthier ‘winners’ of technology-enabled automation, market liberalisation and globalisation, and lower-skilled workers left behind. Though Australia remains a prosperous country, inequality is increasing and the economic middle is hollowing out. This carries consequences for democracy: economic prosperity and a strong middle class are usually associated with democratic success, while economic stagnation and inequality are known drivers of democratic decline.

As Chalmers and Quigley explain, “there is no such thing as technological trickle down.” Technology transfers power and wealth to the owners of technologies, in line with Thomas Picketty’s insight that the natural rate of return on capital is greater than the growth of wages. In Australia, technology-driven job polarisation is also propelling growth and greater productivity in high-skilled abstract jobs (like software engineers, lawyers and financial advisors) and declines in middle-skilled routine jobs (like office administrators, manufacturing workers and checkout operators) which are more susceptible to automation.

Together with diminishing union power, this drives wage growth in abstract professions and wage stagnation in routine and manual professions, widening income inequality. Technological change therefore tends to benefit the highly educated, who also are better placed to transition into higher-skilled jobs. During the pandemic, such inequities have intensified: low-skilled, manual workers are bearing the brunt of job losses.

Such trends deepen geographic divides, because job polarisation disproportionately benefits the cities (where education levels are higher and abstract jobs concentrate), while the regions (with lower education levels, less adaptability and fewer abstract jobs) bear more costs. In some non-urban areas, underutilisation reached 20% even before COVID-19. Indeed, underutilisation has been rising in Australia over decades, probably due to market liberalisation (including casualisation), globalisation and technological job-displacement combined.

These forces cumulatively drive inequality. While inequality decreased during the post-war decades under government policies pursuing full employment, inequality has increased since the 1980s, after Australia’s economy was liberalised. While the Australian Labor Party’s (ALP) liberalising reforms set Australia up for sustained growth, many have since observed the disproportionate costs borne by workers, who accepted wage restraint in exchange for a ‘social wage’. The vast wealth since created has been unequally shared.

When living standards stagnate, trust and optimism decline and anxiety increases. Research in 2003 showed ‘middle Australia’ knew who the winners and losers were. Many felt their income and job prospects were falling. They felt more insecure and angry. Their trust in government was declining. Loss of trust has continued since then. By 2018, Australians’ satisfaction with democracy was at lowest levels since the 1970s, and there is growing voter disengagement. Some argue a ‘Trump-like’ disaffection is taking hold, as more Australians see Parliament as unresponsive to public needs.

Picketty contends that Western countries are increasingly governed by contemporary coalitions between the ‘brahmin left’ (the intellectual and cultural elite) and the ‘merchant right’ (the financial and commercial elite) who, despite some identity-based divisions and culture warring, both largely defend the economic status quo. For Picketty, the decline in centre-left parties worldwide has occurred because social democrats “forfeited the support of the least well-off voters and began to focus more and more on the better educated, the primary beneficiaries of globalization.” If this is correct, then those most disenfranchised by trajectories of change may lack mainstream political choices that genuinely speak to their concerns, exacerbating mistrust in the political establishment.

Picketty’s theory finds resonance in Australia, where minor parties are gaining popularity, centrist major parties are diminishing, and the party traditionally representing workers, the ALP, has faced steady decline in its ‘working class’ membership and primary vote since the 1980s. Some argue the ALP has become too adherent to neoliberal orthodoxies, which may partly explain its increasing appeal to educated professionals.

In the 2019 federal election, regional and suburban seats with high unemployment and low income levels were more likely to swing away from the ALP, to the Liberal-National Coalition or right-wing minor parties, while the ALP made moderate gains in educated, wealthier urban areas – even in traditionally Liberal seats. This aligns with international trends: centre-left parties are increasingly appealing to economically secure, educated, urban cosmopolitans, while the “new working class” may understandably tend towards nativism and conservatism – for liberalisation and globalisation have not worked out as well for them. Feeling unheard by the major parties, disenfranchised voters may increasingly be drawn to tactics and rhetoric which, amplified by new technological platforms, speak to their cultural conservatism and economic concerns.

