Tag: #transparency

The Stock Exchange: The Longest Con of All?

A novel I read a long time ago spoke about “tha market” being about confidence. In that story, a convenient billionaire in on the gig bought shares in a particular company to “shore up confidence” in it. That always stuck with me, tucked neatly alongside stories of grifters and hucksters, con men and women and mentalists… Recent stock market trials and tribulations prompted this post.

The stock exchange is often touted as the beating heart of modern capitalism, a system where companies raise capital and investors build wealth. But at its core, the stock market operates on confidence—perception rather than intrinsic value. This reliance on faith, speculation, and psychological manipulation mirrors the mechanics of a long con.

What is a Long Con?

A long con is an elaborate confidence trick that unfolds over time, designed to build trust and extract maximum value from its victims before they realize they’ve been deceived. Unlike short cons—quick scams that rely on immediate deception—a long con requires careful manipulation of belief. Classic long cons involve setting up an illusion of legitimacy, often with multiple players reinforcing trust.

The origins of the term confidence trick date back to the 19th century, when William Thompson, a New York swindler, convinced victims to lend him valuables with the promise of returning them. His success relied on social engineering, creating an aura of credibility so that targets willingly handed over their possessions.

Sound familiar? The stock market runs on the same principles. Investors place their faith in companies and the market as a whole, believing that their money will return with profit. But this confidence is easily manipulated, and when the illusion shatters—think dot-com bubble, 2008 financial crisis, or sudden corporate collapses—those at the top cash out while everyday investors are left holding the bag.

Three vintage circus ticket designs featuring colorful graphics of circus tents, dates, and entertainment details.

Step Right Up to the Grestest Show in Town! Write Your Own Market Gamble!

The Stock Market as a Confidence Game

Share prices do not reflect absolute value; they reflect perceived value. A stock rises not necessarily because a company is performing well but because investors believe it will perform well. This collective confidence creates self-reinforcing bubbles, only for them to burst when sentiment shifts. The very phrase “market confidence” acknowledges this psychological aspect—when confidence is high, prices rise; when confidence wanes, markets tumble.

Governments and regulators attempt to maintain transparency through mechanisms such as continuous disclosure obligations and trading halts.

  • Continuous Disclosure (ASX Rule 3.1): Listed companies on the Australian Securities Exchange (ASX) must immediately disclose any information that could materially impact their stock price. Theoretically, this prevents insider trading and maintains fairness. In practice, it often allows companies to strategically time announcements to minimize damage or maximize hype.
  • Trading Halts: If a company expects major news to impact its stock, it can request a trading halt to allow the market to digest the information. This prevents knee-jerk reactions but also gives executives time to spin narratives, further reinforcing the confidence game.

Despite these measures, the fundamental nature of the stock market remains unchanged: it thrives on belief, speculation, and carefully managed illusion.

The Sheer Uncertainty of the Stock Market

If the stock market is a confidence game, then it is also a house of cards. Crashes like the 1929 Great Depression, the 2008 Global Financial Crisis, and the COVID-19 market collapse all show how fragile investor faith is. Even in non-crisis times, markets are notoriously unpredictable—commodity prices fluctuate, consumer trends shift, and unforeseen disruptions cause financial chaos.

A stark example is Enron, once hailed as an innovative energy giant, which crumbled overnight when accounting fraud was exposed. The confidence in Enron was carefully cultivated, with executives leveraging market perception while manipulating financial statements. By the time investors realized the con, the damage was irreparable.

If the stock exchange is such a precarious system, what alternatives exist?

Enter B Corps: A Different Way of Doing Business?

Certified B Corporations (B Corps) present themselves as an ethical counterbalance to profit-driven corporations. These companies commit to social and environmental responsibility, balancing profit with purpose. Unlike traditional corporations, which primarily serve shareholders, B Corps claim to serve all stakeholders—employees, customers, communities, and the planet.

What is B Corp Certification?

