State Power and the Left today

 

Above:  Antonio Gramsci developed ideas of ‘War of Movement’ and ‘War of Position’: arguing there was more than one road to change.

Dr Tristan Ewins 

The other day I saw another post by a Conservative trashing Marxism, and arguing that Marxism had never succeeded in practice.  In response I argued that it depends on how you measure success.  There may never have been a communist government of the sort Marx envisaged.  Some regimes were a macabre parody of Marx’s principles.  But Marx also helped to unleash the social forces which at the same time improved society, while perhaps preventing the kind of extreme polarisation that may have driven revolution.   So in a way perhaps Marx helped mobilise forces which prevented the kind of final confrontation he envisaged.  Perhaps the success of democratic socialists and social democrats in achieving reform actually prevented the polarisation which would lead to revolution. Though from the 70s onward the Left has also declined with the embrace of neo-liberalism, the collapse of the USSR, falling wages, declining unionisation, working class militancy and class identity, and so on.  In response to these set-backs most alleged Leftists chose the strategy of capitulation ; and the embrace of identity politics as an alternative to socialism.  Not to say that identity struggles aren’t important ; but they do not replace the need to have a clear critique of political economy ; and an organised and conscious working class.

In response to those who argue there is nothing of value in reading Marxist texts today, I say this: Marxism is fine so long as you don't take Marx's or Lenin's writings as a closed book. Lots of socialist democrats were also Marxists. Marxism influenced many Social Democratic countries in Europe who have been prosperous. China is prosperous but fails to meet Marx's principles on creative freedom and fulfilment. Lenin worked under perhaps the worst possible circumstances and was driven to make terrible compromises. Then much of the world socialist movement applied his (Lenin’s) ideas ''more or less straight' into situations that demanded more nuanced and situational thinking.

 

Thinkers such as Gramsci, Habermas, Marcuse - remedied this to an extent.  Meanwhile Chantal Mouffe mixes Marxism with robust liberal pluralism to base a strong theory of social change today that some call 'Post-Marxism'.  (Mouffe refers to her outlook as ‘Agonism’)  But the Marxist tradition is both deep and broad - and we shouldn't shy away from borrowing from it today. But perhaps with more respect for liberalism than Lenin had.  Because the ideology of liberalism is a kind of defence in the sense that the State’s perceived legitimacy rests upon certain liberal rights and freedoms.  When those aspects of liberal ideology recede the Left typically becomes more vulnerable to brute repression.  But at the same time it causes the capitalist state to face a legitimation crisis where it's perceived legitimacy was based on liberalism.  It 'cuts both ways'.  That said, today many workers are increasingly exploited and impoverished in line with a decline of social resistance and class struggle. In part we're to blame for that ourselves on the broad Left for reverting to nebulous 'Third Way' thinking, and abandoning class and the critique of capitalism in the rush to identity politics.

 

Though Marx himself knew his work wasn't complete, and there's still lots of value in his works we can still draw on today. And as a tradition Marxism is very diverse and broad. But indeed his works don't solve every problem on Earth ; and with the passage of well over a century many things have changed. We do have to account for this.

 

One of the key factors distinguishing Marxism from mainstream liberal democracy is the Marxist critique of the State.  Marx thought the working class had to seize state power.  Lenin, meanwhile, argued this was only possible if the previous state was ‘smashed’ ; that socialists could not successfully take a hold of the ‘ready made state machinery’ to govern on behalf of working people and those who had been oppressed.  The situation which followed Revolution was referred to by Marx as ‘the Dictatorship of the Proletariat’.  Many critics of Marx see this as referring to the literal Stalinist dictatorship which eventuated in the USSR.

 

Yet as Rosa Luxemburg pointed out dictatorship of the proletariat can be interpreted as the democratic rule of the workers ; as opposed to Lenin for whom it was the rule of the Communist Party. So 'dictatorship of the proletariat' doesn't need to mean the dictatorship of one person or party. But Lenin worked amidst a collapsing society where foreign intervention was everywhere ; and the Entente powers (Britain, the Commonwealth, and France) were determined to destroy the new government as that government had pulled out of the war. (that is, World War One) The United States and Italy had also joined the Entente.  Unfortunately the logic of the crises which followed led to centralisation in the hands of fewer and fewer people ; and the Bolsheviks turned in against themselves ; until Stalin was the only one of the old Bolsheviks who was left. (except for Alexandra Kollontai ; who became a diplomat for the ‘workers’ state’ ; and ended up as ambassador to Sweden) Engels pointed out that some authoritarianism was necessary in the midst of a Revolution – to protect the infant Communist government from its enemies.   But Gramsci pointed out that not all revolutions are the same ; and this means we should not apply the Leninist template universally.  Perhaps the Bolsheviks should have maintained the Red Army ; but allowed the Constituent Assembly to sit ; as well as the Soviets. In other words freedom - but with a backup plan. The problem would be if the Constituent Assembly tried to establish their own State ; and hence threaten sustained working class democracy.  This kind of arrangement is called ‘Dual Power’ ; where all power is not centralised in one place.  (but control of the apparatus of force can still be a decisive factor)   Also importantly: the State involves the apparatus of administration and not merely the apparatus of force.  Seeking to 'smash' the state 'root and branch' - including the apparatus of administration - could prove to be self-destructive in the final  analysis.

