Copied from The Alliance Alternative in Australia edited by Robert Leach

Australia and the changing world; the background to a new Alliance of political parties
Beyond Labor and Liberal
by Robert Leach

AThe world belongs to those who can explain it simply@ - Ortegay Gassett, The revolt of the masses

Since the early 1970s, the world has been explained simply by economic rationalism, which is the dominant ideology of con- temporary government, world capital, finance institutions, much of academia and even right-wing unionism.

This ideological view has been anti-government and hostile to the public sector, in favour of free markets (especially for labour and hence anti-unionist) and a limited state interested only in defence and the maintenance of law and order. This is in great contrast to the keynesian model of the state which since 1945 had expanded public sector ownership and the welfare sector.

But the domination of economic rationalism did not happen in a vacuum. The. economic rationalist view of the world is an outcome of the collapse of state socialism in the former Soviet bloc as an accepted economic alternative, and of the crisis of the keynesian liberal welfare state which argued for mixing private enterprise and public ownership. These two events are interrelated. The collapse of the former meant that the post-1945 Western capitalist emphasis on the welfare state to lessen the blandishments of bolshevism no longer had political priority, and was also becoming too expensive Indeed, since the beginning of the Cold War, one could argue that Soviet-style communism had little attraction for the Western working class (including the Australian working class).

There had been, since 1917, what Antonio Gramsci (the Italian communist thinker) had called a 'war of position' between the ideas of capitalism and socialism. One rival was Soviet state communism; the middle rival was the keynesian liberal state (a mixture of labourism in partnership with social democracy and state liberalism inside the nation state); and the last rival was classic liberalism with its ideology of eco- nomic rationalism.

The last had been in disgrace since its failure in the crisis of the Great Depression of 1929. Now it has emerged as the ring champion. It is the newspeak of contemporary politicians and bureaucrats, and the common sense of rising generations of middle-class (or even working-class) citizens who are battered incessantly by media barons outlining correct thinking about ideas of markets and efficiency which exist above popular democracy and the common good.

It is an age where this traditional conception of the common good has been dismissed by New Right ideologies as a conspiracy between powerful interests, such as protectionist business and organised labour~farmer groups, to distort the market. The common good now means the global market which, if achieved efficiently, will create a trickle-down effect for the parts (nations or citizens). The nation is being transcended historically. So a new language has to be created to speed the changeover to market internationalism.

Not only has the conception of the common good been distorted to mean global, not national, common good, but the very term 'internationalism' has been hijacked by the New Right economic rationalists. As the political philosopher Murray Bookchin observes, internationalism once meant common human rights, equality and social justice; it now means deregulation of capital, destruction of national social contracts (especially in the labour market) and adulation of free trade over protection. Human rights are now used selectively: for example, to accuse China but not to accuse Indonesia. Human rights mean the 'right' to lower taxes, especially for the rich.

It is an age where the market concept of free trade has been so successful in dominating the public mind that economists and politicians can talk seriously of awards, basic wage concepts, and redistributive taxes such as wealth taxes and death duties, as impediments to competition. Their abolition is called reform. Our predecessors who suffered the Great Depressions of the 1890s and 1929, and who fought for these social gains, would wonder how language can be so manipulated and overturned.

Such is the power of this dominant ideology and language and top-down control of the existing hierarchical parties that ordinary decent men and women, including politicians of both major Australian parties, offer little criticism, despite bad con- science, of this abstraction of the market over the good of the people.

There were a few in the past like Torn Ryan, the Labor member for Barcoo, who quit the Queensland parliament in 1893 with this classic comment on political careerism: 'The friends were too warm, the whisky too strong, and the cush- ions too soft for Tommy Ryan. His place is out amongst the shearers on the billabongs.' It is unlikely, on present indica- tions, that such an existential step as resigning over principles will be taken by any contemporary Australian Labor or conservative politician. They, especially the left of the ALP, are firmly chained to the chariot wheels of their party's right wing, who do with them as they will. It seems there will be no Jim Anderton, who broke from the New Zealand Labour Party on matters of principle to initiate New Labour and later the Alliance. It appears this initiative must come from a new confederation of interest groups and social movements.

Indeed, the fetish of the market has become such that the purpose of government is seen primarily as the wellbeing of the stock market, the banks and the International Monetary Fund, rather than the wellbeing of the people. This approach was wryly summed up in 1979 by the Brazilian president's response to a question on the economy: 'The economy is doing well. It's just that the people aren't.'

Economic rationalists would answer this cynical comment by claiming that short-run distress of the people will be rectified in the long run. But, as Keynes replied to earlier versions of their argument, 'In the long run we are all dead ... A long run is simply a number of short runs put end to end.'

As previously stated, the common good does not exist as a moral reality for these ideologists of the New Right. To them it has simply been the name for deals made in the past by inter- est groups out to control the market through political power. By 'interest groups', they mean elements of capital (usually national capital) and organised labour; by 'deals', they mean long-enduring historical social contracts that have formed the basis of national compromises over wages, profit, conditions, and social welfare, as well as guaranteeing a decent standard of human rights in such areas as gender, race and the environ- ment. The common good or the national social contract is an obvious obstacle to the world market which seeks to drive all down to the lowest market cost, to the cheapest living wage. Steps are being taken by the new global capitalism to ensure that national politics do not overturn its market power again by new national social contracts. Its old organs of the R\&F and the World Bank have been joined by the new free-trade ideology of GATT (now WTO) to diminish national sovereignty and exempt the control of trade from the nation. This will eventually be extended to allow the free international flow of labour, and to break up previously exclusive national labour markets based on qualifications, migration controls or national union acceptance.

