Category: The Economy

Moving beyond political soap opera

by David Hetherington

A debate over fair distribution of Australia’s mining income gives Labor a platform to reconnect with ordinary voters on national values

Australia’s Gillard government resembles a half-written political drama, but the most creative scriptwriter would struggle to pack in the twists and turns that have marked its first 18 months in office.

Undoubtedly, there have been policy successes – a carbon price, a national broadband network and a streamlined income tax system. Yet there have also been serious misjudgements on the part of the government and the prime minister herself, which have surprised many since she was so sure-footed as education minister.

These self-inflicted wounds include a botched deal to repatriate asylum seekers to Malaysia, an ugly internal ‘stoush’ over same-sex marriage, and the reversal of proposed reforms to address chronic gambling. Excuses can be mounted for each in isolation, but together they’ve betrayed a worrying pattern.

The most recent twists have centred on a high-profile dramatis persona with former prime minister Kevin Rudd. After months of speculation and a sudden late-night resignation as foreign minister, Rudd formally challenged Gillard for the Labor leadership on 27 February. Despite his dramatic intervention, Rudd was roundly beaten, a loss that puts his ambitions on ice for the foreseeable future. Ultimately this was a contest of personalities rather than policies, with Rudd arguing his popularity with voters gave him the better chance of winning the 2013 election. Evidently, his parliamentary colleagues did not agree.

Barely hours after this challenge, another powerful player, senator Mark Arbib, announced his sudden resignation from the government. This in turn opened the door for Gillard to draft in Bob Carr, a wise elder statesman of the party, as the new foreign minister.

This process was far from smooth, and had all the elements of a play-within-a-play. Gillard, fresh from her resounding leadership victory, jumped at the suggestion of Carr’s appointment, with media reports hailing it a done deal. Then, in a sudden about-turn, the government poured water on the idea: it appeared the prime minister had been outmanoeveured by ambitious members of her team.

Three days later, against all expectations, Gillard called a press conference to unveil Carr as her new foreign minister, and in doing so, asserted her control of the government in no uncertain terms. This belated show of strength was certainly a win for the PM, but the stop-start process dulled much of the afterglow of her leadership ballot victory.

This may have proved compulsive viewing for political watchers, but it has left the ordinary voter with an impression of Labor more absorbed in its internal machinations than in running the country.

In need of a new, positive twist, the government found an unlikely hero, treasurer Wayne Swan. A credible if unflashy finance minister, Swan used a major essay to consider the challenges Australia faces in the fair distribution of its mining income. In particular, he highlighted the role of a handful of mining billionaires in resisting attempts to price carbon emissions and to tax mining super-profits.

These magnates have paid for mass media campaigns against the government. In response, Swan placed the debate in the context of the shared national values of egalitarianism and fairness. His intervention was successful in part because it was so unexpected. It surprised a lot of people who’d forgotten that Australian politicians could talk meaningfully about values as part of the wider public debate.

Labor has found it difficult to articulate its raison d’etre in recent times, struggling to explain how its policy achievements connect into a vision for the country. If Swan is able to drive a mature debate about inequality, wealth distribution and the role of media campaigns in policymaking, he will remind voters that Labor is addressing issues of real importance to Australia’s future – a worthy next chapter in Labor’s story.

A contribution to State of the Left, a monthly insight report from Policy Network’s Social Democracy Observatory

David Hetherington is executive director at Per Capita, a progressive thinktank based in Sydney

The Precariat – The new dangerous class

by Guy Standing

For the first time in history, the mainstream left has no progressive agenda. It has forgotten a basic principle. Every progressive political movement has been built on the anger, needs and aspirations of the emerging major class. Today that class is the precariat.

So far, the precariat in Europe has been mostly engaged in EuroMayDay parades and loosely organised protests. But this is changing rapidly, as events in Spain and Greece are showing, following on the precariat-led uprisings in the middle-east. Remember that welfare states were built only when the working class mobilised through collective action to demand the relevant policies and institutions. The precariat is busy defining its demands.

