Federalism and Democracy

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Audit Discussion Paper

Federalism and Democracy

Graham Maddox

Graham Maddox FASSA is Professor of Political Science at the University of New England. The fourth edition of his Australian Democracy in Theory and Practice was published by Longman in 2000.
Why did Australia adopt federalism?
The separate British colonies scattered around the large continent of Australia naturally developed regional loyalties and inter-regional rivalries. On the other hand, the proponents of federation had good arguments for the colonies’ coming together. These largely coincide with what have been described as the generic causes of federation: defence; independent foreign policy; common market; strengthening an existing political affinity; building on geographical proximity; enhancing similar political institutions.1
The reasons for coming together do not of themselves explain the need also to stay apart—the tension that characterises federalism. Many of the advantages of coming together could be achieved more effectively by forming a unified, or ‘unitary’ state—and indeed, Australian federation was sold to the Australian electorate as though a unitary state was being put forward. At least, the intricate realities of federalism were rarely explained to the voters by those proposing it, although critics spoke of its hidden dangers.2

Academic accounts of federalism, while acknowledging that federalism as a system of government was invented by the American Founders, rarely explain how deeply federalism was bound up in the political doctrine surrounding the writing of that first national Constitution.

In the very moment of its invention, federalism was pitted against democracy
In the very moment of its invention, federalism was pitted against democracy. The American Founders denounced democracy as a system given over to diseases, follies and rages. It need not detain us that they probably had a different view of democracy than the modern one, since the effects of their actions were to impede the general democratic idea. The democracy they hated was ‘direct democracy’ as practised by the ancient Greeks in their sovereign assemblies. Many of the contemporary Greek philosophers objected to democracy as government by amateurs, and therefore bound to go awry.
In ancient Rome, with which the American Founders were equally familiar, there was no democracy, and attempts to introduce it were ruthlessly suppressed by the ruling oligarchs. Whenever some politician (usually one of their own number) attempted to place himself at the head of a popular movement, he was scurrilously traduced as a would-be tyrant and as someone attempting to take up that most detested of offices, the kingship. The Americans were quick to draw the inference that someone attempting to lead the ‘faction’ of the people would be almost by definition a tyrant. Their own system of government was therefore designed to place every stumbling block in the way of popular movements.

For and against Athenian democracy

There are few who would wish to revive the Athenian form of democracy—the scale of modern government in most countries precludes it, but there are also plausible theoretical objections: in particular, assembly government is not ‘responsible’ government; it has no ‘government’ to be held to account for its actions, it has no official opposition to keep government honest; and it grooms no alternative government to replace a failed administration. Yet Athenian democracy, for all its shortcomings—and these notoriously include the exclusion of women, slaves and immigrants from active citizenship—was a noble experiment. It placed value on the participation of all citizens, regardless of wealth, education and social standing, and it made the entire people sovereign. Within those limitations, it was truly government by the people.

The very name that the Americans adopted for their new nation, ‘republic’, vested sovereignty in the people, but its institutional arrangements went as far as possible to exclude the would-be popular leader, and therefore also the people themselves, from exercising the power of government. However we wish to construe the notion of democracy, it is difficult to conceive of it apart from the idea of a self-governing people. The name democracy, after all, implies the power of the people, and that in turn implies placing the hands of the people on the tiller of government.

Yet the theories on which the Americans acted were in some respects hostile to the notion of government altogether. The country ideology in early eighteenth century England, which so much influenced them, actually taught that it was by definition corrupt to be in government, and that it was therefore more moral to oppose government in all its forms. The very idea of government was a threat to liberty, and so much greater was that threat if posed by a ‘popular’ would-be tyrant.