The Australian social contract grew out of the trauma of the 1890 Depression and the failure of the Great Strikes of 1890-94. It was articulated by such state liberals as Deakin and Higgins. By 1907, with the Harvester judgement, a concept of the basic wage had been born. The concept of every adult male wage-earner being paid the same basic wage no matter where employed (equity) had won out over a firm's prof t levels (ability to pay).

The deakinite state liberal period from 1907 to the 1980s rested upon four pillars: White Australia, awards, protection, and dependent development under a great power. This unwrit- ten social contract, largely between capital and labour (and white male labour to boot), was nevertheless progressive in its time. Married to it was an underlying yeoman ideal of a colony of white immigrants. These yeomen were serni-independent small businessmen, the small farmer, the battler of the bush with wife, children, farm, and independence from both big labour and big business. Australia rested on these social pillars for eighty years, walling itself off from the rest of the world. In that time,.it went from the world's highest standard of living to around middle level, although other factors (such as the industrialisation of other nations, and rising world standards of living due to productivity increases), rather than declining standards in Australia, caused this relative change. It might be added that most other nations in this period were also protectionist, so the coming of world free trade was hardly the cause of this shift.

But it was a Chinese wall that could only function while based on a continuing British empire. Since 1972, with British entry into the European Common Market, international capital has been battering down this wall that created the lucky country. The last sad shadow-boxing of those far-off days is now being fought out half-heartedly between monarchists and republicans. Real pepper would be introduced into this debate if it was made to include decisions over real rights such as the right to a basic wage, no foreign ownership of land, no foreign ownership of media, re-regulation of the banks, as well as a traditional liberal bill of rights including freedom of speech, assembly and religion.

In this context, the republican debate can be a red herring. The forms of government, monarchical or republican, matter little if both produce a similarly oppressive system of eco- nomic rationalism, falling living standards and declining democratic power, as deregulation of the economy puts the national sovereignty at the whim of money-market speculators, the IMF, the World Bank and the WTO.

Eddie Ward, the fiery Sydney Labor MHR, warned long ago (on ABC radio, 27 March 1946) of the ramifications of these developments: 'The very sovereignty of this nation is in jeopardy... 1 am convinced that the [Bretton Woods] agreement will enthrone a world dictatorship of private finance, more complete and terrible than any hitlerite dream. It offers no solution of world problems, but quite blatantly Sets up controls which will reduce the smaller nations to vassal status and make every government the mouthpiece and tool of international finance... World collaboration of private financial interests can only mean mass unemployment, slavery, misery, degradation and final destruction.' However, he was comforted by the fact that the UN, where all nations (except those on the Security Council) are supposedly equal, was to supervise the world economy and lead it towards the keynesian vision of the high-employment welfare state.

He was not to know that by the mid-1960s the UN would have little control over the world economy. Power would move to GATT, a supposedly temporary body set up in 1947, but which was useful to the US to direct and control Cold War trade. The IMF and the World Bank would become instruments of economic rationalism overriding, in many cases, national sovereignties. However, he did suspect that such bodies as the Trilateral Commission would emerge.

This was set up by the Rockefeller Trust in 1965 to bring together the best business, academic and some token union brains from Japan, the US and Europe, in support of the globalisation of capital. It pushed for economic rationalism in government and the economy and international free trade, as well as launching (from its Kyoto report of 1975, The crisis of democracy) an attack upon what it regarded as the excessive democracy of the 1960s. The ideas of the New Left of that period (including alternative lifestyles, feminism, gay power, environmentalism, anti-racism, regional governments, increased democratisation of government and of private enterprise) were to be marginalised, even if this meant delegitimising or bypassing democratic control. For the real threat to world capital and the market system is democratisation. The gaunt, hierarchical, tyrannical stalinist system, ruled by the apparatchik, was no problem for the West. In fact, it was useful, as the Western worker and citizen is hardly attracted to such an alternative.

Democratisation is the direct opposite of privatisation, which fills the agenda of the New Right and its political allies. Conservatives see more democracy as a nightmare, as a sign of disorder and inefficiency. They wish to confine democracy to the political field alone, as in the 'end of history' arguments, and become infuriated when democracy escapes into other avenues such as family, environmental, racial, sexual and gen- der issues. Democracy, for conservatives and technocrats, is about people voting for competing teams of experts, and then going away for three years; it is not about reshaping society along the lines of equality.

Most conservatives would understand the statement of French political scientist Alexis de Tocqueville who warned in the 1840s, after studying the US, 'democracy will not stop at the factory gate' - an idea that was encapsulated before World War 1 by the German social democrat Eduard Bernstein in his statement, 'democracy will be socialism'. De Tocqueville would have recognised that the nature of the present political crisis is over fundamentals: 'Who shall rule: global capital or the democratic nation?', and 'By what values shall they rule: equity or economic nationalism?'. To understand this crisis - global and national, political and economic - and how this historic conjuncture in the world system will force structural and political change upon us, it is necessary to give a brief historical overview of Australia and of the formation of its former social contract within this system.

Australia and the historical world system

Using the 'worldsystem' theory developed by the American nuel Wallerstein, Australia can be seen as a minor actor in this system from its first European settlement.

