Copied from The Alliance Alternative in Australia edited by Robert Leach

Introduction

by ROBERT LEACH

"We are living something fundamental - globalisation of the world economies and the redistribution of incomes across the planet... and the death of the postwar social democratic welfare state and social contracts " - Alain Touraine, Arena Magazine, no. 5,1993

This book is a beginning to a debate: should Australia's centre- left parties and movements come together in an Alliance, as has happened in New Zealand?

Some contributors to this book are cautious; others are enthusiastic; others still persistently see themselves as the only possibility for all to join, overlooking the fact that only a feder- ation built on consensus like the NZ Alliance will please people of different ideological positions and class back- grounds.

Whatever the problems, we must move quickly on this issue as time is running out for the nation-state. Both major parties, Labor * and Liberal-National, seem bent on speedy Asian integration and GATT (now World Trade Organisation) adoption. This is despite the unstated and undebated ramifi- cations of these policies, especially in their impact on the living standards of the Australian working class, on small business and on the ecology.

This is not to emphasise the politics of nostalgia, of a return to a supposed 'working man's paradise'. Those times were marred by racism and sexism in the culture of both work and private life, and care for the environment was almost non- existent. The Earth was seen as a bank which could be contin- uously drawn upon.

To condemn people for their former attitudes, however, is to write poor history, as so many modern revisionists (including many of the 'politically correct') do. As the phil- osopher Spinoza said in his reference to history, 'The point is not to rage or blame; the point is to understand.' Those times did develop a class compromise or implicit social contract (albeit confined to white male workers) that was highly accepted and pervasive. It influenced both the daily and social wage and was administered by the nation-state.

The trend, especially since the 1970s, has been for both major political parties to abandon this compromise. The pro- cess of nation-state building has been reversed, and the social fault-lines that the compromise glossed over are once more emerging.

Elites in all countries are developing a radically different view of the nation-state and government. For instance, those in Australia and NZ have more in common ideologically with the elites of the USA and Europe (and increasingly Asia) than they do with their poorer fellow citizens. As Robert Reich, the US Secretary of Labor, has written.. 'To improve the economic position of the bottom four-fifths will require that the fortunate fifth share its wealth and invest in the wealth-creating capacities of other citizens. Yet as the top becomes ever more linked with the global economy, it has less of a stake in the performance and potential of its less fortunate compatriots.'

There are thus two opposite trends in Australian and NZ social development: one going up, reflecting elite politics; and one going down, a group increasingly disenfranchised and caught in structural unemployment, whose political aims have no (or diminishing) outlets in the traditional parties and the changing nation-state.

The major parties in both countries are thus seen as increasingly similar. Their lack of credibility amongst ordinary voters increases, despite the parties' faith in 'star power' lead-ers, as their neo-liberal New Right policies triumph over the former compromise between state liberalism and social democracy.

existent. The Earth was seen as a bank which could be continuously drawn upon.

To condemn people for their former attitudes, however, is to write poor history, as so many modern revisionists (including many of the 'politically correct') do. As the philosopher Spinoza said in his reference to history, 'The point is not to rage or blame; the point is to understand.' Those times did develop a class compromise or implicit social contract (albeit confined to white male workers) that was highly accepted and pervasive. It influenced both the daily and social wage and was administered by the nation-state.

The trend, especially since the 1970s, has been for both major political parties to abandon this compromise. The pro- cess of nation-state building has been reversed, and the social fault-lines that the compromise glossed over are once more emerging.

Elites in all countries are developing a radically different view of the nation-state and government. For instance, those in Australia and NZ have more in common ideologically with the elites of the USA and Europe (and increasingly Asia) than they do with their poorer fellow citizens. As Robert Reich, the US Secretary of Labor, has written: 'To improve the economic position of the bottom four-fifths will require that the fortu- nate fifth share its wealth and invest in the wealth-creating capacities of other citizens. Yet as the top becomes ever more linked with the global economy, it has less of a stake in the performance and potential of its less fortunate compatriots.'

There are thus two opposite trends in Australian and NZ social development: one going up, reflecting elite politics; and one going down, a group increasingly disenfranchised and caught in structural unemployment, whose political aims have no (or diminishing) outlets in the traditional parties and the changing nation-state.

