A lone Left winger in the middle of the Reagan-Thatcher revolution or an expert self-promoter with a "Liberal head"?
The death yesterday (16 May 2019) of Australia's former Labor Party prime minister, Bob Hawke, has kept the scribes, pundits and historians busy and will, no doubt, continue to do so over the next few days.
However, it is an observation by former Liberal Party (in Australia the Liberal Party are the conservatives) prime minister, Tony Abbott, that has created the most controversy so far.
In saying Bob Hawke had “a Labor heart, but a Liberal head," Tony Abbott has upset those who would prefer a narrative that ignores some hard facts about the Hawke-Keating era and its implications for historical - traditional, if you like - "Labor" values. But, as they usually do, things will settle down and a calmer evaluation will start.
The fact is, people can tut-tut all they like. Tony Abbott's comment - that Bob Hawke had “a Labor heart, but a Liberal head” - given many things his government did, is a valid discussion point.
It was during this period that Labor's primary vote started heading south and the observation that it was hard to tell the two main parties apart started to get serious traction across Australian society. There are easily identifiable reasons for this change during the Hawke era.
The development was not unique to Australia, as careerists running Left wing parties across the world started to merge their organisations into the new environment, especially economic environment, created by the Reagan-Thatcher revolution. Then, of course, there was the collapse of the extreme - and craziest and mass murdering - Left idea of all, Marxism/Communism.
Arguably, this failure of the Left careerists to cope with the economic changes of the 1980s and 1990s is what has led to their current obsession with "woke" culture. The Left economic argument was lost - or, so they saw it - but, in typical careerist fashion to sustain their own relevance, they still needed something to believe in and argue for. So, let's go exert our influence by going all "politically correct." This is proving a disaster for societies trying to be fair and decent, as opposed to equalised, but that is an argument for another blog article.
In considering Tony Abbott's observation, the ultimate question is: Did the Hawke Government have a choice or was it moderating, within a Labor framework in a small country, the Reagan-Thatcher revolution? That is, did Bob Hawke, and his treasurer Paul Keating, have no option, in an increasingly globalised world, but to implement a range of policies, which were seen at the time as traditional Liberal Party (conservative) policy options?
I suspect this will be debated amongst historians for many years to come. Therefore, the knee-jerk reaction to Tony Abbott's comment should be ignored.
Back in 2014 I compiled and edited a major labour movement document, responding to Tony Abbott's own government's budget audit (the Audit Commission referred to in the text) and first budget. It was a controversial budget and contributed to his demise as prime minister. As part of the response a historical overview was included, which might assist with the ongoing assessment and study of the Reagan-Thatcher revolution and the parallel Hawke-Keating years in Australia.
This section - Some Historical Context - is from this public discussion paper – Aussie values: Worth fighting and voting for - which was commissioned by Australia's nursing and midwifery unions in response to the Abbott Government’s 2013-14 National Commission of Audit. I was the principal consultant and writer. The discussion paper considers this complex question of the Hawke-Keating era and the context it was operating in.
The references are not included with this blog, but they can be accessed through the link to the discussion paper above.
Some historical context
The audit commission has put its own audacious program to dismantle Australian society in historical context. It points out that its plans are essentially the culmination of 30 to 40 years of effort by powerful business interests, here and around the world, to secure unfettered reign over society. The following commission (2014a) statement captures the true essence of its agenda:
Governments have a rightful role to play in society but they are a supplement, not a substitute for markets.
Increasingly, however, our national priorities and identity can be at odds with the global nature of markets. Australians expect their governments to protect our own social arrangements when this might conflict with the requirements imposed on us by globalisation.
In other words society is at the mercy of markets and there is nothing Australians can do about it - at least according to the audit commission and the Abbott Government.
This is very much at odds with the expectations of the vast majority of Australians, including nurses and midwives. These conflicting values cause much of the unease in society today and form the basis of the hostile reaction amongst the general public to the audit commission’s recommendations and the Abbott Government’s 2014 federal budget.
2. So how did we get to this point?
As nurses and midwives and other working people prepare to retake the debate, some historical background is useful.
At the government level this “30 year” process basically started with the arrival of Margaret Thatcher’s Conservative Party government in Great Britain in 1979 and Ronald Reagan’s Republican presidency in the United States in 1981.
These two powerful world leaders implemented policies aimed at reversing the civilising ideas of the previous 100 to 200 years, reducing government programs and the government’s role and place in the economy and destroying the political and social balance in society. This was partly achieved by reducing the role of unions and restoring big business as a central, and often unchallenged, influence on government decision making and the nature and direction of public policy.
