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Tristan Ewins – Tristan is a freelance writer, PhD graduate, qualified teacher, blogger, social commentator and ALP Socialist Left activist of over 20 years. He has written for The Canberra Times and several online publications – most prolifically at On Line Opinion. He blogs at Left Focus, ALP Socialist Left Forum and the Movement for a Democratic Mixed Economy.

Website: http://alpsocialistleft.blogspot.com.au/

‘Political Correctness’ and ‘Cultural Marxism’ – Why the Right is Wrong: A Response to Kevin Donnelly

Above:  Conservative Social Commentator, Kevin Donnelly is a high-profile ‘public intellectual’ – best known for his opinions on Education.  Donnelly also regularly challenges multi-culturalism and radical views on ‘gender fluidity’.  Like many Conservatives, he criticises so-called ‘Cultural Marxism’, (arguably capitalising on fear and ignorance). He argues that ‘Cultural Marxism’ is a threat to Western Civilisation and the legacy of the Enlightenment.  But Donnelly’s opinions deserve to be challenged – For the sake of ‘genuine pluralism’; and for the sake of clarity when it comes to understanding the modern Left.

This is the first of what I hope to be two essays in response to Kevin Donnelly

By Dr Tristan Ewins

Australian Catholic University based public intellectual,  Dr Kevin Donnelly has established himself as one of Australia’s most prominent big ‘C’ Conservative voices: and undoubtedly as an important influence on the ethos of the governing Liberal Party.  This essay is a progressive response to Donnelly’s book, ‘How Political Correctness is Destroying Australia – Enemies Within and Without’.   (probably to be followed by a second essay into the future)

As part of the so-called ‘Culture Wars’ in Australia, Conservatives have decried what they call the ‘Black Armband’ view of the nation’s history, (Historian, Geoffrey Blainey’s term): a view of Australia’s complicity in imperialism and colonialism; and a past Conservatism which disadvantaged minorities.  Instead, Donnelly and those like him emphasise a narrative of Australia’s broad liberal and Christian traditions, (and even of how liberalism developed in tandem with the broader Enlightenment tradition).  Donnelly argues that these have involved pluralism, freedom and intellectual rigour.  

What is ‘Cultural Marxism’ anyway?  Double Standards in our ‘Historic Memory’

While most on the ‘broad Australian Left’ could probably still fit comfortably into the ‘liberal left’ category, Donnelly and other big ‘C’ Conservative thinkers see something more ‘sinister’ at work. The term ‘Cultural Marxism’ is increasingly thrown around with abandon. (Donnelly seems to prefer that to the use of the alternative term, ‘Critical Theory’)  He cites ‘the Left’s’ ‘Long March through the Institutions’ as leading to ‘Politically Correct’ thinking in schools and universities; and more broadly in popular culture.  Importantly; this so-called ‘Politically-Correct’ (PC) outlook often has a tendency to emphasise gender, sexuality, culture and race, (a shift from ‘old left’ emphasis on social class and a critique of capitalism).

Despite most of the ‘broad Australian Left’ arguably identifying as ‘liberal left’, ‘Marxism’ in particular is cited as the ‘bogeyman’.  The reasons for this are obvious: to capitalise on fear, ignorance and confusion. 

Many Conservatives identify ‘Marxism’ as an ‘unbearable evil’;  even though most of them cannot pin-point what the term actually means.  Donnelly refers to Pol Pot and Stalin amongst others as examples of ‘Marxism’.

A more thorough investigation might have identified the place of US bombing in Laos –  in facilitating social collapse, and the consequent rise of Pol Pot,  (this is before mentioning the place of Pinochet’s coup and the mass murder in Chile 1972; the Assassination of Archbishop Oscar Romero in El Salvador, 1980; and of the massacre of over half a million Leftists and labour movement activists by Suharto in 1960s Indonesia; or other ‘Cold War atrocities’).

Also, the place of Western intervention in giving rise to an outlook of utter desperation amongst the Bolsheviks in the period spanning 1917 through the 1920s – could accompany a more thorough investigation.  As would the place of the First World War – which set the scene for Russian social collapse, and itself resulted in approximately 20 million deaths.    

Bolshevism specifically degenerated into Stalinism. Other Marxist thinkers such as Karl Kautsky and Julius Martov identified the effective likelihood of this, and the damage consequently done to the broader socialist cause – relatively early on during the Bolshevik Revolution.

Marx himself had identified the threat of ‘Bonapartism’. – whereby a political leader consolidated themselves above social classes and other interests. (That could apply to both Napoleon Bonaparte AND to Louis Napoleon Bonaparte III; and finally to Stalin himself).  Arguably Stalinism – and the Cult of Personality around Stalin – saw this taken to a level previously unthinkable.  Even before Stalin’s rise, ‘Jacobin’ strategies of revolutionary Terror were also an important factor – but that was not the whole story.

To consider the prevailing ‘selectivity’ in our ‘historic memory’: Trotsky’s march against Anarchist dissident Sailors at Kronstadt in 1921 might be compared in nature to Winston Churchill’s sinking of the anchored French Fleet during World War II (July 1940) – following the French surrender to Germany.  While the Bolsheviks responded to what they saw as an existential threat to the Revolution, Churchill considered a scenario (Nazi capture of the French fleet) which could have turned the tide of the War in Hitler’s favour. In Churchill’s case over 1000 French sailors (until then Allied to Britain) were killed. In the case of Kronstadt total causalities were over 10,000, (considering both sides).

(As an aside; If the Bolsheviks had heeded the voice of Rosa Luxemburg (in 1918) a maintenance of liberties may have provided an ‘outlet’ through which the whole situation may have been avoided in the first place in Russia.  But in reality, now we will never know.)

Both acts could be questioned morally.  It could also be argued that desperate circumstances lead to ethically challenging dilemmas, to put it mildly. What is often missing with ‘Conservative critiques’ as usual – is intellectual and moral consistency.  Critics of Trotsky, for instance (and I am not a Trotskyist), are often silent when it comes to other ‘fateful decisions’ such as that of Churchill.  Dissident Marxist critiques of Bolshevism and Stalinism (eg: Kautsky, Martov, Luxemburg) are also largely absent from popular memory. It should not be like this.

Donnelly points to the ‘Frankfurt School’ as the source of the so-called ‘Cultural Marxist’ movement.  The ‘Frankfurt School’ began as an intellectual movement in interwar Germany, before migrating to the US in for fear of Nazism. (Some ‘Critical Theorists’ were to re-establish themselves in Europe following the defeat of Hitler).  Forming the ‘First Generation’ of Critical Theory; thinkers such as Theodor Adorno, Max Horkheimer, Eric Fromm and Herbert Marcuse, while retaining a critical disposition against fascism, could not delude themselves about the direction of the USSR under Stalin.

Also, the prospects for the organised working class and traditional socialism had appeared increasingly questionable as fascism rose in Europe.

‘The Frankfurt School’ increasingly became synonymous with ‘Critical Theory’.  Broadly speaking; ‘Critical Theory’ developed a critique of Western culture and an emphasis on minority perspectives and rights.  Some self-identifying ‘Critical Theorists’ tended to suppose that the ‘traditional’ socialist movement’s ‘historical moment’ had passed.

In other words – that the working class had largely been co-opted; in part because of the role of popular culture, to which you could also add other factors, including religion and nationalism. In more recent decades, the decline of ‘Fordism’, factory labour and so on in many countries – has seen an accompanying decline of organised labour as well.

Nonetheless, Marcuse – with his work, ‘One Dimensional Man’ (originally published in 1964) – focused on the socialist project as one of ‘radical negation’ – of ‘a Great Refusal’ (of capitalism) involving ‘minority’ perspectives, including racial minorities, women, students and so on.  This was a break with the traditional (Marxist) view of socialism arising primarily from ‘a Dialectic of Class Struggle’.

Marcuse especially was influential in the late 1960s with the wave of ‘student uprisings’ which swept Europe, (and the rise of the ‘New Left’). Marcuse was notable in rejecting modern society’s emphasis on an outlook of ‘social closure’ for which there is no room for deep criticism or negation; an outlook for which ‘the system delivers the goods’ and should not be questioned. “Democracy”  was becoming increasingly tokenistic and shallow on account of its manipulation; a tendency which continues still.

But importantly, some examples of ‘Critical Theory’ are radically at odds with Donnelly’s caricatures.

‘Second Generation’ Critical Theorist’, Jurgen Habermas argued about ‘Legitimation Crisis’; a decline and perhaps even collapse of public confidence in the State and other institutions.  For example, the perceived legitimacy of the State (and indeed capitalism itself) – could suffer in the wake of attacks on welfare, and other hard-won gains of working people, such as labour market regulation and workers’ rights and liberties.  (all the more so where Social Democratic and ‘Left’ parties actually refuse any ‘consensus’ around austerity, and other policies harmful to the working class and the disadvantaged)

Habermas also argued about the conflict between ‘System’ and ‘Life-World’  – a consideration of capitalism’s economic-system-imperatives; its priorities; and the way these conflict with peoples’ ‘quality of life –, especially for the working class.  ‘System’ effectively ‘colonises’ ‘life-world’; becomes detached from the real-world needs of human beings. Economic insecurity and increasing intensity in the processes of exploitation are part of this.  (eg: falling  wage share of the economy; less free time; increasing class ‘stratification’ or ‘bifurcation’)

Drawing in part from Habermas: Arguably, democracy is increasingly reduced to ‘administration’ in the interests of capitalism.  Real pluralism is ‘hollowed out’.   And the inability of governments to resolve the economic and social crises which follow intensify the consequent crises of legitimacy.  As an aside: the ‘Identity Politics’ which Donnelly opposes so strongly – actually helps maintain an illusion of greater pluralism.  This outcome is ironic in light of Marcuse’s original vision of a ‘Great Refusal’. All the oppressed of the world need solidarity more than ever.  But to paraphrase Marcuse; objectively, without this ‘Identity Politics’ society and politics would have been better-exposed as being otherwise ‘One Dimensional’.

Also importantly: democratic socialism more broadly is part of what we might call ‘The Western Tradition’.  (which Donnelly argues he is defending)  Capitalism increasingly puts the gains of democratic socialism – including labour rights, broader liberties, the mixed economy, progressive tax, the social wage and the welfare state – under threat.   

But rather than ‘rejecting’ the Enlightenment project, Habermas instead refers to it as ‘unfinished’.  So without rejecting ‘Modernity’ and ‘Enlightenment’, Habermas defends the potential for what he calls ‘Communicative Action’ and the achievement of a ‘Perfect Speech Situation’.  (that is, perfectly free and rational exchange and engagement without distortions or coercion; And hence: social actors striving for agreement on the substance of human liberation through Reason and Ethics-inspired dialogue).

There is more than so-called ‘Cultural Marxism’ on today’s Left; Past Conservative and ‘Centrist’ traditions also opposed hard economic Liberalism

There is a different emerging tradition on the Left, also, that is worth mentioning. ‘Agonistic’ ‘Post-Marxists’ such as Chantal Mouffe assume enduring pluralism and a permanent place for dissent. That enduring pluralism is at the heart of their perspective. In other words: they assume consensus will not ensue.  Indeed, for many either it is thought to be overly-optimistic to seek that consensus – or maybe even it is undesirable.

There is also the question of class struggle; which can be exclusive of communicative action and any ‘Perfect Speech Situation’ in contexts driven by interest. When capitalists have been increasingly (and successfully) dictating terms in response to various economic crises from the 1970s onward – they are not necessarily interested in dialogue which involves compromise.  (unless forced)

Crucially, though – in practice, both Habermas and the Agonist democrats assume a need for pluralism, liberty and engagement.  The examples they provide ‘fly in the face’ of Donnelly’s characterisation of ‘the modern Left’ and ‘Politically-Correct-enforced-conformity’. 

