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Civilising Global Capital.

Mark Latham, Civilising Global Capital, Allen & Unwin, 1998.

What is striking about these three books is that they constitute another excellent example of the broad consensus among key policy makers and opinion leaders in Australia -- a consensus that is increasingly out of tune with large minorities on the populist Right, the anti-economic rationalist Left and millions of others unaffiliated to either Right or Left. Argy, Latham and Hughes largely accept the neo-liberal socio-economic reforms since 1983 even though they object to the high unemployment and social dislocation produced by `hard liberalism' of the New Right. In this sense, all three can be described as economic rationalists with a `human face' -- that is, pragmatic policy makers and theorists who operate within a post-social democratic and post-Keynesian framework.

Mark Latham, Labor Shadow Minister for Education and Youth Affairs, ambitiously hopes his book will influence the next ALP government's agenda. It may also be part of his own future bid for leadership. Despite the book's serious flaws, it is remarkable that a leading Labor politician has been able to develop a policy perspective, even though a derivative one, in a period when so few ideas are produced within the ALP. One only has to look as far as the 1997 edition of Labour Essays to see how thin a collection of labour movement ideas it is, both in pages and policies. Fred Argy is promoted by his publisher as `wise counsellor' after twenty-seven years in the federal public service advising governments from Menzies to Keating. His target is the `hard liberalism' of the free marketeers who Argy claims are destroying Australian `consensual society'. Finally, Owen Hughes examines Australia from the so-called apolitical office of professor in the Department of Management at Monash University. His audiences are all those students in politics and public policy courses.

Two faces of neo-liberalism

As we approach the twenty-first century, two variations of the neo-liberal or economic rationalist framework dominate the political and economic scene in Australia. The first is an explicitly anti-egalitarian neoliberalism closely associated with the Liberal and National Parties, many businesses, senior media personnel, academics and think-tanks. It is an anti-egalitarianism that has historical continuity with earlier versions that prevailed right through the twentieth century. The main difference is that in the past: two decades the contemporary version has been dressed up in an aggressively pro-market ideology that underpins a set of familiar policy prescriptions based upon deregulation, privatisation, user-pays, international `competitive benchmarks' and so forth. The blatant disregard for low income and disadvantaged citizens and families is infused by an anti-egalitarian philosophy which, in contrast to earlier versions of conservative defences of wealth and privilege (couched in all sorts of religious, racial and other non-market doctrines), reduces the environment and other social, educational and cultural values to the narrow values of the market.

Only a few considerations temper or restrain this explicit neo-liberal framework of anti-egalitarianism. These `restraints' include the need to moderate harsh social policies in order not to alienate major constituencies within the electorate. Then there is the uneven application of free-market ideology flowing from the need to placate specific lobbies or powerful individuals. The latter are usually well-placed historical allies close to or within the Coalition parties who wish to protect their pet areas, professions or interests from the more zealous and `purer' exponents of market fundamentalism. Finally, the ultimate barrier to further anti-egalitarian policies is the level of organised resistance that can result in unsustainable costs to government popularity or business profits. These costs may take the form of mass domestic opposition such as the mobilisation against the attempt to smash the Maritime Union of Australia. They may also result in loss of foreign trade, tourism and investment whenever racist policies determine the government's antiegalitarian policies. In short, the explicitly anti-egalitarian version of neo-liberalism is a product of policy tensions between free-market ideologues and pragmatic political operators. Those who genuinely subscribe to neo-liberal propagandistic claims that free-market policies improve the quality of life for all citizens remain a small minority.

The second version of neo-liberalism (to which Latham, Argy and Hughes subscribe) can be called economic rationalism with a human face -- even though Argy talks of a `progressive liberalism' and Latham imports the `radical centre' agenda of Blair's New Labour. This softer version of neo-liberalism is championed by the Australian Labor Party, the `progressive' wing of business, many academics, `responsible' community spokespersons and commentators in the media, especially in the Fairfax Press and the ABC. The central tension within this broad school of `human face' neo-liberals is the attempt to marry an egalitarian concern for social justice with a fundamentally antiegalitarian economic ideology. Hence Argy's concern about the negative consequences of an unregulated free market and Latham's project of `civilising footloose global capital'. The residues of labourism and social democracy manifest themselves in the desire to protect the poor and disadvantaged with adequate safety nets, to reject anti-unionism in favour of cooperative implementation of `competitive benchmarks' and voluntary downsizing -- thus instituting national competition and privatisation while protecting consumers and others.