B Corp certification is awarded by B Lab, a nonprofit that evaluates companies based on their impact in areas like governance, employee welfare, environmental responsibility, and community engagement. The certification process includes:

  1. B Impact Assessment: Companies must score at least 80 out of 200 points across five categories: governance, workers, community, environment, and customers.
  2. Legal Accountability: Companies must amend their governing documents to commit to stakeholder interests beyond just shareholder returns.
  3. Transparency: Certified companies must publish their B Impact Report, detailing their social and environmental performance.
  4. Recertification: Every three years, companies must reapply, proving continued commitment to B Corp principles.

Recognizable B Corps in Australia

Several well-known Australian companies have obtained B Corp certification, including:

  • Bank Australia – A customer-owned bank that prioritizes ethical lending and environmental sustainability.
  • Ecostore – A household cleaning and personal care brand committed to reducing plastic waste and toxic chemicals.
  • Who Gives A Crap – A toilet paper company that donates 50% of its profits to sanitation projects worldwide.
  • KeepCup – The reusable coffee cup brand tackling disposable cup waste.
  • Australian Ethical Investments – A B Corp that is also listed on the ASX, proving that ethical investing can exist within the constraints of the stock market.

Conclusion: Confidence vs. Commitment

The stock exchange, by its nature, is a long con—a system where faith, perception, and strategic narrative control determine success. Continuous disclosure rules and trading halts attempt to instill fairness, but ultimately, the market remains a confidence game.

B Corps offer an alternative model, focusing on ethical business practices and stakeholder interests. However, when a B Corp goes public, it enters the same speculative ecosystem as any other corporation. The tension between maintaining ethical commitments and satisfying investor expectations creates an ongoing challenge.

Australian Ethical Investments demonstrates that it is possible to be both a publicly traded company and a B Corp while complying with all ASX and superannuation regulations. This challenges the assumption that corporate ethics and profitability are mutually exclusive. While the stock exchange thrives on speculation, B Corps rely on a different kind of confidence—one rooted in trust, accountability, and sustainable impact.

So, is the stock exchange truly a long con? The answer lies in whether investors continue to believe in the illusion—and whether B Corps can resist being absorbed into the same confidence-driven machine they claim to oppose.

Democracy, but no sausage

The 2017 Fitzgerald Lecture, with the Hon. Margaret McMurdo, was, as expected, extraordinary. This great jurist is erudite elegance writ large. It was gently amusing to see such an enormous intelligence have some… er… difficulties with her slides, and the humorous grace with which she corrected herself was so endearing, and a reminder that our greatest heroes are also everyday people.

The Hon Tony Fitzgerald changed the nature of Queeensland with his recommended reforms, and McMurdo’s recap on the various attempts of the Nationals and Liberals to wind back those reforms was concise and razor sharp. I can’t believe I had forgotten about the Mundingburra by-election, the Carruthers Inquiry and the inquiry into the Carruthers Inquiry, Russell Cooper as Premier, and a few other things.

Thank the Westminster system for giving us the concept of our courts and legal system, with separation of powers an inherent, and crucial, part of our democracy. We are blessed to have the strength and wisdom of the courts as a bulwark against corruption.

I asked ChatGPT to help me bring this blog post to life,  so here we go. I asked the AI to expand on The Fitzgerald Inquiry and the greater misdeeds of the Bjelke-Petersen government.

The 2017 Fitzgerald Lecture, delivered by the Hon. Margaret McMurdo, celebrated the significant legacy of the Fitzgerald Inquiry and its transformative role in Queensland’s political landscape. As McMurdo pointed out, Tony Fitzgerald’s inquiry exposed a culture of corruption and government malpractice that defined the Bjelke-Petersen era. It is remarkable how the Hon. Fitzgerald’s recommendations shifted the trajectory of Queensland politics, and McMurdo’s recap of the efforts by various political factions to roll back those reforms highlighted a fascinating and troubling chapter of our state’s history.