Views of human nature
Machiavelli (and after him Montesquieu) taught that the defence of liberty lay in organising government so that the naturally antagonistic factions in society would be pitted against each other, and hold each other in check. Separated powers, and checks and balances, were to be the first line of defence of liberty. Machiavelli also taught that humans were inherently scheming and evil. His view was based on entirely secular observation of human behaviour, but his opinion was confirmed by the Calvinist religion which so many Americans had embraced. In his seminal book, The American Commonwealth, James Bryce argued that the Constitution of the United States was ‘based on the theology of Calvin and the philosophy of Hobbes . . . there is a hearty Puritanism in the view of human nature which pervades the instrument of 1787. It is the work of men who believed in original sin, and were resolved to leave open for transgressors no door which they could possibly shut.’3

It was in this climate of general hostility to the idea of popular government that federalism was devised. It overlaid the strictures which the theory of the written constitution already imposed on active government. John Adams, one of the Founders and soon himself to be President, identified no fewer than eight layers of obstacle protecting the American people from their governments, and one of the chief barriers was the existence of state governments in conflict with the federal government.4

The key to this level of conflict was the matter of divided sovereignty. Sovereignty had emerged as the theory used to define the competence of the nation-state, which imposed its secular and coercive authority on all other competitors for power over the people. The American invention of federalism based this unchallengeable authority in both the federal and state levels of government—a logical absurdity, but one which suited constitutionalists who were determined not to grant supreme power to any one instrumentality. American theorists of federalism got around this by saying that federalism was unfinished business—its very nature depended on the negotiation, compromise and straight out conflict between the layers of government.5 Some have seen it as a system of built-in antagonism, which is taking the idea of checks and balances to the extreme.6

In some respects these post hoc rationalisations of federalism are beside the point. The truth is that for the Americans there would have been no nation without the guarantee of state sovereignty. The antagonisms between the states were already apparent before federation, many of the differences—over economics, religion and particularly the issue of slavery—being irreconcilable. Several states simply would not have federated had their own structures and policies not been entrenched in the new system.

Australian attitudes

Australia experienced no such deep antagonisms. The only real dividing force was the distance between different points on the continent and Tasmania, but their political commitments were very similar: to the Westminster system of government, to British imperialism, to White Australia, and, for the most part, to economic protection. As mentioned, the intricacies of federalism were scarcely discussed with the public at the time of federation, and there was scarcely any widespread enthusiasm for the movement. Several of the Australian Founders were quite perturbed about the adoption of federalist structures, but acquiesced in their acceptance for the sake of nation-building.7

Of most far-reaching significance was the almost total failure of Labor forces to gain any representation on the constitutional conventions which wrote the Constitution. Within a few years of the establishment of the federal parliament Labor was the dominant political force, yet it faced a constitution entirely uncongenial to the style of its typical policies. Repeatedly Labor found its policies thwarted by the Constitution, and repeatedly it tried to have the Constitution amended to accommodate its legislative program. It tried in 1911, 1913, 1930, 1944, 1946, 1948, 1973 and 1974, with only limited success in 1946.
Critics were entitled to think of the situation not as a healthy impediment to the ‘tyranny of the majority’, but rather as a Constitutionally entrenched ‘tyranny of the minority’, considering the small numbers of electors who had actually endorsed the system. A recent statement of this case is made by J. Staples with regard to the role of judicial review under federalism: when ‘. . . the readings given to section 92 of the Constitution transformed a freedom from imposts at the borders into a freedom from Parliaments, this was a triumph for free enterprise’.8 And, we might add, a blow to parliamentary democracy.
The political bias in the Constitution was acknowledged by Malcolm Fraser in 1975: ‘A federal system of government offers Liberals many protections against those elements of socialism that Liberals abhor’.9 Such comments make it difficult to defend federalism as an impartial matrix of government. There has been a stream of observers who have lamented the impediments posed by federalism both to national development and to the equitable provision of welfare. These include at least two past Governors-General, Isaac Isaacs, and his biographer Zelman Cowen, and academics such as A. P. Canaway, G. H. Greenwood, L.F. Crisp.