Whereas authoritarian practitioners of market fundamentalism such as the Kennett Government have opted for a corporate style of administration that abolished or reduced community consultation processes in a whole range of policy areas, the `human face' neoliberals continue to be committed to a more inclusive form of government. For while many in the ALP and sections of business would love to be free of the obstacles and problems associated with democracy and consultation, they favour `efficiency', productivity and other market rationalising outcomes that have been voluntarily and co-operatively arrived at (usually taking the form of compromises and trade-offs) rather than imposed in an abrasive and secretive manner from above. Yet it is rare that dominant corporate investment projects or government rationalising cuts are completely vetoed, simply because community or workers' representatives in the consultation processes have much less power than government and business. Ultimately, most of these more `open' forms of policy making are no less unpopular -- and not very much less anti-egalitarian -- even though they are sold as `democratic' decisions to the constituencies concerned. The important point is that this version of economic rationalism ensures that the marketisation of society continues unabated but with the harsher methods and consequences softened by the provision of more generous but piecemeal welfare and other services.

In contrast to the anti-egalitarian neo-liberals, the `human face' economic restructurers promote a more tolerant and anti-authoritarian cultural agenda of support for Aborigines, multiculturalism, feminism, gays and other minorities. This commitment to human rights and anti-discriminatory policies is not to be undervalued. Neither is their support for more progressive political institutions such as a republic, despite the minimal changes ultimately proposed. Yet, it is also clear that the pragmatic `human face' neo-liberals rarely put their principles first -- witness how the Hawke and Keating Governments subordinated human rights principles to economic goals in their support for Soeharto and other Asian dictators. There is also a strong technocratic current within this school of economic rationalism. Liberal humanist values are not always incompatible with support for all sorts of fashionable technocratic policies that ultimately threaten bio-diversity and fundamental notions of species being -- the negative consequences of which are only revealed many years later.

Just as the explicit anti-egalitarian zealots are restrained by pragmatic electoral considerations, mass public resistance and patronage for special lobbies, the `human face' neo-liberals are torn between competing values and the need to placate diverse interests. Since the. 1980s, the record of federal and state ALP governments has clearly revealed the limits of `human face' economic rationalism. Inequality and poverty have boomed due to the deliberate failure to abandon economic policies perpetuating mass unemployment and fiscal austerity which has resulted in substantial cuts to health, education, social services and public infrastructure. Not only did regressive tax reforms redistribute wealth from the poor to the rich, but many Labor leaders brazenly joined the corporate set in the most flagrant forms of conspicuous consumption that were in dramatic contrast to the lifestyles of the `true believers'. Also, without mass protests to protect Kakadu and other areas, ALP governments have either been restrained by internal divisions at best, or else have tried to outbid the Coalition parties in their eagerness to please pro-development industry lobbies.

Fred Argy stands mid-way between the `hard liberalism' of the Howard Government and critics of economic rationalism such as Michael Pusey. Mobilising data and arguments against advocates of the Thatcherite and New Zealand model, Argy is alarmed at: the unnecessary rise of social divisions, the overemphasis on fighting inflation rather than unemployment, the counterproductive ideological attacks on the public sector and interventionist strategies. While critical of aspects of the Keating Government, Argy is much closer to the ALP strategies of the period 1983 to 1996. Owen Hughes is also positive in his assessment Labor. However, unlike Hugh Emy (his former coauthor of the first and second edition of Australian Politics) who advocated a variation of the German social market model for Australia, Hughes gives the appearance of being less critical of neo-liberalism. Both Argy and Hughes tend to minimise the widening gap between rich and poor that occurred under thirteen years of Labor. Argy places the blame on `hard liberalism' but ignores the responsibility for social divisions and `the breakdown of social consensus' created by Hawke and Keating's `human face" economic rationalism.

While not a political intervention, Hughes' book is nevertheless a valuable text that contains much insightful material for students who wish to read a good overview of recent economic policy, the constitution, changes to the public sector and the role of political parties. However, his notion of `Australian Politics' is far too narrow in its failure to analyse the role of gender, ecology, social movements and other critical aspects of political culture and non-institutional politics. This leaves, for example, his brief discussion of Hansonism and Aboriginal policies bereft of any noneconomistic socio-cultural foundation. In a book of 500 pages it is revealing that so little attention is paid to a broader analysis of the relationship between cultural politics and political economy. This is a pity, as the inclusion of neglected topics would have made Hughes' work (despite its neo-liberal analysis) an excellent overview of Australian politics.

