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The minority of the opulent 

19 Jun 2022

By Kusum Wijetilleke “When the number of landholders shall be comparatively small… Will not the landed interest be overbalanced in future elections?… What will become of your government? In England, at this day, if elections were open to all classes of people, the property of the landed proprietors would be insecure. An agrarian law would soon take place… Landholders ought to have a share in the government, to support these invaluable interests and to balance and check the other. They ought to be so constituted as to protect the minority of the opulent against the majority.”  James Madison, Constitutional convention (1787) Sri Lankans seem to have finally acclimatised and adapted to the new realities of life on the once so-called ‘Paradise Island’. The queues have become longer and the people are still desperately living hand to mouth.  At its outset, when the currency crashed or even when Sri Lanka’s Treasury finally, belatedly, informed our creditors of the impending default, the country’s ruling political class simply shrugged its shoulders. They even consolidated their own positions through various political mechanisms. At no point did it seem that anyone from the ruling party would resign their seats, there was no sign that the Rajapaksa President/Prime Minister brotherhood was taking seriously the sequence of events that would lead to the country’s bankruptcy.  In an ideal world in the immediate aftermath of declaring default, ruling party MPs should have resigned their seats. The Government would then appoint a number of economists, finance professionals, intellectuals and policy experts to the Cabinet with a one-year mandate to develop and implement a long-term economic plan. As it stands, while the Aragalaya has accomplished much during the past 60 plus days, President Gotabaya Rajapaksa remains steadfast, insisting he will complete his tenure. The Prime Minister resigned, the Central Bank of Sri Lanka (CBSL) Governor did too. Yet we keep being presented with representatives that we did not ask for and did not vote for. This is very much a crisis of democracy.  The secret sigh As a founding father of the United States (US) and its fourth President, James Madison was a key contributor to the drafting of the constitution that birthed the nation. The Founding Fathers of the United States were very clear about the danger of democracy being utilised by the majority to further their own interest.  Madison goes on: “In framing a system which we wish to last for ages, we should not lose sight of the changes which ages will produce. An increase of population will of necessity increase the proportion of those who will labour under all the hardships of life, and secretly sigh for a more equal distribution of its blessings. These may in time outnumber those who are placed above the feelings of indigence. According to the equal laws of suffrage, the power will slide into the hands of the former. No agrarian attempts have yet been made in this country, but symptoms of a levelling spirit, as we have understood, have sufficiently appeared in certain quarters to give notice of the future danger.” Commenting on the above statements, Prof. Noam Chomsky notes that James Madison used England as an example, stating that if democracy were to be allowed in England at that time, the “mass of the population would vote for what we now call ‘agrarian reform’” – land reforms. It is an explicit articulation of fear that the majority, made up of the poor and working poor, may use their status as a majority to serve themselves.  Madison debated how best to mitigate the threats to what he referred to as the minority of the opulent: “How is the danger in all cases of interested coalitions to oppress the minority to be guarded against? Among other means by the establishment of a body in the government sufficiently respectable for its wisdom and virtue, to aid on such emergencies, the preponderance of justice by throwing its weight into that scale.” Upon reading, it seems clear that Madison was essentially calling for the wealthy and the land-owning classes to be more closely involved in the functions of Government.  Chomsky notes that Madison himself was “pre-capitalist” and considered the wealthy to be benevolent aristocrats who would act in the interests of the many, but also that Madison soon realised his error. Four years later, in writing to Thomas Jefferson, Madison seems to complain about the leverage of the business and industrial classes on Government, stating: “My imagination will not attempt to set bounds to the daring depravity of the times. The stockjobbers will become the Pretorian band of the Government, at once its tool and its tyrant; bribed by its largesse, and overawing it, by clamours and combinations.” (1791) A credit line from Akuregoda? Meanwhile, in Sri Lanka, the political classes and the media had already decided, long before 9 May, that an election would be impossible for the country to afford, that it would be a futile exercise. According to PublicFinance.lk, the 2019 Presidential Election cost a total of Rs. 4.4 billion, the 2020 General Election cost Rs. 5.7 billion. PublicFinance.lk shows that the 2022 allocation for the Ministry of Defence projects that were locally funded amounts to Rs. 19.1 billion; the allocation for the construction of the Defence headquarters at Akuregoda amounted to Rs. 12 billion in 2022. The cost of providing Rs. 5,000 to State sector employees was Rs. 7.3 billion and the interest payment for the KDU Teaching Hospital was Rs. 4.3 billion. These numbers reveal a startling fact that the political class would rather have us ignore; it tells us that an election is affordable but it might be an inconvenience for the ruling establishment that will do everything in its power to prolong its illegitimate rule, to see out as much of its term as possible. The Sri Lankan public has to begin making this demand more forcefully, but so far, the issue on how to proceed has been muddied by the mainstream discourse. For several months Sri Lankans have lamented over the lack of options and the media has been largely silent on the option of an election.  