Webdiary - Founded and Inspired by Margo Kingston

G'day. Noel Hadjimichael suggested I take a look at a new book by Dr Bob Catley called The (strange, recent but understandable) triumph of liberalism in Australia (Macleay Press). Dr Catley worked for the Hawke government from the early 1980's and was the ALP MP for Adelaide from 1990 to 1993. He is now the professor of management and head of the school of business at Newcastle University. He has kindly given me permission to publish his introduction to the book. Dr Catley describes his life now thus:

"He lives on a McMansion mortgage belt under the Howard Government - in gratitude its residents swung over ten percent to the Liberals and against the local union boss at the 2004 election - in a street containing over 50 children and hundreds of native birds, overlooking an industrial estate, the Pacific Highway, the distant Pacific Ocean and an evangelical Church. He sails, sometimes cycles and has a wonderful wife, two sons, a daughter in law and several grandchildren, all of whom he loves (deeply)."

The triumph of liberalism in Australia by Bob Catley

"Well may we say 'God save the Queen', because nothing will save the Governor-General." Gough Whitlam, 11 November 1975

In November 1975 Gough Whitlam was sacked as Prime Minister of Australia by the Governor General, Sir John Kerr. That ended the high water mark of the political left in Australia. As Whitlam then suggested, the political Left maintained its rage for some time, although not with sufficient support to elect a national Labor government again until 1983.

In the mid-1970s the Australian political Left in general was widely supported after a successful anti-War campaign. It comprised the modestly Left Labor Party, three communist parties — one pro-Moscow, one pro-China and one ‘independent’ - numerous Trotskyite parties, and many single issue organisations from anti-conscription groups, emerging environmentalists and feminists, to Students for Democratic Action and other such bodies. Perhaps half of Australian workers were in unions that supported some degree or other of state control of the economy. A so-called New Left — including myself — was mostly university- centred and comprised people from all of these tendencies loosely affiliated around the ideas of socialism.

In the thirty years since, Australia has swung away from the Left and embraced liberalism in almost all significant areas — economic, npolitical, ideological. This swing towards liberalism is not unique to this country. The dominance of Keynesian thinking in economics came to an end with the crisis of stagflation in the late 1970s. The ideas of Marx and communism came to an effective end in the late 1980s with the collapse of the Soviet bloc. The ideas of the New Left gradually merged with those of the Old Left and declined in popular sentiment in the 1990s to live on only in minority intellectual circles. By the late 1990s liberal ideas were ascendant in much of the developed world (and elsewhere) and faced their major challenges from conservative and even religious ideas.

In Australia the swing to liberalism has been nowhere more pronounced than in the economic sphere. Starting shortly after the 1983 election of the Labor government, successive administrations have pursued at different speeds the liberalisation of the Australian economy and the dismantling of the dirigiste regime that had been erected during the eight decades which followed federation.

By 2005 Australia has an open and competitive economy which had grown as quickly as almost any in the world during the previous decade. Australians learned how to run a market economy about as well as any people and during the rise of the Australian dollar in 2002–5 real per capita incomes here passed those of Germany, France, United Kingdom, Singapore and Japan. I have supported this general policy direction for over twenty years after the failure of Left policies to deal with the problem of stagflation became apparent around 1980.

Although the Labor Party has enjoyed one of its better periods and was in office nationally 1972–75 and 1983–96, and in early 2005 held office in every state and territory, it is a historically very right- wing Labor Party. It has formally abandoned any commitment to a ‘socialist objective’, and had indeed undertaken much of the privatisation of public assets that occurred during the late twentieth century. State and territory governments have little opportunity to influence national directions and are elected to deal with those local issues they administer — school education, police, hospitals, roads — and not national identity, performance and protection involving defence, foreign affairs, immigration, taxation, inflation, economic growth, trade and even culture.

In addition, the Liberal Party has moved away from the statist or ‘social liberal’ position it adopted during the Menzies era and since the mid-1980s has been a more liberal party, markedly the case after it assumed office in 1996. Its coalition partner, the National Party, had also jettisoned that odd species of cross-subsidisation that had come to be known after one of its former Leaders, John McEwen.