Continuing our consideration of Critical Theory:  To assert the centrality of Habermas to Critical Theory is also to assert that the broad Critical Theory tradition cannot be boiled down to post-modern and deconstructionist rejection of Modernity, Enlightenment, Reason; or what might be called ‘the Western Tradition’. ‘Post-Modernism’ itself also has meant radically different things to different people.

While some people claim it as a rejection of ‘Modernity’ and its assumptions, Australian social theorist Peter Beilharz (in ‘Postmodern Socialism: Romanticism, City, State’)  suggested it might be constructed as ‘the critical moment in Modernity’.

Here ‘Modernity’ refers to societies and economies of increasing scale and complexity; developing further with industrialisation, and with themes of Enlightenment, Reason, and so on. We’re talking about a frame which in a way is inclusive of certain tendencies in socialist, liberal and capitalist traditions – even though these are historically in conflict with one another as well.

Again we are in highly-contested terrain.

It might be noted, though, that there is also a now-mostly-forgotten tradition – a tradition historically associated with the Catholic working class – a tradition which styled itself as ‘Centrist’.  (Though notably, those such as Giddens and Blair have also tried to resuscitate a kind of ‘Centrism’)  Yet intellectuals such as Donnelly have apparently chosen to ‘side’ with big ‘L’ Economic Liberalism and big ‘C’ Cultural and Political Conservatism.   (if this is not so, Donnelly does a good job of hiding or avoiding it)  

The old-style ‘Centrism’ emphasised ‘corporatism’, welfare state, and some labour rights including labour market regulation. Today, Giddens and Blair identify as ‘Social Democrats’ or ‘The Radical Centre’.

But looking back to the original ‘Centrism’: amongst some, there was a clear authoritarianism. Some ‘Centrist’ leaders such as the ‘Christian Social’ President of Austria, Engelbert Dollfuss – beginning with his seizure of power and dissolution of a democratically-elected Socialist government in 1934 – historically chose to side with a kind of fascism;  (ironically, not long before the formalisation of the ‘Axis’ of Germany and Italy, Dolfuss sought the protection of Mussolini from Hitler – in return for the suppression of Social Democracy!).

‘Corporatism’ –including state mediation – or forcible suppression – of class conflict and differences– was itself part of the broad fascist tradition; though arguably different kinds of ‘corporatism’ (eg: re Swedish Social Democracy) were much more ‘democracy-friendly’; or even co-existed with a kind of ‘democratic class struggle’ (see: Walter Korpi), (the ‘Accords’ under the Federal Labor Government in 1980s and early 1990s Australia could also be considered corporatist ; not fascist in the sense of Dollfuss ; but compromising the interests of the working class on a number of fronts).  Importantly: though a right-wing authoritarian and fascist, Dollfuss was not a Nazi.  Indeed he opposed Hitler and was assassinated by Nazi agents.

Today – to overcome an ensuing negative electoral response to austerity and other associated attacks, fear of ‘Political Correctness’ is played-upon.  This means  ‘papering over’ the contradictions which could ‘get in the way’ of preserving right-wing footholds amidst the working class – parts of which feel ‘abandoned’ by ‘self-styled social democratic’ parties for whom issues of economic inequality and exploitation have been largely ‘relegated to the Too-Hard Basket’.

To elaborate: in this context, modern-day Conservatives attempt to make inroads into traditional social democratic working class support bases.  They exploit often-exaggerated discussions around ‘Political-Correctness’; with the assistance of the monopoly mass media. This is in a context where much of the working class is relatively conservative on culture compared with the so-called ‘cultural Left’.

In light of the tendency of Critical Theorists to emphasise what they saw as the almost-totalitarian nature of modern popular culture and capitalism in achieving ‘systemic closure’, it is ironic that today some Conservatives see its own perspective as a totalitarian, ‘politically correct’ threat to everything laudable in Western Civilisation.  In reality, today’s Left is highly plural.  While some still identify with the theoretical lineage of Marxism, many (perhaps most) post-modernists and deconstructionists do not identify as ‘Marxist’ at all. 

That said, it would be dishonest to simply ‘deny’ ‘The Cultural Turn’ and the transformation of what passes for progressive politics. The point is to establish that the retreat of a ‘more-traditional’ socialism has not been ‘total’ ; that ‘culture’ and ‘economics’ need not and should not be considered exclusive of each other ; and for much of the Left economics and social class still matters ; though the project of an alternative democratic socialist economic project  in ‘The West’ has arguably been mainly in retreat since the 1970s.  To some extent, it has been a self-fulfilling prophecy.

Much More to Marxism than The Conservatives Understand

Donnelly’s emphasis on ‘Stalinist Dystopias’ and ‘Political Correctness’ also side-steps the matter of Marxism’s original ‘Cultural Project’.   For Marx – and many who followed him (including, for instance, Karl Kautsky, Rosa Luxemburg and Julius Martov) economic abundance under Socialism was not to lead to surveillance, Terror, Cult of Personality,  labour militarisation and labour conscription (In short: Oppression) – but rather to cultural and social opportunity arising from material plenty, including free time.  For instance, this might mean freedom to partake in Art and Philosophy –  amongst other pursuits.

To take the example of Austrian Social Democracy (or ‘Austro-Marxism’) in the 1917-1934 period: this meant promotion of working-class culture including sport, radio stations and libraries; and involving amenities for working class people.  This included impressive public housing estates, including hot running water, communal pools and communal laundry facilities. (rare for the time).

And even before this timeframe; going back to the original theorists of Marxist orthodoxy during the height of the Second International and earlier (ie: pre-WWI):  this might even have meant assisting people in seeking after the highest truths for their own sake.   In addition to ‘freedom from oppression’ that also includes ‘enabling freedom’: empowerment for the purpose of self-realisation.  Understood thus the tensions between collectivism and individualism can also be mediated, and socialism can provide opportunities for individual self-realisation which do not arise under capitalism.

To conclude: Donnelly portrays a Left that has nothing ‘positive’ to say about ‘Western Civilisation’. He totally misses the whole point made by thinkers like Marcuse – that societies which refuse to accommodate debate whereby a significantly-different kind of future can be envisaged and communicated – are not genuinely free!  This must also involve the inclusion of dissenting social movements in public debate. But also, the idea of a ‘teleology’ (or ‘necessary direction’) of history – as presumed by orthodox Marxists – is questioned amongst today’s Left.  Following the lead of ‘Post-Marxists’ and ‘Agonists’, the future is considered by some a matter of ‘collective will formation’, strategy and choice. (indeed, a matter of ‘counter-hegemony’, or the mobilisation of the broad social forces necessary to facilitate change)  Hence as part of a pluralist agenda, we ought to strive for a tolerant Left; though still: radical democrats ought not to be naïve or complacent in the face of existential threats to democracy. (eg: the resurgence of fascism in Europe).

Also, arguably capitalism has always been ‘repressive’, ‘regressive’ and in some senses even ‘progressive’ – at the same time and in different ways.  As Marx argued in ‘The Communist Manifesto’ (1848):  Capitalism unleashed an unprecedented wave of economic growth and innovation; (establishing the preconditions for socialism).  At the same time, capitalism has involved waste, exploitation, excesses, and warped priorities. These conditions gave rise to various movements; for Socialism – but also the Centrism which we have mentioned, and more recently environmental movements.

So in that context: For today’s socialists, the socialist project should still be about ‘radical negation’ in the sense of class struggle (and broader struggle) against the exploitation, warped priorities, injustices and excesses of capitalism.

But socialism can be about affirmation also.  We can acknowledge the progressive economic contributions of capitalism: and of ‘modernity’ considered more broadly.   And along with the original Marxist Social Democrats – who trail-blazed in their pursuit of Free, Equal and Universal Suffrage as early as the 19th Century (when almost all others neglected that cause as ‘too radical’) – we need not reject the place for some kind of parliamentary democracy and far-reaching liberties.  Most definitely we should also be striving to extend the reach of democracy; including economic democracy – whether through the restoration of a robust mixed economy; or through workers and consumers’ co-operatives; or through other avenues such as ‘wage-earner funds’ and comparable projects.   

While the perspective of ‘class’ should not be considered ‘sufficient and exhaustive in its own right’; We should not shy away from ‘class struggle’ in the broad sense. We should embrace the fight for social justice; for economic security and distributive justice; and a fulfilling life for everyone.  Again, that does not have to mean rejecting the very humanity of individual capitalists; (we must avoid the ‘brutalisation’ of politics where we can). It does mean questioning the morality and outcomes of capitalist social and economic relations. 

Finally: we should work to decouple the view of liberties and capitalism- whereby they are seen somehow as ‘essentially and inextricably linked’; (to the exclusion of socialism).  In fact, ‘liberty’ and ‘capitalism’ are often in tension and conflict with one another and depending on the specific expression, the causes of liberty and socialism can be mutually sympathetic.

The cause of democratic socialism is not forever exhausted, but ‘hope’ requires of us that we take a stand.  Donnelly’s narrative on so-called ‘Political Correctness’, and his ‘beating up’ of the bogeyman of ‘Cultural Marxism’ – is part of the problem.  So too is the abandonment of the cause of economic justice by significant sections of the self-identifying Left.

As an Australian Labor Party member of approximately 25 years, it is painful but necessary to acknowledge that for decades Labor has been at the heart of a range of policies which have undermined certain rights of labour, as well as the mixed economy, and at times the welfare state.

Importantly – the Trans-Pacific Partnership has recently been endorsed by the Federal Labor Opposition: a move which could leave governments open to being sued by foreign corporations should they facilitate policies (eg: on the rights of labour) which affect company profits. Even in Victoria under Daniel Andrews of the Socialist Left we see ‘Public-Private Partnerships’ and ‘Asset Recycling’;  (‘code’ for privatisation).

It is those kinds of scenarios that leave the broad Left vulnerable to Conservative and Far-Right strategies of ‘divide and conquer’.

We should have learned that lesson by now.

Bibliography

Beilharz, P. (1994), ‘Postmodern Socialism—Romanticism, City and State, Melbourne University Press, Melbourne.
Donnelly, K (2018), How Political Correctness is Destroying Australia – Enemies Within and Without, Wilkinson Publishing,  Melbourne.
Eley, G. (2002), Forging Democracy, The History of the Left in Europe, 1850–2000, Oxford University Press, Oxford.
Galili, Z. (1989), The Menshevik Leaders in the Russian Revolution—Social Realities and Political Strategies, Princeton University Press, New Jersey.
Gruber, H. (1991), Red Vienna—Experiment in Working-Class Culture 1919–1934, Oxford University Press, New York.
Hudis, P. and Anderson, K., eds, (2004), The Rosa Luxemburg Reader, Monthly Review Press, New York.
Kautsky, K. (1964), The Dictatorship of the Proletariat, University Of Michigan Press, Ann Arbor.
Korpi, W. (1983), The Democratic Class Struggle, Routledge & Kegan Paul, London.
Lenin, V.I. (1996), Imperialism: The Highest Stage of Capitalism, Pluto Press, London.
Marcuse, H. (1968), One Dimensional Man, Sphere, London.
Marx, K. and Engels, F (1989), Selected Works I, Progress Publishers, Moscow.
Mouffe, C. (2005a), On the Political, Routledge, Abingdon.
Mouffe, C. (2005b), The Return of the Political, Verso, London.
Outhwaite, W (1994), Habermas – A Critical Introduction, Stanford, California.
Rabinbach, A. (1983), The Crisis of Austrian Socialism: From Red Vienna to Civil War, 1927–1934, University of Chicago Press, London.
Trotsky, L. (2007), Terrorism and Communism, Verso, New York.