Yergin and Stanislaw (1999) chronicled the fight back by northern hemisphere champions of traditional class structures, the rights of wealth and capital and the inevitability of extreme inequality, against the advocates of the “rights of man”, industrial democracy, people’s rights at work and the civilising and empowering role of government.
According to these researchers, a small group of conservative activists from Great Britain embarked on a long campaign during the 1970s to overturn the mixed economy and the welfare state, both of which were designed to reduce the extreme inequality, poverty and insecurity characteristic of most human societies. This was a direct attack on the civilising developments achieved in many countries over the previous 100 years and especially the previous 30 years since World War II.
As Yergin and Stanislaw (1999, pp14-15) noted:
“The dramatic redefinition of state and marketplace over the last two decades demonstrates anew the truth of Keynes’ axiom about the overwhelming power of ideas. For concepts and notions that were decidedly outside the mainstream have now moved, with some rapidity, to centre stage and are reshaping economies in every corner of the world.
… But if economists and other thinkers have the ideas, it is politicians who implement them, and one of the preeminent lessons of this remarkable shift is the importance of leaders and leadership. Keith Joseph, Britain’s self-appointed ‘minister of thought’, and his disciple Margaret Thatcher seemed to be embarking on a quixotic project when they set out to overturn Britain’s mixed economy. Not only did they prevail, but they influenced the agenda for a good part of the rest of the world”.
As Yergin and Stanislaw (1999, p.16) also pointed out though, these were not new ideas. It really was, and is here in Australia in 2014, very much a reassertion of traditional (economic) liberalism where “the financial burden had gone beyond the ability of governments to manage. Debts and deficits had grown too big”.
So, in summary, in the 1980s a number of prominent governments around the world – most notably in Great Britain and the United States - decided to launch a free market, pro-business “revolution”, using the oil-shock problems many nations were then grappling with as an excuse to attack much of the social progress of the previous 100 to 200 years.
As always, there were problems that needed addressing at the time and some unions at times engaged in unnecessary and disruptive strikes. However, simple corrective action was not the objective. Margaret Thatcher and Ronald Reagan had more far-reaching agendas.
Thatcher (1987) even went so far as to say:
“…so they are casting their problems on society and who is society? There is no such thing!”
Her aim was to shift risk and cost, especially in key basic social support and essential service areas, back to ordinary people, while powerful financial and corporate interests were free to roam the globe increasingly unaccountable to governments and free of social obligation.
As the ACTU pointed out in the media brief summary of its research report into shifting risk:
The global financial crisis occurred amidst unprecedented potential abundance. In Australia, GDP per capita has increased by 42 per cent since 1990 alone. With this growth in total wealth, however, has come significant economic and social change. These critical transformations to working life have followed three key dimensions:
1. The nature of work, characterised by rapid and ongoing changes in technology, production strategies, the security of work and the ways which labour is engaged;
2. The nature of people’s lives beyond the workplace, characterised by increasing risks to individual workers and their families of ill health, housing tenure, retirement, and inadequate education; and
3. The nature of relationships between groups of workers, characterised by widening inequality between workers with respect to working conditions including pay, hours, capacity to bargain and career opportunities.
The result of changes in these three areas has been to substantially shift economic, financial and social risks from businesses and governments to the individual.
3. A quick overview of social progress to the 1980s
Life, for a range of reasons, was very precarious until relatively recently for the vast majority of people in what we call “the western world”. Arguably it still is in some respects, but nothing like it was, including in the late nineteenth century. It certainly still is in many developing parts of the world.
For centuries economic insecurity and injustice were major contributors to the precarious nature of most “western” people’s lives. Technological, scientific and medical underdevelopment were also contributors, but the concentration of wealth and political and economic/market power in the hands of a few individuals and companies exacerbated the harshness and risks of life for most people.
During the 18th century many thinkers across Europe and North America started to focus on these issues. Books, newspapers and pamphlets appeared dealing with the nature of society, the “social contract” that exists between citizens in civilised societies and the “rights of man”. Revolutions, based on these ideas, occurred in Britain’s American colonies and France in the late 1700s and the march towards democracy and fairer societies was underway.
The movement gathered pace in the 19th century with revolutions and “working class” and peasant-farmer protests and uprisings occurring in various European countries at increasingly regular intervals. Collectivism, including trade unionism, grew as a means of empowering ordinary people and re-balancing their rights against the rights of the aristocracy and big business, which had done well as a result of the industrial revolution and the spread of innovations such as railways and the telegraph and the greater availability of world travel.
