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The Equality of Citizenship.

During the period between WW2 and the 1970s most western governments established employment as a right of citizenship. They declared that a properly regulated redistribution of wealth was necessary in a free market system and that an enlightened society required some form of income protection that would be based on a just wage system.

In Australia and elsewhere, the war years had proved that full employment could be maintained with the proper use of deficit budgets. As a consequence, the post war macroeconomic policy of the Labor Chifley years and some of the Liberal Menzies era continued with that approach.

To achieve this, both governments embarked upon an economic expansion program involving the public and private sectors, where the number of job vacancies always exceeded the available workforce. The labour market was then serviced by a carefully controlled immigration program, most of which was sourced from Great Britain and Europe.

This highly successful growth blueprint continued until the early 1970s proving that full employment was not only sustainable but a foundation stone of our national wealth. Thus a commitment to a truly egalitarian society was established and underpinned by a belief in the equality of citizenship.

captains The one sector of the community that objected to this equality was the capitalist class comprised mainly of industry bosses who, over time, realised that the growth of their wealth was compromised by the high rate of demand that came from full employment. They subscribed to the theory that with a permanent pool of unemployed workers they could regain control of supply and therefore, maximise their profits.

So they pressured the Menzies government into applying credit restrictions that would slacken employment growth effectively wresting control of supply from the consumer back to them. The evidence of this in Australia, was the credit crunch of the early 1960s and the cleverly orchestrated debates that surfaced over trade union power.

Subsequent inflationary pressures followed this paradigm shift and were compounded by the Vietnam War and the OPEC oil price rises in the mid-1970s. This created more reasons for western governments to introduce further contractionary economic policies effectively braking the nexus between full employment and demand. This in turn, ultimately led to the dominance of supply side economics, which is what we have today.

reagan The rest, as they say, is history. The Reagan years, gave birth to an unregulated finance and banking system; a free for all where the wealth of the world became concentrated with, and maintained by, those who controlled the supply of money to the world, the bankers. They became the real force behind the captains of industry.

Over the next three decades governments were influenced and manipulated by the wealthy to stay out of their domain. They cited debt as the great anathema. Governments were taught by industry that government debt was bad; that debt threatened supply and had to be controlled. The Government foolishly agreed.

Thus, free from government involvement, greed became the motivator of financial success in the private sector, particularly banking and all areas of society were effectively reduced to a pecking order, accepting whatever they were offered from a vertical and grossly unequal supply side, macroeconomic system.

None of this is fanciful or conspiratorial invention. This is what actually happened. If nothing else, what these events demonstrate, is that very little in this world happens by accident.

If we as Australians are ever to regain equality of citizenship, we must re-discover the principle of demand side economics which is predicated on the assumption that the captains of industry make what we need, what we want and what we use to enhance the quality of our lives.

demand supply In this scenario, production is limited only by demand. On the assumption that everyone will demand something, production will need to keep up with demand thus requiring a greater level of participation from the available workforce. The outcome will be near to full employment and greater equality for all.

The only downside is that the captains of industry will face greater competition and lose control of production volumes, while the banks will lose control of the money supply. Both will be faced therefore, with making less profit.

So the question arises, which of these two macroeconomic systems is best for the consumer; for you and me?

Our present government like its predecessor and all the way back to the Fraser government have been captives of supply side macroeconomic management. During that time there has always been a pool of unemployed, effectively a wasted wealth of potential workforce participation.

Modern macroeconomic theory advocates a return to demand side economics, a return to the days of near full employment, full production and by design, limited social welfare and a higher Gross Domestic Product.

This does not mean raping the planet of its resources for a growing population; quite the reverse. Demand side economics is consumer driven such that if the consumer demands more environmentally friendly products and more sources of renewable energy then that is what industry will produce.

But to achieve this, the consumer has to be properly informed.

What we have at the moment is a conspiracy of denial. Denial of a planet suffering from the plunder of finite resources, a denial orchestrated by the captains of industry with a complicit government that has no appetite for supporting renewables.

Present and future governments cannot be relied upon to lead in this matter, hostage as they are to the captains of industry and their masters.

If we want a better world for our grandchildren, debt is not the problem. The captains of industry are the problem, specifically their unwillingness to change to something more sustainable and longer lasting.

future This means change must come from the consumer. Demand side economics will restore the equality of citizenship. Supply side cannot. Therefore we need to ask ourselves, what is it that we want?

As long as we allow the captains of industry to dictate the terms of supply we will never be in control of our own destiny and Australia Day celebrations will remain a hollow occasion, regardless of all the hoopla that accompanies them.