Jeremy Corbyn, the Left and Marxism: With Lessons for Australia and the World

British social commentator, Mal Fletcher (On Line Opinion 7/11; and‘2020 Plus’) warns of the ‘dangers’ of a ‘Hard-Left’ Jeremy Corbyn and the spectre of Marxist and socialist resurgence. But what’s the reality behind this posturing? We’ll look at both the claims made against Corbyn and at the deployment of Marxism as a ‘political bogeyman’. From there we’ll look at social democratic and Marxist arguments around economy and society more thoroughly.

Firstly: yes, British Labour is turning Left after years of Blairite Centrism. Corbyn is bringing British Labour back to the ‘relative historical mainstream’ of ‘traditional social democracy’.

Still, Corbyn’s plans for limited resocialisation (eg: of railways and utilities) threaten a precedent whereby decades of privatisation are not necessarily “a one-way street”. Some on the Right – including so-called ‘Labour moderates’ appear quite frightened at that prospect. If anything, it is they who are ideologically-inflexible on the public sector; and cannot abide by its extension in any way, shape or form. But compare this with the 1970s when Labour thinkers such as Stuart Holland (in ‘The Socialist Challenge’) were demanding “Nationalisation of the Commanding Heights”. Considered historically, Corbyn is not ‘far Left’; but rather is suggestive of British Labour ‘returning home’ ideologically to ‘traditional social democracy’. (Although some in the Corbyn camp – and in the ‘Momentum’ movement which supports him – might be more ambitious over the longer term). In light of this, Australian Labor’s Bill Shorten’s ‘shift Left’ appears much more modest. Shorten will not consider resocialisations; but may pursue ‘a living wage’ (though has equivocated on prior commitments to raise minimum wages), and moderate progressive tax reform.

Other Corbyn signature policies include Free Education, preservation of the National Health Service,  efforts to reduce inequality, and an investment in public housing. This also means a more-progressive tax system; improvement of wages – including for the working poor; a proper industry policy; and public investment in infrastructure. It suggests a Labour Party which treats social democracy seriously; not a ‘far Left’ Labour Party; but a Labour Party which refuses ‘Policy Convergence’ on neo-liberalism and ‘right-wing economic consensus’. The ‘shift to the Left’ is not ‘extreme’, but nonetheless it is the most significant development on the British Left in decades.

Fletcher seems to agree that ‘planning’ is inevitable; but poses the question “who does the planning?”. If planning is not democratic, here, do we suppose it is done by the corporates ‘behind closed doors’; with many politicians just taking it for granted that ‘the crucial economic decisions’ are not to be made democratically?  That is: that the job of representative government is merely to ‘provide support’ to the corporates – who are the real economic decision-makers. Nonetheless, comprehensive economic planning by central government is not the answer either. Not least of all because it could result in unacceptable centralisation of economic (and hence cultural, social and political) power if implemented without safeguards. Arguably we need both ‘democratisation’ and ‘checks and balances’ in the economy; which also translate into political, social and cultural ‘checks and balances’.

That said: what are we to make of charges of ‘Marxism’; and is ‘Marxism’ really such a bad thing?

Capitalism is a real ‘mixed bag’ here: a mix of success and chronic failure.

Market economies involve corporations and businesses which can be driven by the market context to respond innovatively to the intricacies of consumer demand; and allocate resources as efficiently as they can in order to remain competitive.

On the other hand, there is the threat of monopoly or oligopolistic collusion; as well as planned obsolescence. Some areas (eg: energy markets) exist in a context where product differentiation is difficult; many consumers would just like to ‘take such things for granted’. At the end of the day many of them are simply fleeced by predatory corporations.

So, on the other hand while the traditional Marxist aim of ‘centralising the means of production in the hands of the State’ may seem archaic, great swathes of the Marxist critique of capitalism retain force.  What Marx referred to (in Capital Vol I) as ‘the coercive laws of competition’ means that capitalists are constantly driven to revolutionise the means of production.   Historically, this has led to relative material abundance – which Marx saw as ‘a good thing’.  On the other hand, these dynamics result in inefficiencies, including duplication of cost-structures and premature obsolescence. To offset this capitalism is forced to adopt a posture of ‘perpetual growth’. This can have environmental and social consequences as ‘the economy’ is decoupled from human need; and instead the emphasis is ‘growth (regardless of actual quality) no matter what the cost’. Also, today’s capitalist economy is truly global; and arguably capitalism is ‘running out of new markets to expand into’.  This could lead to serious crises into the future with insufficient markets to absorb capitalism’s ‘excess produce’.

Today, also, those ‘coercive laws of competition’ might result in ‘an unsustainable race to the bottom on tax’ or with regard wages – which means less consumer demand over the long-run. It can also result in privatisation of essential infrastructure and functions; which means the State abdicating responsibility for ‘what it does best’. Hence the possibility of nepotism and corruption in the context of ‘Public Private Partnerships’ for private sector mates; and/or full privatisations ‘at a relative discount.’

Privatisation of ‘Government Business Enterprises’ (eg: Medibank Private and the Commonwealth Bank in Australia) also means that those enterprises’ ‘social charters’ are lost.  In many cases that included a responsibility to behave competitively.  Reversion to privatisation can mean a return to private oligopoly; an inferior deal for consumers; and in the worst of cases damaging collusion.

At the end of the day workers, businesses, citizens, consumers – all end up paying for this. But many capitalists support the ‘neo-liberal status quo’ for Ideological purposes; or because they are fearful of “a foot in the door for socialism”.  (More on that later).

Marxism also critiqued the tendency in capitalism to centralise ownership of most capital in fewer and fewer hands. That observation remains in force; and the consequence is “the translation of economic power into political power”. Narrow-neoliberalism is enforced with the zealotry of “an official ideology”; as are corporate interests. Unions are curtailed and vilified; the wage share of the economy falls; Media Moguls manipulate the climate of public opinion cynically. ‘Political Correctness’ is constantly beaten up to divide the constituencies of broadly-Left Parties by attrition. A return to the principles of social democracy is dismissed as ‘populism’. In Australia specifically, we have the Conservatives banning labour movement imagery in workplaces (eg: the “Eureka” flag); threatening charities who speak out on public policy; trying to shut down mass movements (eg: ‘GetUp!’) and prevent them from participating in elections (and yet at the same time they still talk of ‘liberalism’ and ‘free speech’).

Capitalist societies dealt with problems of distribution via markets and through the dynamics of ‘supply and demand’. This was ‘more efficient’ than the ‘waiting queues’ we once heard of in the USSR; and market forces also meant innovation and responsiveness. But ‘the market’ also ruthlessly excluded the poor on the basis of ‘capacity to pay’. In the West arguably, we had greater cultural freedom and innovation.  (though perhaps ‘post-the-Cold-War’ the West does not ‘need’ liberalism and democracy as much as it used to for purposes of legitimation; hence liberties – and perhaps democracy itself – are under threat). But the ‘economic abundance’ we enjoyed existed in the context of a global economy where the [economic] ‘Core’ exploited the ‘Periphery’. For example, American economic exploitation and subordination of Central and South America; and the emergence of countries like Bangladesh as ‘the sweatshops of the World’. The ‘World Economic Order’ will also ‘be up for grabs’ with the rise of China and India; and continuing relative prosperity cannot be taken for granted.

But if a ‘traditional socialist economy’ (along the lines of the former USSR) is not the answer, what is?

Firstly in response to those specific issues just raised:  again considering the Australian context; a socialist energy policy might provide micro-renewable energy for the poor, and for public housing estates (see: the former South Australian Labor Government’s policy as of February 2018), to reduce demand on the National Grid, and ensure that everyone can enjoy cooling in times of ‘peak-demand’ (eg: Heatwaves). The ‘leave it to the market’ response, however, would see vulnerable people (eg: the elderly) ‘opting out’ in the process of ‘supply and demand’ – despite the fact they are the ones who need the product most (and human lives are at stake!). Meanwhile importation of textiles from enterprises who ruthlessly exploit their workers – including unsafe working conditions – might be banned.

More generally: Probably the best Leftists can expect in the foreseeable future is to forge “historic compromises” which deliver security, freedoms, opportunity and happiness for the masses they represent.  We should talk about Marxist ideas on socialism and communism honestly and not closed-mindedly. But if ever the world does approximate Marx’s ‘authentic communist ideal’ it might never occur strictly via the path Marx predicted. The industrial working-class might never return to the economic pre-eminence that Marx predicted, and to a significant extent as he observed in its early development.  This also means the industrial working class might no longer be considered the ‘universal subject’ bearing ‘universal liberation’. The reality will be much more ‘messy’; and the task is one of building alliances; and indeed what Gramsci may have called a ‘counter-hegemonic historic bloc’This is exactly why efforts to divide the Left’s constituencies against each other are such a threat.

A more ‘rational’ economy means – to begin with – setting the public sector free to do what it does best.  Efficiencies arising from Natural Public Monopolies; and more competitive markets in the context of Government Business Enterprises with ‘social’ and ‘competitive’ charters; can mean a ‘better deal’ for everyone (workers, citizens, business). And ‘collective consumption’ (via tax) of essential social goods and services (eg: Health, Infrastructure, Education, Welfare Services) also results in a ‘better deal’. Extension of the public sector in this way does inevitably involve ‘planning’. And while central planning might not be advisable for an entire economy, there is a strategic place for it.

Most of the OECD is also far from emulating ‘the Nordic Historic Compromise’. In Australia, specifically, though, we are well behind the OECD average with regard our Tax to GDP Ratio as well. Extrapolating from the percentage gap between Australia and the Nordics, Australia would need to raise tax by around $300 billion/year to match Nordic tax to GDP ratios.  (The current figure may be slightly lower: The OECD recently placed the Nordics at around 45% of GDP ; though Wikipedia suggests in the vicinity of 50% – with 54% for Finland ; Perhaps Wikipedia is somewhat out-of-date ; sadly the Nordic Model continues a slow retreat) And redistribution via tax remains an important lever to ‘grow the social wage and welfare state’. (Which are vehicles not only for redistribution and fairness, but also for ‘efficient collective consumption’).

But that kind of change ‘does not happen over-night’. A medium-term objective for Australia, then, might be to match the OECD average; and progressively raise an additional $80 billion/year (in today’s terms); or otherwise put: raise progressive tax by 5 per cent of GDP. In the rest of the ‘Anglosphere’ (USA, Britain, Australia, Canada, New Zealand) progressive parties could do to think on a similar scale over the medium term.

Beyond this Leftists could also think in terms of a ‘democratic mixed economy’. That is: an economy based on a strategic mix of competitive markets and planning; but also, promotion of economic democracy at a range of levels. Let the public sector do what it does best; and don’t necessarily be narrowly Ideological or traditional in determining this (for instance, strategic and limited public investment in print media may be a ‘cultural imperative’: where ‘legacy media’ retain great cultural power; are centralised in the hands of a few; and where the quality of journalism is declining in that context). But where market forces act more to the benefit of society than not – then democratise those market forces. This can mean State Aid in support of mutuals and co-operatives on both a large and a small scale. (both producers’ and consumers’ co-ops). That could also involve ‘public sector co-investments’ with co-ops to help them maintain the scale necessary to remain competitive. In specific contexts regions could also contribute: where local jobs are at stake. It can also mean policies for democratic collective capital formation, and also for (union-friendly) co-determination. (‘Democratic collective capital formation’ refers to a range of policies from Superannuation in Australia (less radical and democratic) to the attempted ‘Meidner Wage Earner Funds’ in Sweden (more radical and democratic) which aimed to compensate workers for wage restraint with collective capital share; resulting in radical economic redistribution. ‘Co-determination’ means structural corporate consultation with workers; including worker representatives on company boards.)

