Book review: Game of Mates


By Phil Soos, cross-posted from LF Economics

This is LF Economics’ first review of a book, entitled Game of Mates: How Favours Bleed the Nation by economists Cameron K. Murray and Paul Frijters. The name is a play upon the wonderful TV series Game of Thrones and rightfully so, given both are about how a small number of wealthy and highly-connected individuals, often operating within a cluster of powerful networks, rig rules, policy, laws and ideology for their personal and class benefit.

Game of Mates is a gold mine of information on the racket of rent extraction for a number of reasons. First, it provides background on how the game slowly evolves (Chapter 1) by contrasting the hard-working Aussie Bruce with the connected insider and rent extractor known as James. By using the power of networking and soft corruption, the wealthy James (the 1%) is able to rip-off Bruce (the public) legally without violating the rule of law.

Second, the book goes on to detail the largest state-backed legal thefts carried out by the corporate sector for the benefit of rentiers. This term means those who obtain rents (unearned wealth and income over and above what is justified by perfectly-competitive markets). Unfortunately, Australia is a haven for robber barons, siphoning massive and illegitimate mountains of rents from the property market (Chapter 2), transportation (Chapter 3), superannuation (Chapter 5), mining (Chapter 7) and banking (Chapter 9) for the benefit of owners and managers.


The gargantuan level of graft which is currently taking place in our economy is not to be underestimated. Australia has the world’s largest tax expenditures to GDP ratio, feeding the property and superannuation industries. Our household debt to GDP ratio is the second-highest, explaining the sky-high land prices and super-profits our state-protected oligopolistic banking industry siphon annually. While there has been much commentary around the banks’ profiteering, it pales into comparison with those generated by the heavily-subsidised, rent-extracting mining industry over the last decade.

Transportation is heavily interconnected with the property market, and has devolved into private monopolistic tax farms, delivering substandard services while charging usurious fees. Private bankers can charge double the interest rates and fees relative to direct public funding (which would actually require no interest costs at all). An additional consequence are the gifts given to property developers and speculators via the uplift of land values around new development sites. The economist Michael Hudson has covered this issue extensively.

Superannuation is a leviathan, taking 9.5% of workers’ pay on the pretext of reducing the burden on the age pension in retirement. Whatever the intentions of the Hawke-Keating government by enacting this scheme, it now exists for two reasons: the system allows the parasites in the financial sector to cream off around $25 billion annual in fees and provides a funnel for high-income earners to reduce their taxes (hence the hefty super tax expenditures). Only minor reforms have been enacted to stem the generosity of superannuation.


The perverse polices which promote the upwards redistribution of wealth are achieved legally by exploiting grey areas within politics, law and regulation (Chapters 4 and 8). Soft corruption is quite distinct to the issue that we focus on, namely control fraud. This is the outright and illegitimate breaking of the law where controllers of the firm use the institutions they manage as a weapon and shield to engage in widespread looting. The Australian banking and financial system is an obvious example.

Game of Mates helps to reveal the absurdity of what is falsely called free-market capitalism, as it is thoroughly infected by rent extractors. Recent research has demonstrated that Australia’s private sector is dominated by cartels of monopolists, duopolists and oligopolists to an even greater extent than the US, the latter of which is often considered the home of crony capitalism. This is no mean feat.

Whoever said there is no such thing as a free lunch (perhaps it was Milton Friedman or someone he quoted) is speaking an utter absurdity. The term ‘free lunch’ doesn’t do justice in describing the epic levels of legal grift in our economy. Indeed, it should be termed ‘free banquets’ as we argued in our article Australia’s Real Lifters and Leaners.


The process of extracting free banquets has gained pace since the neo-liberal reformation of the economy by the Hawke-Keating government, lurching from the centre-left to the centre-right on economy policy during the 1980s. The Howard government continued and magnified these rackets when in power between 1996 and 2007. It should be important to note that these policies can hardly be termed ‘neo-liberal’ when they are not new and often have little to do with economic liberalisation. Perhaps neo-feudal capitalism is a better term.

Unfortunately, the Rudd and Gillard governments did little to reverse this deleterious state of affairs. The current batch of statist reactionaries in power have every interest in continuing the game, while attempting to attack marginalised and disadvantaged groups at every turn, though the leadership is floundering. Abbott (King Joffrey) is gone, Turnbull is in the process of committing suicide (King Tommen), so who will rise up and take power like Queen Cersei?

The reactionary narrative is necessary to divert attention away from those who benefit from Australia’s far larger welfare system as the government runs two welfare systems. The first and much smaller one is the social welfare system that assists those who are in need. In contrast, the far larger welfare system provides assistance to the wealthy, based on inverted principles: those who need assistance the least get the most.


This capitalist welfare system is composed of unearned wealth and income, extracted from the public and passed down tax-free to the next generation of the 1% who continue the game of neo-feudalism. For these vested interests, the game consists of a virtuous positive feedback loop between wealth and rent-seeking.

The Game of Mates is about detailing the methods of redistribution from the poor, labour, productive competitive business and the environment into the pockets of those who benefit the most from non-work. There are some data on how much the wealthy steal from everyone else (Chapter 13). Hint: the redistributions are massive in scale and yet do not quantify the full extent of the rent extraction taking place.

In addition, apart from criticising the upwards redistribution of wealth, they advocate solutions to rectifying these problems (Chapter 14). This can be done by reclaiming the value of the free banquets for the public, disrupting the coordination and networks used by rentiers, and shattering the myths peddled to justify their wholesale theft.


This book is a very timely addition to the emerging research in Australia and elsewhere which explains the processes and estimates the amount of wealth and income siphoned off by these schemes of legal theft. At 204 pages, it is not overly long and is makes for an easy read. Fortunately, the authors avoid the often opaque writing style and jargon often found in the economics and financial academic literature.

If one wants to understand how the country is being looted by the minority of the opulent for their own benefit, look no further.



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