The Fitzgerald Inquiry, instigated by the Queensland government in 1987, aimed to investigate allegations of corruption in the Bjelke-Petersen government, which ruled Queensland from 1968 to 1987. The inquiry uncovered deep levels of corruption within the state police force, the judiciary, and even within the very heart of the government itself. The commission’s findings exposed the abuse of power, cronyism, and a system that allowed for political patronage to thrive unchecked. Notably, the inquiry uncovered the notorious relationship between the Bjelke-Petersen government and criminal elements, which provided fertile ground for bribery, favoritism, and the suppression of political opposition.

The Fitzgerald Inquiry led to the resignation of Premier Joh Bjelke-Petersen and a wholesale restructuring of Queensland’s political system. Fitzgerald’s recommendations set the stage for major reforms, including the establishment of an independent police service, stricter regulations on political donations, and increased transparency within government. These reforms were intended to curb the entrenched culture of corruption that had plagued Queensland for nearly two decades.

However, as McMurdo noted, the aftermath of the Fitzgerald Inquiry saw several attempts to dismantle or undermine its hard-won reforms. Political figures from the Nationals and Liberals—especially those who had served under Bjelke-Petersen—sought to restore the old ways, challenging the very principles of accountability and transparency that the inquiry sought to secure. A prime example of this was the Mundingburra by-election, which became a flashpoint for debate on political reforms, and the subsequent Carruthers Inquiry, which sought to investigate potential electoral corruption. The inquiry into the inquiry itself further demonstrated the resistance to Fitzgerald’s reforms.

Despite these efforts to undermine the reform agenda, the Fitzgerald Inquiry’s legacy stands strong. The introduction of an independent judiciary and the separation of powers provided a vital safeguard for Queenslanders against future governmental overreach. It is through such systems that our democracy is protected, ensuring that no individual or political party can operate above the law. As McMurdo eloquently stated, the Westminster system, with its emphasis on checks and balances, remains a cornerstone of Queensland’s democratic institutions.

The Bjelke-Petersen government’s misdeeds went far beyond what was initially uncovered in the Fitzgerald Inquiry. It was not just the systemic corruption in the police force or the links to organized crime—it was the broader culture of political authoritarianism that pervaded the administration. The government’s suppression of political opposition, its attacks on civil liberties, and its manipulation of the media all contributed to a political environment that was, at best, deeply unhealthy and, at worst, dangerous for democracy.

In the years following the Fitzgerald Inquiry, Queensland’s political landscape has undergone significant changes. Many of Fitzgerald’s recommendations, such as the establishment of the Crime and Corruption Commission (CCC), have been vital in preserving the integrity of our public institutions. However, the fight against corruption is ongoing, and McMurdo’s sharp insights remind us that vigilance is necessary to ensure that the gains made by the Fitzgerald Inquiry are not lost to political maneuvering.

In conclusion, the Fitzgerald Inquiry was a watershed moment for Queensland. It exposed the corruption of the Bjelke-Petersen government and forced a reckoning that reshaped the state’s political system. While the battle against corruption continues, the strength of Queensland’s legal and political institutions remains a testament to the courage and foresight of those who fought for transparency, accountability, and the preservation of democracy. As we reflect on this legacy, we must remain committed to safeguarding the values that Fitzgerald and McMurdo so eloquently championed—values that are essential to the health of our democracy.

We then wandered down the rabbit hole of Queensland’s unicameral parliament. I asked the AI, “what effect do you think Queensland’s unicameral parliament had in contributing to the circumstances of corrupt oligarchy that was the Bjelke-Petersen government?”

The unicameral structure of Queensland’s Parliament—where the Legislative Assembly serves as the sole house—played a significant role in enabling the corrupt oligarchy of the Bjelke-Petersen government. Unlike bicameral systems, which have two houses of parliament (typically an upper and a lower house) to serve as checks and balances on the decisions made in the lower house, Queensland’s unicameral system lacked this built-in safeguard. This made the government particularly vulnerable to abuses of power and corruption during the Bjelke-Petersen era.