Critics could argue that such policies are ‘a foot in the door for [democratic] socialism’. And indeed, they might well be. But the ‘Keynesian Post-War Historic Compromise’ – which benefited workers and citizens – was in the interests of business as well. Resurgent social democracy and democratic socialism today might also (in some ways) be beneficial to business as well as to workers, consumers, citizens. We should be able to reach a ‘rational consensus’ around a robust mixed economy where the debate is focused on ‘where to draw the line’. This would mean Liberals, Conservatives, and the so-called ‘Social Democratic (Blairite) Centre’ ceding Ideological ground.  It would result in a rebalancing of class forces; and for this alone it would be strenuously resisted by many. The Nordics show both the potential for delivering ‘a good society’ on the basis of similar policies; and also, the possibility of pitched struggles over ‘where to draw the line’ on economic democracy. Swedish corporates ‘had their way’ in defeating the ‘Meidner Wage Earner Funds’ in the 1980s. Again, there has been a ‘slow retreat’ since; but the overall historic example is still inspiring.

Today ‘Labour’, ‘Capital’ and other social forces could agree that a ‘robust mixed economy’ is pretty-much in the interests of all; but that what Swedish social theorist Walter Korpi called ‘the democratic class struggle’ will continue on many fronts; and in this process there are ‘no guarantees’. In this process we could envisage what Gramsci would call a long  ‘War of Position’ or what Kautsky earlier referred to as a ‘War of Attrition’. They are different conceptions; but are similar in way ; and both are valid in their own sense. ‘War of Position’ assumes a long ‘counter-hegemonic’ struggle – not only a struggle for the state; but for society’s ‘common sense’ (the Ideological assumptions that are reinforced such as to be ‘taken for granted’ in a given society); and the way that Ideology is entrenched in the various institutions and social bodies of civil society. ‘War of Attrition’ meanwhile suggests a ‘wearing down of capitalism’ over the long term; through social movements, cultural, industrial and electoral interventions – but not a ‘War of Annihilation’ (another Kautskyan term) which assumes more of a ‘frontal assault’ to overthrow the capitalist state. Importantly, Kautsky supposed there were (rare) circumstances where ‘War of Annihilation’ made sense; but if pursued under the wrong circumstances this could simply exhaust the proletariat; see it demobilised or even suppressed or crushed. ‘Wars of movement’ (the Gramscian term for a ‘pitched assault’ against capitalism) are not to be ruled out in every circumstance; but where democratic processes could provide ‘a pathway to democratic socialism’, a strategy of ‘revolutionary reforms’ or ‘slow [democratic] revolution’ is preferable. Though the Left needs to be prepared for the contingency that the bourgeoisie could well ‘dispense’ with democracy itself (as far as it is capable) if its interests are seriously threatened.

Finally let’s remember the underlying human principles of Marxism; which were made a cruel mockery of under Stalinist regimes. Marx saw the material abundance produced under capitalism as creating the economic basis for human freedom. This could mean a shorter working week, as well as greater opportunity for cultural, social and economic ‘personal growth’ and participation. In Australia a reformed National Curriculum might also promote active, informed and critical citizenship, amidst a backdrop of tolerance and deep-seeded pluralism (though this is more in the spirit of Chantal Mouffe’s ‘Agonistic’ ‘Post-Marxism’ than the original perspective of Marx) Marx’s overall approach was not a mere ‘bread and water socialism’; even though socialists believe there are areas (eg: health and education, water and energy) which demand comprehensive socialised provision. Indeed, there are aspects of the Marxist vision which could be compatible with certain strands of liberalism concerned with personal growth, liberty and empowerment.

Marxism should not be seen as an ‘Ideological bogeyman’; especially where terms like ‘cultural Marxism’ are thrown around with abandon – but where few people understand what Marxism really means anymore. The fact that Jeremy Corbyn is experiencing such resistance to any return to ‘traditional social democracy’ (including substantial disinformation) provides some idea, also, of the resistance and ‘muddying of the waters’ we might encounter if we propose anything more-radical. But future convulsions in response to capitalism’s shortcomings (or what Marx would have called its ‘contradictions’) are inevitable. Somewhat ironically: in the ‘big picture’ socialists could well hold the key to ‘saving capitalism from itself’ even while setting the foundations for surpassing it with a far more democratic and free society much further into the future.

This article was originally published on the ALP Socialist Left Forum.

What could ‘Revolution’ mean to Social Democrats and Democratic Socialists Today?

‘It’s Time’ to rethink’ what we mean by ‘social revolution’ on the modern Left. What if any meaning does ‘revolution’ have for today? A comrade in the Australian Labor Party (ALP) Socialist Left recently rebuked me for discussing “revolutionary” politics; and said that “thankfully” the vast majority in the ALP SL are NOT revolutionaries and…

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Radical ‘Letters to the Editor’ ; July-November 2017

What follows are another series of Left-inclined ‘Letters to the Editor’ sent to ‘The Age’, ‘The Australian’ and ‘The Herald-Sun’ between July and November 2017.  Subjects include everything from ‘Cultural Marxism’ to ‘Bracket Creep’ and the Australian Welfare System. 

PLS feel welcome to discuss.

Only a few of the Letters were Published ; but I’m hoping consideration of the content here will justify the effort put in to writing the material.  🙂

by Dr Tristan Ewins


Capitalism and the Threat of Destitution

David Penberthy writes as if homelessness and destitution have nothing to do with capitalism. (Activists no help to the homeless, 13/8/17)  Unfortunately this is not the reality. Under capitalism most people do not own significant stakes in businesses themselves.  They have no choice but to sell their labour power to capitalists in order to survive.  In this system average workers can be ‘disciplined’ (kept in line) by the threat of sinking into a class of working poor.  And the working poor in turn are ‘disciplined’ by the threat of destitution ; sinking into an underclass of destitute and homeless.  This is actually functional for capitalists seeking to depress wages and conditions.  The situation is further worsened by ‘punitive welfare’. Benefits are low ; often below that sufficient for subsistence. (scraping by)  Savings must be exhausted to acquire Newstart. Workers’ bargaining power evaporates under these circumstances.  Also emergency housing, welfare and so on cost money. But even Labor governments are continually under pressure to deal harshly with the unemployed ; to cut spending in order to make room for corporate tax cuts and so on.  And attempts to ameliorate the condition of those affected is branded “class warfare”.

What are Shorten’s Tax Plans in Reality?

The Herald-Sun is waging a campaign against what it argues will be an increased tax regime under Bill Shorten. But so far Shorten’s proposals are in fact too modest. Reform of Trusts will bring in maybe one sixteenth of one per cent of GDP. (approximately $1 billion a year out of $1.6 trillion)  Negative gearing reforms will bring in a similar amount.  Contra the Herald-Sun, these reforms will tend to bypass low to middle income earners. Apart from this the Herald-Sun is emphasising Shorten’s resolve not to deliver Turnbull’s $65 billion corporate tax cut over 10 years.  The problem is that when you cut taxes this way it has to be made up for somewhere.  So corporations get a windfall – but Medicare might be ransacked for cash. To get a sense of proportion – it would take perhaps $400 billion in new taxes to bring in enough money to pay for a Swedish-style welfare state!  But if Shorten devoted an additional 2% of the economy ($32 billion) in a first term to reform of Health, Aged Care, Education and Social Security – surely that  would be a reasonable measure from which most people would benefit.

Bolt’s Double Standards on Liberties

Andrew Bolt (August 24th) argues against what he says is a ‘totalitarian’ Left.  But if Bolt is to adopt the cause of liberal rights let him do so without hypocrisy.  Let’s see if Bolt is willing to support rights of speech, association and assembly – without punitive laws, and without the dispersion, vilification and criminalisation of protest movements such as that once associated with the “We are the 99 per cent” cause, occupations against homelessness and so on.  Once the consensus on liberal rights breaks down everyone is potentially at risk.  Both Left and Right need to avoid double standards on liberal rights ; and that includes “celebrities” such as Andrew Bolt. Meanwhile attempts to shut down councils wanting to change the date of Australia Day celebrations – suggests a Federal Government which is not serious about reconciliation with Indigenous Australia.

Refuting Bolt on Welfare

The Herald-Sun (27/8) editorialises that “Welfare is Not a Right” and advocates a crackdown against the unemployed especially.  But at the same time provides scant room for the expression of the contrary view: that Australia already has one of the most punitive and austere unemployment regimes in the developed world.  Instead, the Herald-Sun ought argue for the kind of labour market and industry policy regimes that exist in Denmark.  This requires many billions to work ; but the returns in terms of the creation of more high-wage jobs – pitched to workers’ skill sets – makes it a price worth paying.  Meanwhile Newstart could do to be increased by a minimum $1000/year, indexed.  Job-seekers who cannot even afford transport, decent clothes or internet already have little chance of finding work.  Newstart provisions (introduced under the Turnbull Liberals) forcing job-seekers to exhaust much if not all of their savings before receiving support also need reconsideration. Where’s the incentive to save when losing your job could cost you everything?

Labor’s Modest Tax Agenda

Chris Bowen is laughing off claims by Scott Morrison that Bill Shorten is promoting a ‘socialist’ agenda.  In reality, Bill Shorten is talking about very moderate tax reforms that so-far will struggle to raise $4 billion a year. Or roughly one quarter of one per cent of GDP.  But there’s a problem with such suggestions being “laughable” as well.  And that Labor has come to depend on such claims being laughable. Certainly Labor are not outwardly democratic socialists. That applies probably to most Labor MPs ‘internally’ as well. But the Libs win by default if Labor is too scared to talk about democratic socialism, redistribution, economic democracy, social wage and welfare reform, industrial rights, public ownership and so on. For instance, Labor should be aiming to match the OECD average on tax (roughly 34% of GDP)  and associated social expenditure over several terms. In order to fund reform of education, health, aged care, infrastructure, welfare and so forth.  If Labor ‘wins’ on the Liberals’ terms then the Liberals win anyway – through Labor’s internalisation of their economic and social assumptions and values. Even if Labor achieves government, under those circumstances Labor (and the people Labor represent) lose.

The Truth about the ‘Luddites’ has Lessons for us Today

Rosemary Tyler (Letters, 10/9) mentions the ‘Luddites’ and their response to the Industrial Revolution, comparing them to those who resist Clean Energy today.  But there are important differences.  The Luddites were not just ‘mindless wreckers of Progress’. They were largely skilled crafts-people who were resisting ‘proletarianisation’ and the de-skilling of their industries.  They were forced from their homes ; compelled to be wage slaves in dangerous factories ; reduced to bare material subsistence; compelled to suffer 12 hour days and worse.  They lost creative control over their labours and their labour’s products. The capitalism of the Industrial Revolution created a foundation for economic and scientific progress ; but it often came at a terrible cost.  Today, also, modern capitalism rests upon the brutal exploitation of ‘peripheral’ economies such as in Bangladesh ; but also often the exploitation of working poor within the ‘first world’ itself.  Privatisation is arguably the main driver of the current energy-affordability crisis ; But if re-socialisation is not considered an option (it should be!), other measures must be taken to ‘immunise’ low income workers and pensioners during the transition to renewables and beyond.

Turnbull ‘Asleep at the Wheel’ on Energy

David Ingliss (Letters, 25/9) writes that the “electricity crisis” is the result of “rabid Green ideology”. Let’s get some things straight, though.  The current Conservative Government has had years to prepare for the closure of coal-fired plants such as Hazelwood. It’s Turnbull who has been “asleep at the wheel”. Also global warming is not an “Ideology” ; it’s a scientifically-verified environmental crisis and not necessarily to do with political values. Hence our response SHOULD be bipartisan. Further, if energy had not already been privatised the decision on what to do with the old energy infrastructure (and when) would have been the choice of governments.  Instead it’s out of our hands. If we had kept the old SECV which Ingliss refers to in public ownership arguably energy would be cheaper, and battlers would receive cross-subsidies.  Instead privatised or corporatized energy production and distribution – combined with shrinking economies of scale (as those who can afford to switch to micro-renewables) – means  ‘battlers’ are left with a spiralling cost of living.