 

Considering the matter historically: Under immense pressure, The French Revolution descended into Terror ; and eventually Bonapartism (dictatorship) ; But this didn't cause liberal democrats to abandon their cause. Eventually they succeeded. Neither should we on the Socialist Left abandon our cause. Most importantly we need to be outspoken about our cause ; because without this we will not mobilise anyone. Without this capitalist ideology and institutions appear beyond question ; and alternatives are seen as practically unthinkable. Also we need to be principled on issues like privatisation – as hypocrisy has a demoralising and demobilising effect  , and upcoming generations of activists are thoroughly detached form the values of their predecessors.

 

Lenin was a democratic centralist ; which translated to the rule of the Party - which in turn delegated power to decide and govern between Conferences to a Central Committee. He was prepared to share power with like-minded Parties such as the Left Social Revolutionaries ; but after he suffered an attempted assassination by one of their members he abandoned this. Rosa Luxemburg was scathing of over-centralisation ; pointing out that it smothered workers' democracy ; and the self-corrective dynamics of that democracy.  The wisest Central Committee was no substitute for democratic practice. You could argue that over-centralisation was a crisis-management measure - but the problem is that the Crisis never ended. And we ended up with the personal dictatorship of Stalin. The comparison between socialists and liberal democrats stands ; because even if Lenin was an over-centralist - he did not speak for all socialists. The aim should have been to balance crisis management with workers' freedom and democracy.

 

Some liberals have a problem with forging a State which is sympathetic to the Left ; and hence not likely to resort to extreme violence against the Left.  They presume that the modern state is democratic and impartial ; and hence all the Left has to do to change society is to win a majority in Parliament.  Problem is: apply that to the Austrian instance. At the end of World War I the Austrian Social Democrats controlled the Army. They achieved a liberal democratic revolution. But after the war they gave up State power and allowed a new conventional army to be set up. As an insurance policy they maintained their own militia. In 1934 they achieved a majority in the Constituent Assembly. Immediately the Fascists dissolved the Parliament by force - and in doing so they were supported by the regular Army. For a time the Social Democrats negotiated behind the scenes. While they did this the Army raided their arms caches and arrested their leaders. Finally what was left of the workers' militia (the Schutzbund) took up arms, fortifying the public housing estates in Vienna. But they were crushed after about a week, and many of their remaining leaders were executed. Austria was under the heel of a kind of fascism – years before the Nazis occupied the country.  (The Austrian fascist regime had clerical sympathies ; and did not want German dominance ; like Franco’s regime in Spain they were repressive ; but they did not have the Nazis’ racialized Ideology)

 

The point is that unless progressive forces control the Armed Forces – or otherwise influence it towards democracy - they have no guarantee they can peacefully achieve a majority and govern for their constituents. They can allow other parties to govern, yes. But they cannot afford to allow their enemies to control the armed apparatus of State if they actually have a choice in the matter. 

 

In Australia the prospect of radically reforming the Armed Forces seems unlikely.  Perhaps the best we can do is school the military in pluralism and democracy ; and try and ensure they never intervene inappropriately.  Unfortunately, constitutionalism is not necessarily enough ; as Reserve Powers can be used to undermine democracy. Such intervention is currently not likely as what passes for the Left in Australia does little to challenge the status-quo. The opportunity to radically reform the armed forces in Austria only occurred after a State collapse with the defeat of Austria-Hungary ; and over a million Austrian and Hungarian deaths in World War One.   But with no opportunity to radically reform the State, radicals always run the risk of falling afoul of it.

 

Historically, though– in the instance of Revolutionary Russia - what I'm arguing for is basically that there should have been a kind of dual power. Here, again, the Bolsheviks would have controlled the Red Army and hence that would comprise 'the last line of defense' . The Soviets would have had their sphere of influence ; but the Constituent Assembly would be enabled to do its job of representing voters as well. Though without forming a state that was hostile to the Revolution.

 

In a recent argument I put forward this view and was accused of hypocrisy.  I was accused of endorsing state repression ;  and hence having double standards on liberty.  It was held that radically reforming the State so the apparatus of force upheld democracy – including support for elected left-wing governments - led to actual dictatorship in the common sense of the word.

 

But that's not what I'm arguing. My argument is "hold on to control of the apparatus of force if you can - AS AN INSURANCE POLICY against the violent or repressive tendencies of your enemies." So THEY cannot use the state against you in an oppressive way. More generally, I'm glad for my rivals to have free speech. I'm not glad for them to have the option of using state power to repress me when things don't go their way.

 

In the Russian context, however, things were more complex ; as it was in the middle of a Civil War - and with foreign intervention ; there was the spectre of hunger and social collapse and so on.  Once you’ve accepted that the French Revolutionaries had to resort to crisis management under certain circumstances, then the same ought apply to the socialist Left in its struggles. But better still to avoid the kind of crises that warrant such tactics. Hence 'War of Position' is better than 'War of Movement'. (we’ll explain this shortly) It all ended badly for the Bolsheviks anyway.  There was a virtual 'repeat of history' as the rise of Stalin shadowed the previous rise of Napoleon.  So if you could achieve stability on the basis of a progressive and democratic pluralism that would be best. But it’s best if you can have that pluralism while progressives control the apparatus of force as an insurance policy. Importantly, the State is not homogenous.  While I am not a structuralist, the structuralist Marxist Nicos Poulantzas described the State as a ‘contested field’ ; upon which the logic of class struggle was ‘imprinted’.  The idea that the State can be contested without being left as a homogenous ‘instrument’ across its breadth and depth is a very important one.

