Just over two years ago I was in New York working with Larry Summers and Ed Balls to prepare a report for the Center for American Progress on inclusive prosperity. One morning, I had the opportunity to walk the High Line and on the side of an old brick building was a large advertisement that read “the French aristocracy never saw it coming either”.
It was yet another reminder of the groundswell of support sweeping around the world for a more inclusive form of prosperity, and it’s been an image seared in my mind ever since.
In early 2015, the Inclusive Prosperity Commission Report was published. Its first paragraph concluded that growing inequality is a threat to “the political system and for the idea of democracy itself”.
I don’t find it politically comforting that growing inequality is now more openly analysed and discussed because I fear that those who need to understand its impact the most are blindly oblivious to its consequences. Nowhere is that more obvious than here in Australia.
The IMF has been warning for some time that we ignore the distributional impacts of globalisation and inequality at our peril, yet the Abbott-Turnbull Liberals went to the last election with a $50 billion handout for multinational companies and radical proposals to undermine the voice of working people.
If you’re looking for reasons for Trump’s victory, look no further than the potent combination of powerful vested interests dictating policy and some progressive elites shoving their orthodoxies down working people’s throats.
If you’re a truck driver in Logan or a steelworker in Wollongong, you’re constantly told to work harder for less while tax cuts go to the top end — you’ll suck that up for a while because you have to. If you are a Medicare or Centrelink worker, your wages have been frozen for three years and many of you are on the hunt for second jobs. All the while you see progressive issues like same-sex marriage dominate the discussion nationally, and the interminable debate about immigration bubbles away. These issues make you uncomfortable and give rise to constant muted grumbles, because your priority is secure jobs and wages.
[Wayne Swan: we know how to stop Trumpism]
But once the orthodox economic crusade reaches a breaking point and your job has been sent off-shore or made casual, or you otherwise get tossed on the economic scrap heap, it’s like a drum of kerosene dumped directly on those smouldering social issues, and you have an inferno of white-hot rage erupting from large numbers of the working-class base. Our party has a proud record of progressive social reform, but we must always have at the forefront of the policy battle the economic interests of working people.
The Australian business elite (aristocracy) suffer from the blindness of affluence. The winners from our prosperity just don’t see poverty and injustice anymore let alone the persuasive case that a fair society produces a more prosperous economy.
They don’t understand that ignoring inequality leads us down a policy route to greater inequality. There is a small but growing group lead by Gina Rinehart and Rupert Murdoch — the oligarchs, if you like — who are increasingly forcing their influence from the top of the stairs and seeking to have disproportionate control of our democracy.
There are some good people in the business community but there are also a noisy minority who only look to the immediate consequence of economic reform on their own business. This group preaches productivity and competiveness for the economy as a whole but they’ll never support it if it has a negative short-term impact on them.
As I warned in my 2012 Monthly essay, The 0.01%: the Rising Influence of Vested Interests in Australia, Australia’s fair go is today under threat from the business elites. To be blunt, the rising power of these business elites or vested interests is undermining our equality and threatening our democracy. We saw this most obviously in the ferocious and highly misleading campaigns waged against resource taxation reforms and the pricing of carbon pollution.
After the 2010 election, the corporate right mobilised against Labor as never before. Our removal of WorkChoices, the implementation of the Fair Work Act and the advent of minority government emboldened the business community.
Fair industrial laws, combined with our powerful Keynesian response to the global financial crisis, became a lightning rod as Labor was seen to be mounting a full-frontal assault on the dominant conservative narrative of the past 30 years: trickle-down economics.
They commenced an ongoing campaign to delegitimise and destroy the labour movement and through those actions, the Australian Labor Party.
[How Wayne Swan’s ‘no’ saved investors millions]
We’ve seen this demonstrated time and time again over the last three years by the Liberals’ attempts to shift the tax burden onto working people via a GST and the attempts to dismantle the social safety net and Medicare.
In the 2000 days I was treasurer, I learnt a bit about what we need to do to defeat the survival-of-the-fittest trickle-down agenda pushed by the Tea-Partiers in the Coalition and their plutocratic allies. I enthusiastically supported my party’s decisions not to take a backward step on the 2014 budget. We stood up and fought the attempts by the Liberals to criminalise Labor’s progressive policies by persecuting Labor through the trade union (Heydon) and pink batts (Hanger) royal commissions. We opposed outright the outrageous proposals in their audit commission.
Growing inequality in the developed world is a direct consequence of the voice of working people being crushed, and that’s why Labor must never support the conservative agenda to split or dilute trade union participation in the Labor Party.