Privatisation and Tax Cuts a ‘Two Edged Sword’ at Best

The Herald-Sun (27/9) proclaims the headline “Budget Repair: Nation $4.4 billion better off”.   And Scott Morrison has been boasting the Coalition Governments ‘success’ in bringing government spending down to 25% of GDP.  But do lower levels of government expenditure on services, infrastructure, and social security really improve our ‘national well-being’?   By contrast government spending in Sweden is at approximately 52% of GDP.  (A $400 billion difference if translated proportionately to the Australian context)  The difference is that in this country we have User Pays in everything from Aged Care to Higher Education – which hits those on lower incomes especially hard.  While the Conservatives provide ‘corporate welfare’ with tax cuts valued at about $60 billion over a decade, we treat the unemployed like criminals and allow barely enough (or not enough) for them to subsist and effective search for work.  We neglect state education by comparison ; and we are forced to opt for private provision of infrastructure – which ends up costing consumers AND business more in the end.

Coal Seam Gas a Risk

The Herald-Sun (27/9)  editorialises “Drop ideology and drill” : directing its attention squarely at Victorian Labor Premier Daniel Andrews.   But Coal Seam Gas drilling has extreme risks – such as water contamination and contamination of land.  These risks have nothing to do with “ideology” ; and neither does the need to reduce carbon emissions in the face of a virtual scientific consensus on global warming. Also energy plants like Hazelwood have shut down – increasing the risks of an energy shortage – something governments were left with no control over as a consequence of past privatisations.  Hazelwood had to close sooner or later : but under public ownership could have continued until the State was ready for the transition.  Finally, Australia has ample reserves of gas without resort to coal seam gas (fracking) but the Conservative Government has not properly regulated the industry ; meaning this gas could be exported while at home we experience black-outs. Knowing all this it is Malcolm Turnbull who has been “asleep at the wheel on energy policy” for years ; and now is interested in blame shifting.

The Truth about ‘Cultural Marxism’

In response  to Dr Andrew P.Retsas (3/10/17) : while it’s true that Marx has nothing to do with many modern discourses on sexuality, some interpretations (eg: from Engels on ‘The Origin of Family, Private Property and the State) emphasise the potential of communal social solidarity and organisation compared with dependence on the monogamous nuclear family.  But the reality is that the vast majority of Marx’s work is to do with the struggles of workers to overcome exploitation and oppressive working conditions ; and enjoy opportunities for personal growth through engagement with philosophy, science, art, music and so on.  Critiques of ‘cultural Marxism’ ignore this, and try and use Marx as a ‘bogey’. Marx wants workers’ freed from the oppressive conditions of existence and labour – which in certain ways still prevail today.  Some seeing themselves in the Marxist tradition (eg: some from the ‘Frankfurt School’) lost faith in the working class, so instead looked to racial and sexual minorities, students and women. (for instance Herbert Marcuse in ‘One Dimensional Man’ (1964) But the Heart of the original Marxism is still the self-liberation of working people ; and “From each according to ability, to each according to need” as a doctrine of liberation, human solidarity and justice.

Education must Support Democracy

Anthony Gilchrist complains that “the socialist left has…infiltrated the education system” (Herald-Sun, 12/10) . A few points in response.  Firstly, education should support democracy.  That ought mean political literacy and support for active citizenship. That does not mean ‘indoctrinating’ with one doctrine or another ; but preparing students to make their own free decisions in a democracy in keeping with their interests and their adopted value systems.  Socialism has a place here, as do liberalism and conservatism.  A strong democracy means pluralism (ie: real choices) and not just ‘convergence politics’.  What Gilchrist calls “victim” politics might simply be citizens speaking up for their rights and interests in a democracy.  If we never questioned injustices, indigenous Australians and women would never have gained the vote.  And workers would never have achieved the 8 hour day.

Stop Vilifying Vulnerable People on Welfare

The Herald-Sun (23/10 ‘Trillion Dollar Handout’) is developing a pattern of effectively vilifying vulnerable people in the context of attacks on Australia’s already threadbare welfare system.  In reality the lion’s share of the welfare system is taken by the Aged Pension. (which funnily enough the Herald-Sun rarely talks about) Meanwhile for the vast majority unemployment benefits, disability payments and so on are ‘social insurance’ which ALL of us pay for via our taxes. Instead of vilifying the vulnerable we need an industry policy which actually facilitates the creation of decent jobs.  (as opposed to driving the car industry out of the country as the Coalition Government has done) And given activity tests already exist for Newstart there is no excuse not to raise the payment significantly: in part to support people as they search for work ; during which they need access to decent clothes, transport, internet access and so on.  Further, if the Herald-Sun wants to break the ‘dependency cycle’ and ‘poverty cycle’ it should agree to greater support for sole parents and low-income families ; and provide greater scope for Disability Pensioners to escape poverty traps by engaging in flexible work without losing a very significant part of their payments via means tests.   When those with a serious mental illness are dying on average 25 years younger than other Australians they are not ‘having us on’ or ‘rorting the system’.  See:  http://www.abc.net.au/news/2013-05-09/schizophrenia-lowers-life-expectancy-by-25-years/4680580

All the Usual Complaints from the Right on Socialism

Tom Elliot (27/10)  makes all the usual complaints about socialism that you hear from the Right. But what is socialism really meant to be? I wrote my PhD on this topic so I have a clue.  The totally-reasonable principle underpinning Marx’s philosophy was ‘from each according to ability, to each according to need’.  What is more Marx believed in achieving abundance and recasting the division of labour so every individual had the opportunity to engage in science, art, philosophy, popular culture and so on.  Everyone has the right to personal growth and fulfilment. This – and Marx’s passion for extending democracy across he political and into the economy – is what distinguishes him so clearly from those who abused his name ; using it to justify totalitarian regimes.  Countries – such as Sweden and Denmark – who have advanced socialist principles to some extent – have also enjoyed prosperity, equality, full employment and happiness.  We need a genuine pluralism in this country where democratic socialism is part of the debate.

More on ‘Cultural Marxism’

Chris Zappone (The Age, 13/11)  is right to be critical of the widespread condemnation of ‘cultural Marxism’ by people who don’t really even know what Marxism is.  In fact many Marxists were extremely concerned about ‘the cultural turn’ from the 1970s onwards ; with the embrace of ‘identity politics’ and the abandonment of themes of class struggle, economic justice and of the promotion of a democratic socialist economy. On the other hand the intellectual movement began by Adorno, Horkheimer and others was real, and is still real.  But it is very diverse ; and attempts to brand it as some ‘homogenous’ entity comprise something of a moral panic.  Adorno and Horkheimer especially were despairing of the prospects for socialism in an era of totalitarianism ; but they also critiqued popular culture in the West as a medium of social control.  Later critical theorists like Jurgen Habermas were more hopeful ; and Habermas promoted a theory of ‘communicative action’ which supposed a progressive consensus may be possible through dialogue. Contrary to right-wing assumptions about ‘critical theory’ Habermas was decidedly within the Enlightenment tradition.

Kevin Donnelly is Wrong on the English Curriculum

Kevin Donnelly (HS, 16/11) again takes the English curriculum to task, accusing it once more of left-wing bias.  But the modern English curriculum is about more than spelling and grammar. It is about communication life skills which empower students, including the critical analysis of texts.  This need not involve a bias towards the Left or Right.  It is about comprehending and criticising the assumptions beneath texts of both a Left or Right-wing inclination ; and also those which don’t fit within that framework.   The modern English curriculum is also about encouraging students to develop and express opinions. Again, this need not involve a prejudice towards the Left or the Right.  But it does empower students to make informed commitments on social issues , and to express their associated beliefs effectively. There are some Conservatives (but not all I’d argue) who feel threatened by this.

Tax Cuts, Corporate Welfare and Bracket Creep

The Herald-Sun (20/11) editorialises in favour of tax cuts to compensate for bracket creep. A few points in response.   Bracket creep tends to flatten the income tax system over time ; to make it less progressive.   But tax cuts emphasising the upper end can also exacerbate this.  The most equitable way of dealing with bracket creep is to INDEX the lower thresholds to ensure those on lower and middle incomes don’t end up paying proportionately more.  But progressively-sourced increases in tax should not be ruled out.  After all, tax is necessary to pay for Medicare, schooling, roads and so on ; and a National Aged Care Insurance Scheme could be funded via progressive tax ; providing for the health, happiness and dignity of older Australians.  Certainly sweeping Company Tax cuts amount to ‘corporate welfare’ ; where corporations fail to contribute fairly to the infrastructure and services they benefit from ; and hence everyday taxpayers are made to ‘pick up the tab’.

The ‘Nuances’ of Intersectionality

“Janet Albrechtson (‘The Australian’, 25/11) takes intersectionality theory to task, accusing it of being a cover for a new “racial essentialism”, and probably also suggesting a new sexual essentialism. But as with many schools of theory there are different tendencies. Some are ‘vulgarised’ and some are ‘nuanced’. Some people see categories such as gender and race as “compounding on one another in a simplistic fashion”, where knowledge of which of these categories a person falls in to provides all the information necessary to determine a person’s privilege. And those categories are often prioritised over one another with a kind of ‘arbitrary hierarchy’. Others acknowledge that race, gender (and other factors) can be important contributors to disadvantage and privilege ; but they also acknowledge that many of our experiences and social positioning are individual and unique. Hence we should not rush to pre-judge one another. Also, well into the past, Marxist influence in the social sciences saw a prioritisation of class – sometimes to the exclusion of other oppressions. Yet worryingly, and following the example of the US liberal left, today class is widely de-prioritised compared with gender and race. This helps the likes of Trump co-opt great swathes of the US white working class. (‘Divide and Conquer’) A general movement against subordination must promote solidarity, engagement, mutual recognition and mutual respect. Though it must not ‘paper-over’ oppression in the name of liberal-bourgeois Ideology either.”

Debating Marx’s ‘Labour Theory of Value’ and ‘Marx on the Environment’ on the 150th Anniversary of Marx’s ‘Das Kapital’

A look at Marx’s notion of ‘Labour Theory of Value’ on the 150th Anniversary of ‘Das Kapital’.   Also a consideration of Marx on the natural Environment Dr Tristan Ewins At the ‘ALP Socialist Left Forum’ Facebook group we’ve been discussing Marx’s ‘Labour Theory of Value’.  This is notable because this year is the 150th…

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Bill’s ‘Class War’? ; Credlin must be Joking

“Bill’s low-rent class war” is scrawled across the pages of the “Herald-Sun” (6/7/17). Liberal operator and Opinion columnist Peta Credlin in full flight: defending the rights of the very rich against unconscionable calls to contribute to the common good.

Defending the wealthy and corporations against the ungrateful masses – who in the face of a cost of living crisis are feeling inequality more acutely than before ; and who scandalously expect tax evasion loop-holes to be closed ; for affordable housing ; for an end to punitive welfare ; for a modern living wage ; high quality public Health and Education, and so on.

Credlin asserts that “the top one per cent pay nearly 20 per cent of all tax.” And: “there are nearly four million households that pay no net tax after transfer payments.”

Further, Credlin draws on Roger Wilkins to argue “Australia is more equal today than forty years ago.”

And so Credlin infers that any kind of redistribution: whether through welfare or the social wage will drive “businesses and people offshore”; and hence Shorten is “[pushing] a hard left agenda.”

How to respond to this?