 

This is why what Antonio Gramsci called 'war of position' is preferable to what he called 'war of movement'. In a 'war of movement' - eg: the 1917 Russian Revolution - order is collapsing and competing interests and parties rush to fill the void. In the process the struggle can become very violent. In the Russia 1917 context there was foreign intervention and White Armies besieging the Revolution.  And if Communist Parties do 'whatever it takes' there's the potential for it to end disastrously. (though in that context many feel they have no choice ; it’s easy to judge when personally you live in conditions of stability)  By contrast a 'war of position' involves a long term struggle for hegemony ; through institutions, organisations, traditions, practices, movements.  Power is gained by reaching pre-eminence in civil society - potentially through democratic processes.  And again the State can be penetrated by the process of class struggle itself.  But the fate of Salvador Allende – whose democratic socialist government in Chile was overthrown in 1973 by Pinochet with the assistance of the CIA - shows that if the armed forces are hostile it can still end in slaughter. (against the Left)   The massacre of Leftists and labour movement activists in Indonesia in 1965-1966 is an even more horrifying example: where over half a million were slain and the rivers literally ran red with blood.  The apparatus of force is perhaps the hardest part of the State to penetrate and challenge. In Australia, also, the Labor Government of Gough Whitlam was effectively overthrown in 1975 in a ‘constitutional coup’. 

 

Of course bourgeois regimes don't mind wars ; and there is hypocrisy when it comes to the matter of violence. Violence might become inevitable in defence of a picket line for instance. But the modern Left has an interest in not escalating violence too far ; because it does not stand a chance against the violent power of the modern State if that state is hostile.  Or more to the point ; against the State’s apparatus of force.  Perhaps the word ‘apparatus’ suggests an instrumental outlook – which is problematic – but the armed forces can be isolated from any broader class struggle. At the end of World War One, though, the establishment of workers’ armies was possible in a context where millions of workers were mobilised in the armed forces by a horrific war which had discredited the old regimes.  And the class struggle in Australia is also problematic because class consciousness is now at an all time low following the demobilisation of the labour movement in the 1980s and thereafter.  The Left has a substantial task in front of it.

 

So the modern struggle involves taking every opportunity to reform the State ; while engaging in cultural and social struggles ; as well as civil disobedience.  This means always pushing the boundaries ; but having the wisdom not to press them too far if there is a likely prospect of overwhelming repression.   Again: escalation beyond a certain point is not usually a wise option for the Left. 

 

A strong and mobilised civil society is also a defence against repression ; so achieving this is a high priority for both revolutionaries and reformers.  Perhaps the best way is a mix of reformist and revolutionary outlooks. That is: seek qualitative change ; but be prepared to achieve this incrementally.   While at the same time taking advantage of ‘watershed’ scenarios to achieve radical change more quickly.  All this involves mobilising civil society and reforming the State to contain the threat of repression.

 

This may also seem distanced from the reality of day to day politics ; but that current reality is one where progressive parties have limited power because of the threat of international capital strike ; and the Left’s marginalisation in Civil Society.  The Left has also largely abandoned struggles or – and ideologies of – radical democratisation, class liberation, and other progressive causes.   In other words, large parts of the modern Left have either lost their reason for being ; became irrelevant ; or limited themselves to identity struggles while only contesting political economy at the margins.  Again: Hypocrisy on issues like privatisation, and timidity on issues like tax reform, Industrial Relations reform, and social wage expansion – leave newer generations on the Left demobilised, disoriented and demoralised. But if the Left ever rediscovers itself, all these issues discussed here will once again burn with immediate relevance.

The Legacy of Daniel Andrews. Recognising the Good with the Bad

 

above: Daniel Andrews Triumphant one last time (2022)

Dr Tristan Ewins

Today the impending retirement of Daniel Andrews – Labor Premier of Victoria – has been announced.   For many of us this came as a surprise ; but it seems Andrews wants to leave on his own terms. 

Andrews has led a reforming Victorian Labor Government.   While championing the rights of trans women and men, Andrews also presided over a radical increase in the number of women in Cabinet.  He also oversaw controlled legalisation of euthanasia and medicinal cannabis.  What is more he oversaw the shift towards railway crossing removals as a much-more cost effective means of reducing road congestion.  The Andrews Labor Government also took something of an authoritarian turn during the Covid 19 crisis ; but perhaps the unparalleled times called for this. Andrews also oversaw the beginning of negotiations for a state-based Treaty: blazing a trail ahead of his Federal  colleagues.