Of our three authors, only Argy discusses the vital issue of environmental degradation and the politics of ecology. Hughes mentions it once in relation to a paragraph on greenhouse and trade, while Latham is completely and utterly silent on ecological issues! Unlike the Blair Government which has made ecological issues a part of New Labour, Latham's agenda for the next ALP government is a regression to the pre-1960s in its neglect of the environment. How can global capital be civilised without a single reference to ecological issues? Where has Latham been during the past thirty years of local and international green movements, conferences and treaties?

Recycling New Labour

However, Latham's blind spot on ecology is partially compensated for by the outline of a series of policy initiatives in the areas of welfare, education, health and employment. It is a pity that Latham's style is one of endless small chapters, each no more than a few pages in length, so that paradoxically, despite being almost 400 pages long, no topic is analysed in depth. Also, just as the mining industry appropriated concepts such as `environmental sustainability' from the green movement and transformed them into anti-green marketing slogans, so too, Latham appropriates Marxian concepts such as `fiscal crisis of the state', `Fordism', etc., to develop his anti-radical New Labour scenario. But then any reader of social-policy literature in Britain will be only too familiar with the mountain of rhetoric flowing from Labour politicians and ideologues about the `third way', the `radical centre' -- all by-products of a decade of post-Fordist, `new times' analysis developed by ex-marxists in defunct old journals such as Marxism Today or Blairite organs such as the New Statesman, Demos and Nexus.

Latham imports a great deal of this New Labour perspective and tends to gloss over or be unaware of the complexity of different socialist and social democratic agendas in the European Union. His essential thesis is that we live in a globalised economy where the old Keynesian social democratic agenda of big, centralised welfare states based upon sovereign nation states is obsolete. Hence the old Left statist agenda of solving social problems by more government expenditure is now unpopular with the masses who demand a more customised, individualised set of services that correspond to their ideas of freedom and niche needs based upon location, age, gender, community and so forth. According to Latham, global capital is footloose and it is the task of a new centre/Left agenda to maximise social equality by strengthening individual and collective capacities to utilise private sector and limited government resources. This requires new economic policies that do not repeat the old protectionist subsidy of industry. It also requires a major reform of our tax, welfare, education and health systems. He favours greater citizen mutuality via a more decentralised set of service delivery systems, forms of administration and communal involvement of individuals in their own welfare and education.

Latham may find it surprising to know that the desire for democratic decentralisation and the replacement of bureaucratic welfare states has long been a central aspect of numerous varieties of left thought outside and even inside the ALP. His post-Fordist fusion of neo-liberal forms of self-help and collective social policy is currently flavour of the month. Yet Latham provides little evidence that most people in Australia want smaller government. On the contrary, most polls reveal a contradiction between dislike of `big government' and the desire for social welfare, education and other services to be increased. People are even willing to support higher taxes to ensure adequate hospitals and schools. But leaving this important fact aside, the key feature of Latham's policy initiatives is the gap -- also very evident in Blair's agenda -- between the rhetoric of wanting to do something for low income and disadvantaged people, and the failure to mobilise adequate fiscal and social resources in a society suffering from enormous inequalities. However, he does not, contrary to Peter Costello's misrepresentation of his argument, favour a GST. Instead, Latham advocates Kaldor's progressive expenditure tax -- a policy that is entirely different to the inherent inequalities of the GST.

The emperor has no clothes

If Latham's message is that we have to learn to be creative and do much more with much less government, some of his key policy suggestions contradict this view. Take, for example, his admirable advocacy of the public sector as the employer of last resort if the private sector fails to supply enough jobs. If this were implemented then the local, state and federal public sectors would have to provide close to a million extra jobs for all those currently unemployed and willing to enhance our community services and infrastructure. There is no way that this radical expenditure could be implemented without a significant boost in revenue or an increase in the budget's deficit. On the other hand, Latham's reform of the welfare state and education primarily revolves around administrative reforms rather than a large infusion of extra funds to assist the poor. His `Income Security Accounts' are based on streamlining all types of social security and income payments for education into one lifetime account to which individuals contribute (i.e. subsidised saving' like superannuation) and then draw upon for their different life-cycle needs -- from education to pensions. This unofficial partial privatisation of social welfare through self-provision is closely tied to a neo-liberal revival of the work ethic -- common to Blair and Clinton's reforms. It is light years away from other post-Fordist proposals for citizen's incomes or basic minimum income schemes that do not force individuals into market-related notions of social security or welfare programs tied to labour markets. Latham's proposals also tend to ignore the varying capacities of high and low income individuals to save for their retirement and the perpetuation of post-retirement inequality (not to mention the consequences of lifetimes of insecure casual, part-time and jobless cycles) on family and individual incomes.