To begin, ‘the top 1%’ comprise people on incomes of over $227,000 a year ; and these would still end up with post-income-tax incomes of over $150,000. (calculated according to the income tax scales) They are not ‘battlers’.

Joe Hockey made similar claims in 2015 when he argued that “50% of all income tax in Australia paid [was] by 10% of the working population”.

We will deal with Hockey’s claims as a way of responding obliquely to Credlin’s arguments.

‘The Conversation’ concluded that Hockey’s claims were accurate , but put it down to Australia’s progressive taxation system. Without progressive taxation distributive outcomes would be skewed even further towards the rich, and against everyone else, especially the poor.

Therefore these figures must be considered in the context of rising income and wealth inequality. That is – the rich (including the top one per cent) are paying more tax because they are bringing in much more money. (at other peoples’ expense ; it does not ‘trickle down’ ; exploitation is a reality)

As I have observed elsewhere: Professor Robert Wilkins conceded that the portion of national income going to the top 1 per cent has approximately doubled since the 1970s to over 8 per cent, and that inequality is “high by modern standards” (‘the Australian’ (22/7, pp 1, 8).

And if we include the GST in our calculations we might acknowledge the fact that the wealthy also pay more GST because they can indulge in so much more conspicuous consumption.

The Conservatives in this country have also been concerned at the possibility that Australia may develop a European-style welfare state. But when put in context we see (admittedly according to 2009 and 2013 figures) that in 2009 Australia devoted just over 7 per cent of GDP to cash payments (welfare) ; compared with roughly 17 per cent in France. And in 2013 France devoted roughly 34 per cent of GDP to “social expenditure” compared with roughly 19 per cent in Australia. Even with very significant reforms such as I project in this article – we are nowhere near a “European style welfare state”.

The Conservatives also say nothing with regard the fact the Aged Pension takes the lion’s share of the social security Budget. They take the ‘aged demographic’ for granted ; but ultimately want a retirement age of 70. And when a greater proportion of Australians start retiring on their superannuation savings we might expect a more “frontal assault” on pensioners.

At only about 26 per cent of GDP overall levels of tax in Australia are in fact very low. Australia’s $154 billion social security and welfare bill (2016 figures) is also low by international standards, despite an obvious tactic by the Liberals of cultivating ‘downwards envy’ – intended to create resentment against the vulnerable ; often involving the distortion and misrepresentation of statistics. In fact the cost of social security and welfare in 2016 (approximately $154 billion) was somewhat less than 10% of a total $1.6 trillion dollar economy ; but is larger proportionate to the total tax take only exactly because overall Australian tax levels are comparatively so-very-low.

So again ; when you factor in a dramatically rising cost of living – as well as levels of personal indebtedness for those on lower and average incomes, or with lower to average wealth – the problem of inequality is becoming far more urgent.

This personal indebtedness includes mortgage stress. Indeed while some banks have behaved in an irresponsible and predatory way, there is the danger that the unsustainable personal debt which fuelled the housing boom (and perhaps consumption levels more generally) may finally give way to bust ; flowing into overall consumer confidence as well.

Factoring the housing affordability crisis in, that makes a strong difference to those on average or lower incomes attempting to pay off a mortgage, or even to afford the rent in an established suburb with decent amenities and infrastructure. Indeed home ownership is down to 31% from 41% in 1991, reflecting the concentration of housing in the hands of investors – to the detriment of first home buyers. The plight of those forced to the urban margins ; or to forsake the ‘Australian Dream’ of their own home also cannot be grasped by mere considerations of income inequality. Again, because of a broader cost-of-living crisis inequality is more urgent than any time in decades.

So Wilkins talks at length about income, but not so much about wealth ; this in a context where home ownership (or the lack thereof) is becoming a crucial socio-economic fault line.

And yet the Sydney Morning Herald’s Paul Maloney observes research from ‘Credit Swisse’ to the effect “the top 1 per cent of Australians own more wealth than the bottom 70 per cent combined.” And that according to ACOSS research “someone in the highest wealth group had 70 times as much wealth as someone in the lowest.” Maloney further observes the selective nature of the statistics Wilkins draws upon. Had Wilkins began by observing inequality from 2004 onwards that would have revealed a radical increase in inequality during the 2003 to 2008 period. This applies to income as well. According to the OECD, for instance, “Real incomes for the top quintile of households [in Australia] grew by more than 40 per cent between 2004 and 2014 while those for the lowest quintile only grew by about 25 per cent.”

Also since the 1970s profit-share has risen from 16.5 per cent to 26.5 per cent ; but the wage share of the economy has fallen from 62.7% to 52.3 per cent. (2016 figures) It had been assumed that increasing the profit share was necessary to spur investment ; while a falling wage share (and a largely neutralised trade union movement) would prevent a ‘wage-price spiral’. But in fact workers have less capacity to consume ; have turned to private debt to maintain lifestyles ; and the whole arrangement is beginning to look very precarious.

Neither pre-tax or after-tax income is enough to grasp the growth of inequality. While taxes have grown ‘flatter’ (less progressive) but nonetheless lower, the ‘user pays principle’ has been applied less and less discriminately , to the point where it applies now to everything from education and energy to communications, transport infrastructure and water. This intensifies the impact of inequality. Appallingly, ‘user pays’ for residential Aged Care especially has become akin to a ’death tax’ . But unlike progressive inheritance taxes or ‘death duties’, this impacts disproportionately upon families with lower to middle incomes, including those for whom the family home is the only significant asset they have.

As opposed to the earlier post-war mixed economy, the user-pays element has been increasing proportionately, and privatised entities are no longer providing cross-subsidies for ‘battlers’. Also: arguably privatised entities are abusing their market power to reinforce their bottom line. Hence the cost of “essential items such as food, electricity and insurance” is rising at almost double the rate at which wages are rising. And the position of the poor and welfare-dependant is even more precarious. A look at Medibank Private’s increasing premiums is enough to hammer these points home ; along with soaring profits.

Meanwhile policies such as capital gains tax discounts, superannuation tax concessions, and negative gearing – overwhelmingly benefit the well off – to the detriment of social programs which may otherwise further social solidarity and the common good. According to Treasury in 2015 $10 billion out of $30 billion in superannuation tax concessions alone are lining the pockets of the wealthy. (the top 10%) With time the problem could worsen markedly.

Bill Shorten’s agenda is not ‘hard left’by any reckoning. Michael Pascoe of the Sydney Morning Herald has observed that Shorten’s reforms to family trusts only scratch the surface (saving less than a third of what may have been possible). And that Shorten is even using 10 year projections to make his reforms look more substantial.  Pascoe concludes that if this is ‘class war’ Shorten is “firing blanks”!

We need much stronger policies from Labor: reforms of the tax mix, and new progressive taxes to provide for significant new social policies. End inequitable superannuation tax concessions. Wind back user pays in Aged Care and Education for equity and fairness ; and improve the quality of service. Reform welfare to further ameliorate poverty (raise all full pensions by $1000/year). A big investment over time in public housing to increase supply, deflate the bubble, provide for the vulnerable. Consolidate and extend Medicare. Provide the necessary resources and apply the political will to maintain transport, communications and other infrastructure as natural public monopolies. Consider strategic re-socialisations ; maybe re-establish a public-owned savings bank. Properly fund mental health.

The lower end of the labour market needs re-regulation as well ; though this is not necessarily linked with tax.

Arguably decades of privatisation and austerity have resulted in inferior cost structures for areas of the economy properly the domain of natural public monopolies. Meanwhile in Australia a limited welfare state has restricted ‘collective consumption via tax’. That also has impacted upon cost structures ; and has given consumers worse value for money in the end analysis.

The consequence has been less consumer demand for the remainder of the economy. Capitalism is desperately striving to expand existing and new markets to stave off its contradictions. But ironically perhaps the best way it can do this is to transition to a ‘hybrid economy’ which cedes ground to socialisation (public and other democratic ownership). Efficiencies via socialisation (natural public monopolies, collective consumption, enforcement of competition in specific sectors, eg: banking, insurance – by government business enterprises with competitive charters) would mean more income left over for consumers to spend elsewhere (ie: in non-socialised sectors). Many capitalists would resist such a transition for political and Ideological reasons ; but many others still could stand to gain from such a compromise. As could the public at large.

Public investments in services and infrastructure can also comprise a ‘pull factor’ for investment (for instance an educated workforce). This gets forgotten in the constant push for more austerity and lower taxes. And it is one reason why the Nordics are so successful with their welfare states, mixed economies, industry policies and active labour market programs. The opposite of the catastrophe scenario suggested by Credlin in response to Labor’s modest policy agenda.

As things stand a Shorten government could ameliorate social injustices including economic inequality. But Labor’s existing policies are very mild. Shorten has time to develop a stronger policy profile ; though the modesty of past ALP policy is such that Labor’s recent announcements appear ‘radical’ to some.

Token reforms are not enough to deliver, even though they may convince those without a sense of proportion and history. Rather than reforms bringing in $1 billion Labor needs to think bigger ; perhaps in the vicinity of 2 per cent of GDP in a first term. (approximately $32 billion in a $1.6 trillion economy)  And gradually more in subsequent terms. Not because that is just some ‘silly’ arbitrary figure ; but because Labor needs to think of what is necessary for its policy ambitions ; but also what is politically ‘do-able’ – and over what timeframe.

Meanwhile those claiming a $1 billion tax reform (that is, one sixteenth of one per cent of GDP) is ‘class warfare’ are frankly kidding themselves.

References:

http://www.smh.com.au/business/the-economy/labors-war-on-the-rich-is-firing-blanks-20170730-gxlz6r.html

http://www.abc.net.au/news/factcheck/2015-10-14/do-eight-of-ten-taxpayers-fund-welfare-bill/6822840

http://theconversation.com/what-income-inequality-looks-like-across-australia-80069

http://www.smh.com.au/federal-politics/political-opinion/roger-wilkins-claims-about-inequality-at-economic-conference-should-be-tested-20170727-gxk9m6.html

http://www.abc.net.au/news/2015-07-07/denniss-abbotts-promise-not-to-solve-our-super-tax-problem/6601112

http://www.smh.com.au/federal-politics/political-news/private-health-insurance-premiums-to-rise-by-nearly-5-per-cent-20170209-gu9p8t.html

http://evatt.org.au/papers/northern-lights.html

Dr Tristan Ewins is a Social Sciences PhD, qualified teacher and social commentator based in Melbourne.  He also blogs at ‘ALP Socialist Left Forum’, ‘Left Focus’ and ‘The Movement for a Democratic Mixed Economy’.  He has been a member of the Socialist Left of the Labor Party for over 20 years.  The opinions he expresses here are his own only.

 

 

Labor Turning Left on Inequality; Let’s Make Sure the Policies Match the Rhetoric

Apparently Federal Labor under Bill Shorten is considering significant reform of Australia’s tax system to bring in potentially billions in new annual revenue, and to address the scourges of disadvantage, inequality and poverty.

Labor had already long since committed to reform on capital gains tax concessions and negative gearing; with some modest changes on superannuation tax concessions as well.

But according to ‘Age’ journalist, Peter Martin (‘The Age’ 22/7, p 17), additional possible options now being canvassed include:

  • cracking down on the abuse of family trusts by the rich, bringing in maybe over $3.5 billion a year, and
  • “ending the diesel fuel rebate” for miners and farmers; again bringing in perhaps over $4 billion.

These would be very welcome announcements should they eventuate. Though to aspire to an extended social wage and welfare state, Labor really needs to be considering ‘in the ballpark’ of 5% of GDP in progressive new annual spending – arrived at over several terms.

And a figure of increasing Federal Government expenditure by 2% of GDP may be appropriate and realistic under a first term Labor government (ie: increase progressive tax and associated expenditure by around $32 billion in a $1.6 trillion economy).