In office and over the last three years, Labor has fought for the big structural reforms required to secure growth with equity. At no stage has the business community backed sensible proposals, which are in their long-term interest; reform of negative gearing, a sensible price on carbon, the Gonski education reforms, to name just a few.
We see now in Australia, like in the rest of the developed world, that capitalism is dominated by a plutocratic family model backed up by an over-powered and overpaid financial and corporate elite. They want an economy run by the rich for the rich.
My party should more explicitly call out this behaviour for what it is: selfishness and greed camouflaged as a growth agenda for all. These people aren’t seeking consensus; they’re seeking to dominate our democracy.
Many thought Donald Trump would probably lose the election but his election is the final warning to both parties, but especially to Labor. Without a strong inclusive agenda we’ll end up like the US Democrats, or worse, end up like the British Labour Party — fractured and shattered.
A strong trade union movement and a strong Labor Party is the only antidote against the poison of politically inspired trickle-down economics which erodes living standards for ordinary people.
Tackling inequality isn’t a technical problem; protecting working people is our historical task and shared prosperity has always been our party’s sacred mission.
We won’t win the battle of ideas unless we are steadfast and consistent in the presentation of a progressive framework and a framework for a greater voice for working people.
We must never let vested interests divert us from the core message and never operate under the illusion the plutocrats operate in the national interest.
We don’t want to end up as a country ruled by a new plutocratic aristocracy where in the words from Bruce Springsteen’s Badlands:
“Poor man wanna be rich/ rich man wanna be king/ And a king ain’t satisfied, till he rules everything.”
*This article was originally published at John Menadue’s Pearls and Irritations
Well written. Well argued.
Thank you.
The last occupant of the Gilded Palace at Versailles lost his head in a bloody revolution presaging 30 years of instability and the complete vanquishing of the French Aristocracy; who “never saw it coming”.
Today the media is full of images of a latter day Versailles located in downtown New York; complete with suitable sycophants and sundry retainers ascending the gilded lifts.
I am reminded of the chief white Orc in Lord of the Rings hoarsely proclaiming that the Day of the Orc has finally dawned (“The Return of the King”) – only to be flattened by a large rock minutes later… Trump does look somewhat like the rather ugly Orc.
History (and Fiction) repeating itself as we watch.
My Question is what do we do about the “Post Truth” age we now live in (as of last week) when rational considerations gave way to herd instinct; when well argued rational pieces like this (Thanks Wayne) cut no mustard against the mob rallying in the market square, pitchforks at the ready; called forth by supposed leaders…
as someone recently said – “back to Christianity then…”?
I hate to say this, but Labor ties it’s trailer to the LNP truck way too many times for anybody’s comfit. For instance, why was it not burning down the TPP deal root and branch? The smelly covert trade deal is dead and gone now anyway, but Labor remains standing there looking like a cheap hooker for big corporate interests. I’ve been saying this, mostly to myself, it seems, for way too long. Unshackle yourselves from the conservatives completely and start acting like the Labor party of old. Stop doing deals with the LNP, and stop attacking the Greens. The Tory is your enemy not your fellow travelers. Believe me, there are votes out there to be harvested, because all the evidence supports the view that people want change. Honestly, there is very little point of difference between the two major parties for the average punter. Look around the world, and, more importantly, look to the primary vote of both LIBs & LABs and tell me I’m wrong? Which direction is it heading – up or down?
The only LNP policy that the punters wish to retain, sadly, is the inhumane treatment of refugees. I have no answer to that problem. If there was an easy answer to it would have been discovered by now.
Spot on, Labor needs to grow a pair and stop spending their time worrying about being wedged and go hard with some real policies that drag them back from just being part of the LNP or they’ll never win.
Yes indeed and well said Nudie.
Growing inequality.
Yes-Labor gutted the middle-class. If you are looking for reasons look no further than Labor.
Apart from factional infighting they don’t seem to know what is going on in the real society. Migration-hadn’t a clue but a lot of good speeches filled the air. Great policies regarding the occupants of the 3rd and 4th standard deviations of society but the stuff the people in the major part of the Bell curve.
Off shoring Labor= Liberals.
If Liberals look after the +3 and +4 standard deviations and Labor looks after -3 and-4 standard deviations- who looks after us ??? No one, so why the surprise when some actually do decide to take their voting power seriously.
‘The truck driver in Logan ‘was systematically put out of business by labour and unions-until the machine was dismantled, rather reluctantly, by the Liberal government.