The major parties in both countries are thus seen as in- creasingly similar. Their lack of credibility amongst ordinary voters increases, despite the parties' faith in 'star power' lead- ers, as their neo-liberal New Right policies triumph over the former compromise between state liberalism and social democracy.

US political economist Nathaniel Cardels (International Herald Tribune, 14.4.93) writes: 'Only the archipelago of the connected classes that reside in every rnegacity from Bornbay to Sao Paulo will prosper from the new capitalist (global) order. The rest of the ever swelling ranks o 'f the lumpen planet face a fate worse than colonialism: economic irrelevance.' In NZ, a powerful Alliance of parties - New Labour, Greens, Liberals, Democrats, and Mana Motuhake (a Maori party) - has come into being as the voice of those regarded as losers or irrelevant in this new elite rearrangement of the world.

In Australia, there is no political party or movement powerful enough at the present to oppose or contest these new elite trends. The ALP Socialist Left, unlike those in NZ, will not leave the ALP despite all the defeats, insults and policy reversals that the ALP right heaps upon them. Their life has become one of an endless battle for numbers in a struggle they can never win. The ALP right hates them more than they do the conservatives. But the Socialist Left persists in the belief that the ALP will one day be theirs. This has never happened. Perhaps also it is simply that there are too many careers involved.

There is no real united voice on the Australian left, no Alliance of left forces. This book is intended to be one of the first steps in this direction.

We live in an age when the Australasia we once knew is fast unravelling in its social culture and the social contract between capital and labour. The social, economic and cultural certainties of the postwar period, best exemplified by the title of Donald Horne's book The lucky country (1964), are gone or are in the process of transition. The upheaval in the structure of former empires, trade patterns and capital movement since 1945 has made obsolete the privileged social contracts that exemplified the lucky countries of Australia and NZ.

These were white-settler countries which came into nationhood in the early twentieth century, during the long decline of the British empire. These cultures and their peculiar 'whites only' (especially white male) social contracts (or more par- ticularly, class compromises) produced a political system of opposing labour and conservative parties, based upon an early internal colonial class structure within a division of labour shaped by the British imperial context. This internal class structure and the political system resting upon it, was later reinforced by the arrival of the fordist mass-production indus- trial system, especially after World War 11. These parties reflected not only class division, but also the dominant Aus- tralian dreams of a family, a small house or a small farm, and a welfare and protecting state.

The social contract of 1907 between worker and employer was founded on the basic wage concept. This had emerged from the Harvester Case presided over by Justice Higgins in the new Commonwealth Conciliation and Arbitration Court. Higgins stressed the notion of equity in wage cases: all should receive the same. Nowadays, this is changing towards concepts of 'ability to pay' in enterprise bargaining. So we are seeing the ALP pushing the American mode of wage fixing with resulting future unevenness of living standards. No wonder elements of the ACTU demand that some aspects of the award system remain.

The period between 1907 and 1975 represents a historical period of class collaboration. It was based upon bipartisan political support for the ideology of state liberalism, resting upon two economies: one was the international commodity- exporting economy of mining and agriculture; the other was the highly protected urban-based manufacturing economy, which employed most Australians and was sheltered under the wing of the British empire. The former paid for the latter. This was a liberalism, used so well by Menzies, that believed in state intervention in society for welfare and equity purposes. Alongside it flourished labourism, the idea that capitalism should be let run free, but should deliver a return to labour which was equitable and uniform.

This partnership was outlined in its four factors by the Victorian liberal Alfred Deakin, a future federal prime minister, at the end of the nineteenth century. They were: White Australia; awards for workers; protection for local business and certain farming interests so they could pay high awards; and great power dependency on the UK, which was essential for markets and defence. It was noted also for its social endorsement of the yeoman ideal in both small free-selection farming and Australian 'suburban peasant' dreams. This smallholder or suburban ideal underlay the life ambitions of the emerging Australian middle class. The political party that best provided for this dream would win government in the lucky-country period.