We will consider other possibilities to reach that vicinity later in this article.

The Herald-Sun has responded to this recent positioning on distributive justice by Shorten, proclaiming that: “Bill Shorten has ratched up his class warfare rhetoric”. For the Herald-Sun instead Labor must cut “wasteful spending”  and not target “so-called” “rich and big business”. Here inequality is to be considered not a reality. Rather according to the Herald-Sun it is Shorten who is “dividing us” into a “Have and Have-Not nation” (Herald-Sun, 22/7, p 12, 38). There is talk of rewarding and not punishing “aspiration”; and a rising cost of living is blamed on renewable energy.  (as opposed, for instance, to abuse of market power and inferior cost structures in the wake of privatisation)

But ‘The Australian’ (22/7, pp 1, 8)  talks itself into a corner while unwittingly providing ammunition to refute the Herald-Sun’s suggestion that ‘inequality is a mirage’ conjured up by Shorten, and is not real.

It quotes labour market economist Professor Robert Wilkins to the effect that inequality has not been “ever rising” since the Global Financial Crisis. (2008)  But then has to concede that the portion of national income going to the top 1 per cent has approximately doubled since the 1970s to over 8 per cent.  Wilkins also interestingly concedes that inequality is “high by modern standards”.

Wilkins further concedes that we do have wage stagnation. And when you add a rising cost of living, the reason inequality is becoming a far more urgent and resonant issue is clear.

Further, ‘The Australian’ observes that Shorten and Bowen are drawing on pre-tax figures on inequality. But if anything taxes have long been becoming lower, more broad-based, and less progressive; at the same time as we have observed a growth in the application of the ‘user pays principle’ for everything from education to water.

Briefly, arguments about ‘the size of government’ also flounder in the face of statistics. Whereas Australia enjoyed a general tax rate of 26 per cent of GDP and expenditure levels of 35 per cent of GDP in 2014, the figures for Finland were at 43 per cent of GDP and 55 per cent of GDP respectively. Meanwhile Germany enjoyed a total tax take of 37 per cent of GDP, and expenditure levels of 45 per cent of GDP.

So Australia is lagging behind some of the most successful economies in the world in respect its levels of tax and expenditure. Despite Ideological claims to the contrary from the Business Council of Australia (‘The Australian’, 22/7/17) and elsewhere, the reality is that ‘bigger government’ can be good for the economy, and even ‘good for business’.

While Labor has recently only been courageous enough to target the very rich with admittedly very-modest reforms, ACOSS observed in a 2015 report that inequality was marked in our supposedly-egalitarian nation.

Drawing on ABS (Australian Bureau of Statistics) research, ACOSS depicted the average income and wealth according to five “quintiles”; “a statistical value representing 20% of the population, of which the first quintile represents the lowest fifth of the population, 1-20%; the second quintile represents the second fifth, 21-40% and so on”.

Here the bottom 20% of Australian households enjoyed a total averaged income of under $34,000/year; while the quintile immediately above enjoyed a total averaged income of only $67,113. The middle or third quintile amounted to $97,570 ; the fourth to $134,127; and the final and wealthiest layer $232,175.

Household wealth was similarly measured, and here the bottom 20% enjoyed average total household wealth of $31,100, but the top 20% enjoyed average wealth of $2,212,200.

This gives us some idea of the extent of income and wealth inequality. Though these statistics may also admittedly be influenced in the context of ‘asset rich, income poor’ households; those who may own a family home for instance, but who may fall into one of the bottom two quintiles for income.

Also the top 20% wealth and income quintiles may be affected by the weighting of the extremely wealthy. Again: after all, research quoted by Robert Wilkins in ‘The Australian’ (22/7/17) has it that the top 1 per cent alone account for over 8 per cent of total wealth in Australia.

Labor needs a nuanced approach: assisting the income poor and the asset poor, while redistributing from those who are income and asset rich. Deflating the housing bubble and making home ownership a real prospect for families again is crucial. Labor’s Negative Gearing reforms are essential here. Expanding public housing is necessary to assist low income families and vulnerable individuals as well, while also boosting supply with a ‘flow on effect’ to affordability for everyone.

But that’s not the end of the story. In short, Labor needs to redistribute from a broad enough economic base to fund redistribution via the tax mix, tax-transfer system, social wage and welfare state. That must mean redistribution from the upper middle class as well as the outrageously wealthy.

Yet tax may need to rise for the ‘middle income’ layers as well.

The rationale for this is as follows:

Tax comprises not merely a burden as if taxpayers received nothing in return. It is also the means of funding collective consumption and social insurance. Despite complaints from the banks, the recently-implemented Federal tax upon them was a way of paying for an effective ‘government guarantee’ – a form of ‘economic insurance’ which originated with the Rudd Labor Government during the Global Financial Crisis of 2008 (GFC).

Morally-speaking, the ‘middle income layers’ should also show some solidarity with those who are struggling. That’s part of the picture. But by ‘collectively consuming’ infrastructure, services and social insurance they can ensure they also get a much better deal for their tax dollar than they would as atomised private consumers. Consider communications, transport, water, energy infrastructure, health and education infrastructure – and the costs of the associated services. And taxes also must be levied so citizens are ‘covered’ in the case of accident, illness, disability, job loss and so on.

Also there is a growing crisis of what some would call ‘corporate welfare’. Ostensibly in order to be ‘competitive’ in attracting capital we have seen an increasing phenomena of tax payers, workers, citizens – effectively subsidising business. Governments ‘look the other way’ on tax evasion, tax havens, abuse of trusts and so on. Or ‘talk the talk’ while taking only token action (Labor could do with some introspection here as well).

Corporate Taxation falls lower and lower to ‘remain competitive’. A ‘race to the bottom’. The ultimate consequence of this is that business is no longer paying its fair share for the services and infrastructure it benefits from. That means workers and other taxpayers have to ‘pick up the tab’.

But as well as being unfair, ironically this ‘comes back around’ to harm certain businesses as well. Workers and taxpayers therefore have less disposable income, which means less scope for discretionary consumption. This is why some businesses are beginning to worry about falling wages. Though others remain narrowly self-interested – looking only at their own sectional interests, and for instance supporting attacks on penalty rates.

The other possibility is that crucial services and infrastructure will just be neglected. But much of that infrastructure and services is a ‘drawcard’ for investment as well.  For instance an educated workforce. ‘Social disintegration’ can also mean added costs in the form of crime, ill health and so on. This is without even considering the question from the viewpoint of striving for ‘The Good Society’ and not just ‘economic goals in the abstract’.

There are other possibilities for tax reform, also, not examined by Martin’s article. Those could be crucial in lifting Australia closer to the examples set by successful economies such as Germany and Finland. We will consider a number of those:

  • Further (and genuinely substantial) cuts to superannuation concessions for the unambiguously well-off (the upper middle class and higher); with the potential to save tens of billions a year with that one measure alone
  • Fix the Company Tax rate at 30 per cent and take serious action on corporate tax evasion, use of tax havens etc
  • Gradually wind back Dividend Imputation (tax credits ostensibly to stop ‘double taxation’ – the rationale of which has weakened with falling Company Tax rates) that would have the potential to save $5 billion a year from reducing Dividend Imputation to a 75% rate alone in a first term Labor Government; and much more over time depending on the reaction
  • Seriously restructure the PAYE income tax mix for progressivity, including indexation of the bottom two or three brackets thereafter – to prevent future unfair bracket creep
  • Raise and restructure the Medicare Levy into a more-progressive multi-tier tax; and index to prevent unfair bracket creep. Also cover Aged Care costs within the Medicare Levy – and raise enough revenue to eliminate unfair user pays costs for lower income, middle income and working class families while improving services, and hence improving quality of life and happiness for residents and those remaining at home.
  • Introduce a progressively-scaled ‘infrastructure levy’ to provide for all manner of infrastructure (transport, communications, energy, water etc) and to stem the trend towards privatisation – which is worsening cost structures and arguably fuelling nepotism
  • Introduce a modest inheritance tax on inheritances valued over $2 million; perhaps excluding the family home, and again indexed for progressivity
  • Introduce a ‘Buffett rule’ – or ‘minimum income tax’ affecting the wealthy.

Importantly though, Labor’s consideration of increasing the top income tax rate by 2 per cent is not substantial enough to make serious inroads into the deficit, provide for social wage and welfare expansion, or to render indexation of the income tax mix sustainable thereafter. Compared with other taxes, income tax has great progressive and redistributive potential and its significant reform must be prioritised to achieve the best outcomes.

It’s encouraging that Labor is considering serious reform of the tax system for fairness. We need such reform to promote distributive justice, and provide the means for social wage and social security expansion. But Labor activists need to hold their politicians to a high standard as well.  There is a history of rhetoric on these issues, combined with a failure to match that rhetoric with the necessary action in the ‘end analysis’. Not every measure considered here will be implemented by a first term Shorten government. But extension of progressive tax and associated social expenditure by 2 per cent of GDP, or $32 billion in a $1.6 trillion economy, is a very good place to start.

This article was originally published on ALP Socialist Left Forum.

Doctor Who?

The news that the next ‘Dr Who’ will be played by a woman (specifically by British Actress Jodie Whittaker) has been met with a generally positive reception. But as a fan since I was about seven years old I have to reluctantly confess to feeling somewhat more ambivalent. It’s not that I have any problem with strong female leads. Female Sci Fi leads in the Star Wars movies ‘Rogue One’ and ‘The Force Awakens’ provided new stories and new backgrounds and were in keeping with modern expectations of strong female characters. This was entirely appropriate exactly because we were dealing with new characters and new stories.  (It was not as if Anakin Skywalker – aka Darth Vader – suddenly switched gender; and even though today’s society is more ‘open’ to themes of ‘gender fluidity’, such a change would still be seen as ‘over-reaching’ by most fans).

But ‘Doctor Who’ is different from Star Wars – ‘The Force Awakens’ and ‘Rogue One’. While both franchises have a lineages going back decades, ‘Doctor Who’ stretches back more than fifty years and involves ongoing themes of both continuity and change. And since the 1960s a ‘male doctor’ has been a constant.

In an enlightened society popular culture should feature strong female and strong male characters in equal measure almost spontaneously. As well as ‘sympathetic’ female and male characters of significant depth. Though in reality: yes at first the barriers to strong women leads have had to be broken down consciously and deliberately. And this has met with sometimes unwarranted cultural resistance.

Even relatively recently we lived with the legacy of women’s treatment by some as what Simone de Beauvoir famously called ‘the second sex’. But we also have to ask ourselves: is every instance of male prominence also an instance of male privilege that must be uprooted and overturned? Can we now ‘leave any stone unturned’ when it comes to strong and traditional male leads in popular culture?; (for instance in science fiction generally and Doctor Who specifically).  Is this a sign of ‘progress’? Or perhaps are we sometimes overcompensating for centuries of past male cultural dominance?

Again ‘the Doctor’ has always been played by a male actor since the 1960s. And while the writers of Doctor Who have tried to prepare the way for a female Doctor: for instance with the change of gender by traditional adversary ‘The Master’ (or ‘Missy’ in her most recent incarnation) – it still feels like ‘a bridge too far’. People like a mix of continuity and change. But a woman Doctor is perhaps too great a change. Perhaps it goes against peoples’ expectations to the point where they feel they are no longer dealing with the same character.  Which could turn out to be something of a weakness for the new series.

Not everything that is ‘male’ is at the same time representative of ‘male privilege’ and hence must ‘be torn down’. Though yes, ‘Doctor Who’ originated in an era where the strong female leads of today were unthinkable by most. So indeed even Doctor Who has not escaped the history and influence of gendered power relations. But the cultural milieu which produced ‘The Force Awakens’ and ‘Rogue One’ does not need to tear down every strong and traditional male lead character in order to promote women’s cultural liberation. The battle over strong women leads in Science Fiction and Fantasy popular culture has been fought and it has been won. If anything it is the strong male leads who are becoming more the exception and less the rule.

