J.S. Mill’s Economic Philosophy and Political Corruption in 21st Century Australia
Carly Sandler
Z5088638
University of New South Wales

Introduction
John Stuart Mill was an influential economic thinker and reformer, whose novel ideals of economic social proved to have a lasting impact on future reformative programs endowed in moral value. Mill’s economic contributions has been characterized into the classical system of economics: production, the distribution of goods, rents and wages, and the economic role of government, which leaves many to critique its practical implications to modern day issues like political corruption in Australia. Today’s political environment in Australia is pigeonholed by a lack of transparency in government contracting and enforcement of regulations, greedy politicians extorting taxpayer money, and power of lobbyists on influencing government policy. Though these concepts were of no concern during Mill’s life, the fundamental theme of institutional power and constraints on societal development can be utilized to weave abstract thinking into realistic interpretations. Thus, the aim of this paper is to ascertain the extent to which Mill’s 19th century economic ideas can be applied to issues of political corruption in 21st century Australia and possible reform.
The Economic Philosophy of John Stuart Mill
J.S. Mill was born in 1806 in Pentonville, France. He was the eldest son of James Mill, who was a major constituent of Jeremy Bentham’s radical utilitarianism (Wilson, 2014). James Mill was a significant influence on J.S. Mill’s economic theory as he stringently oversaw his son’s education. Completely immersed into his studies and sheltered from the reality of the world, J.S. Mill’s utilitarian education greatly influenced his interest of societal welfare. However, Mill suffered from acute depression in his late twenties as he became dissatisfied from his dispassionate work in analysis, shaped by his father’s teachings (Heilbroner, 2000). Mill’s emotional development was not complete until he met his wife Harriet Taylor in 1830 and became a father to his daughter Helen. Harriet and Helen taught Mill about the importance of the individual’s right and the progression of mankind (Wilson, 2014). His economic philosophy, though rooted in utilitarianism, which fundamentally calls for the greatest good for the greatest amount of people, was founded more on an individualistic basis and prided itself on progression of human development.
Thirty years after mastering the political economy, J.S. Mill published “Principles of Political Economy,” in 1848. Transitioning into the climax of the Industrial Revolution, working conditions grew intolerable and unemployment grew at a dynamic rate as labour was replaced by machinery (Heilbroner, 2000). Though economic laws of capitalism were unquestioned, there was a clear need for reform, and Mill believed it could come from changing the social behaviour of the intellectually open-minded working class (Heilbroner, 2000). Mill sought to expand upon the basic principles of production and distribution of wealth to provide a basis for social progress at the time. In his writings, Mill makes a clear distinction between production and distribution, stating that economic laws such as scarcity and marginal productivity concern production only and do not apply to the distribution of wealth. He contends that once the right mix of goods is produced, “mankind, individually or collectively, can do with them as they please” (Heilbroner, 2000, p. 128). Mill argues that individuals in society will always take goods away from another unless society has governing institutions that are composed of people who are paid to prevent the misallocation (Heilbroner, 2000). Thus, distribution of goods is based on the cultural and institutional laws of the given society, a clear example of his utilitarian background. Mill concluded that if society did not see fit the current distribution of wealth, they could change it through processes such as taxation on inheritances, government takeover and transfer of land, and moderate subsidies to promote the wealth of the working class (Nathanson, 2012). Hereby, as an economist, Mill’s is considered a socialist, as he asserted that the distribution of wealth should be based on what mankind wants collectively.
Another core construct of Mill’s economic thinking is the changing social behaviour in the stationary state of the economy. Mill was influenced by the disciples of Augste Comote, who stated that destruction of old institutions occurred during “critical periods”, and new social forms and institutions flourished in “organic periods.” Mill thus rationalized a responsibility to bring Victorian England into a new stable society grounded on progressive institutions (Wilson, 2014). Mill believed, that the cause of immense poverty experienced in England at the time was due to a lack of population control. According to Verburg (2006), Mill argued the idea that “improving the condition of the laboring classes resolved around influencing this proportion by controlling population growth through moral restraint” (p. 238). The political economy thus stated that through education and restricting institutions, the working class could find individual and collective social progress. This ratio of population to capital and employment is dependent on the customs and habits of the working class, thus education reform is necessary to alter public opinion and further guide new habits of progress (Verburg, 2006). Education would also lead to greater forms of productivity, as people learned how to allocate their time better.