On infrastructure and Health, Andrews made big investments in public health: most specifically in increasing the number of nurses on the ground ; and providing incentives and financial support for future nursing graduates.  A total of over $150 million was invested in indigenous Health (with an anticipated 100,000 extra appointments) ; as well as free IVF, women’s health clinics, and a mobile health clinic.  Further, public Aged Care levels were maintained ; and funding provided to assist in ensuring a registered nurse was provided in every aged care facility. Almost $50 million was maintained for GP Respiratory clinics: whose importance I testify to personally as a person whose mother died of Chronic Obstructive Pulmonary Disease after a long and traumatic illness before this was made available.   And since 2021 the Andrews Labor Government has invested over $6 billion in mental health: largely in response to the Mental Health Royal Commission.  This includes the establishment of the new ‘Mental Health and Wellbeing Act 2022’ which will modernise the operation of mental health in Victora, with dialogue and inclusion of families and consumers in decision-making emphasised.

On infrastructure in addition to investments in health infrastructure (hospitals and the like) Andrews Labor also made big investments in public transport which anticipate future need. This includes projects such as the Metro Tunnel, North East Link Program, and West Gate Tunnel – which together have created over 50,000 jobs.  Failing to invest here would come with a huge social and economic cost into the future, with uncontrolled congestion and a decline in the overall quality of the public transport network.

On the other hand, though, it is against these backdrops that the Andrews Labor Government has continued a now long-held Labor government tradition of privatisation.  (acknowledging that 50 year leases are not ‘technically’ privatisation ; though they will effectively operate as such for decades and decades to come)  Amidst a strong sense of irony the Liberals argued in November 2022 that Andrews had raised approximately $20 billion from the (effective) privatisation of the Port of Melbourne, VicRoads,  and the Land Titles Office.   

Consumers will pay the price for this for decades to come. Some of these are now effectively private monopolies in their fields.

But in a seeming Ideological U-turn Andrews Labor also announced the re-establishment of the SECV. (State Electricity Commission Victoria)  Those of us old enough to remember the old SECV may recall a time when energy was provided relatively cheaply ; and natural public monopoly effectively held down cost-structures.  The new SECV will be a substantially different creature – despite the nostalgia.   Beginning with a $1 billion investment, the new SECV will emphasise the building of renewables infrastructure, with (according to Andrews) the creation of 59,000 jobs.  The task will not be the recreation of natural public monopoly , but the re-establishment of a part-public player: which might perhaps be run on a not-for-profit basis – and inject significant competition into the sector.  In this case consumers would stand to gain.  Depending on what the involvement is with superannuation funds, however, there will be pressures to run ‘for-profit’.

In June the Federal Government – in an olive branch to the Greens – announced a $2 billion fund to be provided to the States for the construction of public housing. https://thenewdaily.com.au/finance/property/2023/06/17/labor-pledge-2b-housing/?breaking_live_scroll=1

This was enough to get the Federal Government’s $10 billion public housing fund passed with Greens support for this year. The Greens’ defence of this behaviour was that over the long term a $10 billion fund could not provide enough turn over to substantially increase and improve public housing stock.  But in the future this $2 billion expenditure will have to be renewed every year – or even increased. (perhaps to the vicinity of $3 billion)  This is because State Governments (including State Labor Governments) are pressed for cash and rely on Federal money to get many projects over the line. 

That said, the housing crisis is real, and Andrews Labor’s response has been disappointing on many fronts.  Recently the demolition of 44 public-housing towers was announced – to be replaced mainly by ‘affordable’ and ‘social’ housing (alongside mainly private dwellings) in the form of ‘public private partnerships.’  Social-Housing is ‘broadly defined’ ; and includes so-called public-private partnerships. (which can be light on the public component, and deliver rivers of gold to private investors)  Public land will be made available for private investors in return for a 10% ‘affordable housing component’.  The alternative for developers is to pay a levy accounting for 3% of the project’s worth; then diverted into social housing.

There is a place for ‘affordable’ housing in ‘the mix’ ; but looking to Austria for instance, public housing can be done so much better than this.  In Vienna nearly half of the city’s housing market is covered by co-operatively owned players and city-owned housing.   Not only does this deliver for equity: it provides quality and flexibility. 

Benita Kolovos of ‘The Guardian’ has observed that: “of the 30,000 proposed new dwellings on public land, only 11,000 will be available to public housing tenants.”.  This has led the Greens to brand the policy as ‘the biggest privatisation since Jeff Kennett.’  The continued ‘ghettoization’ of public housing will see it marginalised on an ongoing basis.  To break out of that ‘ghetto’ – and to break prejudices and stigma - public housing needs big ongoing investments ; and it seems now the only hope for that lies in bigger purpose-tied commitments from Canberra.  And this requires Federal Labor to move away from overly-conservative fiscal policy.

Again: State Labor Governments, and State Labor parties – need to be pressing Federal Labor to provide at least $3 billion a year for this purpose.  Andrews Labor’s expansion of the market may increase supply over time, and in-so-doing do something to contain prices. But at the same time quality housing will remain out of reach for many struggling families.  Perhaps if Labor had diverted the $3 billion earmarked for the Commonwealth Games into public housing this would have been more palatable.

 

So in conclusion, there is something of a ‘mixed report card’ for Andrews Labor.  On many fronts – despite absurd jibes about ‘dictator’ Dan (Comparing him to the North Korean despot Kim Jong-Un) - Andrews Labor has proved itself ‘more socially liberal than the Liberals’.  In this day and age that is not all that surprising.  In-so-far as there was a streak of authoritarianism it was only under the unique circumstances posed by Covid 19.  But the structural costs of a suite of privatisations will be passed on to consumers for decades to come.