Ideas like the following gathered momentum in many countries and were being freely discussed and taken seriously from about the 1850s onwards:
· allowing all adult males, irrespective of economic class, to vote in parliamentary elections;
· voting by secret ballot to avoid intimidation of and retribution against voters;
· land reform to more fairly distribute land amongst the people;
· the eight hour day, to provide a better balance to life;
· compulsory, free education for all children;
· the establishment and expansion of trade unions; and
· an increased role for government in economic life.
The world could be a better place for everyone – a belief underpinned by the idea that individuals had rights, irrespective of their financial position, and basic needs that should be met and that the interests of all sections of society should be balanced against each other. Governments had a big role in achieving these progressive social objectives.
Europe would spend the first half of the 20th century battling over these ideas. A devastating war between 1914 and 1918 brought various long-running European empires to an end. A deep depression in the 1930s discredited big business, banks and market economics in the eyes of many. By the end of the Second World War in 1945 the long-suffering ordinary people of Europe had had enough. Democracy and the mixed economy, with strong government programs such as universal healthcare and a welfare safety net spread across most of Western Europe.
In Great Britain, the popular war-time Conservative leader, Winston Churchill, lost the 1945 general election to a reforming Labour Party in a landslide defeat. A universal national health service, greater educational opportunity for the working and middle classes and a stronger financial safety net were on their way.
However, it took a long time to get to this point and there was appalling death and destruction along the way. The beneficiaries of the traditional power and wealth structures, such as Britain’s class system, had to be dragged reluctantly to the reform table.
4. Australia was different
Free European settlement in Australia started in the mid-19th century as many of the progressive ideas outlined above were gaining prominence across Europe.
In fact, some British and Irish reformers had already been sent to Australia as convicts because of their involvement in various social reform, land reform and workers’ rights activities. Many free settlers had also been involved in these movements. In fact, large numbers of Australia’s free settlers came from the working and lower middle classes of England, Scotland, Wales and Ireland.
For them Australia was going to be different. It was truly a “new world” country and they wanted it to be more inclusive than the “old world” places they had left. Most had come to the new world to get away from kings, queens, empires and the injustices of class-based societies.
Ideas like trade unionism, the eight hour day, the universal adult male franchise, the secret ballot and equitable land reform took off very quickly. In fact, Australia ended up leading the world in many of these reforms. For example, the secret ballot was often referred to as the “Australian ballot” system. Free selection of land by settlers, often without the need for a time-consuming survey, was introduced in many Australian colonies in the 1850s and 60s. The idea of large tracts of land being held by a few wealthy people was not acceptable to the majority in this “new” land.
Such democratic reforms are very recent developments in the overall history of human existence. They have only been around for about 150 years. It was not until the 1880s that Britain itself finally followed its Australian colonies and extended the vote to males of all classes. By the 1890s, Australia and New Zealand had become the first places in the world to allow women to vote. It would be almost another 30 years before Britain introduced this simple reform and it took mass protests, imprisonment and a world war to enable it.
Many prominent people, and certainly the labour movement’s early leaders, wanted Australia to be a working people’s “paradise”. Over the next 100 to 150 years, in a robust democratic environment, major reforms, including important and successful government involvement in the nation’s economic development, occurred.
Unlike “old world” Europe, where extreme views on the left and right of politics, such as communism and fascism, often disrupted effective reform, Australia embarked on a practical, middle-of-the-road approach to most matters – albeit with no shortage of debate and differences of opinion at times – that brought a level of shared prosperity and basic security to people from all walks of life. It was not perfect. Wars, depressions, recessions and race relations have hampered progress.
However, Australia was proof that the ideas of democracy and equity and a mix of individualism and collectivism in public policy could achieve decent social and economic outcomes. It was a gradual process, with each generation adding new achievements.
5. The 1980s and beyond in Australia
Significantly, just as the Thatcher-led return to blind faith in markets and individualism was gaining a foothold in Britain, the Australian people voted out their conservative government led by Malcolm Fraser and his treasurer, John Howard. A major reason was the clumsy, insensitive way it tried to undo many of the social reforms of the Whitlam Government, including Medicare’s predecessor, Medibank.
The Hawke-Keating Labor Government won a huge majority at the 1983 federal election and 13 years of Labor rule began.