The precariat has emerged from the liberalisation that underpinned globalisation. Politicians should beware. It is a new dangerous class, not yet what Karl Marx would have described as a class-for-itself, but a class-in-the-making, internally divided into angry and bitter factions.

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Republican liberty and the future of the centre-left

by Michael Lind

The dominant tradition in popular politics is infused with the values of republican liberalism.  The contemporary centre-left, influenced by a mix of residual Marxism and technocratic progressivism, has ceded this ground to conservatives and libertarians, losing elections and popular appeal in the process. A twenty-first century centre-left needs to reclaim the tradition of republican liberty as its own.

The centre-left in Europe and North America is in a state of political collapse and intellectual exhaustion. In recent elections the Labour party lost control of the British government to a centre-right coalition and in the US the Democrats lost the House of Representatives to a resurgent right.  Parties of the right already ruled Germany, France and Italy.  Even Sweden, long the flagship of social democracy, is now governed by conservatives.

The crumbling of social democratic parties on both sides of the Atlantic has much deeper causes than poor leadership or the voter discontent produced by the Great Recession.  It is the culmination of trends going back to the unraveling of postwar social democratic settlements in the 1970s. In Europe and America alike, the industrial working class that supported midcentury social democracy has contracted, as a result of the offshoring of industry, productivity growth and the shift toward services in employment. When the postwar boom came to an end in the 1970s, Keynesian full employment and demand management policies appeared to be discredited. Ronald Reagan and Margaret Thatcher and their counterparts in other countries led a counter-revolution which failed to shrink the size of the state but succeeded in deregulating the economy and marginalising social democrats.

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Liberal social democracy, fairness and good capitalism

by Will Hutton
 
The left needs a new language to differentiate between good and bad capitalism; a radical, shared conception of fairness – based on equity rather than equality – to underpin an economy of reciprocity, proportionate reward and mutual ownership

The European left is bewildered, in denial and in retreat. If electorates should have learned anything over the last two or three years it is that financial capitalism is a menace to itself and the economy and society beyond – and that governments are the peoples’ friend.  It is true that bankers are hardly popular, but opinion has not swung behind the liberal left. Instead, the enemy everywhere is government, debt and deficits − scant reward for being the saviour of the hour.

Opinion polls in Britain show that the majority believe that welfare cheats, immigrants and government waste are to blame for contemporary ills, with bankers a long way behind. It is not a dissimilar story across Europe. This is a tough climate in which to build any constituency for liberal left activism, and indeed the liberal left itself is not wholly certain what any such activism should be. What is socialism anyway? What would a good economy and society look like? And what would the popular values be that underpinned them? Does the left in any European country offer a convincing answer?

In this vacuum ugly nationalist movements are flourishing, and on the left one of the few dynamic elements are the Greens. The conventional left needs to do a great deal better, not least for the working people it purports to represent.

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Cut to the chase: 15 political truths for the centre-left

by Andrés Velasco & Francisco Diaz

The world has just experienced the biggest financial crisis since the Great Depression. Over 80 million jobs were lost worldwide. The United Nations estimates that as many as 145 million more people are living in poverty. Scores of countries have emerged from the crisis with weakened financial systems and huge public debts. These nations may be condemned to slow growth and insufficient job creation for years to come.

Market fundamentalism, weak regulation and misplaced incentives for excessive risk-taking helped cause the crisis. Yet in the aftermath of the meltdown, reforms have been few and far between. Local financial systems remain prone to speculative bubbles and the world economy remains vastly unbalanced between surplus countries that earn far more than they consume and deficit countries that consume far more than they earn.

A crisis of global capitalism might have been an opportunity for the centre-left. Yet social democratic parties have taken more blame for the occurrence of this crisis than credit for their efforts to control it and prevent the next crisis from happening. Electorates in many countries have been swinging to the far right as an illiberal, inward-looking mood becomes a by-product of the crisis.

This all poses a tremendous challenge for the centre-left. The challenge, first of all, is to extract the right lessons from the crisis, and then to translate these lessons into a progressive political action plan. Here are 15 ideas to help leaders in that effort.

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