Notably, research finds political disillusionment especially evident in the regions, where “major parties are particularly on the nose” and minor party popularity is increasing – especially among ‘working class’ voters who may be more concerned the ‘world is changing too fast’, more worried about job security, more begrudging of globalisation, and more nostalgic for past prosperity. These voters are also more likely to feel their concerns are being ignored by politicians.

Along with disillusionment, there is growing political polarisation in Australia. Fewer voters now identify as being in the ideological ‘centre’. Voter ideological variation from the average (standard deviation) increased between 1987 and 2019. Notably, polarisation of ‘very engaged’ voters has increased almost twice as fast as ‘less engaged’ voters. Accordingly, polarisation is particularly evident among politicians, with fewer rating themselves as moderate. This suggests a growing disconnect between a rapidly polarising political elite, and more a gradually polarising but increasingly disengaged public.

Technology is Directly Disrupting Australian Political Culture

While technology is driving economic inequality and anxiety, it also amplifies and exacerbates discontent. Technology enables fast-paced information bombardment which, evidence shows, may reduce attention spans, inhibit our abilities to reason and deliberate, decrease memory and dull empathy. Increased competitive pressure on media outlets to differentiate results in niche information and eventually greater extremism in content. Technology may also contribute to decline in traditional sources of social capital, such that connective ‘bonds and bridges’ deteriorate, contributing to polarisation. Some argue social media has facilitated negativity and bullying of marginalised groups, with trolls emboldened by anonymity.

The political, psychological and social impacts of technology cumulatively change the tone of debate: fake news, echo chambers and tribalism proliferate. This online atmosphere can negatively impact real-world deliberation, creating a “spiral of silence” which inhibits moderate participants from joining offline political conversations, amplifying the disconnect between the polarising political elite and disengaged voters. Supercharged polarisation (in particular among the political class), plus social media’s preference for sound-bite solutions, means sensible policy answers to the problems described above are less likely to be found. Politicians can now appeal directly and instantaneously to the people, but the truth and quality of communication diminishes.

The internet is having a profound effect on Australian politics. A 2020 report found 48% of Australians get their news online, yet many are concerned about fake news. In the 2019 federal election, the internet overtook television as the most followed media channel, highlighting problems of misinformation, user manipulation and abusive micro-targeting.

The ‘death tax’ scare campaign on Facebook perpetuated the fallacy that the ALP was proposing a new tax on estates – a falsehood repeated in the recent Queensland election. Federal MPs are also using social media to ‘astroturf’ desired feedback (i.e., attempting to create an impression of widespread grassroots support for a policy or individual). Energy Minister Angus Taylor infamously forgot to switch Facebook accounts before praising himself with a “Fantastic. Great move. Well Done Angus” comment under his own post. Queensland Senator, Amanda Stoker, similarly admitted to using a fake pseudonym on social media to defend against criticism and agree with supporters.

Social media is being used to propagate false information in aid of the culture wars. During the 2020 bushfires, trolls and bots exaggerated the role of arson to undermine links with climate change. During the COVID-19 lockdown, the hashtag ‘#Danliedpeopledied’, which attracted 10,000 tweets, was found to be driven by hyper-partisan, fake accounts, while Twitter bots gamed an online poll about the Premier of Victoria’s approval ratings. In the digital world, it is increasingly difficult to sort fact from fiction.

However, social media has magnified public scrutiny of political elites by holding candidates more accountable for past behaviour. During the 2019 election, several candidates withdrew after social media history exposed politically incorrect posts. But magnified visibility is also impacting other citizens. In 2019, a public servant was fired for anonymous tweets criticising government policy, and Australia’s implied freedom of political communication was found by the High Court to provide no shield. Ironically, social media’s power to facilitate free speech has also curtailed it, by amplifying its adverse consequences. Contributing to the sense that free speech may be under threat, Australia’s Freedom House press freedom score declined from 4 to 3 in 2019.

