Whatever ? Voter Alienation in Australia’s Neo Liberal Capitalist Reality and the Need for a New Democratic Socialist Economic Model

 

In this latest article, ALP activist and democratic socialist, Geoff Drechsler argues against austerity and for a revived democratic socialist approach to economic management. He argues for the Left to assert itself on the economy - including in the form of economy democracy and full employment.

by Geoff Drechsler

One of the less discussed trends in Australian politics is 'voter disengagement' - the declining rate of voter enrolments, prevalent amongst young voters, and the steady increase in informal voting, particularly in working class areas. At the last federal election, in 2010, in the federal seat of Blaxland, informal votes accounted for 14% of the total votes cast, up from 9% at the previous election in 2007. Before the recent WA state election, one in three 18-25 year olds was not enrolled to vote. Looking specifically at young voters not enrolling, a similar pattern can be observed in other developed democracies, which have predominantly voluntary voting systems. In each new generation in these countries, voter turnout has been steadily declining generally for the last five decades or so. But after decades of economic growth here, why are young Australians so lacklustre about enrolling to vote ??

Could this disconnect be the product of the reality that 20 plus years of economic growth has not led to an increase in economic security, particularly for this group ? The two main political parties have both embraced key neoliberal economic tenets in recent decades, and irrespective of economic growth or not, this still results in greater fluidity in the labour market and less equitable economic outcomes across the community. Also, the high cost of living in major Australian cities then in turn has a multiplier effect on those in this predicament, and delay the events that usually mark the path towards adulthood - starting a family, purchasing a home and getting full-time stable work. Given the dearth of choice politically on economic policy, and the lived reality, the point of voting is maybe somewhat less obvious or attractive ?

Prosperity without Security

* Since 2008, the number of teenagers in full-time jobs has fallen from just under 270,000 to about 200,000 in 2012. In 2012 a quarter of 18-19 year olds were not in full-time study or work.

* Rates of part-time employment have increased significantly. The 2012 edition of How Young People Are Faring indicates that the number of teenagers in part-time work and who were not in education increased from 8.7% in 1986 to 30% in 2012. The proportion has more than doubled for 20 to 24 year-olds from 8.3% to just over 19% during the same period. This reflects a long-term pattern of replacement of full-time employment with more part-time jobs within the teen and young adult labour markets

* ABS data indicates that in 2011, a third of the 814,700 part-time workers who would prefer to work more hours were aged 15 to 24 years. Around 28% of underemployed part-time workers in this age group had insufficient work for a year or more (what the OECD defines as "involuntary part-time work").

Ultimately, it all comes back to economic policy, and the embrace, by centre left parties of neo liberal economics is linked to events at the end of the 20th century. Internationally, there is now a tendency on the Left to focus on social issues and policy because in the 1980s, the failure of the Soviet centrally planned economic model, and the inability of the Scandinavian nation state social democratic economic systems to make the transition to participating effectively in a globalised international economic system undermined the two most widely accepted “left” economic models almost simultaneously. Subsequently, many centre left governments have simply grafted left-wing social policy onto a basically orthodox right wing economic program, seemingly in the hope the former will ameliorate the latter. The absence of a credible "left" economic model has also allowed the Right to dominate economic debate for the last 20 years too. Seizing the opportunity, in countries that have had long term right wing governments during this period, including Australia, these conservative governments have manipulated predictable less equitable economic outcomes (and the inevitable resulting fluidity in the labour market......), and the subsequent insecurity that is generated to undermine the institutions of the welfare state (how popular is Centrelink ?) and promote individual solutions - 'work for the dole', making public sector workers self-employed individual contractors etc etc. This is all enabled by a general loss of faith in collective solutions in the community.

More recently though, due to the 2008 Global Financial Crisis, free market capitalism, and its derivatives, have lost popular credibility as a result of this economic collapse, and failed right wing policy remedies for this. A practical example of this is the UK Conservative Liberal Democrat coalition government austerity program that commenced in 2010. It has all been in pursuit of some ephemeral notion of a 'balanced budget', based on the outdated notion of "the Treasury view"— that fiscal policy has no effect on economic activity. Two years into this austerity program, the UK started 2012 with the biggest trade deficit since 1955, and the government’s adherence to classic neo liberal economic policies has put the UK economy into recession. Fortunately, finally, it appears even the IMF is now questioning austerity budgets. Olivier Blanchard, the IMF chief economist's paper on austerity, at the last American Economic Association's annual meeting, concluded that austerity program's adverse effects are stronger than believed. There is even a new book that claims austerity is seriously bad for our collective health, and that cutbacks have already had a devastating effect across Europe and North America. It points to soaring suicide rates, rising HIV infections and even a malaria outbreak, researchers arguing that in fact governments' austerity drives are costing lives in The Body Economic: Why Austerity Kills.