On the other hand, supporters of Australian federalism tend to adopt a position of realism: this is the system we have inherited from the Founders, and we should learn to live with it and see how it can be made to work better. There is an implicit acknowledgment here that having a federal system is bought at a price in terms of practical frustrations, duplications, overlaps, inefficiencies and unnecessary financial expenditure; the system seems built for buck-passing between one layer of responsibility and another. Indeed, there are obvious implications in all of this for the theory of responsible government. The areas of overlap, duplication and unattended business have often been documented.10 The proponents of federalism, while acknowledging the costs, repeatedly come back to the argument that the benefits of federalism in terms of limited government and personal freedom outweigh the disadvantages. That is, they have recourse to the ideology prevailing at the time of American Federation.

For example, Jean Holmes and Campbell Sharman argue that the federal system, presumably as adapted to Australian conditions, is designed to inhibit government initiative: ‘It is just this concentration of responsibility for coherent action which a federal system is designed to preclude. Federal structures stress a conflicting theme of constitutionalism which sees the need to check both the mode and scope of government action by entrenching certain laws in a constitution which it is beyond the power of the legislature to amend’.11

Restricting governments from legislating happiness schemes
Brian Galligan endorses the adaptation to Australia of the American view that federalism is so structured to enhance private enterprise, ‘taming Labor’s challenge and preserving the dominant liberal capitalist order’.12 Galligan and Walsh go further, and present federalism as an obstacle even to genuinely liberal governments which might stand in the vaunted Benthamite tradition: the purpose of liberal constitutionalism and Federalist theory ‘is to guarantee citizens and groups the right to pursue their own happiness, and to restrict governments from legislating happiness schemes. No public good is presupposed, but rather a multiplicity of private goods . . .’13
Any fair reading of this approach is to see democracy stood on its head. The original democracy of Ancient Athens vested all legislative authority, with acknowledged safeguards, in the assembly of its citizens. It was specifically designed to achieve a public good, as citizens were wont, and further encouraged, to see their own welfare as bound up with that of their neighbours. Despite the rift of the federal Constitution cutting across its history, a common good was also the objective of the original American democracies, derived as they were from the collective action of Puritan congregations in both Europe and in the colonies. It is difficult to see how any sensible theory of democracy—always a theory of government, could reduce it to an aggregation of private interests, presumably in competition with each other. Yet it is easy to traduce democracy as ‘majoritarian democracy’,14 or ‘populism’. For Philip Pettit democracy does not have ‘any definitional connection with liberty . . .’15 No ‘definitional connection’, but a strange statement nevertheless, given the passion for liberty among the foundational democrats, the Athenians.

To return to the practical questions, the cumbersome nature of federalism is implicitly acknowledged by the mechanisms devised to ‘make it work better’. Chief among these in recent times is the Council of Australian Governments (COAG), inaugurated by Prime Minister Bob Hawke in 1993. The intention was to gain a measure of coordination among the sovereign governments of Australia, both state and federal. Among the recent concerns of the Council are matters of policy one might expect to be the subject of normal political processes: human cloning; foot and mouth disease; salinity and water quality; public liability insurance; resource management; food regulation; quarantine restrictions; national competition policy; gambling; and a Mutual Recognition of Regulations Agreement. All of these are pressing political concerns, but thwarted by a federal constitution requiring supplementary structures to get necessary public business done.