There is now hardly a debate about the appropriate structure of economic policy in Australia. It is largely agreed between the major parties that the objective is to run a liberal capitalist economy efficiently and competitively. The Labor leader at the October 2004 national elections, Mark Latham, had some very modest qualifications to this and partly as a result lost that election badly.

Ideologically, the Australian nation is no longer committed to social democratic or socialist ideals of a kind that were often seen to be the cutting edge of practical socialism in the antipodean British colonies a century ago. It is no longer accepted that the state should be used as an economic instrument owning capital and regulating trade both internal and external. The state is no longer being used so instrumentally to create the economy of the nation. As Michael Pusey documented, by the late 1980s the dominant ideology among senior state bureaucrats in the economic sphere had became liberalism. State owned assets have been sold off, including Qantas, the Commonwealth Bank, state banks and half of Telstra, with more to come, No new ones have been created.

The social composition of the Australian nation also changed substantially. In terms of occupational definition, fewer Australian workers were unskilled, blue-collar workers, long the backbone of any Left political coalition. As secondary industry became more efficient and more internationalised, so the proportion of Australians working in large factories declined.

Further, other sectors which had long provided the constituency of Australian Left-wing organisations found their labour force replaced by capital even in those workplaces, like the wharves, where political deals had arrested this process. The membership of unions declined rapidly, particularly in the private sector, to the point where only a fifth of Australian workers belonged to them.

The program of the union movement is now influenced increasingly by the interests of those parts of the work force where unionism remains strong. These are now the service industries, like distribution and retailing, the public sector workforce in teaching, nursing and clerking, and in some residual protected manufacturing industries.

This has given a new meaning to the ideas contained in many New Left publications of the 1970s around the theme of the decline of working class politics. As Kim Beazley’s father put it in a widely quoted expression: when he first joined the Labor Party it had contained the cream of the working class, but by the 1970s it was the dregs of the middle class. In 2005 they comprised students, teachers, nurses and public servants. But in the early 2000s more Australians owned businesses than belonged to unions.

In the field which first recruited so many to the New Left of the 1970s — foreign policy, and the war in Vietnam in particular — alienation from state policy has been more limited in the succeeding thirty years. Almost all of Australia’s wars since Vietnam have been popular and successfully waged, including the Cold War, the Gulf War, Somalia and East Timor, where John Howard delivered the initial blow for liberation.

The exception, the 2003 war against Iraq, generated some quite large street demonstrations but no lasting mass movement as John Howard withdrew most Australian forces before they suffered any casualties. The more general War on Terrorism retains public support, particularly so after the killing of 89 Australians by Islamic extremists in Bali.

In the main, there is also bipartisan support for alliance with the US, cemented during Bill Hayden’s period as Labor foreign minister, which remains a bed rock for Australia’s strategic posture.

A shift in thinking in and about the education sector has also occurred during the last decades. The teachers’ unions have become chiefly oriented towards the pay and conditions issues which motivate their members, and with trying to get a greater commitment of resources for their sector. There are now few echoes of the debates and ideas which drove radical ideologies in the 1970s. The same might be said about the universities. In the early 1970s they were centres of radical thought; by 2005 two other stronger tendencies were in evidence.

First, the disciplines which generated the young radicals of the 1970s are now relatively a much smaller proportion of total university activity. Humanities faculties, and with them sociology, political science, history, economics and philosophy in particular, attract a much smaller proportion of students now, while business studies teaches a third of all students and a half of all international students. The shift has been from ideas about society towards how to run a capitalist economy. Both political science and sociology openly discuss their heydays in the early 1980s, while economics degrees have been abandoned by several universities. Nonetheless the disciplines that are taught have become much more radical as the students that drove the radicalism of the 1970s became the professors of the 1990s.

Secondly, recent strands of radical thought are decidedly unattractive for the vast majority of working Australians and are now mainly confined to university environments. Deprived of a serious economic program after the collapse of socialist economics, many university radicals retreated to the obscure regions of post-modernism, deconstructionism, post-colonial theory, critical theory and their derivatives. These were sufficiently bizarre to form the basis for a fine satirical play, Dead White Males, by the country’s leading playwright and Labor supporter, David Williamson.