In contrast, in the post-war period, the one thing that has characterised successful left wing governments of all orientations, whether Chavez's Venezuela or social democratic Sweden has been a successful economic model. These have all also placed a strong emphasis on employment. In Venezuela, between 2002 and 2012, the government has increased social spending by 60.6%, and extreme poverty was reduced from 40% (1996) to 7.3% (2010). Part of this program is the intense political participation that the Venezuelan democracy incorporates, that includes 30,000 communal councils, which determine local social needs and oversee their satisfaction and allows ordinary people to be protagonists of the changes they demand. But also, the Venezuelan economy has low debts, high petroleum reserves and high savings and the Venezuelan economy has grown 47.4% in ten years, that is, 4.3% per annum, and reduced unemployment from 11.3% to 7.7% in the same period. In modern Sweden's case, high rates of productivity, historically low rates of unemployment and high standard of living for all of its citizens in the post war period in one of the world's most highly developed post-industrial societies. Both of these examples show that a viable alternative economic model that has refocused the economy's outcomes more equitably, delivered growth, jobs and development and consequently, unsurprisingly, then led to longer term electoral success. Even at a workplace level, there are numerous examples of successful enterprise level exercises in industrial democracy that have been economically successful, from Ricardo Semler's Semco in Brazil, to the Mondragon Cooperatives in Spain. Ricardo Semler has also been a visiting scholar at the Harvard Business School too, demonstrating the widespread applicability of his ideas.

Alternatives

A viable democratic socialist economic model would be characterised by a mixed economy characterised by a leading role for different forms of social ownership, a proactive role for government and democratic planning, alongside market forces and a viable private sector, introduced incrementally as a consequence of electoral endorsements. The key long term aim of this program is to democratise key economic decision making and incorporate the aspirations of the majority of the population in regards to this process. Undoubtedly, full time permanent full employment being an overt public policy goal (again) is probably one expression of this.This in turn will also lead to more equitable economic outcomes, through moving beyond the pursuit of the profit motive being the sole economic benchmark of success. At a workplace level, alienation would be reduced as workers gained more control by encouraging cooperative and collective workplace industrial democracy process. And a rejection of failed free market orthodoxy will lead to more equitable outcomes that reduce income disparity between the richest and poorest and reverse the trend of Australia being one of the most unequal developed societies.

All of these changes listed above could utilise technological improvements to allow greater distribution of information and participation in workplace decision making in post-industrial white collar workplaces too.

Geoff Drechsler is a Labor Party and trade union activist.

Generation next: where to for Australia’s young people?

http://theconversation.com/generation-next-where-to-for-australias-young-people-10604

Youth face snakes and ladders on the path to full-time employment

http://theconversation.com/youth-face-snakes-and-ladders-on-the-path-to-full-time-employment-10677

 

Paul Krugman “The Big Fail" - NY Times 6.1.2013

 

Austerity kills, economists warn

http://www.guardian.co.uk/business/economics-blog/2013/apr/29/austerity-kills-health-europe-us

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'Battlelines' - what’s Tony Abbott really about?

 

above: an image of Tony Abbott

 

Tristan Ewins searches for the 'real Tony Abbott' interrogating the arguments and values presented in the Australian Conservative Opposition Leader's 'manifesto', "Battlelines" from a progressive perspective. 

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By Tristan Ewins

For those interested in understanding the political thinking behind the politically-resurgent Tony Abbott, they could do worse than to read about the “Abbott agenda” as proclaimed by the man himself in his manifesto, Battlelines.

Abbott begins by proclaiming himself “the pragmatist”. “Ideology”, after all, has become something of a dirty word in western democracies - associated with such “evils” as socialism: compared with which neo-liberal practice is “objectively” sound economic management (please note the irony).

By contrast Abbott portrays his “pragmatism” as a fluidity of policy responses to political and economic contingency: but for which conservative values remain fixed. And in this context - Abbott sees conservatism in the sense of respect for Western traditions and institutions as both wise and practical.

For Abbott “Ideologues want to impose their values on others” while “pragmatists want to solve … problems as long as the cure is not worse than the disease” (p.xi).

While this is a clever piece of rhetorical posturing, critical minds might point to the dominance of neo-liberal ideology in Australia and world-wide without care for the real world consequences.