Wallerstein states that all history is world history. Marx the clash between capital and labour, causing epochs identified d by their mode and relations of production. ial process that ran on historically as capital and labour fought it out. Wallerstein includes the nation-state in this process. He identifies three dynamic opposites in historical development: capital versus labour, supply versus demand, and polity (nation-state) versus economy. To this should be added today: the environment versus industrialism, and patriarchy versus equality.

Wallerstein argues that world history has been dominated. by the expansion of Europe since the sixteenth century, the 'long European age'. The modem world system is a product of this expansion due to tension between these opposites. The capitalist system. has been with us since the sixteenth century, overrunning and absorbing at different rates and in different modes all other social structures (such as tribalism and feudalism) which it encountered through the long period of imperialism and colonialism.

The world system has been created historically in three tiers, dominated by a series of great powers. The system until recently was a shifting scheme of core, semi-peripheral and peripheral nations where white nations (except for Japan) dominated the first-world or core levels. Initially, in the sixteenth century, Spain was the leading core power. After a short period, Holland became dominant, but declined swiftly as its population was too small. The rise and decline of the great powers in the historical world system always depended on their military as well as their economic power. They always declined as their military costs grew too burdensome for their economy; or some great crisis or war, or rising internal challenge of organised labour, destroyed their financial base. When this occurred, a number of new powers would contest for hegemony.

The bolshevik revolution and the subsequent self-sufficient Soviet state were adventures that could not break free of the dominant capitalist system, which still has much development to achieve and many markets to invade. This includes global industrialisation and subsequent creation of a world working class and middle class, as can be seen in the present rapid industrialisation of the former peasant countries of Asia and Latin America. This process includes the deindustrialisation of former core countries such as Britain, and of second-world or semi-peripheral countries such as Australia, with the division of their former working classes into a still-employed, educated, skilled section and another part doomed to be an underclass.

This underclass comprises, in particular, those manual labourers whose jobs have emigrated to cheaper locales. If they wish to compete with this cheap global manual labour, their wages (according to economic rationalism) must fall to that other locale's level or they must move to these new regions of industrialisation, even across national boundaries. We can see this process of economic migration in the vast flow of illegal Mexican labour into the US, or of North Africans, Turks and Slavs into the European Union (formerly the European Cornmon Market). Some forty million migrant workers are on the march in the world, with some eight million from the former Soviet Union alone (News, Mexico, July 1993).

The Soviet system, in this global process, could only be maintained by political will and by such police methods as the Berlin Wall. This all collapsed with the coming of Gorbachev. We are now witnessing the global reintegration of the former communist bloc, including China.

Britain and France fought for hegemony from the seventeenth to the nineteenth centuries. After Waterloo (1815), Britain emerged triumphant. One of the outcomes of this struggle and subsequent leadership (or hegemony) was the rise of the specially privileged white-settler variety of colony. Britain took the lead in developing a three-tiered empire held together by divide-and-rule racism, for example, Hindu versus Moslem in India.

Australia was one of these privileged dominions (like NZ, Canada, and, to a lesser extent, South Africa). It grew up in the nineteenth century as a product of specific British core policies and needs in the world system. Britain needed Australia first as an outlet for the convict debris of its own indus- trial revolution, as a strategic base in the geopolitical struggle with the French, as a staple producer of wool, and as a place for investment accumulation, especially after 1850.

By the 1830s, a new colonial policy emerged. Policy makers such as Lord Ripon, and theorists like Edward Gibbon Wakefield, dreamed of creating New Britannias within the empire. The legal fiction of term nullius, which identified lands such as

Australia as empty of human civilisation, was also at hand to expedite emigration.

These colonies would replace the lost North American colonies. As well, they would provide a destination for excess and troublesome home population. This was always handy to avoid political discontent at home by the dispossessed or by the increasingly organised British labour movement (the Chartists) in the 1840s. Ripon also believed that the British yeoman dream of self-sufficient farmer with a model home, loyal wife and family would blossom in the colonies. The pos- session of such private property and responsibilities would conservatise British 'likely lads'. Revolutionary Chartists at home would become, at worst, larrikins, or, at best, responsible liberals in the colonies. The long wool boom of the 1820s and 1830s, and later the gold rush, sucked in British investment. This investment raised the Australian standard of living up to, or beyond, many first-world levels. It also distorted the Australian economy in favour of Britain, and encouraged a dependent and disarticulated development around the bor- rowed yeoman dream in the various Australian colonies.

Even today, this dream still persists in the 'suburban peasant' mentality on which Menzies based his long reign. Here, mum, dad and the kids, with dog, cat, fruit trees and chooks, are all rolled together on a quarter-acre block. This formerly dominant pre-industrial yeoman ideal is today ail undercurrent in a postmodern age, still influencing housing styles, mainstream politics, and youthful dreams of love and marriage, while the nuclear family, and even the rural family, is rapidly declining. Much of the strong emerging support for green politics could be traced to this ideal in the Australian historical culture which is now threatened by local and general world environmental concerns.

By the 1890s, it was evident to the white-settler colonies that they occupied a second tier in the three-tiered British empire. The real imperial proletariat, exploited by low wages and conditions, lay in the non-white colonies or as marginalised native groups (for example, Aboriginals or Maoris) or amongst women generally. Both the white colonial working class and, to a certain extent, the core British working class were a labour aristocracy in a world system of many such empires, which were divided racially between the dominant whites and the coloured others. The Japanese, before and during World War 11, felt justified in setting up their own empire on similar lines.