Finally, relating to his economic thinking of poverty relief, Mill offers his position on government’s role in society. He was a proponent in Laissez faire policies as they protected individual freedom and self-development. He distinguished government functions into the necessary and the optional, with the necessary including “security, taxation, and protection” (Smith, 2011). He stated that government should provide poor relief rather than private charities (Nathanson, 2012). Protecting society involves government rules and regulations enacted to punish those behaviors such as force, fraud, neglect that hurt the greater society and limit their freedoms of self-development.
Application of Mill’s Economic Philosophy on Political Corruption in Australia
A major them of political corruption in Australia today is the misappropriation of taxpayer money by the government. Specifically, during political campaigns, incumbent candidates have the ability to use public resources such as vehicles, travel allowances and office spaces. Gartrell (2015) has disclosed that in the past G20 summit, hotel and taxis costs reached $1.8 million and the federal government spent $104,176 of Australian taxpayer money on flag adornments at the summit. Based on the concept of distribution of wealth, Mill would rationalize this self-interest driven action as a function of the laws and customs of society. In order to prevent the misallocation of wealth to superfluous political spending, society as a whole must create preventative forces for protection.
Expanding on this notion of self-serving politicians, Tiffen (2014) highlights the current trend of corruption in government contracting as he states that “So much of our politicians’ energies seems to be aimed at progressing their own or their party’s interest; very little seems to be aimed at the public good.” As a utilitarian, Mill would irrefutably condemn the government for not only failing to protect its people, but also causing a disproportional amount of pain to pleasure. Mill would justify that repercussions are necessary for behaviours of fraud as well as behaviours of negligence to the necessary duties of government. Professor AJ Brown, the director of Transparency International Australia, notes that citizens have recognized a pattern of increased attention on political scandals followed by a debriefing of government’s inability to impose any prosecutions or remedies (Whitbourn, 2014). Thus, Mill would further reprimand the failings of the government to effectively combat political corruption.
There has been much political debate on possible creation of a federal Independent Commission Against Corruption (ICAC) to effectively expose corruption in federal spending, thus protecting taxpayers from government contracting (Whitbourn, 2014). Mill would be in agreement with this institution as it creates a sense of accountability for the government to perform its duties of security, taxation, and protection. Additionally, the creation of this federal restrictive institution would serve to reallocate the misdistribution of public wealth that greedy politicians have taken to promote private interests. While Mill felt that poverty and overpopulation of labour were of greater importance to integrity and justice, contemporary Australia is arguably in a steady state of capital. Therefore, justice through an independent institution can be of great importance for the purpose of establishing new public sentiment and cultural forms towards political corruption and government accountability. One issue that must be addressed however is that the distribution of wealth is determined by what the “ruling portion of community” say are the laws of society (Heilbroner, 2000, p. 129). Thus, in order for a change in distribution, the overriding majority must have a collective set of opinions and must have the power to change institutions. Therefore, Mill would either say that there needs to be greater public presentation in government in attempt to influence the Parliament and high government leaders, or that major political parties on their own must come to a consensus that new institutions would better society. Due to the inability of the Greens and the liberal and labour senators to agree upon legislation, we see a limitation in Mill’s thinking: “there were limits on the freedom with which societies could restructure their distribution” (Heilbroner, 2000, p. 130).
Furthermore, there is an increasing inability for Australia to take action on public issues such as climate change and income inequality due to the influential power of lobbyists in government decisions (Menadue, 2015). Fairfax columnist Ross Gittins states: “Industry lobby groups have become less inhibited in pressing private interests at the expense of the wider public interest. They are ferociously resistant to reform proposals” (Menadue, 2015). A particular problem with the power of lobbyists is that much information disseminated by media outlets is fuelled by the propaganda of the lobbyists. A 2010 survey found that 55 per cent of content in major publications was driven by propaganda handouts of lobbyists (Menadue, 2015). This aligns with Mill’s exertion of education’s importance on the habits and opinions of common man. However, the media promotion of lobbyist self-interests can skew the breadth and clarity of knowledge of overall society, leading to further persuading and an inattention to the true needs of the individual.