Removing public business from parliament
Most tellingly, the Council has been concerned to streamline the cumbrous processes of consultation between governments. Much of the background organization for COAG has been necessarily carried out by public servants, with ‘intergovernmental managers’ taking much of the load.16 From the democratic perspective, COAG removes public business from the parliamentary arena, with a consequent diminution of the accountability of governments to the people through their elected representatives. According to Campbell Sharman, ‘there has been a clear shift from a partisan to a bureaucratic mode of interaction and an increasing stress on administrative rather than financial and partisan resources’.17

When all is said and done, federalism still has many questions to answer. When it is claimed that a constitutional system provides a neutral framework for the interplay of legitimate forces, how can a system acknowledged on all sides to be a peculiar impediment to traditional Labor, and indeed to progressive Liberal, politics, be said to be conducive to democracy? Who has yet satisfactorily answered the objections of William H. Riker, addressing the American system: ‘If one approves the goals and values of the privileged minority, one should approve of federalism. Thus, if in the United States one approves of Southern white racists, then one should approve of American federalism.’18

Realism tells us that there is no immediate prospect of dismantling the federal system of government, and certainly not so long as the power bases of politicians are rooted in federal structures. Yet any objective audit of democracy will have to engage with the anti-democratic bias of the theory of federalism as well as the issues of democratic accountability that federalism presents.

1 K. C. Wheare, Federal Government, London, Oxford University Press, 4th edn 1963, p. 37.

2 See e.g. Hugh Anderson (ed.), Tocsin: Radical Arguments Against Federalism, Richmond, Drummond, 1977.

3 James Bryce, The American Commonwealth, New York, Macmillan, 1921, 2 vols, vol. 1, p. 306.

4 John Adams, A Defence of the Constitutions of Government of the United States of America (against criticism by the French statesman, Turgot), cited in Charles Edward Merriam, A History of American Political Theories, New York, Macmillan, 1903, pp. 139-40.

5 Ivo D. Duchacek, Comparative Federalism, The Territorial Dimension of Politics, New York, Holt, Rinehart and Winston, 1970, pp. 192-3.

6 Morton Grodzins, The American System, Skokie, Rand McNally, 1966, p. 327.

7 L. F. Crisp, Federation Fathers (ed. John Hart), Carlton, Melbourne University Press, 1990.

8 J. Staples, Oxford Companion to the High Court of Australia, (eds T. Blackshield, M. Coper, and G. Williams), South Melbourne, Oxford University Press, 2001, s.v. ‘socialism’, p. 627.

9 Malcolm Fraser, ‘National Objectives — Social Economic and Political Goals’, Australian Quarterly, vol. 47, no. 1, 1975, p. 25.

10 See e.g. Jennifer Aldred and John Wilkes (eds), A Fractured Federation, North Melbourne, Cassell, 1975; Geoffrey Sawer, Federation Under Strain. Australia 1972 - 1975, Carlton, Melbourne University Press, 1977; D. J. Walmsley, Social Justice and Australian Federalism, Armidale, The University of New England, 1980; Allen Patience and Jeffrey Scott (eds), Australian Federalism Future Tense, Melbourne, Oxford University Press, 1983.

11 Jean Holmes and Campbell Sharman, The Australian Federal System, Sydney, Allen & Unwin, 1977, p. 21.

12 Brian Galligan, ‘Federalism’s Ideological Dimension and the Australian Labor Party’, Australian Quarterly, vol. 53, no. 2, 1983, pp. 139-40.

13 B. Galligan and C. Walsh, ‘Federalism — Yes or No?’, in Gregory Craven (ed.), Australian federation towards the twenty-first century of the Australian Federation Conference 1890, Carlton, Melbourne University Press, 1992, pp. 197-8.

14 Galligan and Walsh, ‘Federalism — Yes or No?’, p. 196

1515 Philip Pettit, Republicanism: A Theory of Freedom and Government, Oxford, Clarendon Press, 1997, p. 3.

16 John Warhurst, Central Agencies, Intergovernmental Managers, and Australian Federal-State Relations, Occasional Paper no. 29, Canberra, Centre for Research in Federal Financial Relations, ANU, 1983.

17 Campbell Sharman, ‘Executive Federalism’ in B. Galligan et al, Intergovernmental Relations and Public Policy, Allen & Unwin, North Sydney, 1991, p. 33.

18 William H. Riker, Federalism: Origin, Operation, Significance, Boston, Little, Brown, 1964, p. 155.

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