In this racially divided and exploited world, the Australian white working class were fearful of dropping to the non-white level of imperial exploitation. They argued that they were spe-cial. By the 1890s, the Australian social contract emerged, based upon 'fair' wages and British laws for whites. This social contract thus emerged at a time when it was shaped by a vicious racism. Deakin recognised the nature of this racially divided world system, and stressed racism and Britishness as a part of the created nation in 1901.

Deakin was highly influenced by nineteenth-century British social (or state) liberalism, drawn from the writings of philosophers such as T. H. Green and L. T. Hobhouse who were overwhelmed by the social injustices of the contemporary British class system. They were also aware of the writings of the economist J. A. Hobson on the need to overcome investment stagnation in the core or developed nations by increasing (not decreasing) the buying power of the workers. Hobson also argued for the avoidance of class warfare by increasing the powers of an interventionist state, which would mediate be- tween capital and labour in the name of equity and create political stability based on a solid middle class. These ideas were crucial in the formation of the 1907 Australian social con- tract. Many 'wet' liberals, in both the Liberal Party and the Australian Democrats, continue these ideas today.

Britain was in industrial decline from the 1890s and was threatened in its world hegemonic role by the rise of imperial Germany and the USA, both of which were follow highly protectionist policies. The New Protectionism that emerged in Britain was a response to these policies. At the turn of the century it was outlined by Joseph Chamberlain and by Cecil Rhodes. Rhodes in particular stressed its twinned idea, the New Imperialism, as a means to fight socialism. By protecting British and imperial markets, they hoped for a self-sufficient empire. The white colonies in particular would attract working-class migrants, taking away the attraction of socialism in Britain. This meant a new readiness of Britain to listen to the white colonies, as they became increasingly important for investment and other imperial purposes such as migration. Britain became more willing to increase trade and military dependency.

Lastly, Australian radical labour was exhausted by the Great Strikes of 1890-94 and the union weakness due to the Great Depression of the 1890s. State liberal schemes for social agreements between capital and labour seemed the only way forward for organised labour after the crisis of syndicalism (or non-parliamentary trade union action) and its concept of the general strike in this period. (1989 was not the first time there has been a crisis in socialist ideology.)

Labourisin, in particular, was satisfied to make a deal with the state liberals of this period. Labourism sees the role of labour as confined to the defence of workers' economic gains, and increasing their share of the pie if possible.. This is the politics of consumption. Labourism saw the capitalist system as the end of history, in which labour would forever be a junior and usually flexible partner. The system would never change from capitalist domination.

Labourism was (and is) a highly masculine image, married to the yeoman dream, excluding women, other races and homosexuals from the true definition of the worker. It is still the dominant ideology of right-wing Labor. Its major aim was (and is) full employment within the capitalist system, without which right-wing Labor lurches into crisis. Right-wing Labor cannot imagine a society which is not capitalist. This is why it is fearful of the left. Social democracy in its full democratic form talks of the 'great republic of equals' and sees beyond the capitalist-labour structure to a new democratic society. It has rarely surfaced in Australia except in the Labor left and in left- wing groups outside Labor. Right-wing Labor will never allow such an ideology to emerge in the ALP as it is wedded to a capitalist, technocratic, Christian-democratic view of society.

Deakin drew together the threads of this turning-point period of the 1890s and proposed a new social contract. He called for a federal White Australia policy; labour would receive award wages; the state would be the great independent mediator in the best corporate (or guiding) state tradition; this would be backed by a class alliance between white capitalist business and white male labour; Australian business would receive protection.

Free trade would be outlawed as it would mean a per- manent peripheral white male labour group (or underclass) who, because of lack of skills, would live on the edge of poverty, as in less lucky countries such as Britain and the USA. This group would never achieve the Australian dream. Organised labour, whether right-wing or left-wing, would have none of it.

Free trade would also mean the destruction of the local national capitalist by foreign capitalism. National capitalism, or locally based big business, needed the state to protect it and wanted labour demands to be reasonable (or, as some argued, to be slowed). Arbitration would do this. Protection and industrial arbitration and conciliation became the norms as local capital and right~wing trade unions and Labor politicians found a mutual interest in their existence.

All of this depended on a sure market for raw resources, or dependency on a great power as a special privileged supplier. This power was Great Britain, which by Federation (1901) was retreating into empire and eager to develop greater ties with its colonies.

There are four basic modes of development which a coun- try can choose: autarchy, export-led development, import replacement approach, and dependent development. Australia quite early chose dependency, or at least moved into this position as a natural, national extension of empire.

However, with Britain today in the European Union (EU, formerly EEC) and Australia being drawn into the Asia- Pacific region, it has left Australia with a crisis in how to restructure. A comfortable lucky-country dependency culture does not adapt easily to demands for independent thought, sacrifice and action, as it goes from simple primary commodity production (for example, mining) to a service or tertiary econ- omy without the development of manufacturing industry as the dominant economic basis.

Dependency and the stability of the social contract also had their effect upon politics. Deakinism provided the basic four pillars of bipartisan political possibility for nearly eighty years. Within that ambit, political ideology was reduced to utilitarian state liberalism and labourism. Menzies prospered under this system, and from 1949 to 1972 his Liberal Party supervised the middle-classing of the Australian workforce, as Thatcher recently supervised the middle-classing of enough of the British working class to keep the Conservatives in power. The lucky country was a mixture of this local deakinism coinciding with the worldwide adoption of keynesianism after World War 11.