Although in this example, the direct interpretation of Mill’s steady state of capital through controlling population does not hold absolutely, a modern adaptation of this core idea can lead to policy recommendations that Mill would approve. Firstly, reducing the population of the lobbyists can be equated as restricting their power, thus bringing forward a steady state of political corruption, as opposed to capital, and allowing for social change. Thus, Mill would agree for the restriction of a minister or high government official to work with a vested interest group for a certain time period after retirement or resignation (Menadue, 2015). In terms of his economic philosophy on government, there should be stringent consequences for nondisclosure of meeting discussions with government agents. Most importantly, to ensure effective social progress in the future, Mill would argue that a well-informed group of citizens gain direct representation in asserting reliable public interest to governments. This in turn will allow for better distribution of wealth in terms of public policy that are a reflection of the greater majority of society as well as future institutions created to enforce the public sentiment. Of course, in order to do so, Mill would recommend increased education for children on current events. As state in Frijters and Foster (2012), “education engenders a common identity, with associated advantages of joint expectations and social norms that reduce the costs of interaction and the potential for conflict” (p. 188). This is analogous to Mill’s thinking and possibly alludes to the notion that education reform is the first step in changing the habits of Australian society.
Conclusion and Implications for the Future Political Economy Mill’s economic rationale was founded on the historical context of the 19th century; however, it is inarguable that classical economic theory can be applied to modern day issues such as political corruption in Australia. Mill’s ideas on the redistribution of wealth can serve in protecting Australian taxpayers from self-serving political agents through the creation of a restrictive institution like a federal ICAC. His viewpoint on necessary government responsibility to protect the self-development of society can prove useful in increasing effective prosecutions and sanctions of corrupt entities. Finally, his ideal of a changing social society through education provides insight on how to combat the power of the lobbyists. Economists view institutions as social structures in an evolutionary competition to meet human needs. Thus, in terms of political corruption, it can be argued that institutions of the legal system and government enforcement bodies are evolutionarily unhealthy and must be changed. This is clearly exemplified in Mill’s economic thinking, as he states that society can change their laws and customs so they see fit, reflecting the changing opinions of the majority. While Mill’s economic thinking concerned the issue of poverty in the working class stray from relevancy in the subject of political corruption, his economic ideals entrenched in social progress all are rooted in the importance of institutional changes, serving to be useful in analysing political corruption in Australia.

Word count: 2153 (including headings/in-text citations)
References
Frijters, P. & Foster, G. (2013). An Economic Theory of Greed, Love, Groups, and Networks.
Cambridge University Press.
Gartrell, A. (2015, August 30). Taxpayers slugged $100,000 for G20 flags. The Age.
Retrieved from http://www.theage.com.au/federal-politics/political-news/taxpayers-slugged-100000-for-g20-flags-20150828-gjaizj.html
Heilbroner, Robert (2000). The Worldly Philosophers: The Lives, Times and Ideas of the Great
Economic Thinkers. Seventh Edition. Pearson.
Menadue, J. (2015, May 18). How the ruse of the lobbyist is corrupting Australia’s democracy. The Age. Retrieved from http://www.theage.com.au/comment/how-the-rise-of-the- lobbyist-is-corrupting-australias-democracy-20150515-gh2iyw.html
Nathanson, S. (2012), John Stuart Mill on Economic Justice and the Alleviation of Poverty. Journal of Social Philosophy, 43: 161–176.
Smith, N. (2011, December 7). Analysis and Summary of “Principles of Political Economy” by John Stuart Mill. Retrieved from http://www.articlemyriad.com/analysis-summary- principles-political-economy/
Tiffen, N. (2014, December 5). Australia’s slide into corruption must be stopped. The
Age. Retrieved from http://www.theage.com.au/comment/australias-slide-into-corruption-must-be-stopped-20141203-11zso4.html.
Whitbourn, M. (2014, December 3). Calls for federal ICAC as Australia slips outside top 10 'clean' countries in global corruption ranking. The Sydney Morning Herald. Retrieved from http://www.smh.com.au/federal-politics/political-news/calls-for-federal-icac-as- australia-slips-outside-top-10-clean-countries-in-global-corruption-ranking-20141202- 11ygwk.html
Verburg, R. (2006). John Stuart Mill's Political Economy: Educational Means to Moral Progress. Review Of Social Economy, 64(2), 225-246.