Interestingly, Abbott raises the opposition between compassionate conservatism and the kind of ruthless neo-liberalism that cares nothing for the social consequences of austerity (pp.xii-xiii). Here the author juxtaposes the “[single-minded] cutting [of] public expenditure … striving to deliver smaller government” to “compassionate conservatism, stressing solidarity with those who are doing it tough” (pp.xii-xiii). By this reckoning the “social fabric … has to be respected and preserved”, while individuals should enjoy such circumstances that they are “empowered, as far as reasonably possible, to live the life that he or she thinks best” (p.xii).

Abbott’s proclaimed support for those doing it tough might be traced to the influence of the Democratic Labor Party (DLP) early on in his life. While the DLP helped shut Labor out of government for decades, and to this day retains a socially-illiberal outlook, its Catholic origins were such that there remained a measure of compassion for workers, and for the poor (p.10).

Regardless of whether this stance is a political ploy, or whether it echoes Abbott’s true sentiment, Abbott is captive to the Liberal political machine. The Opposition has tried to undermine the stimulus without regard that this would compromise the recovery from the global financial crisis. They have fear-mongered about tax and trade unions. Ruthless neo-liberalism remains the dominant current within the parties of the Australian Right - and should the Coalition be elected later this year, it is very likely that this would be reflected in policy.

This opposition between “compassionate conservatism” and what I call “ruthless neo-liberalism” is one that Abbott attempts to dispel later on, but for those of us interested in interrogating the contradictions of the Australian Right, the issue demands greater attention.

We will return to this theme later.

Abbott attempts to mould an image of conservative and liberal impulses as interlocked and complementary. He emphasises this again and again.

But there are other conflicts at work also. Even within the broad gamut of liberalism, there is division between social liberalism (concerned with social justice) and economic neo-liberalism (utterly indifferent to it).

For Abbott there is the practical imperative to reconcile competing currents in the parties of the Australian Right to present the kind of “united front” needed to win the confidence of voters. And there is also the need for Abbott to pitch his message broadly, to maximise his support base.

For his own part, Abbott does not show respect or recognition for many of the marginalised and the oppressed. He speaks of his experience in student politics: mocking his then-rivals on the Left as being typified by an outlook of “Land Rights for Gay Whales” (p.12).

There remains within Abbott a sense of injustice - perhaps even outrage - at the marginalisation of Conservative forces within the broader student political sphere at that time. As he writes: “the student paper wouldn’t print conservative arguments” (p.13).

Fast forwards to today and the Conservative parties in government passed legislation (so-called “Voluntary Student Unionism”) which hindered student self-organisation, and especially the position of the Left. This also had the added impact of draining the lifeblood of student culture from campuses all over the country.

Here, it must also be emphasised that the position of the Left has itself been broader than the “identity politics” held up to ridicule by Abbott. Student poverty and the imposition of increasingly onerous fees have for decades been flashpoints of concern for the student movement.

Perhaps student culture and organisations should have been more inclusive. But the extreme outcome of voluntary student unionism which, in effect, shut down student organisations was never a legitimate answer.

Abbott attacks unions often in Battlelines raising that same “bogey” which has figured in conservative fear-mongering in Australia since time immemorial.  But workers need self-organisation to have the industrial strength to bargain effectively and maintain wages, conditions and rights. Weakened unions, combined with deregulated labour markets means exploitation and a poor deal for workers.

WorkChoices took away unfair dismissal provisions; took away the “no disadvantage test” in enterprise bargaining; removed the right of workers to withdraw their labour except under the strictest of circumstances; and outlawed “pattern bargaining”. Removal of the right to pattern bargaining in itself promised a race to the bottom in wages and conditions for Australian workers.

It says something of the real underlying sources of economic and political power in Australia that much of the WorkChoices agenda has been maintained by Rudd Labor- despite broad opposition among the public. The legitimate electoral power of ordinary Australians has not been able to stand against the economic power of an aggressive employer lobby.

The only hope ordinary Australians have of reversing the long-term trend is to organise independently. But the critical point, especially with a Federal election looming later this year, is that Abbott cannot be trusted on industrial relations.

Labor is torn between its union base, and the pressure applied by employers, but the Conservatives and neo-liberals still want to crush the union movement, and will not be nearly as inhibited. Should the Conservatives get their way, ultimately there would be no labour movement to resist their agenda into the future.

Conservative disdain for the rights of workers in Australia dovetails with a broader scepticism about social and distributive justice. Abbott makes the usual noises about “soaking the rich” only being able to be taken so far (p.80). And for Abbott spending cuts were justified in order to “allow lower taxes” and “give more incentive to people who could create wealth” (p.81).