In this scenario, both radical social democracy (New Left) and neoclassic liberalism (New Right) were confined to the political margins of mainstream Australia. Only traumas, instigated by a crisis of the world system caused any problems within the dominant deakinite system of labourism and state' liberalism. This was the politics of Tweedledum and Tweedledee.

The end of deakinism

The true crisis of this social contract came in the 1970s and, unluckily for the ALP, in the last years of the Whitiam government. This was the last of the true keynesian-deakinite federal governments with some elements of radical social democracy, although some dismantling of protectionism was undertaken.

By 1972, the deakinite system was being invisibly broken up, due to the pressures of the changing world system. Capital was already transcending nation-state controls by virtue of transnational companies. The OPEC oil crisis of 1973 saw the end of the three-tier world which was based upon cheap energy, exploitation of the third world, and the economic roles of the nation-states. Capital began to internationalise and to export manufacturing overseas. As unemployment increased, the third world arrived in the first-world and second-world countries; it can now be found in any major city, usually three blocks down from the central business district.

In this historical period, world capitalism returned to classic liberalism. This emerged in a double form: the rise of a New Right in politics and culture, and the rise of economic rational- ism as the dominant ideology of economists, business and government.

The White Australia policy had been repudiated in its various forms (there never was an official single policy) by both major parties by 1973. It belonged to an imperial age and was plainly dysfunctional in an age when Japan, by 1965, was already Australia's best customer for commodities.

Protectionism has been consistently under attack by Labor governments, from Whitlam to Hawke and Keating. The ALP is no longer a protectionist party, despite the obvious signals of its 'true believers', as in the Wills electorate with their switch of votes to the independent protectionist Phil Cleary, or the disquiet of its rank-and-file backbenchers who have been mugged by Treasury. Free-traders (or economic rationalists) have hijacked the agenda in all important worker and farmer organisations, including the National Farmers Federation and seemingly the ACTU.

Great-power dependency continued, but in a different form. By 1985, japan had poured some US$35 billion into Australia. While still presently behind the US and UK, Japanese investment will be dominant by the turn of the century. But this flows into areas of Japanese choosing, not like earlier investment which was often portfolio investment, at the service of Australian governments to borrow and spend how they chose, and/or into import-replacement industry, mining or agriculture. The preferred Japanese investment in services, tourism and vertically integrated food and wood industries can have a tendency to distort the economy by its area of pref- erence and overseas control. Certainly the potential for de- skilling is immense.

The award system is the last of the four foundations of the old social contract. Increasingly this, too, is being subjected to demands for change, the latest of which is the Brereton plan for enterprise agreements and the inclusion of non-union employees in such negotiations. The original Accord between 'unions and the Labor government has been in existence for over a decade. The unions delivered wage restraint; but the taxi cuts, rise in the social wage, and direction of investment thati formed the other aims of the Accord have been slowed or are non-existent.

It would seem that the hidden agenda of Treasury was always economic rationalist, not corporatist (that is, economic and political agreements between government, labour and business). Business, and the federal and state bureaucracies, never played the corporatist game, going their own way. This can be partly blamed on their view of the realities of the world system, and partly on the dominance of economic rationalism in academic economies training since the 1950s. Some see this dominance as the long-term victory of the Mt Peletin free-trade group, set up by Hayek in the 1930s to combat keynesian economics in universities around the world, and financed by neo-liberal finance capital in particular.

Whatever the causes for changes to deakinism and the turn to economic rationalism, it has followed logically from the financial deregulation of the 1980s. It is also a response to the long-term change in the world system, especially the collapse of the European empires. The British empire was the scene where these social compromises were first struck be ween capital and labour. For Australia it was a privileged compromise in a lucky country. True capitalism, without any special deals, is about to arrive.

The New Right argues that this is inevitable, and that labour should bow its head and accept the coining reality of a dual workforce of tenured and contract labour with an increas- ingly irrelevant underclass looking on. But, in fact, the war of position between Australian capital and labour is about to begin again after nearly eighty years of truce during the lucky- country period.

The only thing inevitable is that the system itself is break ing up. The labour movement is still practising the politics of breaking into the system, and is mostly unaware that the parties and instruments previously used for this purpose (in particular the ALP) are no good anymore, and are in fact doing the opposite of what is expected of them.


Society in transition

We seem to be living through what the French Annales school of historians would call a conjunctural period. This is a period of fundamental change to political ideas, such as nationalism and t, and to social myths and cultural norms by which we define our life, such as the concept of what it means to be an Australian male. All of this is due to a coincidence of world and national economic and social crises.

Daily we are faced by role reversal or change in gender, and sexual and social stereotypes, as well as standing on a fundamental ground shift in the previous economic and political order of the world. Nations are declining as political actors, while the political means to control or direct world capital have not emerged.

In this situation, nations are managers for world capital rather than controllers of this flow. They find their sovereignty less and less meaningful, as they must act as salespersons or to attract capital to their economy. A desperate competitive struggle between nations is set up, reflecting the uneven levels of their internal balance between capital and labour. Put simply, the price of labour on this world market plus the skills level of labour decides the struggle. Labour is sold to the highest world-capital bidder or, in many cases, to any capitalist interested at any price.