So ideally we need to arrive at that point where strong female and male leads are produced in roughly equal measure in popular culture ‘spontaneously’ – or even ‘organically’. Where one is not seen as being a threat to the other. And where we can enjoy ‘traditionally male’ lead characters at the same time as enjoying the path-breaking, strong female leads in productions such as the more-recent Star Wars movies, and in ‘Game of Thrones’.

‘Doctor Who’ is a production where the masculinity of the lead character has been a key element for over fifty years. I enjoy and support modern productions with strong female leads. But after enjoying ‘Doctor Who’ for several decades of my life I like to feel I am still dealing with the same lead character. That has me a little uncertain about the recent announcement.

Scott Morrison’s 2017-18 Federal Budget: Some Good Measures Amidst the Typical Austerity

Many media commentators are responding to the 2107-18 Morrison Federal Budget by branding it as ‘Labor Lite’ or ‘worse’.  But how much of that actually stands up to scrutiny?

Yes the Government is attempting to appear ‘fair’.  And many media figures are throwing around terms like “cash splash” which are commonly reserved to use against Labor governments.  There are pressures in the right-wing monopoly mass media for a ‘right-turn’ in response to any moderation of economic policy under Turnbull.  Bernardi’s ‘Australian Conservatives’ and the libertarian ‘Liberal Democrats’ stand to gain most from this.  But despite years of conditioning from the monopoly mass media Australians may resist these trends given the remnants of our ‘egalitarian spirit’.   The point of all this appears to be stigmatisation of social investments and expenditure ; ultimately leading to a US-style political culture.  Which in turn would support a US style class system based on the absolute destitution of many , and the blatant exploitation of a class of working poor. To the extent Turnbull and Morrison resist pressures for an ‘economic hard right turn’ then that is welcome.

Some Budget changes do appear at the least superficially ‘Labor-esque’.  Many of the billions in cuts and savings originally proposed in the nightmare 2014 Hockey Federal Budget are laid to rest permanently here. The increase to the Medicare Levy will be welcomed by many, and will help provide for the NDIS. (National Disability Insurance Scheme)  The Government claims a ‘$56 billion shortfall’ for the NDIS ; though most of that could have been made up for immediately by jettisoning the Government’s $50 billion in planned corporate tax cuts over 10 years.  (much more over time) $8.2 billion will be taken via the Medicare Levy increase over the first four years.

A so-called ‘Google tax’ targeting corporate tax evasion is also expected to net more than $3 billion over four years  (though it is quite insignificant compared with corporate tax cuts elsewhere).

Further, the ‘big banks’ (including CBA, ANZ, Westpac, NAB) will be hit for $6 billion over 4 years ; apparently including an effective payment in return for the ‘government guarantee’ for the sector (which began with Rudd’s response to the Global Financial Crisis).  In response there is the question : will the banks hit customers or will they hit shareholders?  If somehow larger shareholders could be targeted that would ensure the most equitable outcomes.  A payment by the big banks in return for an effective government insurance policy makes sense.  Without it ultimately there could be impositions on workers, citizens, tax-payers.  So on this front at least the Government is doing the right thing.  And if the Banks respond by upping fees and charges arguably the co-operative and mutualist sector could ‘step into the breach’.  Were the Commonwealth Bank still in public hands then assuming a ‘competitive charter’ it could have held the rest of the sector accountable , countering tendencies to pass costs onto consumers.  That’s also a good reason for Labor to consider restoring a public-sector bank – perhaps taking advantage of existing Australia-Post infrastructure.

Meanwhile, foreign home owners who leave properties vacant six months or more will be taxed – a measure apparently borrowed from the Andrews Labor State Government in Victoria.  As well as raising some revenue, this measure should also influence investor behaviour ; and effectively increase available housing supply ; with downwards pressure on housing and rental affordability.

The ‘Gonski 2.0’ measures, meanwhile, are a significant improvement on past Liberal policy, and include needs-based funding.  David Gonski is due to present another report by the end of the year.  The Catholic sector appears to be in the firing line.   More broadly, Shorten points out that despite the gains, here, (including some cuts to some of the richest private schools) the proposals nonetheless still involve an overall $22 billion cut to the sector over ten years compared with the deals previously negotiated by Labor.

Other constructive policies include significant tax breaks for ‘empty nesters’ to ‘downshift’ to smaller, lower-maintenance accommodation.  That could also increase effective housing supply.  The housing bubble will eventually deflate (or ‘burst’ disastrously). But government could step into the economic breach with public housing.  There is still the need to expand supply to meet underlying human need.  Planned Negative Gearing and Capital Gains Tax reforms from the Government are welcome, but do not go anywhere near far enough, saving just $1.6 billion over 4 years . Stronger action on Negative Gearing is necessary to lessen competition between first home buyers and investors , correcting the Housing Bubble over time.

Also there’s $10 billion for rail as part of a suite of infrastructure commitments (though these are not as significant as some think when compared relative to infrastructure investment under a ‘traditional’ Labor Government).

A once-off payment of $75 for singles, $125 for couples – to assist with energy costs – is very insignificant when you consider the rising cost of living. The Liberals point to renewable energy as the alleged ‘culprit’ here ; but what of privatisation?

Finally ;  Annual TV Licenses are scrapped in favour of a much lower ‘spectrum fee’ – which makes sense given the changing media landscape – which is hurting traditional media. Arguably the licenses aren’t worth as much anymore.  But diluting media ownership laws will still enable the likes of Murdoch to dominate traditional media.

The Down-Side
But there’s a very significant ‘down-side’ to this Budget as well ; including ‘traditionally Liberal’ attacks on vulnerable groups ; and treating tertiary students like ‘cash-cows’.

Higher Education stands to lose almost $3 billion a year – with students hit hardest.  The Turnbull Federal Liberal Government claims that its fee increases – and its reduction in the minimum repayment threshold to $42,000 a year (down from $55,000) “better reflects the lifetime benefits reaped by higher education graduates”.  But these measures will start ‘kicking in’ affecting people on approximately half the average wage.  Hence in places the measures really bear no relation to any alleged private financial benefits for students. The logic behind these measures also neglects entirely the gains by business and society at large from a more highly educated populace.   There is some progressivity as those with much higher incomes will repay at a significantly higher rate.  But this does not excuse or make up for a 7.5% average increase in tuition fees.  In response Labor needs to raise the threshold somewhere much closer to the average wage ; and higher over time ; while entrenching a progressive scale in the rate of repayments.  Exceptional groups such as the disabled should probably be forgiven their debts, here : or at least have them frozen. The inevitable effect of this will be to deter many poorer students from study, reducing the nation’s pool of ‘human capital’ over time, and impacting on ‘equal educational opportunity’.  It is dubious at best to consider educational investments a ‘bad debt’.

The 0.5 per cent increase in the Medicare Levy is supposed to reassure voters that Labor’s warnings on health are only a ‘scare campaign’.  But while the Levy is re-indexed the forsaken increases to Medicare’s coverage in recent years are not made up for.  Medicare might still be eroded by stealth ; and that is ‘de-facto privatisation’ in the sense of intermittently eroding the coverage of ‘socialised’ public health proportionately.  This was always what Labor alluded to , but for some reasons ‘the waters were always muddied’ in the mass media, with throw away lines like ‘Mediscare’.

Also , while the Medicare Levy is rising, the 2 per cent Deficit Levy is gone – directly benefiting the wealthy in the final balance. There are ‘traditionally Liberal’ distributive  outcomes, here, despite claims of the Budget being ‘Labor Lite’ (that is, the Budget favours the wealthy).

Payroll tax on foreign workers will also be replaced with a levy of $1500 to $5000 per employee raising $1.2 billion over four years “to improve Australian workers’ skills”.  To an extent this will take some of the wind from Labor’s sails on related issues.

Other measures include punitive attacks on the rights of the  unemployed, with the threat of payment suspension for those who miss a job interview or refuse a job offer they don’t want.  And reversion to a ‘cashless welfare card’ for anyone found to have illegal drugs in their system.  5000 people will by thus tested – and effectively humiliated – in order to create a ‘Trojan Horse’ for the introduction of cashless welfare.   Already Australia has one of the most negligent and punitive unemployment benefit regimes in the advanced capitalist world.  But ‘cashless welfare’ will see Australia revert to Depression era ‘Susso’ style ‘payments’.  The ‘Susso’ basically provided threadbare material subsistence (rations and vouchers) for the long-term unemployed.

Conclusions

Claims to the effect this Budget is ‘Labor Lite’ do not really stand up in the longer view historically when you consider pre-1980s relativities on the Economy ; and more recently with the ‘relative economic centrism’ of former Liberal leaders like John Hewson. The reality is ‘convergence’ on right-wing, economically Liberal policies ; though Shorten has begun to ‘break away’ to something more recognisably ‘left of centre’. Ironically,  the “Abbott Purists” will likely claim the austerity has not gone far enough. Though they may be upset by the attacks on Catholic education.  But it is THEY who have abandoned ‘traditional Catholic Centrism’ on welfare, labour and the economy (a tradition which interestingly had parallels with other ‘Christian Democratic’ parties in Europe).

This government is restrained by its own inflexible “small government no matter what” Ideology (spending is set at no more than 26 per cent of GDP ; well below the OECD average).  This drives various ‘cuts to the bone’ (as Gillard would have put it) , because it leaves no other option than harsh austerity.  Ultimately, Scott Morrison will have to make a choice: real people or Economically Liberal ‘small government’ Ideology.

Terry McCrann of the Herald-Sun calls the Budget ‘a disgrace’ for not sufficiently addressing government debt.  And Jeff Whalley (also of the Herald-Sun) argues that government debt amounts to “$375 billion” or “$15300 for each man, woman and child” .   But while government spending can have a positive ‘multiplier effect’ on economic activity,  austerity also has a negative multiplier effect ; dragging the broader economy down in sympathy.

Also we must remember  that private household debt is the much bigger problem, and is connected with falling real wages.  (Why the cuts in Penalty Rates, therefore, we might ask! ; which will lead to lower tax revenue also).  And reducing investment in PUBLIC owned infrastructure presents its own associated problems of passing inferior cost-structures on the broader economy. Indeed, investments in some services (eg: Education) and infrastructure add to productivity – and the public sector (natural public monopolies) can often do the job more efficiently.  So Morrison’s ‘good debt’ and ‘bad debt’ has some substance. (A pity in the past they did not apply those principles to Labor governments!)

In conclusion;  The Herald-Sun reports with an air of alarm that taxes will be up $23 billion over four years ; and spending up $15.7 billion over four years.   Indeed, Commentators are complaining that income tax is becoming more significant proportionately.  Though really, this need not be a problem if total income tax is progressively restructured, and also the rest of the taxation mix.  Also keep in mind the economy is worth approximately $1.6 trillion.  So in reality spending is up by less than a quarter of one per cent of GDP.  The revenue gap has at least been appreciably narrowed.

In some ways this Budget is better than we might have expected from the Liberals after the horror Hockey ‘Lifters and Leaners’ Budget from 2014. But a lot of that Ideology is still there.  And the cuts are still significant ; with the introduction of ‘cashless welfare’ setting a precedent for the further future humiliation of job-seekers.  And shutting many lower-income Australians out from Higher Education.  An Opposition with strong, traditional Labor policies on distributive justice can still ‘outflank’ a Liberal Government which cannot help but govern primarily in the interests of its core constituency: the unambiguously well-off.

This article was originally published on ALP Socialist Left Forum.

 

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