This takes us back to Prof. Chomsky who, it might be fair to say, made a name for himself in the political sphere with his seminal critique of how mass media controls a population through propaganda. Prof. Chomksy and Edward Herman actually borrowed the phrase ‘Manufacturing Consent’ from the American commentator Walter Lippmann from his 1922 book ‘Public Opinion’. Prof. Chomsky has criticised this work by Lippmann for being opposed to the principles of a free democracy.  The specialised class and the pseudo-environment Lippmann’s work is extremely interesting, presenting a position whereby he believes that the common man does not possess the necessary intellectual advancement to interpret the world as it really is. People “live in the same world, but they think and feel in different ones… The real environment is altogether too big, too complex, and too fleeting for direct acquaintance,” noting that people often dwell in a “pseudo-environment” which Lippmann regards as a fiction.  Lippmann continues: “The process by which public opinions arise is certainly no less intricate than it has appeared in these pages, and the opportunities for manipulation open to anyone who understands the process are plain enough… A revolution is taking place, infinitely more significant than any shifting of economic power… Under the impact of propaganda, not necessarily in the sinister meaning of the word alone, the old constants of our thinking have become variables. It is no longer possible, for example, to believe in the original dogma of democracy; that the knowledge needed for the management of human affairs comes up spontaneously from the human heart. Where we act on that theory we expose ourselves to self-deception, and to forms of persuasion that we cannot verify. It has been demonstrated that we cannot rely upon intuition, conscience, or the accidents of casual opinion if we are to deal with the world beyond our reach.” What Lippmann is essentially saying is that the average person has no real chance to understand the reality of the world, they only see the world through their prefixed set of stereotypes and thus, their understanding is flawed. Yet the most sinister aspect of what Lippmann is describing is that he considers a “specialised class” as necessary to analyse the data, form conclusions and then relate these conclusions to the decision makers, the political class, so that they may use the “art of persuasion” to inform the public and convince them to take a position on the ’correct’ side of an issue.  The Sri Lanka Podujana Peramuna (SLPP) majority now exists and sustains itself by selling its own version of reality to the Sri Lankan public. In this version of reality, the new administration is a ‘National Government’ and Prime Minister Ranil Wickremesinghe took up the position because no one else was willing to. The new Cabinet is a vehicle to ensure the survival of the State, which would certainly crash if these brave members of the political class did not step up when the country needed them to; that there is no choice but to wade through the muddied waters of a parliamentary majority that is, in reality, defunct.  Sri Lanka currently faces a financial, economic and political crisis, but we might be subject to another, altogether more serious crisis – the crisis of democracy. In this situation, the issues are so dire that the Sri Lankan people are to have no say in how the country proceeds and who should really lead. In reality, one of the most pressing issues should have been to increase the State’s revenue. You will notice that the Gota tax cuts have been reversed to an extent, the phrase being used is to take the tax code back to “pre-2019 levels”. During the intermediate period between the tax cuts and today, many high income earners and corporates saved significantly on their tax bills, earning huge windfall profits. In the period after Sri Lanka’s most dramatic and disastrous economic collapse, those that benefited the most from the tax cuts do not seem to be asked to pay a larger, fairer share. Instead, the burden has been divided to ensure that the masses, the low income earners and the middle classes all share in the project to increase revenues.  Elections should not change economic policy? Former Greek Finance Minister Yanis Varoufakis gave a lecture on ‘Democracy’ to students at The New School in New York City, a premier private research university. Varoufakis began by noting that his mere presence at his very first meeting of European finance ministers was a cause for concern among the European political elites. Varoufakis represented the newly-elected radical left party of Greece, Syriza, which had been elected following a period of austerity measures imposed by the International Monetary Fund (IMF) and lending institutions. The policy platform had failed to significantly alter the dynamics of indebtedness and low growth that had been afflicting the Greek economy.  Varoufakis recounted his opening remarks to Europe’s finance ministers, stating that he was there to represent the mood of the Greek people who had elected a government that was antithetical to the economic orthodoxy that dominated the European political establishment. When the Greek economy was near collapse in 2008/2009 and it was revealed that the Greek Government of the time had under-reported its actual debt levels, the European Union (EU) and the IMF granted Greece a loan of some $ 250 billion, one of the largest loans in human history.  