All deals are off in this period of flux. As Gramsci said, >The old is dying and the new has not yet been born... and in the meantime this system shows signs of great morbidity.' Until a political solution to control this international situation is found, global capital will be released from the cage constructed by Keynes and Deakin. Lenin terminated his half- grown Russian species of domestic capitalism in 1917. Now Yeltsin is trying to coax a new, more savage variety from various holes and hiding places.

The dangers of this period are noted not only in the prevalence of the ideas of economic rationalism stressing the privatisation of the economy, but in the use of postmodemist theory stressing the privatisation of the mind. The danger extends to

the universities. There, the battle of ideas has seen the decline of collectivist thought, of the idea of the benign interventionist state, and of the ethical humanism that has existed since the Enlighterunent of the seventeenth to nineteenth centuries. This philosophical view has served as the basis of the fight for social justice and progress since that time. The danger lies in the wide penetration of New Right thought amongst the intel- ligentsia and student body since the 1960s, as well as the corporatisation of universities to function on a self-funding or profit basis.

In this postmodern age we are taught that corporate man and the technocrat keep the world functioning according to their values. The citizen has been tribalised or individualised to the extent that he or she no longer believes in the effectiveness of collective action beyond the self or the immediate tribe or group. This is often presented as a pluralist view of the world. Strangely, pluralism of views does not apply to economics. Here only economic rationalism reigns. No postmodernism exists on Wall Street. In such a situation, state liberalism or the left, which depended on collective movement or on the state mobilised by collective ideologies and morality, collapses as a meaningful activity. The market where seller meets buyer triumphs. This is Thatcher's famous dictum: 'There is no class; there is nothing higher than self and family.'

The anomaly then emerges: we find ourselves in a time of depression, high unemployment, and the outrageous and sanctimonious domination of the unjust theory of econorrtic rationalism; by all historical precedent this should raise a mighty storm of protest and reversal of political policy in the name of humanity; instead, we are faced with a quiescent intelligentsia and an unemployed mass that is not angry, not! even sullen, but self-condemnatory and resigned. The thatcherite slogan of TINA (there is no alternative) seems to have been accepted without protest. We have been disarmed.

This is a deeper crisis for liberalism and social democracy than that of the 1890s or 1929. This is a crisis of the imagi- nation, of political possibility, of utopia. The centre-left seems cowed by the collapse of both the Soviet state and the Westem keynesian social democratic state. It is in danger of believing its enemies. These enemies claim that markets are superior to collective political solutions and agreements, and that basicconcepts important to collective views of the world, such as class and capitalism and citizen and equality, were creations of Enlightenment intellectuals and never really existed.

But what we are seeing, in fact, is a crisis of the nation- state. Both the left and right have used this body in the national phase. The Western centre-left in particular saw the nation as the democratic manager of collective rights and the democratic controller of interest-group power, especially capital. Collective institutions such as community groups, political parties and unions were an important part of this structure. Now, through such technology as computers and television, the individual is being de-collectivised. We can now choose to operate or not in collective groups, whereas once this was fundamental to existence through our family, community, class, union, work body, etc.

Increasingly we are linked to groups by choice, not by necessity. In times of continuing unemployment, two or three generations may emerge without employment. The work ethic does not exist here as meaningful self-definition, only an increasing individualisation and marginalisation. Cut off from the necessity of work, which creates so much of the sense of self, collectivity means less and less.

It would seem increasingly valid, therefore, that the key to the revival of left support can only be from the revival of work. Such work must be meaningful and endurin& rather than part-time and alienating. Work has two elements: self- definition and means to an end. While both aspects of work have different purposes, they both contribute to self-respect, an increasingly meaningless concept due to proletarianisation and tribalisation.

The fundamental problem for the left is how to rehabilitate both the notion and the possibility of work, in order to re- establish the individual as a member of a meaningful collective group. Fundamental to this also is the change of the image of work from being only white, male, heterosexual, and environ- mentally ignorant. Allied to this is the establishment of effective democracy, in both the workplace and the political institutions. Work, environment and democracy can be the major themes to be used against privatisation and elitism, even in the complexities of a glob,alised capitalist economy and a postrnodern world.

Strategies and tactics

One could be tempted in such writings as this to build up a 'perfect world' scheme, as was the pleasant practice of gentlemen liberals and utopian socialists of the nineteenth century. This could be a pointless exercise. However, without a program of proposals, there is no agenda. Indeed, throughout this book, the contributors have followed a similar process o theorising and analysing the present Australian condition. They have their pragmatic and possible solutions to the pre- sent political crisis, especially concerning the proposal for a unified or confederated Alliance beyond Labor and Liberal.

I have outlined my proposals in two stages:

Strategies: These deal with the present conditions of nationa and international change; the elements of the old national and emerging social contracts; the role of the state; the role of democracy as ideology; the economy; the 'new' electorate of social movements plus 'old' social classes; the environment.

Tactics: The structure of the new party; the democratic community or state, and new modes of organisation; the bureaucracy; communal organisation; work and the com- munity.

Neither of these listings is exhaustive. They serve as initial elements for discussion only.


The foremost area calling for a political strategy by any party is the link between the changing nation-state, inter- national capital, and emerging blocs of nations and internal unemployment. The major element here is the problem of free trade versus protection, which underlies the present arguments between economic rationalists and interventionists. This debate must be put back on the political agenda.

