An Economy is Not a Society (9 page)

Orwell, of course, isn't the only writer to notice that progress comes with a cost, and that the march of time doesn't necessarily make life better. Two of my favourite novels, L. P. Hartley's
The Go-Between
and J. L. Carr's
A Month in the Country,
also deal with this idea: men returning to the places of their youth, where the formative events of their lives took place. Why is the superiority of the past such a recurrent theme of literature? It's a form of pastoral, of course, and thus nostalgia, not meant to be taken literally. But does the appeal of the past lie only in the fact that the past was when we were younger and more carefree, fitter and stronger, without mortgages to pay and superannuation balances to worry about, and had possibly fallen in love for the first time? Maybe. But could it be that, in some essential ways, the past
was
better? Could it be that, as Shelley once observed, it is actually great artists (and not, we might add, economists and change-management theorists) who are most sensitive to the transformations going on around us, who best understand what those changes have in store and whether they really do add up to something superior, and who are best placed to tell us how to proceed?

If this is so, then pastoral has something to tell us, because in all pastoral, as in the paintings of Poussin, beneath the drooping vines and beyond the prancing minstrels, there lies a truth of sorts: that life, in many of its important and easily definable aspects, actually
was
better once. When, in their dismissive way, economists tell us to forget the past and embrace a risky new world, we should not necessarily acquiesce, at least not fully or without a fight. Ordinary people – and by this I don't mean ‘change agents' – understand this, and this is why change is often resisted, and why opposition to change will always find a listening ear.

Asked to come up with a theme for a major lecture to be given by one of my speechwriting clients, the then Labor treasurer, Wayne Swan, I encouraged him to talk about something he knew and loved: the poet of blue-collar America, Bruce Springsteen. The speech made the point that artistic sensibility is much like the finely sprung workings of a seismometer, sensing motions deep beneath the surface of society, the first rumblings of change. Economists can do that, admittedly, with their repetitive predictions about how the global free market is coming to destroy everything, and that the best we can do is hasten its triumph by shutting our mouths and surrendering – freedom being nothing more to them than the recognition of necessity. But their chants are less like warnings than commands. This is because economics, unlike art, lacks a serious moral dimension. Data, after all, doesn't ‘do' morality, being incapable of telling us what economic and social change means for the quality of our lives, beyond how much GDP it might, theoretically, create for some of us. If, for example, the data tells us that greater inequality will produce higher GDP, then many managerialists, including some normally quite left-wing ones, will accept it as necessary for the national good. I wouldn't. Springsteen's songs, by contrast, amplified echoes of the decline of blue-collar affluence, quality of life and happiness in America that Springsteen had heard in his New Jersey home town, the sort of place the dismal scientists ignorantly or wilfully never see, and whose decline they can only conceive as a good thing.

The problem this analysis faces is our inability to recall what this quite recent past, this life before the economic transformations of the mid-1980s, was like. It may have sounded like a Bruce Springsteen rock ballad from
Darkness on the Edge of Town,
or maybe some song written for Cold Chisel by Don Walker – ‘Flame Trees', perhaps. But what did it
look
like? It is too easy for the boosters of economic reform to dismiss this past as always overcast and raining, brown-walled and acrylic-carpeted, greasy-haired, cigarette-smoking, pallid and poor. If you look hard, though, you can still catch glimpses of how this past moved and worked.

I have before me a magazine called
International Auge of Mexico.
It's a massive, magnificent, glossy representation of the world before the internet.
Auge
translates roughly as ‘peak' or ‘apogee', and every edition was a separate feature on countries or places then considered on the rise. This one is a special edition from April 1973 all about Australia, called
Australia the Awakening Giant.
Going by what the creative destroyers tell us, we should expect to see a portrait of a drab, dreary, bogan country, a place in decline as it is slowly strangled by corporatism, tottering on its wobbly forelegs like an obese heifer, waiting for the Yom Kippur War, the Arab oil embargo and Vietnam-linked inflation to finish it off. Instead, Australia is portrayed as full of life and potential. Australia was once cut off and largely unknown, the magazine says. ‘But today, with rapid communication and transportation, Australia is neither unknown nor isolated, and has taken its proper place on the map as one of the most rapidly growing and progressive countries in the world.'