Swan’s short-term memory is fading which is sign of early political dementia.
Des,
What are you smoking? At what point was the the union “machine… dismantled, rather reluctantly, by the Liberal government”? The Lib “reluctantly” attacking the union movement? Really? Reluctant RC’s I suppose? Reluctant attacks in the media? Reluctant “workchoices”? Reluctant changes in legislation?
Oh yeah, I bet it tears the LNP up every time it kicks the union movement in the cods.
oops – word should be -Machinery – the system put in place by Labor & unions to make the truck owner/drivers extinct.
Is the reason why Labor spends so much time talking about social issues that they find enacting proper left economic policies too difficult? Weren’t they the party attacking the Libs for being too harsh in their superannuation reforms?
I would be more convinced of your commitment to doing something about income and the social and geographic wealth imbalance if you hadn’t signed on to the 30 million by 2030 immigration policy.
No I don’t support Pauline and I don’t think we should turn away every boat, however you and your successors have been bringing in about 1 million people net every five years.
The neo liberal economists of course think this is wonderful. You bring in people with money and skills and no historoy of collective involvement in the workplace i.e. unions. You create a set of laws that makes it impossible for worker to get reasonable wages and some security of tenure and then wonder why YOUR constituents aren’t getting wealthier.
Thees economists love that argument that more people increases GDP/GNP. Wonderful everyone says. I have heard this so many times I can almost believe it except that I’m not stupid. Of course immigration DOES increase the aggregate wealth of the country. Big deal! What really matters is the wealth per capita, how well that wealth is distributed and what sort of environment this creates for the Australians who are already here. We know the answer to this. Gerry Harvey, Solomon Lew and those other great supporters of Australian manufacturing, sell even more imported washing machines and glad rags to all of these new people so they get even more obscenely rich. Of course they live in rather salubrious locations and don’t have to actually see the rest of us who support this rotten system.
Not only does the wealth not flow to all protagonists, but as there are all these new people who need somewhere to live AMAZINGLY house prices and land become so expensive that only a Chinese Communist Party Hack who made his money exploiting the Chinese rural and regional poor can afford one.
You politicians wring your hands and protest that it’s all beyond your control. No one can stop globalization and immigration we just have to adapt to it. Code for you need to stop complaining and suck it up. Why are politicians so paranoid about the boats. Surely it can’t be because these people are poor and haven’t filled out the paperwork? No of course not. It’s a smokescreen to cover up the excessive and undemocratic notion that we must populate or perish. Look we are strong on immigration “We will decide who comes to Australia” Wow!! So tough so dynamic!! But there has never been a public debate on how quickly Australia should populate or wheter it should at all. This is so undemocratic that it makes Austrlia more like a fascist dictatorship than a modern civilization. The mandarins of Canberra and the Boardrooms of Australia and of course overseas get a say, but none of us ever do. Your attitude is We will decide those important issues and you plebs can get riled up about boats (not planes) and fringe issues like gay marriage and free speech. Issues which have a clear and simple answer, but which play well over and over and over in the press as bromides for us plebs.
The idea immigration is some uncontrollable, but benevolent phenomenon, a bit like the weather, is a lie which you and you conservative opponents have foisted on Australians for the last thirty years.
Unfettered and irrational immigration has created an explosion of substandard housing in substandard suburbs with no decent public transport systems, a gross shortage of health and mental health resources, police and a gridlock of substandard roads that can never keep up.
A little example of our wonderful infrstucture.
I live in regional Victoria. If I need to attend a conference for work outside of Melbourne for one day, it takes me four days in travel to get there and attend what may be only a four hour event and get back. It takes me 20 minutes to get to the Traralgon Station, 15 Minutes waiting time, 2.5 Hours to get to Flinders St, 0.5 Hours minutes on the BUS to Melbourne airport. Checking in 40 minutes prior for cattle class. An hour to Sydney, or Brisbane or wherever and then usually one to two hours to get to the site I am working at. Invariably this requires that I head off the day before and thus incur the costs an overnight stay. To get home is the same crappy itinerary in reverse. This is BS.
It has been like this for all my working life. You lot couldn’t provide decent infrastructure and services for 15 Million people and you want 30 million plus. What a joke.
Well Robert…if you think it is soooo easy to provide all those things you say the politicians (mostly Labor ones it seems) didn’t/don’t want to…then I suggest you stand for parliament yourself.
Give it a go and then tell us how easy it all is. If not…STOP WHINGING!!