When Varoufakis told the finance ministers that his Government did not intend to pay back this loan, that the EU and the IMF would need to take a ‘haircut’ themselves as their own policies inflicted on the people of Greece, had not only failed to reduce the debt but had also led to GDP contraction by 28% annually, his European counterparts were not impressed. Varoufakis has said in the past that Prof. Amartya Sen, the Indian Nobel laureate Economist, had said to him: “You must have been the only person negotiating with creditors that did not want their money back.” The most interesting response to Varoufakis in the chamber was by German politician, currently President of the Bundestag, Wolfgang Schäuble, who was quoted as stating: “Elections cannot be allowed to change the economic policies that apply to Greece.” Traditions of democracy This presents Sri Lanka with a dire warning that, very soon, the economic policy of Sri Lanka might be derived and decided in some far-flung office in Western Europe. Judging by Sri Lanka’s abject record of fiscal management in the past few years, many might consider this to be a positive change. Yet Sri Lankans must defy this notion that we cannot solve our own problems, that we are left at the mercy of the political elites who will negotiate for themselves a further period in power before saving Sri Lanka’s economy.  Ironically, democracy is largely believed to have evolved in Greece, with Athens being the high water-mark, having a strong record of democratic rule by the 6th century BC, but many other parts of Greece had also adopted similar systems from around the 4th and 5th century BC. Athenian democracy is not without its critics, mainly based on whom it excluded. Participation was only allowed for the male adults, no foreign residents, no women and no slaves.  Yet Varoufakis notes that we should not disregard the early system of Athenian democracy based on who it excludes and that in fact, in 75 years of democracy in Athens, the majority of the poor and the working poor did actually rule Athens. He notes that the intellectual elites of Athens were not overly impressed by the system of democracy. Plato is quoted as stating that democracy is “a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequals alike”. Aristotle stated that it is “a constitution in which the poor and the free, courtesy of being in the majority, control the government”. It might be an oversimplification to call these ancient Greek philosophers ‘anti-democratic’; they held many nuanced views about the various systems of government. However, this provides us with a fascinating window into how societies of the past considered democracy and representation against the interests of the wealthy and the state.  What Varoufakis notes is that our current notions of democracy, the system itself, did not evolve from Athenian democracy, but instead came from the Magna Carta of 1215 which presented us with the notion of ‘rights’. Of course, the Magna Carta involved itself with the rights of the nobility or the aristocracy against the monarch. It was designed to protect the private property of the aristocracy, their land and their slaves from being acquired by the King. It was a social contract between the lords and the monarchy.  Then, with commodification, with global trade and the establishment of the merchant classes, the system would evolve again, under pressure from what we now describe as capitalism. Under this system, the merchants began accumulating significant amounts of economic power but had virtually no political power and were not considered aristocrats; the aristocracy openly considered the merchants to be inferior. The merchants acquired political power eventually through organisation. Further organisation occurred in the 18th and 19th century, this time amongst the workers. Organised labour would introduce a new facet to the system, demanding their own involvement in the process of governing and allocating resources.  Varoufakis contends that the modern state, as we know it, emerged as a “mechanism for regulating class conflict, this is how government proceeded from the narrative of rights to the narrative of a liberal democracy.”  The appointment of business tycoon Dhammika Perera to Parliament through the National List and his position as Cabinet Minister for Investment Promotion and Technology is a fresh manoeuvre by the political elites, designed perhaps with a future Presidential Election in mind. His resignations from his companies was supposed to calm concerns of conflicts of interest, however we must accept that while his shareholdings are still intact, like former US President Donald Trump, those conflicts of interest are too deeply embedded to be ignored. Dhammika Perera’s appointment runs completely contrary to the basic standards of ethics we expect in the relationships between the State and private enterprise. The President and the SLPP may consider the inclusion as part of their agenda to introduce a technocracy, but the fact remains, Dhammika Perera’s appointment is more of a step in the direction of a total oligarchy.  Further, in a climate of Sri Lanka needing desperately to enhance its credibility, will the inclusion in Government of one of its richest people provide comfort to our lenders and creditors? Or does his inclusion by the SLPP’s defunct parliamentary majority signal to creditors that the same set of politicians whose policies crashed the economy are not only in power but very much in control, completely against public sentiment? The crisis of democracy is upon us and it seems that the Sri Lankan public has unknowingly consented to ignoring the only real solution.  (The writer has over a decade of experience in the banking sector after completing a degree in accounting and finance. He has completed a Masters in International Relations and is currently reading for a PhD at the University of Colombo. He is also a freelance writer and researcher, and can be reached on email: kusumw@gmail.com and Twitter: @kusumw)  


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