 

Federal Labor needs to ‘step into the breach’ to remove fiscal incentives for State Labor Governments to ‘sell what’s left of the family silver’ in order to pay for big projects. A good Labor government is one which expands the social wage and welfare state, while also strategically expanding the public sector.  Ideological preference for ‘Small government’ will not do.  (though the source of Andrews Labor’s policy was more pragmatic than Ideological)  Who-ever takes the helm of Victorian State Labor ; and whatever else happens Federally – something needs to change. And hopefully this article is suggestive of where we could start.

 

Dr Tristan Ewins

 

Dr Tristan Ewins is a rank and file Labor member of over 30 years.

 

http s://www.theage.com.au/politics/victoria/bronze-age-how-do-dan-andrews-3000-days-as-premier-measure-up-20230217-p5clb1.html

https://otr.anmfvic.asn.au/articles/budget-delivers-on-andrews-government-election-workforce-commitments

https://www.health.vic.gov.au/mental-health-and-wellbeing-act

https://www.theguardian.com/australia-news/2023/sep/23/daniel-andrews-victoria-labor-government-housing-statement

https://www.politico.eu/article/vienna-social-housing-architecture-austria-stigma/

Australia Day 2023

 

Dr Tristan Ewins

Around about this time of year the nation usually pursues a debate on Australia Day.  What is the Australian identity?  What do we have to celebate?  Is there anything we should regret or mourn?  Is January 26^th really the best date for our national day, or should we reject the idea that Australia’s history only began with colonisation?  After all, January 26^th is the date that the First Fleet arrived in 1788, but indigenous history goes back for some tens of thousands of years.  As such debate on Australia Day also spurs discussion around the formation of an Australian Republic ; on the flag ; on a Treaty and the need for a Voice to Parliament ; and the reality of modern multicultural Australia.

That said, there are things to celebrate in our history which we can construct a national identity around.  Australia played an important role in the defeat of Fascism in World War Two.  The egalitarian spirit of mateship helped the men to persevere during the conflict and sometimes as POWs in Changi and the Thai-Burma railway. The question of the flag is complicated by the fact tens of thousands died fighting under that flag to defeat fascism.  And there are aspects of our working class historical culture which resonate with egalitarianism ; though the Conservatives have worked to minimise the significance of this in our National Identity.

By shifting our national day to the date of Federation we would at least avoid the notion that history began with colonisation.  Though there needs to be simultaneous recognition that indigenous history goes back some tens of thousands of years before that.   Since January 1^st is already a public holiday an additional public holiday would need to be established.  Perhaps this could even be rethemed as ‘reconciliation day’ where we strive to grasp our past and heal for the future.  Such a day could provide focus for discussion on a Treaty ; and once a Treaty is achieved could provide an opportunity to commemorate that achievement.  And to focus on whatever work remains to be done. If a Treaty were established ‘reconciliation day’ could become an annual event.

Australia Day is a time to contest ‘what it means to be Australian’.  The Left has a mission to embed progressive values in our ‘national psyche’. Today is a good day to pursue that mission.   To discuss the Republic and perhaps the flag.  And to pursue far-reaching reconciliation.

Labor's First Budget pitched as "Modest and Responsible' - But more Ambition needed

 above: Federal Treasurer, Jim Chalmers

Labor’s first Budget has been pitched as ‘modest and responsible’, with limited new spending ; and the intent of not fueling inflationary pressures. That said, there are some welcome measures.   $20 billion will be invested towards upgrading the electricity grid ; preparing for a low-emissions future. Promises on Aged Care will be fulfilled, with tougher regulation and an improvement in the wages and working conditions of Aged Care workers. Over $2 billion will go into Education ; with free TAFE, 20,000 university places for the disadvantaged, and money for more qualified teachers and better-resourced schools.  Money will be provided for ‘urgent care clinics’, and reducing the maximum co-payment for medicines from $42.50 to $30. Finally, there will be more support for parental leave and subsidised childcare ; with a plan to promote an increase in housing supply (and hence affordability), as well as an increase in Defence expenditure to over 2 per cent of GDP.  (Herald-Sun 26/10/22)  Though this housing plan appears over-dependent on private investment.

All that said, there are numerous problems as well. Jim Chalmers has flagged possible intervention into the energy market, with power prices set to rise by 40 to 50 per cent.  This will crush struggling individuals and families. Also, Labor is flagging its intention to go ahead with the Stage Three Tax Cuts which will deliver a  $9000 windfall for those earning $200,000 at a cost to the Budget of around $250 billion over 10 years.  Nothing has been projected in the way of energy subsidies, and the price for reining in inflation seems to be falling upon those least able to pay.  Wages are also flatlining, regardless of pre-election commitments to get wages moving.

