Labor was at it zenith. It was in government nationally and in virtually every state. Parliament House had been open a few months before. It was a splendid occasion, especially for Bob Hawke, who had won three consecutive elections.
It is easy to taint the whole of this Labor period with the gloom of the present recession, just as the whole of the Whitlam period was tainted with the catastrophic last six months. But in spring 1988 the outlook was quite bright. Keating had balanced the 1987 Budget and had a $5.5 billion surplus in August 1988. He was talking about “”the way back to prosperity.” Foreign debt was a worry as was rising unemployment, but the expectation was they would both fall and the worse was over.
Then the moths came.
Every year in late spring bogong moths fly from the coast to the mountains to mate. Some years they are in plague proportions, other years there are few of them. But they come every year and are part of the stable seasonal cycle of Canberra, the city of national political life.
They navigate by large distant lights: the dusk, the stars or the moon. If man-made light interferes, they fly towards it and circle helplessly till they drop.
When the winning design for Parliament House was unveiled it seemed much more imbedded in the hill than when it came out in reality. Also, the flagpole seemed out of place. It seemed too bright and large. What was praised during design as a building of democracy, where the people could walk over their representatives, became a building of ostentation.
None the less, the workmanship was superb. It was a marvellous work of excellence in Australian construction standards, whatever one thought of the standards of those who occupied it.
But the two elements of ostentation, the flagpole and the building’s needless elevation, resulted in an enormous show of light.
When the moths came in plague proportions in October, 1988, the light distracted them.
The moth plague of 1988 is powerful allegory of Australian political life since the bicentenary.
The moths flew hypnotically towards the big artificial light and then around and around in dizzy directionlessness till they fell, both inside and outside of Parliament House. They clogged the corridors in thousands. They got in the insect-proof curtains and carpets. They soiled what was supposed to be the confident expression of a mature Australian democracy to mark 200 years of European settlement on the continent.
There was no light on the hill for the moths. No true direction. Like the Labor Party beneath, they were distracted by the pompous artificial lights of the new Parliament House, flying around and around and going nowhere.
It was hardly recognised at the time that Labor had lost the pursuit of the light on the hill. WA Inc and the Victorian and South Australian banking fiascos were yet to be thoroughly exposed. The dreaded R word hardly mentioned. It was only later that the economists’ oxymoronic definition of recession as two quarters of negative growth became etched into the mind of the voting public.
In 1988, Victoria, South Australia and Tasmania were not yet consigned to rust-bucket economies.
Yet Labor was losing its ideology. It had lost its pursuit of Ben Chifley’s light on the hill, the pursuit of a better life for working people.
The loss of ideology and the idealistic pursuit of the light on the hill has had a profound effect on the Labor Party. It was like a loss of religion. Political leaders lay themselves up “”treasures on earth where moth and rust doth corrupt and thieves break through and steal.”
The moths corrupted the direction of federal policy making. Rust corrupted the industry of Victoria and South Australia and the thieves broke through and stole in Western Australia.
Faced with defeat at the polls and the economic ruin of the very working people it purports to help, Labor is starting to look for a new direction, or to redefine the old. It is happening for two reasons: the failure of those elements of economic rationalism embraced by Labor and the collapse of the communist bloc. For many in Labor, the death of the extremes of capitalism and communism require the search for something else to fill the gap.
Nine members of the Federal Parliamentary party (none of whom come from the Right) published Redefining Socialism earlier this year as part of that search. But more of that later.
Meanwhile, on the other side of politics (insofar as there is one now), the allegory of the moths does not yet apply. For now, the Opposition’s direction is clear and consistent. It has not been distracted by large artificial lights. This is not because the clarity and consistency of its policy make it right. It is simply because it has not been in power for nearly a decade and therefore compromised by its own failings. Nor has it had to jump, knock down or run around the practical hurdles that pop up when policy is put into effect. Thus it is only a question of time before the allegory of the moths will apply to it, too.
Already with Labor we have seen how partial economic rationalism in Australia has failed partially. Absolute economic rationalism, will fail absolutely. And with their ideology blown away, the Liberals, too, will become like moths.
The failure of economic rationalism in Australia has been portrayed in Shutdown. The Failure of Economic Rationalism and How to Rescue Australia. This book by 14 academics published earlier this year is a practical demonstration of economic rationalism’s failures. It has been scoffed at by the new True Believers.