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  1. Graham Houghton

    And the TPP is the final nail in the coffin for us all.

  2. RosemaryJ36

    Hopefully the economics advisers to the ALP will take note of this article since that side of politics is our only hope of achieving greater equity in our population.

  3. Tony

    Full employment pre 1970s due to absence of a welfare state. Check the figures for what happened after Gough Whitlam introduced welfare as a right. Same thing around western nations as welfare programs became part of left’s political game. Don’t blame capitalists who would rather have people with incomes to spend than welfare recipients needing more taxes to pay for them.

  4. Rossleigh

    Gee, Tony, I thought you thought social media was electronic graffiti. But I guess you’re trying to make up after knighting Phil.

  5. Rossleigh

    But you’re right, of course, We all remember the full employment associated with the 1930s.

  6. Kaye Lee


    “There was a major extension of the social security system in 1945 with the introduction of Commonwealth unemployment and sickness benefits in the form of flat-rate payments financed from general revenue and subject to an income test.”

    What is it about Conservatives and facts…or lack thereof

  7. Anomander

    Thanks for the (lack of) facts there Tony. Hmmm… Research Officer ‘eh? Here’s a hint – making stuff-up to match your beliefs isn’t actually research and doesn’t constitute facts.

    Oh well, keep trying and better luck next time. 3/10 for participation.

  8. kasch2014

    The permanent state of waffle continues. Economics is not a science, money is not a resource. The free market is a fond illusion, and human nature is a shit-pit. Therefore – real skills are in enginneering, farming, processing, etc., etc., and all the “service industry professions” which form the major part of the Australian “economy” have in time turned into destructive bulldust factories because they take themselves seriously in a papal infallibility kind of way, and so many people believe in them as they do in that impermanent knowledge base called science. We need to start with a set of values other than the idotic 19th century constitution we now all accept as the word of God, and use honesty and courage as the major tools to deal with the over-speed destruction of our life support system, rather than to endlessly jerk off about F.A. has some options and outrageous attitudes to share. Just don’t let your narrow rabbit-trap mind snap shut at the first politically incorrect buzz-word you come accross.

  9. Tony

    Thank you, Kaye Lee, for demonstrating the difference between the right who can agree to disagree in a civil manner versus the left who resort to censorship and usual intimidation tactics refined in the old Soviet Union to silence dissent. Shall we have a show trial for me for not suporting your side?

    And out of curiosity, how did you find my full name as it is not shown on screen? Is your “outing” effort to censor a conservative out of the conversation or just plain old malice against all conservatives?

  10. Kaye Lee

    Have you been censored Tony? Do you find facts intimidating? Have you been silenced?

    My incredulity at you being a “research officer” comes from the lack of research/truth in your statements.

    As to my outing you….you did that yourself with your email address where you use your full name. I have no malice against any person. I do however prefer truth to made up crap. You are welcome to proffer your opinion but be prepared to back it up. The people here want facts, not propaganda.

  11. Kaye Lee

    As for debating in a civil manner… I to follow your lead?

    “Julia Gillard most successful PM” – Is that a typo error or did you forget to take your memory pills? Is there anyone that really takes this nonsense seriously.”

    or is that “just plain old malice”?

  12. corvus boreus

    Censorship? Intimidation? Soviet show trials? The civilized right vs the oppressive left?
    It seems a shame that you are a ‘research officer’ for an elected representative, and not just because you seem big on rhetoric of absolutist generalisations unsupported by corroborative evidence. You are also missing your true calling working the switchboard at ‘Dial-a-cliché’ (hyperbole department).

  13. Kaye Lee


    I would be interested to hear your view about the edict from the PM’s office that public servants may not express their views on social media.

    “PUBLIC servants will be urged to ­dob in colleagues posting political criticism of the Abbott government on social media, even if the comments are anonymous, under new Department of Prime Minister and Cabinet guidelines.”

  14. John Kelly

    “Don’t blame capitalists who would rather have people with incomes to spend than welfare recipients needing more taxes to pay for them.”

    Actually progressives would like everyone to have an income. That way the country receives larger tax revenues, production increases to accommodate demand and welfare would not exist. But, unfortunately your side of politics requires a pool of unemployed to keep wages in check thus enabling the rich to get richer, the poor to get poorer.

  15. Kaye Lee


    When Tony said that I have an uneasy feeling he meant he would rather associate with rich people. The poor, sick, disabled, unemployed, elderly….they are all just a burden we shouldn’t have to bear. But I am open to hearing a different interpretation.

  16. Pingback: The Equality of Citizenship. | THE VIEW FROM MY GARDEN

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