While Margaret Thatcher and Ronald Reagan were trying to destroy unions, the role of government and collectivism in general, the Australian Labor government brought business and unions together to deal with the nation’s economic issues. It adopted an inclusive approach – called the Accord - to decision-making, which helped Australia avoid the excesses of the Thatcher-Reagan model and continue to develop a mixture of popular government-run programs, such as Medicare, and where appropriate private, market-based arrangements.
There was no shortage of debate and controversy surrounding some of Labor’s policies, including privatisation of the Commonwealth Bank and QANTAS. With the benefit of hindsight it is arguable that Australia could not completely isolate itself from the many pro-market and globalisation changes occurring around the world. Many of their excesses were avoided though. Better balanced policies, which also forced business to pay its way through the closure of various tax rorts like the tax-deductible long lunch, were implemented. Medicare and compulsory superannuation were introduced.
However, during this period supporters of the Thatcher-Reagan “revolution” were also growing in number and confidence in Australia and many of the ideas behind it started to be openly promoted by conservative politicians and organisations. The first full attempt to import this “revolution” occurred at the 1993 federal election when the Liberal-National parties campaigned for a program of substantial change called “Fightback”. Amongst its proposed changes were the introduction of a 15 per cent goods and services tax, the effective abolition of Medicare and a significant reduction in workers’ rights, collective bargaining and the role of unions. The Australian people rejected it.
The conservatives had learnt their lesson though. In 1996 the Liberal-National Coalition finally won power again after 13 years, with Fraser government treasurer, John Howard, as prime minister. It won by avoiding the high profile approach of 1993, when “Fightback” and all its details were published months before the election, allowing for close public scrutiny.
During its period in office, the Howard Government again forced large numbers of Australians into private health insurance, started tampering with Medicare, cut taxes on business and capital and introduced a 10 per cent GST on virtually everything working people and pensioners buy. Then, after nearly ten years in office it finally launched a major attack on workers’ rights through its WorkChoices policy.
This last policy cost the Howard Government the 2007 federal election, and John Howard his own electorate. Over the next six years in Opposition, the federal Coalition parties again adopted a low profile approach to such unpopular policies. Consequently when they resumed power in 2013 most voters were unaware of their real agenda. This time, they proceeded quickly to introduce their pro-market, small government ideology.
The sweeping changes they propose, and the ideas underpinning them, to Australia’s way of life and traditional social-economic model based on the “fair go”, are outlined in the National Commission of Audit and the 2014 federal budget.
These hard-line policies are not a sincere effort to rein in spending after the GFC emergency. They are arguably the most audacious changes proposed for Australia since free European settlement replaced the convict system in the mid-19th century.
Thatcher and Reagan used the oil price shock of the 1970s to implement an ideological agenda, rather than simply address the specific issues and problems of the time. The Abbott Government is using the same strategy. It is trying to use post-GFC debt and deficits, which every serious expert knows and says are at very manageable levels in Australia, as an excuse to attack our national values and our expectations of policy fairness and balance and implement the 1980’s thinking that drove governments like Margaret Thatcher’s in Britain.
As Quiggin (2013) noted:
“Advocates of commissions have learned nothing, and forgotten nothing, since Kennett's audit 20 years ago, which in turn reflected the political orthodoxy of the 1980s, based on microeconomic reform, privatisation and financial deregulation.
When commissions of audit began, there was a lot of excitement about new ways to involve the private sector in the provision of public services, epitomised by the hit American book of the time Reinventing Government. Some of those ideas, such as competitive tendering, have worked reasonably well, even if not up to their promoters' expectations. Others, such as PPPs, have been disasters, to the point that even insiders like Lend Lease have described the model as ‘broken’.
In all probability, none of this experience will be reflected in the commission's report when it is released in January. Instead of a road map for Australian government in the 21st century, we will see the ideology of the 1990s used to support one last push for the policy agenda of the 1980s.”
The world, including Australia, has now had some time to assess these market-based policies and it is obvious they have a mixed record.
The appalling conduct of financial institutions, which led to the GFC, and the growth in inequality, is now obvious. Governments that had to resolve the market-created GFC by bailing out many failed banks, guaranteeing the savings of ordinary people, and spending money to keep people in work.
Here in Australia we have witnessed many “market” or private sector failures, with governments having to take back public hospitals, private road projects going bankrupt and the collapse of ABC Childcare, to mention just a few. Rural and regional Australians know they would have limited community services if they relied on “markets’ to deliver them.