Free trade is dependent upon the implementation of such international treaties as the WTO. These are a total attack upon national sovereignty, of which little has been said in federal parliament. The WTO is out to ring fence national sovereignty. On the other hand, world trade is now irrevocably globalised. There are three major markets: the national domestic market, the international nation-to-nation trade, and the newer transnational company trade. The latter already carries between 40% and 60% of world trade. Protectionist moves in this context must concentrate on trading blocs as another political area to control capital over and above the nation. The European Common Market, now the European Union (EU), has a weak social and labour charter in the final treaty of union wl-dch most nations support. There is neither a labour nor environmental charter in the latest GATT. Labour is the ghost at the feast as global capitalism organises.

If an Asian bloc does emerge, similar to the EU and the North American Free Trade Agreement (NAFTA), then the strategy should be to enter it only on the creation of such a social charter encompassing human, labour and environmental rights for the bloc. This approach is now endorsed by the ACTU, with particular reference to the Australian trade treaties with the South Pacific nations and NZ. Many of our national industries or foreign joint ventures are re-establishing offshore (for example, in Samoa) to take advantage of cheaper labour and to export back to Australia. The ACTU demands that our trade treaties contain a social clause, so that only those industries that pay a unionised wage should be given the right to export to Australia. The federal Labor government has refused to endorse such social clauses.

Such a policy should be part of a new regional protectionism. The pursuit of this strategy should include the org- anisation of community Protectionist Leagues or Jobs and justice Leagues, similar to those in pre-Federation Victoria. They could popularise the discussion of new protection around human, labour and environmental themes, as well as increasing democratic input into policy-making concerning these themes and their relation to work, environment and democracy. Citizens could be educated in the idea of trading blocs as a progressive idea, with benefits for all nations as long as trade is controlled and labour and environment clauses are inserted.

The new social contract being pushed by global economic rationalism should be identified and publicised. This is the move away from the 1907 ideas of equity, with a common minimum wage, to the 'ability to pay' concept. This latter idea makes for an uneven and divided workforce and is the first step towards labour fragmentation. The idea being constantly pressed by economic rationalists is to replace 'social defence', based upon a basic wage, with 'social compensation' (and a whittled-away, paltry compensation at that).

A major policy should be the creation of an increased focus on other modes of property ownership. The predominance of the private property mode, accentuated by the privatisation mood of government, should be offset by an increasing stress on other types of property: national, co-operative and collec- tive. Foreign property in particular should be strictly controlled even, if necessary, by constitutional means, given the looming nature of 'third wave' foreign investment and the speculative volatility of its hot money. The social relations existing in both private and national property are anti-democratic and hierarchical, and institutionalise relations between capital and labour (that is, between business organisations and trade unions) as the only historical options. These forms of property are essentially unequal and technocratic.

An increasing emphasis upon state intervention and job cre- ation must be undertaken, to offset the emerging dual labour structure and the permanent unemployed. This means emphasis on the notion of the enabling state, rather than the dominating state of the technocratic keynesian model. The enabling state devolves power and money to local government or to local organisations of the unemployed and poor, emphasising co-operative forms of property or at least employee participation schemes. The technocrat is on tap as advisor, never on top. Secondment to such groups from federal and state government departments should be a factor of organisation. A bank of tax-free public works should be created to fight busi- ness cycles. Thought should be given to lifting all tax off the public sector, a tax which was instituted by Menzies in 1957. Public services should revert to being offered at cost, Plus small-interest (1%) Reserve Bank loans for development purposes. Such a loan policy built the transcontinental railway in 1917.

A bill of rights (including traditional liberal and social rights) should be among the strategies of a new party, and with the coming republican debate requiring a new constitution, it is imperative that this policy be included in the party's minimal program.

Democratisation, not privatisation or corporatisation which benefit largely the capitalist and technocrat respectively, should be the major overriding guide. Democratisation should apply to the tax system, which implies a return to PAYE (pay as you earn), and to the question of foreign ownership of land and industry. Re-regulation of the banking system, or its democratisation, is an imperative. Most importantly, a transactions tax should be laid upon the finance system.


The supporters who might be attracted to such a new con- federation of parties or party would come from various back- grounds. Old class-based groups (socialists, social democrats, state liberals) might be attracted, as well as those from the newer social movements (greens, indigenous movements, feminist and gay activists). The fragments of the old left (the Rainbow Alliance and the Left Connection, as well as a host of socialist independents including elements of the ALP Socialist Left) would do well to remember previous failed attempts to set up a left party outside of the ALP. The discord over names, tactics and organisation was deafening. In order to form an Alliance of parties as in NZ, a single party of the labour left must first emerge. This was a key factor in the NZ Alliance, coalescing thousands of highly trained and energetic members. Today New Labour has the largest membership of any party in this Alliance. Also, why should the Greens, the Democrats, and others who are already organised into functioning parties, make an Alliance with an unorganised mass of left individuals or even with functioning parliamentary independents? There is no weight or advantage in this. In order to have an Alliance of parties, there must be parties to ally with. The first step must be the organisation of a single, democratic party of the labour left.

Such an Alliance of parties would have a problem with ideology. A minimum common program, however, would emerge from commonly accepted ideas on work, environment and democracy. Such a twelve-point policy, or manifesto of principles, has emerged in the NZ Alliance as a non-negotiable foundation. The 'issue' politics of the 1960s and,1970s would still be a part of the program, but the left must realize (as the NZ Alliance has done) that history has swung back to class issues. While many were pressing against the glass ceiling, the floor has given way. Those who have spent most of their political life in pursuit of the former would find it most difficult to reverse priorities. But it is either that, or face the obsolescence that Helen Clark's neo-liberal, issue-orientated Labour Party is now facing in NZ, compared to the working-class, environ mental, social-democratic orientated Alliance. This is not a case of 'either/or', but of 'both/and', in an acceptance of a different historical priority.

