Explaining Australia's Contested Forest Certification Politics Fr
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Economic Value Hierarchies in Public and Private Governance: Explaining Australia’s Contested Forest Certification Politics Fred Gale, University of Tasmania School of Social Science Tasmania, Australia Paper Presented to the Private Governance and Public Policy in Global Politics Panel, International Conference on Public Policy, Montreal, Quebec, Canada 26-28 June 2019 This is an early draft so please do not quote without permission. The theoretical sections of this paper were previously presented to a Yale University workshop on Private Authority and Public Policy in Global Context: Competition, Collaboration or Coexistence, 11-12 January 2018. The paper has been substantially updated to include the empirical analysis of the Australian FSC case. Comments are welcome and can be forwarded to [email protected] 1 Introduction Humans swim, usually unreflexively, in a sea of personal values that have their origin in the complex interaction of nature, nurture, political economy and culture (e.g. Wildavsky 1987, Elster 1989, Bowles 1998, Slovic et al 2007). While individuals can shrug their shoulders and agree to disagree when the value stakes are low—over the aesthetics merits of a painting for example—they are equally prepared to discipline, punish or even kill those perceived to be threatening fundamental values. Some of the most intractable political disputes of the post-war era—racial integration, abortion, gay rights, gun control, immigration, McCarthyism, voluntary euthanasia—have their origin in competing, deeply held personal values that, scaled up, pit one community against another. Since agreeing on what constitutes authoritative evidence to resolve such value-laden disputes is often not possible—some appealing to religious texts, others to tradition, and others again to philosophy, law or science—value communities often seek hierarchical, government-imposed resolution. This results in one of the most prominent features of modern democratic politics: policy churn. Right-wing legislation enacted under one administration is overturned by left-wing governments whose acts are later overturned by returning right-wing governments in favour of the status quo ante. Bipartisan agreement is the exception, not the rule, and increasingly hard to achieve in a hyper- interconnected, web-mediated world. While it is widely recognised that people have differing aesthetic and moral values, it is mostly assumed today that such differences do not extend to conceptions of economic value. This is because most of us now adopt the viewpoint of neoclassical economists which, emerging in the 1870s and consolidated in the 1930s, claims that economic value is nothing more nor less than the value a thing has when it is exchanged for other things (i.e. the price one pays) as determined by demand and supply at the margin.1 The field of environmental economics, for example, analyses ecological degradation in terms of ‘externalities’ and market failures, and proposes market-based solutions like green taxation, carbon trading, payment for ecosystem services and deposit-refund schemes to make nature visible in price signals (Daly & Farley 2011). 1 These were a group of 19th century mathematically inclined political economists that included Stanley Jevons, Leon Walrus and Carl Menger. 2 Yet, despite the hegemony of the economic idea of exchange value as coincident with economic value, I will argue in the first part of this paper that, properly understood, the concept of sustainable development calls into question the ‘marginalist’ solution to economic value. It does so because sustainability recognises that things have usefulnesses beyond their value in exchange. Building on the history of political economic thinking about economic value (Gale 2018), we can reframe the general concept of economic value as one that involves reconciling the competing usefulnesses things have. Summarising this crudely, a thing can be useful to a group (family, community, nation) for what it directly provides them (use value). Alternatively, it can be useful because it can be traded for something else that is directly useful (exchange value) or because there is substantial human labour embodied in it (labour value). Finally, a thing can also be useful for the role it plays in maintaining the ecosystem of which it is a part (function value). Reinterpreting economic value as a pluralistic, molecular conception of value composed of four interacting and potentially competing value elements—a notion we can term ‘Sustainability Value’—is practically useful. The approach reframes the operational meaning of Sustainability, with enormous consequences for the structure and action of public and private agents. Notably, it highlights how the creation of economic value as Sustainability Value is no longer the provenance of business alone. Indeed, unless business is explicitly aware of the trade-offs involved between realising exchange value, use value, labour value and function value, it is highly likely that the pursuit of former will visit a degree of harm on the latter. Much recent business literature implicitly accepts that this occurs, proposing corporate social responsibility, triple bottom line accounting and circular economy solutions to overcome it. However, business acting alone is failing to deliver Sustainability Value because the incentives it confronts to realise exchange value at the expense of use, labour and function value are too powerful. It is thus only when these latter values are fully and directly involved in establishing the conditions under which production is to take place that Sustainability Value can be realised. Many will argue that it is the role of the state to determine the conditions under which production occurs. This, importantly, raises the question of the structure and operation of the state in a world aiming to realise Sustainability Value. As I will show below, the liberal democratic state we have inherited from the 19th century is poorly adapted to deliver Sustainability Value, primarily because it temporarily puts in power a government that is ideologically committed to a singular, a priori notion of economic value as primarily the realisation of exchange value, national use value or labour value. Thus, just like business, the party-political democratic state is biased in favour of realising a specific component of 3 Sustainability Value, although this component varies depending on which party is in power. Liberal parties are biased towards exchange value, nationalist parties towards use value and social democratic parties towards labour value. It is these ideological biases, I argue, that account for at least some of the conflict between public and private governance systems. Building on the above conceptualisation of economic value as Sustainability Value, the paper investigates the following proposition: that a multi-stakeholder private governance scheme genuinely seeking to balance use, exchange, labour and function value in the pursuit of Sustainability Value will have its legitimacy called in to question by public officials who aim to privilege one of four values over the others. To investigate the proposition, I use the empirical case of the ‘certification war’ in Australia between the Australian Forestry Standard (AFC) (a member of the Programme for the Endorsement of Forest Certification (PEFC)) and the Forest Stewardship Council (FSC). First, I compare and contrast how the four component values of Sustainability Value are mediated by AFS and FSC. Then, employing the Manifesto Database Project’s database, I undertake a content analysis of the value hierarchies of Australia’s three major political parties and compare these to expectations derived from ideological theory. Finally, Hansard reports of the debates that took in the Australian Commonwealth (federal) Parliament on forest certification from 2000 to 2018 are analysed to illustrate how the value hierarchies of different political party mediate politicians’ perceptions of the legitimacy of each scheme. The empirical analysis supports the proposition and finds that the centre-right Liberal National Coalition (LNC) and the centre/centre-left Australian Labor Party (ALP) strongly endorsed the AFS’ focus on exchange and labour values and sought to undermine FSC’s legitimacy, while the far-left Greens opposed the AFS scheme but expressed only lukewarm support for FSC’s. The paper is structured as follows. In the next section I derive the concept of Sustainability Value from a consideration of the integrated nature of sustainable development and Sustainability and contrast it to conventional political economic and ecological conceptions of value. Noting that Sustainability Value requires balancing its four component values, I consider in section three whether and how this is done in public governance systems focusing on political party type and party ideology. Section four undertakes a similar analysis for private governance organisations (PGOs), focusing this time on comparing them in terms of organisational type and structure. In section five, I develop a proposition regarding the goodness of fit of the value hierarchies that emerge from these two different governance 4 processes. In an extended section six, I test the basic proposition in a case study of forest certification in Australia. This involves analysing the value hierarchies of two private governance schemes (AFS and FSC); three Australian political parties (the Liberal National Coalition (LNC), Australian Labor Party