But while leftist thought and organisation in Australia declined, material conditions for most people steadily improved. The standard of living gradually improved, new technologies and products were continually added to the style of life, expectancy of life gradually rose and the welfare system was generally enhanced (although targeted). Indeed, even on some of the issues where the left may have identified its cause, improvements were in evidence, especially where these issues overlapped with liberal ideas. The most clear improvements in this respect may be cited as involving: the status of women, where feminism has clearly had an impact; policies towards Aboriginal issues, where vastly more resources are deployed towards a setting of self-determination, although the results here are ambiguous; and policies towards racism where the official and popular adoption of multiculturalism stands in contrast to the White Australia Policy which was still largely in place even in 1975.

This shift from a statist and primary industry-based economy to a competitive, open, liberal and diversified economy involved the strategic defeat of the Left, which mostly opposed it. It was defeated for several reasons.

The late twentieth century witnessed the immense failure of the previously socialist states. The Soviet Union disintegrated in 1991 after a long period of internal political and economic decline and decay. This removed a vast reservoir of material, financial and intellectual resources from the international and Australian Left with incalculable but massive consequences. The People’s Republic of China had already, of course, broken with the Soviet bloc and made common cause with the United States against Moscow. It then dismantled its socialist policy and organisational structure, but not its political apparatuses — thereby earning derision from the Left on both counts. The Vietnamese socialist revolution, which offered so much hope for leftists who had supported it, including myself, fell into a morass of wars against other socialist states, economic incompetence and mass corruption. In Cuba, Fidel Castro had held power for over forty five years and became a byword for Latin dictator rather than liberator. Albania, Kampuchea and Yugoslavia each attracted socialist supporters who were in turn eventually alienated.

This failure of actual existing socialism coincided with the failure of Keynesian/social democratic policy regimes to cope with the stagflation of the late 1970s and the reversion by most economists and policy makers to the prescriptions of the liberal school. In turn, this coincided with the rise of a globalised economy, of which Australia quickly became a part.

The defeat of the US in Vietnam paradoxically heralded not the triumph of socialism but the victory of global capitalism, the chosen American strategic objective. Globalisation meant the rise of a global liberal economy with reduced impediments imposed by states on the flow of goods, capital, technology, profits and ideas — although not labour to the same extent. This has been enabled by the rapidity of technological change which has, in turn, greatly enhanced productivity in production, communications, transportation and finance. This has permitted truly global corporations to emerge on a greater scale and in greater numbers, and although the greatest single host country remains the United States, and while most still come from the leading capitalist countries of the UK, France, Germany and Japan, other countries benefit from the process.

The policy regimes of states have been widely adjusted to accommodate this process, often at the behest of American policy makers. The resulting policy structure was once termed the ‘Washington Consensus’, in recognition of its origins and sponsorship by Washington based institutions including the International Monetary Fund, the World Bank and the US Treasury. The policy involves:

* a freely traded and floating currency;

* no controls on capital movements or foreign trade;

* no state ownership of capital;

* deregulated internal markets, and

* the rule of commercial law under representative systems of government.

Australia has, of course, adopted much of this policy regime.

Few in the political classes now doubt that the country is better off for doing so. By 2005 Australia was rated regularly as one of the best places in the world to live. In 2001 the United Nations rated it as second only to Norway, by not counting the weather. Following liberalisation, Australia’s economic growth has been among the strongest in the world and based largely on the growing productivity of the labour force, which is increasingly university trained. It has taken up the computer and Internet revolution as quickly as any country in the world.

Australia has established this record during the hegemony of the United States and as one of its closest partners under the ANZUS alliance. After the 2001 terrorist attacks on New York and Washington, Australia has been, with the UK, arguably the strongest supporter of the US War on Terror. One reward was a Free Trade Agreement with the US, which the remaining Left again opposed.