Off every page of the magazine leap bright pictures of thrusting skylines of modernist architecture, rapid transit systems, high-tech communications, cultural sophistication, leading-edge manufacturing industries with new factories producing 450,000 shiny new cars a year, radio-controlled pilotless aircraft and bulk container ships, all interposed with the more traditional representations of agriculture, the outback, Indigenous history and Australians at play on the beach. ‘Australia's industrialisation,' it says, ‘has come a long way in a short time; all the ingredients – resources, expertise, sound economy, population growth and stable government – are there for it to continue its dramatic story of development. So this is Australia,' it continues, ‘a land quite unlike any other. It is a country well worth getting to know, not only because of its intrinsic fascination but also because it deserves to be recognised as a nation with a tremendous future.'

All up, Australia in April 1973 looks a pretty damn nice place to live. No wonder Australians over fifty remember it that way. To put it mildly, this is not the picture the economic reformers want us to see, because it contradicts their convenient story that, before they came along to rescue it, the Australian economy was lying face-down in the gutter.

The Hollywood epic
The Deer Hunter,
directed by Michael Cimino, is another piece of evidence, though far less glossy. Much criticised despite winning five Oscars, most of the movie, especially its orientalist representations of Asia, doesn't stand up today. However, the opening act, set around work, marriage, drinking and deer hunting in a Pittsburgh steel town, supposedly in 1967 but really in 1978, is like a time capsule of a way of life that barely exists today, except in folk memory and the grooves of Springsteen's early LPs. What is of interest is the representation of a world in which the working class, through its unions, its culture and the economic power that resided in its muscles, was still master of its own little world. Its culture is rough, male, lubricated by beer and bourbon chasers, and punctuated by periodic fistfights – so it is best not totally idealised. But because we now know what came after – deindustriali-sation and economic devastation – we can see that something significant was lost with its passing. What was it?

This story of loss is told by the
New Yorker
writer George Packer in his book
The Unwinding: An Inner History of the New America.
As Packer tells it, in the wake of the Reagan revolution, de-industrialisation began to spread like a cancer along the highways of old blue-collar America, bringing with it unemployment, drugs and rising crime rates. In Ohio the steel plants downsized and then shut – or, rather, moved to Mexico, where the labour was cheaper (just like Heinz moved from Dandenong to New Zealand). Workers over fifty took their retirement and the younger ones left town; the owner-managed strip shops went under and were replaced by ugly, minimum-wage-paying low-cost chain stores like Wal-Mart, built on Springsteen's dark edge of town; houses lay empty and then were vandalised and burnt; whole neighbourhoods were depopulated and became ghost towns; local taxes dried up, decimating municipal police forces and allowing gangs to get a stranglehold over the streets; schools went into decline and student grades fell, taking away any hope of upward social mobility; and crack cocaine finally dissolved what was left, the way gin did in Hogarth's eighteenth-century England. Our picture of Doveton is starting to look familiar.

As Packer puts it:

So ask yourself: if you were a blue-collar American, where and when would you have preferred to live: Michael Cimino's Pennsylvania or George Packer's Ohio? The world created by post-war planners and ruled over by industries and trade unions, or that created by modern market economists? And if you were a blue-collar Australian, in which Doveton would you want to live: the Doveton of then or the Doveton of now? We have improved on the past in many ways, and one could easily point to places in Australia where life is far better now, but not in Doveton and other murdered suburbs.

If, as L. P. Hartley wrote at the start of
The Go-Between,
‘The past is a foreign country: they do things differently there', then the past in Doveton was a different suburb. Its people were at the centre of things in a way they clearly are not now: they all had jobs. Their past was better than their present. But what of their future?

CHAPTER 5

HISTORY TO THE DEFEATED

L
et's begin our examination of the future by thinking about the thing that must make it better: the Australian Labor Party. Over the last thirty years Labor has lost its way amid the economic revolution it started and led for much of the time. Like a wild horse, that revolution has escaped from its handlers and is threatening the party's future. What must Labor do to find its way again?

A good place to start is to think about why people join the ALP in the first place. A while back I had lunch with a thirty-something Labor lawyer who revealed that, having joined the ALP just after her fifteenth birthday, she had recently resigned, dispirited at its failure to project sufficient idealism. Stories like this are commonplace, so rather than ask why she left, I was more interested to ask why she had joined at just fifteen, which is somewhat unusual.