Latham's proposals should be widely debated in order to show the flaws in the `radical centre' solutions to unemployment and poverty. Britain has one of the highest levels of poverty in Western Europe and New Labour's tinkering around the edges will do little to improve living standards `for the poor. Similarly, Australia has witnessed massive cuts in the public sector under Keating, Howard and Kennett (over 80,000 jobs slashed by Kennett alone). Once one strips away the tantalising rhetoric of Latham's New Labour analysis, there is no way that schools, hospitals and numerous other services can magically begin to meet egalitarian objectives without a massive infusion of government funds. This is not an argument for old-style centralised bureaucracy; but it is also clear that the private sector will do little to redress inequalities. Hence the need for substantial public investment combined with new communal structures and processes that simultaneously democratise and engage citizens in their society while combatting poverty, unemployment and social exclusion. There are numerous imaginative proposals advocated by critics of existing economic policies. Dave Purdy, for example, proposes the conversion of government employment and social security departments into Social Opportunity Services (SOS). Apart from offering conventional services, training and placement schemes, the SOS offices in each locality would organise properly managed projects proposed by grass-roots groups, non-profit organisations and individuals -- all designed to fulfil unmet public needs and extend the options for unemployed and other social security claimants.

The value of Latham's book lies not so much in his policy prescriptions, but in the fact that the ALP or any political movement should be forced to debate what kind of alternative polices they favour if Latham's suggestions are rejected or modified. If we live in new socio-economic times and cannot return to old forms of protectionism, renationalise the privatised utilities and so forth, the challenge for the Left :is to devise alternative policies that go beyond both the `hard liberalism' that Argy rejects and the soft neo-liberalism that Latham promotes. Apart from the specific economic policies advocated by these authors, greater attention has to be paid to the deep-seated socio-cultural and ecological values that emerge as a result of `progressive liberalism' or New Labour.

Conclusion

Finally, it is critical that we understand the vital role that public policy advocates such as Argy, Hughes and Latham play. All three come across as essentially decent, caring individuals. Torn between partial or total acceptance of dominant macro-economic policies, desire for social justice and the sustenance of nonmaterialist or spiritual cultural values, the economic rationalists `with a human face' nevertheless constitute the indispensable social and moral authority without which the hard-nosed anti-egalitarians would be reduced to a small minority. This is because rightwing populists' craving for the monocultural economic nationalism of One Nation strips the free-market fundamentalists of a majority domestic base. Occupying the `political centre' gives Argy, Hughes and Latham much legitimacy. However, it must not be forgotten that their contemporary `moderate' positions would have been regarded as right-wing ideology by similar `moderates' less than twenty years ago.

In response to Hansonism, a `popular front' of unlikely allies -- transnational corporations, Aborigines, ethnic groups, the labour movement, greens, professional technocrats, the arts community, investment bankers -- directly and indirectly safeguard and consolidate the dominant macro-economic framework of neo-liberalism by default. For in the absence of a vibrant, left political force against economic rationalism, a coalition of anti-racist forces makes the economic status quo look moderate and respectable.

Hence, the progressive forces calling for a multicultural republic based upon social equity and reconciliation with indigenous people are almost locked in to a modified free-market agenda (with a `human face') driven by global and national market forces. Or are they? Are we witnessing the consolidation of neo-liberalism, or have we already seen the first signs of an emergent post-economic rationalism that will result in major domestic and international policy conflicts in the coming decade? So far, the dominant economic rationalist vision largely shared by our major parties is for Australia to become part of a vibrant supranational regional market based on countries in the Asia Pacific. Argy, Latham and Hughes take this scenario for granted. Whether the recent Asian crisis has been a major setback to this supranational bloc or the necessary precondition for its realisation remains to be seen. What we do know is that the narrow Keating and Howard trade-orientated scenarios for APEC will at best have to try to accommodate discontented political forces -- both in Asia and Australia -- and at worst, risk being blown away by the enormity of these emerging oppositional forces.
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Author:Frankel, Boris
Publication:Arena Magazine
Article Type:Book Review
Date:Aug 1, 1998
Words:3446
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