Possible Solutions?

Despite concerning trends, Australian democracy is comparatively healthy and stable: we are not yet as unequal or polarised as the US. The unique constitutional combination of compulsory and preferential voting, strong party discipline and non-partisan electoral commissions temper polarisation. However, this should not minimise problems or downplay the urgency of reform.

Though technology is a key driver of the trajectories described, we do not advocate stifling technological advancement. Rather, government should more actively help workers transition in anticipation of technological change and support those left behind through robust safety nets and just provisioning of opportunity.

Education will be key. When the pace of educational attainment lags behind the pace of technological advancement, inequality increases. Education is the most powerful weapon against inequality and the best way to equip citizens to reap the benefits of technological change. Education accessible to all will ensure the workforce is skilled enough to transition into higher-skilled jobs when routine jobs disappear. This should include flexible workplace training and short course upskilling, including government supported ‘lifelong learning accounts’, as seen in Singapore.

Not everyone will be able to transition into abstract jobs, however. In the face of technological change, globalisation and market liberalisation, some will be unable to make a decent living. This is proving a concern for Australians: a 2019 YouGov survey found 81% are worried automation will decimate jobs, and many think government is not doing enough to protect livelihoods. It found 67% of Australians support a federal government job guarantee, which would provide a job safety net, rather than just a welfare safety net, as a solution to underutilisation. A federal job guarantee should be pursued with urgency.

Initiatives that foster citizen engagement, participation and deliberation can also help reignite trust in democracy and generate new policy ideas. Mechanisms encouraging public deliberation can help combat polarisation and echo chambers, and may reduce susceptibility to fake news. Australians widely support increased use of direct democracy, especially on matters of principle, with strongest support among politically disaffected citizens, suggesting this could counter disengagement. Direct public voting, including citizen-initiated referenda, could help break through partisan blockages on policy and foster engagement. But rather than inefficient postal surveys (as utilised with same sex marriage), secure online technology should be used.

To prevent politicians propagating mistruths, truth in advertising laws should be implemented nationally, a move supported by 89% of Australians. Political ad transparency should also be improved. Platforms could be required to utilise ad libraries displaying spend, audiences targeted and purchaser information. Facebook provides this in the US, but not in Australia. Platforms could also block misleading political advertisements.

No one solution will prevent democratic decline: holistic reforms are needed. Underlying economic and other drivers of disengagement, polarisation and loss of trust must be tackled. These ideas and others should be debated with urgency to prevent the decline of Australian democracy.

Dr Shireen Morris is a constitutional lawyer and senior lecturer at Macquarie University Law School. She was previously a McKenzie Postdoctoral Fellow at Melbourne Law School and a senior adviser at Cape York Institute, leading policy work on Indigenous constitutional recognition and a First Nations constitutional voice. Shireen has published several books including Radical Heart (MUP) and A First Nations Voice in the Australian Constitution (Hart Publishing) which was the topic of her PhD thesis, and A Rightful Place: A Roadmap to Recognition (Black Inc). Shireen is a research fellow with Per Capita think tank, an Academic Fellow with Trinity College at University of Melbourne. Shireen regularly commentates in the media on tv, radio and in print.

Andrew Ball is an Executive at Accenture, one of the world’s leading technology consulting companies. He is a thought leader in helping large corporations leverage agile frameworks to take advantage of Digital Age uncertainty. In this capacity, he has worked for clients in a range of industries including telecommunications, financial services, government and manufacturing.  Andrew obtained his Bachelor of Economics from Monash University, his Graduate Diploma of Finance and Investment from Finsia and has studied International Trade at the University of International Business and Economics in Beijing, China. Andrew also acted as a campaign manager for a targeted marginal seat in the 2019 Australian federal election.