The Alliance would have to be a confederation. As in the NZ Alliance, this seems the obvious organisational structure, allowing different parties to exist under an agreed minimum! policy. The advantages to this would be:

Devolution of power, thus avoiding the top-down executive dominance common to Labor and the Liberal and National Parties. These are nineteenth-century hierarchical parties, extremely easily dominated by single personalities embarked on the politics of ego, or penetrated and manipulated by technocrats, timeservers, careerists and opportunists - or, in more Australian terms, by posers, bludgers, urgers and no-hopers.

The Alliance would have to be more democratic to survive. Each party would have a veto over central executive decisions on policy. Joint decisions would therefore be based on consensus rather than on predominance of numbers. This would allay the fears of smaller groups that they could always be swamped by the larger ones. This would also ensure that fac- tions, open or clandestine, which have done much to ruin the existing parties or to shipwreck the proposals for new parties on the left, would find manipulation of the Alliance difficult or indeed impossible.The careerists, politicians, technocrats and power-hungry bureaucrats who have done so much to influence the move towards economic rationalism, despite electoral promises, would have to be controlled. This would require:

The recall (where politicians could be dumped by an electoral or party referendum): It is important to realise how vital this power will be to democracies of the future. We have the half-serious words of the former president of the Liberal Party of Queensland (Courier Mail, 8.11.93) that in future parties will have to put up programs that the people want, and then do what the parties really want when in power. The recall would make any politician reconsider such an action. Liars and double-dealers could be recalled.

Limited terms: Fourteen US states now have a limit of three terms for members of congress, and the US president can only serve two terms. Limited terms should be minimum party practice and policy.

Devolution of power to regional bodies and secondment to local bodies of state and federal bureaucrats, and from thence to community groups, should be a foremost policy. This is the policy of the decentralising, enabling state.

Treasury policy should be subject to public discussion before implementation, and Treasury should be divided into development, budgeting and audit branches, to disperse the power of its bureaucrats. This is Alliance policy in NZ.

Increased public hearings on policy would be carried out by the Senate, or even by citizen bodies.

The citizen-initiated referendum would have to be seriously debated by the left, despite the present media campaign against it as a right-wing elitist plot. This is laughable considering the media ownership structure.

A system of proportional voting must be brought in at all political levels.

These suggestions are limited to ideas about structure, especially of the institutions of democracy. From the beginning the Alliance must itself be internally democratic, as well as proposing democratic ideas for society at large. Without this, it will lose heart and, with that, commitment and will.

Privatisation is the philosophic essence of New Right e( nomic ideology. It can only be combatted by the idea democratisation, which is crucial to the struggle, and is a] one of the most pressing aspects of a new politics in the des, of technocratic politics that we now inhabit.

Society in Australia is increasingly restless, both because economic change to the old boundaries of security, and the seeming inability of politics to effectively explain and cont: this vast global sea-change. Analysis is fine; the world of analysts is alive and well, and these days living in economic rationalist Chicago and Canberra, or in postmodern Paris. But go analysis reflects the basis of reality that confronts us, and ti reality is the increasing predicament of the mass of the people on this Earth, and ultimately, at this period of history, in thisl our Australia. This demands analysis of what is meant by 1 idea of the common good and what is meant by collects action. Analysis and action can't be left to bankers, postmodernists, columnists for the Murdoch press, technocrats and marketeers. Such people only come up with greed or futility as motives for action. To believe this is todisarm ourselves about the possibilities of politics.

Further reading

Jeff Atkinson, GATT.' What do the poor get?, Community Aid Abroad,1994

Abe David & Ted Wheelwright, The third wave: Australia and Asian capitalism, Left Book Club, 1989

Brian Fitzpatrick, The British empire in Australia: An economic history, 1834-1939, Melbourne University Press, 1949

Robin Collan, The myth of the level playing,field, Catalyst Pres 1993

Antonio Gramsci, Prison notebooks, Columbia University Press, 19 91

D. Green, The New Right: The counter-revolution in political, economic and social thought, Wheatsheaf, 1987

John Gyford, Politics of local socialism, Allen & Unwin, 1985

Paul Kennedy, The rise and fall of the great powers, Unwin Hyman 1988

Martin Khor Kok Peng,'A new global giant to rule the south?', Third World Resurgence, no. 29-30, 1993

V.g.Kiernan, European empires from conquest to collapse, 1815-1960, Leicester University Press, 1982

Robert Leach, 'Right-wing Labor', Arena, no. 76, 1986

Robert Leach, Political ideologies: An Australian introduction, Macmillan, 1992

Robert Leach (ed.), National strategies for Australasian countries: the impact of the Asian-Paci fic economy, Queensland University of Technology, 1993

D.J.Murphy (ed.), Labor in politics: The state Labor parties in Australia, 1880-1920, University of Queensland Press, 1974

D.J.Murphy , 'The Labors of Keating', Arena Magazine, no. 6, 1993

Michael Pusey, Economic rationalism in Canberra: A nation- building state changes its mind, Cambridge University Press, 1991

Immanuel Wallerstein, The modern world system, 3 vols, Academic Press, 1989

Richard White, Inventing Australia: Images and identity, 1688-1980, Allen & Unwin, 1981