So – what *should* Labor do?  Some would oppose improvements for those on low wages and welfare as fuelling inflation.   But those people should not be shouldering the burden.  Already the bulk of their income is going towards non-negotiable necessities ; and increases in power costs will challenge their capacity to make ends meet in the most basic sense.  There will be homelessness, skipped meals, and Winters and Summers without heating or cooling. A temporary increase in tax for those on middle and higher incomes could also have an anti-inflationary effect without impacting on the most disadvantaged.  Specifically, temporary tax increases for those on middle incomes could tighten demand significantly.  Without such tax increases, individuals and families will be left to shoulder the burden with higher interest rates, and hence higher home loan repayments.  Some of this will be passed  on to renters as well. The question is: What is the most efficient way of containing inflation? ; and how can this be achieved while lessening the burden on those least able to pay?   Also ; what other measures need to be taken to sustain an improvement in the social wage longer term?  Including the preservation of a truly needs-based National Disability Insurance Scheme. (NDIS) This may mean some other taxes need to increase progressively and permanently.

Over the longer term Labor needs a rethink on tax reform. Ideally the Stage Three tax cuts should be withdrawn completely.  There are so many priorities which demand funding.  But a compromise strategy could be to deliver the same amount of tax relief ; but skewed towards those on lower and  middle incomes.  Median taxable income is just under $50,000/year.  If tax credits are provided for those on low and middle incomes ; relief could be delivered without delivering an expensive windfall for those on higher incomes. By the time the tax cuts are projected to be phased in we will likely be struggling to recover from an inflation-induced slowdown ; or maybe even a recession.  At this point, it makes sense to support the vulnerable and low-paid – as they spend the highest proportion of their income on ‘getting  by’ compared with others.  That is ; they can be depended upon to spend their incomes.

Unemployment is also set to rise to 4.5% over 2023 to 2025.  This begs the question of whether Labor accepts arguments around a supposed Non Accelerating Inflation Rate of Unemployment. (NAIRU) Again ; recession and ‘spare capacity’ are not the only means of containing inflation.  Taxes can achieve this without depending on social misery and wasted human resources.

Also, record profits in the gas industry should be subjected to taxation ; as has occurred in Norway for instance. Those resources properly belong to all Australians ; and any windfall should be shared substantially with the Australian people. This could be redirected to energy consumers with subsidies – especially those on low incomes – while a legislated gas reserve could ensure Australian consumers don’t miss out because of exports and global demand.

Into the future Labor should be seeking to reduce poverty and inequality by boosting the social wage and driving reform of the labour market ; especially for the working poor.  An important improvement in the social wage would be implementation of Medicare Dental.  Earlier in its first term Labor delivered an increase in the minimum wage.  But others on low wages also need urgent assistance.  This is especially the case in feminised industries like early childhood education. Again, any inflationary impact could be countered with strategic and temporary increases in tax.  While impacting ‘the economic middle’ would be regrettable ; the plight of those on low incomes is more urgent ; and Labor needs to prioritise.  

While Labor needs to deliver on promises to improve the Cost of Living, including energy affordability, it also needs to be looking to boost the wage share of the economy. To some extent this should be delivered as a matter of distributive justice ; and not only in return for improved productivity.  In 2018, Jim Stanford explained how the wage share of the economy had fallen from 58.4 per cent in 1975 to 47.1 per cent in 2018. That translated to over $16,000 a year on average per worker ; and $210 billion per year in total.  Not only does Labor need to agitate for improved Awards at the lower end. It also needs to improve workers’ bargaining power more broadly ; and this must include support for pattern bargaining.  Even Secondary Boycott should be legalised in circumstances where the ‘industrially strong’ support the ‘industrially weak’ ‘in good faith’.

Importantly, though, the wage share is lagging in areas like mining ; where regardless of this wages are significantly higher than average.  Profits are that high.  In this case the social wage needs to be factored in ; and again a windfall profits tax ; and a longer-term super-profits tax – could help.   Welfare also needs to be reformed to respond comprehensively to the Cost-of-Living crisis ; including all pensions and unemployment benefits.

Finally, the required strategic expansion of social and affordable housing demands a greater public investment.  While Labor is correct to promote an increase in housing supply in geographic areas of job growth, it also needs to ‘put its money where its mouth is’.

Labor has come to government at an especially difficult time.  But there is a need to deliver on its mandate ; especially for those most in need.  Inflation can be contained without hitting the most vulnerable overall ; and this needs to be Labor’s priority during its first term.

Social Justice doesn't need to be 'put on hold' to Fight Inflation

 

above:  Albanese doesn't need to 'put social justice on hold' to fight inflation

In Australia the Labor Government is being warned not to spend too much for fear of exacerbating inflation.  At the same time workers are urged to moderate wage demands to avoid a ‘wage/price spiral’.  This is the ‘common sense’ of the day.  But at the same time the labour share of the economy has fallen by over 10 per cent of GDP since the 1970s.

Furthermore, income inequality is marked.  ACOSS observes that:

“People in the highest 20% income group receive 42% of all national income, which is more than the share of the lowest 60% combined. People in the lowest 20% receive only 6% of all household income, while the second lowest 20% receive 12%.”

Here, those in the lowest 20% bracket earn on average $753 a week. While those in the highest 10% bracket take $5230.

Meanwhile, in terms of wealth the bottom 20% average $36,000, while the top 10% average $4,754,000.