The two books could be put together and renamed: Coping with Politics in the Absence of Ideology. It could have a sub-title like: How Australian Politicians Stuffed It Up 1980-2000. That assumes, of course, that it will take about seven years of Hewsonism for the conservative side of politics to realise that the playing field is not, was not and never will be, level. Let’s hope it does not take the 70 years it took to realise socialism is unworkable.
These are really sad books for Australians. They are sad because of the wasted opportunity. And they are sad because they are further evidence of a failure by Australian politicians to say “”I was wrong; I’m sorry.”
Only once has Keating got near it. When unemployment hit 11 per cent, he said he was sorry about the unemployed and their plight. But he did not say that he was responsible and was sorry for his actions. His sorrow was one of pity, not contrition.
If politicians cannot say “”we were wrong”, they cannot change quickly to new policies which will work. Instead, they have to bumble with the old policy, or change it imperceptibly, or so slowly that it is ineffective.
With the collapse of communism and socialism and their accompanying ideological baggage it should have been easier to change direction when experience showed a change is needed. An unladen ship turns easier. Without the necessity to cart mono-directional ideological baggage, it should be easy to change policies. Apparently not. At least not in Australia.
What do we find instead? The conservatives invent a new ideology (economic rationalism) with which to shackle themselves, and the those on the left fly in circles looking for a new one to replace the old.
Barry Jones, national president of the ALP: “”I would argue that a party cannot survive simply on the basis of a commitment to economic efficiency, political pragmatism, and a particular set of leaders. It must have a ideology, too. I agree that that ideology has to be redefined and updated, but it has to be there.”
Why, Barry? Why does it have to be there? What does history tell us about ideology? Death and misery at worse. Folly and incompetence at best.
Dr Hewson, supporting the reduction of the sugar tariff so it could get through the Senate in April: “”We are not going to kowtow to any particular vested interest anywhere and I don’t care whether it is the sugar industry, the car industry or anyone.”
As Robert Manne pointed out in Shutdown, Hewson was treating the sugar industry as an enemy, not an employer of fellow Australians.
I’d go further. It is ideological dogma as fatuous as Karl Marx’s concept of “”class enemies”.
The other eight ALP contributors to Reinventing Socialism do their best to redefine the ideology that Jones thinks the Labor Party must have. The fact that the eight do it in radically different ways shows how impossible the task is.
Graeme Campbell seeks to distance the new definition from the old intellectual and middle-class elements, particularly the fuzzy-feel-good multi-culturalism and feminism. He says this new social agenda results in bureaucracy and an emphasis on status and power. He wants socialism to be redefined as the equitable distribution of wealth. He thinks nationalism is important and sees high immigration as a danger because it will drive down wages.
Brian Howe wants to redefine socialism as social justice. That means social welfare programs with a recognition that they require economic growth. Government has to be in partnership with individuals. He says social justice is the reason for the ALP’s existence.
Nick Bolkus emphasises regulation for consumers, working conditions, the environment, land rights and social-welfare schemes.
Peter Baldwin remains closest to the Marxist view of socialism: the state owning the means of production. He sees a greater role for public enterprise and many instances of market failure to which he sees public enterprise as the answer. However, he acknowledges that some public enterprises should be private, but the decision should be a pragmatic one, not ideologically based. This does not square well with Jones’s view.
Duncan Kerr wants to use the tax system to redistribute wealth. Michael Tate equates Catholic social views with those of the Labor Party in his attempt to redefine socialism.
John Devereux stresses the environment. In fact, this is the element requiring greatest attention in an attempt to redefine socialism, simply because it wasn’t an issue when Marx wrote. Further, the full command economies of the communist bloc indulged in horrific environmental vandalism. Any redefinition which did not accept that and try to reverse it would be laughable.
Bob McMullan wants to stay in power and build small reform upon small reform.
Thus socialism is redefined.
The redefinitions are fuzzy and contradictory in both means and ends. Inevitably so. Which politician is prepared to admit that much of his or her political life has been based upon a sham? Wouldn’t it be easier to admit the sham rather than redefine it?