Australasia moved rapidly between 1945 and 1972 (when the UK entered the European Common Market) to new dependencies upon the USA and now Japan. (The smart money, now that Japan is faltering, is for a twenty-first century dependency upon China.) The aim of this dependency shift was to preserve Australasian high living standards and the structure of their dependent economies without having to undergo massive structural change, with its attendant impact upon the social contract and the peace between capital and labour.

But this historical shift to Asia and the end of the post- 1945 'long boom' has been implacable in its devastation of the 1907 social contract. The politicians and bureaucrats of both Labor and Liberal-National Parties have answered the demands of this period of change by converging towards eco- nomic rationalist theory and capitalist market solutions in trade and public policy, in search of a new contract between capital and labour. The major parties are interchangeable in all but words.

We now face, however, a new international capitalism which has transcended the national political stage. Such capitalism has no need to make separate deals with national labour groups of varying organised strengths, as in the old days of first, second and third-world countries. Its view of the world is as a pure market, in which nations and their parlia- ments do not exist as sovereign bodies, but only as varyingly expert managerial bodies of the one international system. What matters are labour costs, supply and demand, and com- parative advantage. Politicians do not deliver utopias or even concepts of the national common good. They deliver efficiency, not to their voters, but to global capital.

Marx got it wrong. It is capital, not the workforce, that has no homeland. Operating through world financial institutions such as the International Monetary Fund (IMF), the World Bank, and the General Agreement on Tariffs and Trade (GATT) or the World Trade Organisation (WTO) as it is now called, international capital expresses itself through this ideology of economic rationalism. Here the role of the old nation-state and its political function is reduced. What is particularly reduced is the public sector of the national economy. This is first corporatised and then privatised to increase markets for capitalism.

There is little patience for such populist democratic deals between the old opposites of nation-based capital and labour as underpinned the lucky country since Higgins' basic wage decision of 1907. With the crisis of socialism, both as an ideology and as a practical political force, there is little patience, too, with the state (or social) liberalism that underlay the rule of Deakin and even of Menzies, who strove to give capitalism and liberalism a kinder face by social welfare plans and government intervention.

There is even less patience with the rising political forces of minority racial groups, feminism and environmentalism. The latter, especially, is an attack on the consumerist mentality that underlay the keynesian solution to the problem of over- production that has bedevilled capitalist industrialisation since the nineteenth century. This mentality is a necessary part of the great internationalisation of capital which is spreading into former peasant countries of Asia (apart from Japan), especially in our near North. Capitalism rests upon this consumerism. But it also rests upon cheap labour and the lowest wages it can enforce. This is another reason for its inter- nationalisation.

The major parties in Australia and NZ, especially at the rank-and-file level, are not unaware of the impact of these global and national trends. However, their top levels are dominated by the technocratic middle class and its advisers who, in turn, are dominated by the ideology of economic rationalism. Hierarchy, careerism, and an ideological black hole have all coincided to create a difference of rhetoric but a unity of action by both major parties. The reality, in the Labor and Liberal-National Parties, is a choice between slow or rapid economic rationalism.

Followers of both parties, but particularly the working- class followers of the ALP, have a nagging feeling of betrayal. No one in the ALP has been honest enough to tell Australian workers, particularly in manufacturing, that present policies mean a future of a dual or divided working class - one por- tion in work, the other moving in and out of casual jobs and the dole. For small farmers, it means a constant battle against an accelerated drift from the land, caused by cheap cornpeti- tors or dumping of foreign primary commodities.

The popular attitude toward politics and politicians across the world has become one of distrust, cynicism and dismay from the true believers. We hear constantly from the bottom ranks that 'the ALP is the best Liberal Party we ever had'. A political vacuum has appeared on the centre-left. Those of us who are attempting to fill this vacuum believe we should defend what we can from the old social contract while creating and theorising the new.

This book is therefore an attempt to outline what can be done. We are not the first to approach this historical problem for left and progressive forces. In Mexico, Germany (especially former East Germany), Italy, France and the former Soviet Union, major political forces.have emerged to re-state the link between the people and politics, not capital and politics. The real problem for the left in these countries is that it is in a race with a new fascism which is based upon an exclusionary ultra- nationalism and economic protectionism, such as that of Le Pen in France. Yv'hat is new in this fascism is its broad working-class support which once would have been directed to the left. This is the fascism of the marginalised, of the losers in globalisation, who have no place in the New World Order. Racism is only a step away.