Amidst this the Federal Labor Government’s support for an increase of the minimum wage in line with inflation is welcome. But ‘the bigger picture’ is one of increasing inequality, and an increasingly lower share of the economy going towards the needs of working Australians.  At some point Labor needs to confront inequality ; and rectify these imbalances.  But rather than suppressing wages or implementing austerity, the ‘heat’ could be taken out of the economy by raising tax.  Temporary tax increases could target those on middle incomes, while permanent tax increases could target those on high incomes with the goal on funding social wage measures – like Medicare Dental.   Because of the need to moderate demand at this time, the ‘middle’ will be affected either by interest rates, or wage suppression, or tax.  Choosing ‘the tax lever’ achieves this while providing the means to fund infrastructure, welfare and social wage initiatives.   At the same time wages – especially at the lower end – could rise – with the aim of furthering distributive justice.  Overall wages should also rise where the wage share is lower ; and where rectification is necessary. Labor should make representations to Fair Work Australia to achieve this ; and to increase the share going to lower income earners overall. But in the immediate term demand would be moderated through higher tax.  Over the longer term such taxes on ‘the middle’ could be removed to promote an economic recovery. 

The question Labor needs to ask is: ‘can social and distributive justice be furthered while tackling inflation at the same time?’  In this context, pursuing the Stage Three tax cuts makes no sense economically, and from a social and distributive justice perspective.  They will see a flat 30 per cent tax rate for all incomes from $40,000 to $200,000.   This will see an increase in overall demand rather than have a dampening effect.  (though by then the inflation genie may be 'back in the bottle' so to speak)  It will also minimise progressive redistribution and entrench inequality.   It means proportionately those on lower incomes will pay more for the services and infrastructure functions of government, The Stage Three Tax Cats will also cost the Budget billions: almost $250 biillion over nine years.  This money could fund high speed rail, and Medicare Dental, while improving pensions, and winding back user pays in Higher Education.  It could also fund a massive investment in public housing, while improving the wages of Aged Care workers significantly. And probably much more besides.  Some would say such investment would act as a stimulus ; but again it depends on what temporary and permanent tax increases accompany said measures.  Importantly, if such spending kicked in a bit later down the track, the inflation crisis might be over ; and stimulus may in fact be appropriate once more.

The bottom line is that managing inflation does not have to mean social and distributive justice are put on hold. There is scope to improve welfare and social wage while dampening demand overall in the immediate term ; but also rectifying the imbalance between capital’s share of the economy and labour’s share of the economy.  When we have Labor Governments we need to make the most of such opportunities.  We need an Albanese Government that makes the most of the possibilities of government ; and makes long term structural reforms which further the goals of social and distributive justice.

Remembering Mikhail Gorbachev and his Legacy

 

above: Former Soviet leader, Mikhail Gorbachev

Dr Tristan Ewins

Mikhail Gorbachev has passed away at the age of 91.  In the West Gorbachev is still held in high esteem for ‘ending the Cold War’.    His policies of Glasnost (‘openness’) and Perestroika (‘Restructuring’) opened the way for reform, but also perhaps sadly the disintegration that then followed, with the effective theft of peoples’ assets and industry that was later to occur under Boris Yeltsin.  The world of (capitalist) ‘oligarchs’ that has followed the collapse cannot seriously be considered as in any way better than the former state of affairs ; and liberties did not last long in the former USSR following Gorbachev’s fall from power.  Though it’s interesting that we do not call our own billionaires ‘oligarchs’ in the West ; and especially in the United States where corporate lobbyists have unmatched power.

Gorbachev understood that the USSR could not compete militarily with the West while it failed to compete economically.  In the 80s military competition had accelerated and there was a widespread fear of nuclear war which we have now forgotten.  Gorbachev agitated for peace at the same time as Reagan pursued his ‘Star Wars’ plan, which aimed to make a nuclear war ‘winnable’.   At the same time there was repression, Terror and mass murder closer to home, in countries like Guatemala, Nicaragua and El Salvador.  And yet the United States outpaced the East largely because of a ruthless exploitation of its economic periphery. (eg: including Central and South America)  In many ways Gorbachev heralded the kind of reform democratic socialists had long been hoping for, legitimising the USSR for many, but also helping to precipitate a collapse.  In retrospect it would have been better if the USSR had not collapsed.  But decades of Stalinism meant there was little in the way of a mobilised and independent civil society.  The consequence was that when the collapse occurred there was little resistance. In light of all this it would have been better if Gorbachev had mobilised civil society in defence of democratic socialism from the outset.

Gorbachev’s passing reminds us of missed opportunities, and begs the question of whether there was a better way forward.  Today there is war in Ukraine ; and the Russian Government entertains ideas of an Imperial restoration.  Russia may find a place as an important trading partner of China, but cannot really hope to restore ‘former glory’ when opposed by almost the entirety of Europe ; and the US.  Also the rupturing of Russia’s trade ties with Europe is harming both sides immensely. Though Russia’s still-massive nuclear arsenal deters uncontrolled escalation.