Here are some key ways in which Queensland’s unicameral system contributed to the circumstances that allowed the Bjelke-Petersen government to operate as a corrupt oligarchy:

1. Lack of Legislative Oversight

With no upper house to act as a counterbalance, the Legislative Assembly, dominated by the Nationals and their allies, essentially became a rubber-stamp for the Premier’s decisions. This centralization of power made it easier for Bjelke-Petersen and his government to push through policies and decisions without meaningful opposition or scrutiny. In a bicameral system, a second chamber could have questioned the decisions of the government, offered alternative perspectives, and delayed or amended controversial legislation. In Queensland’s unicameral system, however, there was little room for such checks and balances, leading to a lack of oversight and accountability.

2. Unrestrained Political Power

In a unicameral system like Queensland’s, the party in power has virtually unchallenged control over the legislative agenda. Under Bjelke-Petersen, the Queensland National Party was in power for nearly two decades, and the absence of an upper house allowed them to consolidate their control. The political system effectively empowered the government to act with impunity, making it easier for Bjelke-Petersen and his colleagues to engage in cronyism, patronage, and, ultimately, corruption. The centralization of political power in the hands of a single house and party contributed directly to the culture of corruption that flourished during this period.

3. The Role of the “Rubber-Stamp” Cabinet

The lack of an upper house also meant that there was little space for debate or reform from within the government itself. Queensland’s cabinet and party machinery, dominated by Bjelke-Petersen and his closest allies, operated with a level of secrecy and internal loyalty that stifled dissent. The government’s legislative agenda was driven almost entirely by the Premier’s office, with little room for independent analysis or critique. With no second house to challenge or question the executive, the cabinet became an even more powerful tool for pushing through controversial decisions, including those that served the interests of a small political and business elite.

4. Electoral Malpractices

Queensland’s unicameral parliament also facilitated a political system that allowed the Nationals to maintain their dominance, despite growing public dissatisfaction. The gerrymandering of electoral boundaries, designed to benefit the ruling party, was another key element of the Bjelke-Petersen government’s longevity. With a single house, electoral malpractices such as these went unchecked, enabling the government to maintain control even if its support was waning among the broader population. This was further exacerbated by the suppression of opposition voices, particularly those from the media and civil society, which meant that there were fewer avenues for public scrutiny of the government’s actions.

5. Political Patronage and Corruption

The lack of an upper house made it easier for Bjelke-Petersen and his government to engage in political patronage and corruption without the risk of public exposure or legislative intervention. The Queensland government’s connections with business elites, police corruption, and the undermining of democratic processes thrived under the near-total control the Nationals had over the legislative process. The absence of an upper house to question political appointments, review government spending, or probe unethical behavior meant that corruption went unchecked and unchallenged for years.

6. Difficulty in Reform

The Fitzgerald Inquiry was a direct response to the systemic corruption that had taken root during Bjelke-Petersen’s tenure. However, even after the inquiry and its reforms, the struggle to maintain those reforms was ongoing, as the power dynamics entrenched during the era of Bjelke-Petersen were difficult to dismantle. The continuing efforts by the Nationals and the Liberals to roll back reforms—such as attempting to weaken the independent police service or challenge the Crime and Corruption Commission—highlighted the persistence of oligarchic power. With no upper house to mediate or block such attempts, Queensland’s government remained susceptible to the reemergence of corrupt practices.

Conclusion

In sum, Queensland’s unicameral system, while efficient in some respects, contributed to the consolidation of power in the hands of a few individuals and made it easier for the Bjelke-Petersen government to perpetuate its corrupt practices. The lack of a second legislative chamber allowed for unchallenged political dominance, enabling the abuse of power, corruption, and the suppression of democratic processes. The Fitzgerald Inquiry, and the reforms it triggered, were crucial in addressing the damage caused by this unchecked political environment. However, the history of Queensland’s political system during this time serves as a powerful reminder of the importance of checks and balances in maintaining a healthy democracy.