Prime Minister Julia Gillard has at last begun the effort to explain her carbon price policy, but all agree she has a lot of ground to regain after scoring yet another spectacular own goal for Labor, this time by announcing a price on carbon without having any clear policy on compensating households. This while facing a Leader of the Opposition who will say and do anything for a populist scare campaign, his biggest bogey of all being a great big new tax. It is not so hard to think of how to present the issue to the public, as a journalist and a blogger demonstrate. Why cant Labor?
Labor has form, as former PM Kevin Rudd also scored a spectacular own goal last year by walking away from the greatest moral challenge of our time, global warming. Then there were the running sagas of home insulation, green loans and so on, which could and should have been explained, fixed and continued but which became such a political liability they too were abandoned. Labor has displayed staggering ineptitude.
There are many theories about why Labor is doing so badly: too much reliance on focus groups and the polls, the 24-hour news cycle, too much factional control, too beholden to big money and the media barons, and so on. These all have truth, but they are only symptoms and side issues. The real problem is that Labor abandoned its founding purpose decades ago.
Although a longer process was involved, a pivotal moment was the overthrow of Bill Hayden in 1983 and the take over by the right wing, led by Bob Hawke and Paul Keating. They had been seduced by economic rationalism, also known as neoliberalism, and they set about enacting the neoliberal program of deregulation, privatisation and government withdrawal from services.
Neoliberalism has always been bankrupt both as a political philosophy and as an economic program. This is easy to show at the level of ideas and is also evident from its mediocre economic accomplishments compared to the period 1945-1975, contrary to pervasive neoliberal propaganda. Ultimately, and not surprisingly, the worldwide dominance of neoliberalism led to the Global Financial Crisis. The GFC has substantially discredited neoliberalism in the public mind, but neoliberalism is so entrenched in the media, the bureaucracies and academia that better ideas are still almost invisible, unless you go looking for them.
Kevin Rudd can take partial credit for steering Australia through the GFC by departing from neoliberal gospel and undertaking Keynesian stimulus spending, however poorly explained and executed it was. The other factors that saved us were the mining boom, which is widely acknowledged, and our continuing addiction to borrowing, which is widely ignored thanks to neoliberal tunnel vision. Private borrowing is hovering around 150% of GDP, up from 25% fifty years ago and more than double what it was just before the Great Depression. The biggest part of that is mortgage debt, which is about 90% of GDP thanks to a housing bubble. As a result our economy is fragile and vulnerable to external shocks when it could have been healthy and robust.
However, after Rudds brief flirtation with heresy the thrall of neoliberalism quickly returned, and Julia Gillard has pledged to get the government deficit down as quickly as possible. This is despite government debt being only about 6% of GDP, trivial beside private debt.
The problem with neoliberalism for Labor is that it systematically undermines everything Labor used to stand for, which was to look after the little people. By succumbing to the neoliberal mantra that markets are always right and government is the problem, not the solution, as Ronald Reagan put it, Labor was reduced to applying bandaids to cover the wounds inflicted by its economic policies.
As a result Labor has progressively alienated itself from its old core constituency, the workers, and repelled what should have been its natural new constituencies, environmentalists and social progressives. As its membership has shrunk its connection with the community has been lost. It has been captured by those attracted to power for the sake of power. Such people lack vision, so they naturally focus on the short term – the news cycle, polls and focus groups – and they will take sponsorship from anywhere.
This was the context of Kim Beazleys disastrous decision in 2001 to meekly endorse John Howards actions blocking the Tampa and interring legitimate asylum seekers, innocent men, women and children, in remote concentration camps for years on end. Reportedly up to half the Labor membership subsequently resigned in disgust. Having taken the first step on that slippery slope, Labor was easily wedged by Howard into supporting his oppressive anti-terrorism legislation, and the issue has been a running sore ever since.
Since it abandoned its founding purpose and moral and legal principles, Labor has been perennially on the defensive. It has trapped itself in the right-wing framing of events, which leaves it no option but to be right-wing-lite, a little less bad than the other lot. To break out, it would have to remember its purpose, frame the issues clearly on its own terms, and then aggressively and articulately argue its case.
Australia is suffering a severe lack of political leadership. Though the grip of the major parties has weakened a little, they still dominate the political discourse. Until Labor either expires or re-discovers its founding purpose – protecting the little people – Australia will flounder while the world becomes increasingly uncertain and difficult.