Buttressing this alliance relationship, and ensuring that its supporters extend beyond the confines of policy makers in Canberra, is the ubiquitous nature of a US-dominated Western culture that is so popular in Australia. Modern mass culture is deeply integrated with the vast media sector of the economy and embraces print, audio and video, free to air and pay TV, sport, fast food, infotainment, movies and the Internet. Newn Leftist Humphrey McQueen was correct in anticipating the dominance of this form of culture wherein a media sells an audience to an advertiser.

It is extremely successful and culturally penetrating. Sharing a language with the United States, Australian popular culture has quickly become a sub-set of the global cultural system. Its most successful practitioner, Rupert Murdoch’s News Limited, has become closely integrated into the global pattern with which it, in turn, complies. Its message and values are those of the commercial civilisation of which it is a product.

The social structure of modern and wealthy Australia has increasingly generated the values of economic liberalism, and even political conservatism, rather than of socialism. It is an economy with relatively fewer blue collar workers and agricultural labourers, and more white collar workers and self-employed entrepreneurs; it now has a high rate of share owners and home ownership and those homes have recently greatly increased in value; its work force is marked by considerable geographic and social mobility and its families by increasing dispersion, particularly from south to north; and its ethnicity is increasingly diverse. In 2005 the stock exchange claimed that 55 per cent of Australians own shares, 44 per cent directly and eleven per cent through superannuation funds. In the private sector of the economy, union membership fell below the number of self-employed in 1998 and the gap has widened quickly since. This is not a society in which communal political ideologies will readily seize hold.

During the last decade the chief harbingers of Left ideas in Australia have been the ‘cosmopolitan’ intellectuals rather than the working class for whom they were intended. Katharine Betts has argued that Labor’s recent electoral failure at the national level can be partly explained by the defection of part of the working class to the Liberals over issues of race, national identity and border protection — anti-‘political correctness’. This first showed up in the Pauline Hanson phenomenon of 1996-1998 and then over the ‘Tampa election’ in 2001. Labor now faces the difficult task of creating a program that appeals to both the conservative, nationalist blue collar workers and to the cosmopolitan and leftish, inner city middle class. The origins of the latter are to be found in the 1970s New Left.

The peculiarity of the New Left was that it comprised middle class radicals, mostly from universities, who didn’t have a clear policy program but mounted a critique. What Warren Osmond described as the ‘Arena thesis’ believed that intellectually trained workers would become more politically prominent and turn to the Left as their life patterns demanded a freedom which capitalism could not provide. Thirty years later their ideas are, in fact, confined mostly to university humanities faculties and equivalents, and their recent products.

Their ideas will likely remain influential in those circles. But they are more likely to emerge in a minor middle class party — like the declining Democrats or the rising Greens — or in a middle class institution like the ABC or some of the Fairfax media — than they are in a mass socialist organisation.

The last time these ideas achieved a modicum of political power was during Paul Keating’s Prime Ministership. How this came about is made clear in Don Watson’s very lengthy study Recollections of a Bleeding Heart. This provides a detailed account of how a former right-wing Labour Treasurer elected as Prime Minister by 56 mostly right-wing Labor politicians, including myself, transformed himself into the darling of the ageing New Left. Generally, this involved re- staffing his office with appropriate personnel pursuing their chosen icons — arts, indigenous, gender, deficits, infrastructure, multicultural, Asian engagement — and producing one of the worst electoral defeats in Labor Party history, in which a majority of blue collar working class males voting against it for the first time in over half a century. After some recovery in 1998 a similar disaster was unfurled in 2001; and then again in 2004.

Can a strong political Left be reconstructed in this environment?Unless some structural change of great magnitude occurs, this seems unlikely. To his credit Mark Latham was quick to both see and say  this in his major early work, Civilising Global Capital. He then based his policy pitch on the notion of the legitimacy of aspiring to individual improvement, a most liberal and un-leftist position. Labor Party members it would seem would have then been well advised to read more Mill and less Marx. In the event, however, during the 2004 election campaign proper he married this to some class warfare rhetoric and paid the price. In early 2005 he was replaced by Kim Beazley.

This book tries to explain the transformation of Australia from a regulated economy and egalitarian society embracing a national political culture of social democracy, to a predominantly liberal economy, a more inegalitarian society, and a laissez faire national ideology in the space of one generation.

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