But the truth is that under the Howard government - in which Abbott was a key Minister - the tax mix became increasingly regressive. There was the Goods and Services Tax (GST). Massive superannuation concessions were provided which mainly benefitted the wealthy, and there was regressive restructure of income tax; with the tax free threshold remaining fixed. These policies impacted against those on lower incomes.

Low taxes and small government do not necessarily mean a “bigger economic pie”. All workers create wealth regardless of incentives in the form of tax cuts. In reality, it is possible to gear the economy to something approximating full capacity without gross exploitation, a gutted public sector, or ever lower and more regressive taxes.

In the coming Federal election Labor could do worse than to challenge the Liberals on the issue of distributive justice, engaging with Henry Tax Review recommendations, and restructuring the tax mix in favour of most Australians - especially for the most vulnerable.

Abbott himself is incredulous that families on combined annual incomes of $150,000 are considered “rich”, and thus opposes means-testing benefits such as the Private Health Insurance rebate (p.94).

But most families are not receiving incomes in this vicinity. To provide for the educational, welfare, infrastructure and health-related needs of ordinary Australians - and especially the most vulnerable - restructuring and targeting the social expenditure mix could be vital. And for deep and meaningful progress, tax reform would need to target a broad enough cross-section to fund the necessary social expenditure programs.

In his “manifesto” Abbott concedes that Australia’s conservatives were wrong to oppose Medicare. As long as bulk billing is not “absolute” or “total”, there remain, as he says, “price signals in the system” (p.143). But government subsidies make most general health services affordable for all. Basically “collective consumption” via Medicare works better and is fairer than the free-for-all of US-style health care system.

In the same spirit, Abbott needs to be open minded about social wage expansion. Provision of “universal dental care through Medicare”, which Abbott identifies as having cost $4 billion if it was implemented in 2007, should receive bipartisan support (p.144).

While Abbott identifies such a program as being very expensive, a practical Opposition Leader would not obsess about small government (p.144). The Australian economy, after all, is valued at well over $1 trillion. Rather, they would realise that collective consumption provides better value for taxpayers and consumers, and provides access on the basis of genuine need for people who would otherwise be excluded.

Should Abbott genuinely prefer to adopt a “compassionate conservative” persona - as opposed to one of “ruthless neo-liberalism” - he could do worse than engage with these issues, and break the taboo against progressive tax and social expenditure reform.

Drawing to the conclusion of this critique, it must be conceded that there are many dimensions of the “Abbott manifesto” that I have not covered. But I will try and make some observations prior to closing.

In Battlelines Abbott continues to support positions which could be at best described as controversial for the Australian public.

He tries to justify Australian participation in the Second Gulf War despite questions surrounding its legality, and the false pretences (for example, “weapons of mass destruction”). And he does not acknowledge the terrible and enduring human cost.

He supports increasing the retirement age to 70 without recognising the difficulties this would mean for manual workers, or for older Australians to re-skill. This is also aside from the “human dimension” in this context. Even if taxes must rise to support an ageing population, after a lifetime at work older Australians should have the freedom to develop their human potential. Possibilities include study, civic activism, engagement in creative arts, and quality time with family.

He supports “punitive welfare”, especially “work for the dole”, appealing to “dark and judgmental” tendencies in the electorate. This is without addressing the failure of student payments and job search allowances to provide even for the bare necessities. And when students work part-time to support themselves the distraction could compromise their study.

He lauds the centrality of civil society as opposed to the state, yet he provides no account of the Howard government’s bullying of charities, threatening to revoke their tax-free status should they criticise government policy.

For those desperately ill who cannot afford potentially life-saving medication not included in the Pharmaceutical Benefits Scheme (PBS), he refers to their pleas as “political blackmail” (p.5). What price a person’s life?

Truly practical politics would balance collectivist and individualist impulses and currents; and would balance and mediate between civil society and state.

By contrast, it is neo-liberal ideology which blinds the Conservatives - and to a lesser extent Labor - to the benefits of a democratic and mixed economy; a strong social wage and progressive tax system; and robust protections for the rights of workers.

But again, and in conclusion: should Tony Abbott fully embrace the “compassionate conservative” persona over that of “ruthless neo-liberalism”, this could precipitate a “political sea change” of benefit to workers, and also for those most vulnerable.

THAT would be a worthwhile legacy.

Battlelines by Tony Abbott, Melbourne University Press, Melbourne, Australia, 2009.

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