Public ownership of industry has now had 70 years of failure. It fails not because of some doctrinaire Hewsonite view that only the market works and public intervention is always flawed. No; it fails because government instrumentalities (like every other organisation or individual) cannot be trusted to regulate themselves sensibly or fairly. The result is environmental rape, trampling on workers’ rights and bureaucratisation. It fails also because the collectivist culture is flawed. There will always be a few selfish ones to wreck things. Competition is important for industry, too. Without it practices get inefficient, people get lazy and consumers suffer.
But will Labor politicians accept the obvious? No. Look at the agonising in the past five years over the government getting out of industry. Socialism is not dead. Some are redefining it.
Meanwhile, the other side of politics is redefining capitalism. It, too, is not a pretty sight. Like any infant ideology it is dangerously consistent and to be applied uniformly across the gamut of human activity.
Essentially, the ideology says that competition produced by market forces, and only competition, can produce excellence; that the private sector always works better than the public sector; that tariffs and other protective devices for domestic industry are abhorrent.
Yet it should be obvious that competition, market forces and the private sector are not the salvation for things like defence, health, education and social welfare. Certainly, the majority of Australians think that public health is important. They consistently support Medicare and do not want a system of wealth (rather than medical need) determining who gets health care.
The majority also supports educational opportunity not being provided according to wealth.
Competition and market forces are powerful benefactors in industry. They produce excellence at lower prices and great benefits for consumers. But only the most determined ideologue would apply the same precepts to the provision of health, education and defence.
Will the Liberals acknowledge the obvious? No. We will have a mindless repetition of Fraser’s dismantling of Medibank. Yet the most casual objective glance at the United States health system will tell you the horror that awaits us _ less health care at a higher cost.
Even in industry, the doctrinaire level playing field is flawed. üShutdown@ relates the tragic economic history of Australia with the dogma of economic rationalism partially applied by Labor.
John Carroll goes through the case histories of successful Australian industries folding under rationalist policies: Black and Decker, Letona, citrus fruits, Ralph McKay farm machinery.
He highlights how tariff slashing has caused an increase in foreign debt, high interest rates and unproductive investment.
The essential difficulty with economic rationalism is that it wants to apply what works in theory, not what works in practice. What works can be determined only by experience. This is because human behaviour cannot be predicted.
Humans are not rational. To base an economic theory on the assumption that they are is idiotic.
Humans in organisations do some really dumb things, both in business and the public sector. You can go to any business or even unto the very heartland of economic rationalism itself, the Treasury, and witness irrational conduct. They whinge about costs yet turn up the air-conditioning every summer so it is comfortable for men to go around wearing garments that are totally unsuitable for the climate: shirts and ties, long trousers and leather-soled shoes.
People don’t behave rationally; they behave as others do. They rarely optimise. They herd.
Markets are not rational; they are artificial. They are based on convincing people to buy things whether they need them or not. This convincing is nearly always done by appealing to the irrational not the rational: sex, status, power, scientific mumbo-jumbo and all the other drivel that pours out of television advertisements.
What is rational about buying water in bottle that comes from France? Why buy water that is no better, and probably worse, than water in most places in Australia that comes all the way from France? In all probability it was shipped past the Horn of Africa where Somalians are starving. Is that the rational, market-based, exporting economy that we should emulate? I call it immoral and dumb.
There are thousands of examples to show that humans behave erratically and stupidly more often than they behave rationally. To rely on an unregulated market of human foibles to produce optimum human happiness is bound to end in misery.
These two books are sad because taken together they show that Australia can change for the better and overcome its problems, but they show that politicians have little will to do the practical and the obvious.
In Shutdown, Gregory Clark points to a practical way to help Australia.
Clark has spent a long time in Japan and South-East Asia. He suggests a system to auction rights to set up industry in Australia to produce a range of mildly protected consumer items. Consumers would pay slightly more, but we would get the best overseas technology on the best terms and our people would get jobs and training. And this does not have to be an ideological trade-off when protection for capitalists is given in return for collectivist power to organised labour.
Alas, it won’t happen, at least until the ideology of economic rationalism has been conclusively disproved in practice at great cost. Even though it should be obvious that there is no need to put the nation through that misery to prove it won’t work.
If the economy picks up after a Hewson victory it will be despite his application of economic rationalism to international trade, not because of it, and because of the other worthwhile reforms in Fightback such as tax and industrial relations.