In our close neighbour NZ, the Alliance has emerged as a left progressive answer to this challenge and has done as- toundingly well in its first electoral campaign, receiving 18% of the vote. In polls in late 1994, the Alliance gained 30% support

pared to 20% for the Labour Party. With the introduction of proportional voting at the next election, the Alliance may c .. n become the government or at least a senior member of a governmg coalition.

This NZ Alliance is based on confederal, non-hierarchical politics emphasising social justice for all, sustainable develop- ment for the nation and the world, and minority rights. These are joined in a loose coalition with democratic 'class' and 'issue' politics as fundamental factors of policy. The word 'democracy' is stressed. This is rank-and-file democracy, unlike the Australian Labor or Liberal-National Parties where policy and candidates are increasingly selected by factions or an elite. For these parties, the rank and file are good enough to serve on booths and to put literature in letter-boxes, but must be kept away from power.

Australians, especially those who support thu@ ALP (the conservatives were always elitist), are gradually realising that the ALP is no longer the democratic party of the people which it pretended to be. It, too, has become a party of the elite, albeit a new technocratic elite based upon education and often the public sector, unlike the 'old gold' foundations of the Liberal-National Coalition.

The way forward for the left in countries like Australia is, as it always has been, through democracy and its extension into all areas of society. Ms means a considerate and tolerant approach to each other by those who would attempt to make an effective Alliance of parties. That is the purpose of this book.

The ideas here and in my introductory chapter do not necessarily coincide with the views of the other contributors. They are an attempt to outline some of the historical and sociopolitical changes influencing the lucky country since 1945, and to offer views on whether a new Alliance politics, going beyond the increasingly similar Labor and Liberal Parties, is possible.

What 1 have outlined has been endorsed, criticised, elaborated or reflected by the other contributors. Each has added their own perspective on the theme of unity. Nor is anyone bound by their initial comments. Some, such as the Australian Democrats, are lukewarm, given their own view of their future role and the possibility of a Liberal Party split. All are cautious.

The major thrust of this book is to point to some of the external and internal forces that have created a crisis in tradi- tional Australian politics and the social contract, and to identify other political forces and possible paths. It is simply a first step in this debate.

The movement away from the quiet and ordered lucky country, for good or ill, has opened a political vacuum on the centre-left of politics. This vacuum can only be filled by a new Alliance of forces outside of traditional parties, an Alliance which is not solely motivated by the politics of nostalgia, nor by the politics of the partnership of big business and bureaucratic governments that drive the mainstream parties.

At what pace such an Alliance will develop as a political reality depends on the attitudes of the political forces that the contributors represent and on the response and support for such a movement by the reader. It also depends, if NZ is a model, on the role of the left, especially the ALP Socialist Left, in endorsing and/or supporting such a fundamental political restructuring. This will depend on the level of disillusionment and leadership within that faction. Unlike the NZ situation, the ALP right which dominates government has not carried out a blitz on the preexisting awards and protectionist policies. The process has been slow and cautious, giving some hope to the ALP Socialist Left that it can be reversed. Alas, it cannot, at least not within the ALP. In general, the welfare state has been maintained, and initiatives have been taken on many issues relating to the quality of life, particularly issues of gen- der and racial equality. But the Socialist Left has had no say in fundamental economic and class policy, and it never will.

It was fundamental economic change, especially anti- working-class employment and wages policy, that brought out the left of NZ Labour to create the Alliance of parties. Our process may be different.

Lastly, practical moves, such as an initiatory conference on the possibility of founding such an Alliance, may be the outcome of this book. If you are interested, please write to Alliance Information, c/- 237 Boundary St, West End 4101.

Readers could also contact the Reworking Australia movement (PO Box 547, Glebe 2037), for information about neo-protectionist economic ideas to combat economic rationalism and its disastrous free-trade policies.

Acknowledgement: Many thanks to David Hudson, Wendy Lowenstein and Ken Norling, without whose advice, work and help this book could not have emerged .

* This book uses the spelling'Labor' when referring to the policies, members and official bodies of the Australian Labor Party, or to the state Labor Councils; 'labour' is used in all other cases.

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