In later years Gorbachev commonly referred to himself as a Social Democrat ; and tried to establish a social-democratic party in Russia.  On the other hand, arguably the USSR was still ahead of Western Social Democracy on many fronts prior to its collapse.  Mainly in regard to the spread of socialised industry.  Maybe Gorbachev was trying to move with the times, and promote the best possible outcome available at the time. Though his efforts to promote social democracy in the Russian Federation largely met with failure.  In some ways China demonstrates how in certain respects compromise with capitalism can help an ostensibly socialist state to economically compete with the West. Though this could also lead to a crisis of legitimacy and identity. 

Perhaps attempts to consolidate a democratic USSR might have failed given the influence of various nationalisms, but now we will never know.  In the mid to late 1980s Mikhail Gorbachev represented the best hope for peace, détente and avoiding nuclear war.  With his passing we should also consider the world that ‘might have been’ ; and mourn the ultimate failure of Gorbachev’s reforms ; with capitalist restoration and the rise of an Imperial Russian State.

Labor in Government provides Opportunities that Should not be Wasted

 

In the run-up to the Federal Election many progressives tried to justify Labor’s small target strategy by arguing that Labor would get things done once in government. But that too much detail beforehand would confuse and overwhelm people.  Now the day has come.  Labor has enjoyed a strong victory. And it’s time to deliver.

The Greens have argued for Medicare Dental ; but Labor could make the policy its own while winning broad and ongoing Greens support for the remainder of the term.  The squeeze on the cost of Gas also demands subsidies in favour of those on low incomes and welfare.  While an increase in the supply of public housing could improve housing affordability. Pressure on the NDIS should be lifted with additional funding ; as should pressure on our hospitals.  Waiting lists have exploded with Covid ; and action is urgently required. Accessibility and affordability in Higher Education should also be addressed with lower fees and an increase in repayment schedules clearly above the average wage.  Tied grants should be provided to the states to fund an increase in teacher numbers ; while a National Curriculum should be designed which promotes active, informed and critical citizenship.   This includes understanding of political processes and opportunities for public sphere participation ; as well as sophisticated ideological literacy. Finally, promises on Aged Care should be implemented. Albanese has promised an increase in care personal attention hours for residents ; but to implement this we need Aged Care Worker Ratios. Winning Government is not the end of the journey ; it is only the beginning.

We also need a sense of scale when talking about funding for reform.  There is often a sense of panic and alarm when talking about policies which go into the billions.   How often do we hear that ‘we cannot throw money at problems’ or that funding policies is dismissed as a ‘cash splash’.  (and hence ‘irresponsible’)  But let’s be clear ; the economy is valued at some $1.7 Trillion a year. That’s ONE THOUSAND AND SEVEN HUNDRED BILLION.  Fear to pursue truly ambitious policy leads to stagnation.  And failure to commit money translates as a failure to commit resources.  Viewed thus, any public policy agenda will fail without sufficient resourcing.  Labor needs to be thinking about what is reasonable in terms of short to long term plans to expand the social wage and welfare state, as well as other programs to provide infrastructure and skill development, and to improve public broadcasting.  We need to develop popular understanding of concepts such as ‘collective consumption’ ; and how the social wage can provide better value for money for workers, consumers, tax-payers.  $17 billion is one per cent of GDP. And over several terms of Government it is a reasonable objective to aim to broaden the social wage and welfare state by 5 per cent of GDP.  

 

This is not an arbitrary figure, but an estimate of what is necessary for ambitious reform.  Again, this could fund public housing, education and health, aged care, welfare and unemployment insurance reform, infrastructure (including renewable energy, rail transport and fiber to the home National Broadband Netowork (NBN) ), and programs to secure guaranteed job placement and experience for the disabled.  Disability Pensions should be reformed also, to increase the scope to supplement income with part-time or casual work, and to take away perverse incentives to avoid intimate relationships.  (eg: measures which radically reduce pension payments to individuals in relationships and marriages)   Further ; local government should be supported so that suburbs who suffer from undeveloped social infrastructure like parks and gardens, sporting and fitness infrastructure, libraries and so on – are able to deliver better quality of life to working class families.

 

Meanwhile ; over the long term there should be plans to resocialise energy and water.  And to reintroduce public-owned competitors in markets like financial services and insurance: to counter collusion and support consumers by providing competition from government business enterprises on a not-for-profit footing.

 

Finally, the labour market demands structural reform to prevent the entrenchment of a class of working poor Australians. This may have a once-off inflationary effect ; but redistribution one way or another is necessary to deliver wage justice.   We need to address the distribution of the economic pie between capital and labour ; but also between labourers themselves as well.  Other innovative policies could include financial support and financial counselling for people planning on developing co-operative enterprise. (on either a large or small scale)  If increases in minimum wages will not eventuate without direct intervention, then there should be direct intervention.  This should be undertaken where the current framework of Fair Work Australia fails to deliver.  Allowing secondary boycotts 'in good faith' could also enable the industrially strong to assist the 'industrially weak' in achieving better outcomes for historically low-paid workers.

 

It's not good enough to put ambitious reforms off until a second term. Policies like Medicare took years to become entrenched ; to the point where any effective frontal assault against basic socialised medicine became impossible.  Here, also, once-introduced and accepted as part of the ‘socialised medicine landscape’, Medicare Dental would be very difficult to dismantle. The establishment of  a Labor Government provides the opportunity to introduce life-changing reforms. It is an opportunity that should not be wasted.