The difficulty of economic rationalism has been pointed out. Australia has a small market and lower economies of scale. It is hard to compete with the big US, Japanese and European producers. Hewson says we need an export mentality to reach a bigger market to get economies of scale in our production runs.
But this logic is flawed and can never work. The trouble is the tyranny of distance. Japanese, US and European exporters have a large domestic market with low transport costs. The domestic market forms a large proportion of the exporter’s total market. Any Australian exporting company has a very small proportion of its market nearby with low transport costs.
Immigration to boost the size of our domestic market is no answer. Australia’s climate, soil and natural resources are similar to northern Africa’s. The only reason Australia does not suffer north African famines, is because we do not have 200 million people. If we did, we would certainly have those famines.
Therefore even if all government help in favour of the foreign companies that export to Australia were stripped away (and it is not), there would still be no level playing field. We would still have to tip up our end a bit to make it level. We can only do that with government intervention. This need not necessarily be tariffs, there are other clever ways. Whatever they are, we would have to be alert to laziness behind the shelter of government help.
But it is better to risk some laziness in a working industry, than to shut the industry down.
If we don’t change, we will continue to lose our industry, our industrial base, the skills and the education as more and more industry is closed down in the face of cheap imports. They will sell them here for as long as we have credit or money to pay.
I draw this gruesome analogy. Australia is like a casino. We have let a lot of foreigners into our casino. They gamble with our currency and with their own. However, we have sovereignty in the casino. We set the rules and we establish the odds, even if the casino is partially foreign-owned.
But we are setting the odds too low. The foreign investors, importers and speculators can come in and place their bets. They might place a dollar on the red in roulette. When red comes up, however, they are not getting two dollars, but three. They are slowly bleeding the bank dry. The evidence for this is our huge foreign debt.
When they have actually bled the bank dry, and we have no industry left, they will pass on to the next casino.
Australia is small enough to be the casino that goes broke because it set its odds too low.
International competitiveness needs to be redefined. It certainly does not mean, as Dr Hewson would have it, the ability for an enterprise to compete on a level playing field. As we have seen Australian enterprises cannot compete on such a playing field.
International competitiveness should be redefined to mean: can Australia, as a nation, compete internationally on whatever playing field there happens to be. One of the essential elements to international competitiveness is the skill with which a government can tilt the playing field in its favour. Those countries that tilt it deftly (so their industry gets the advantage of help without going soft) are more internationally competitive that those countries which are incapable of tilting the playing field because their governments are too dumb or too consumed by ideology.
At the game of tilting the playing field in our favour we are singularly uncompetitive internationally. Our Labor Government did not understand the game. The next Liberal Government understands it even less. Under Hewson we might be even less internationally competitive: the Australian Government will be inept at tilting the playing field in Australia’s favour.
The acts of government themselves are an integral part of international competitiveness. To deny this, in this highly integrated world, is stupid. Governments that don’t recognise it will inflict lower standards of living upon their people.
The foreigners invited into our casino will smile at our generous odds, break the bank and take their loot home, leaving us much the poorer.
This is not to condemn all that is in Fightback. There is much there of value. We need intelligent tax reform and we need reform of power-hungry, industry-wide unions. Nor is it to condemn all that the Hawke-Keating Governments have done. They have targetted social welfare intelligently and with compassion.
And apart from those things we need an intelligent industry and environment policy. Not ones with pork barrels and slogans but ones that put the national long-term good first.
This is why Australians are so browned off with our politicians. One lot having shed ideology is scratching around for a redefinition. The other lot, never having had a strong ideological base, is now embracing one.
Neither side admits its ideology is flawed. They try all the things that don’t work first. And only when they are all eliminated are the obvious things contemplated.
They apply their ideologies uniformly across the gamut of human activity.
Yet as a people, Australians do what works. In our businesses and homes, if something doesn’t work we abandon it, and usually admit we were wrong and then try something else that will work.
We don’t use Marx to change light-globes. And we don’t use Friedman to shoo moths out of the house.
In the history of democracy has there ever been such a disparity of temperament between the governed and governing as there is in Australia today? Reinventing Socialism, edited by Duncan Kerr. Australian Fabian Society. Pluto Press. 122pp. Shutdown, edited by John Carroll and Robert Manne. Text Publishing Company. 195pp.