‘Well,' she said, ‘it's part of the family's story.' When her grandfather, a docker, was killed just at the end of World War II, his former comrades, hardly well off themselves, sacrificed their spare shillings to a widow's fund that helped her grandmother to keep her nine children from hunger and cold.

That's why people once joined the ALP! Thanks to Australia's recent wealth spurt, few today live in fear of the penury that grandmother faced. My point is that while this Labor story involves economics, it isn't essentially an economic story, and one shouldn't answer it simply by emphasising modern Labor's economic credentials. It's a romantic moral tale, one that appeals to a radical spirit in Australian culture, and one that today's progressives, considering joining the Greens but not really wanting to, are crying out for Labor to tell anew. That grandmother's life may perhaps have been improved by a productivity ratio with a 2 in front of it – or maybe not, if it involved industrial-relations reform that threw her benefactors out of their jobs – but making the economy stronger isn't an end in itself; creating a better society is. In short, Labor has to remember that it is primarily a social movement, not a policy unit of the Department of Treasury.

Downplaying its own radical history would be a mistake for Labor as it seeks to build a viable future. To paraphrase Orwell, if Labor's managerialists control its past, the party may not have a future at all. Labor's thinkers should get writing. And one of the things they must do for a start is get over the Hawke and Keating era.

This may seem strange. After all, that duo is generally regarded as having presided over the most successful government the ALP has ever formed. My problem isn't that people continue to recognise and celebrate the successes of that period in office; it's that for too many in modern Labor, and the political class generally, Labor history doesn't seem to exist prior to 1983, the year the party began its reinvention as one of market-liberal economic reform.

This idea occurred to me a few years back, when a Gillard government speechwriter showed me a draft of a speech that contained a curious historical simile. Praising some new government initiative – I can't remember what it was – it said: ‘This is our floating of the dollar.' Not our Snowy River Hydro Scheme or our Medicare; our
floating of the dollar.
The great nation-building achievements of Chifley and Whitlam had been replaced as Labor's ‘Light on the Hill' by the deregulation of the currency. Since 1983, Labor's purpose, along with its history, has been turned on its head.

How has this happened? One obvious reason is that a number of ministers in the Rudd and Gillard governments once served in or worked for the Hawke and Keating governments, and they saw their job as completing its program. This is only natural – after all, it wasn't until the rise of Bill Clinton that the Democratic Party stopped trying to complete the New Deal. But I think there's another explanation: the extraordinary success of the Hawke/Keating generation of ministers, advisers and senior press gallery figures in writing and selling the first – and, to date, unchallenged – draft of the history of their own era. The recent history of the modern ALP, and of Australia more generally, has largely been written by participants in the great economic reform crusade and their admirers. Their books take up at least half a shelf in my study. Not just Hawke and Keating themselves, but the former advisers and the commentators who took their economic reform program on as a cause, especially the
Australian's
Paul Kelly with his (currently) three-volume
End of Certainty
thesis. Theirs was the era of the economist as hero, the neoliberal reformer as revolutionary, the big-picture man as patriot, the productivity ratio as the measure of national progress. Never, it seems, has a generation been so worthy and its vision so noble and unchallengeable.

So thorough has been their crafting of this new narrative that they have imprinted on the Labor psyche the belief that only those who take up and carry forward the dropped banner of managerialist ‘economic reform' are worthy to be considered true national leaders. Hence the appeal to ‘our floating of the dollar'; hence the feeling of
déjà vu
brought on by the ‘new' big-picture narrative of the Asian century; hence the never-ending calls for more tariff cuts and more business tax cuts and more labour market reform and so on. Together, these storytellers have raised the philosophy and practice of the Hawke/Keating governments to the status of a religion, and made the productivity ratio the measure of all things. Those who buck it by definition fall short.

This thesis is repeated time after time after time by a new generation of Labor historians and chroniclers. The towering genius of Hawke and Keating and the inability of Rudd and Gillard to match it is the central message of just about every book on the Labor Party published in the last half-dozen years. No countervailing story has yet to knock this narrative off its course.

This is not to denigrate the achievements of the 1980s and '90s generation in any way. Hawke and Keating did have a certain greatness, there's no doubting that. And their chroniclers and policy advisers are merely doing what every generation does, which is to project their achievement as the end of history. But here's the really big problem: history never ends. The Hawke government was elected thirty-two years ago, as I write. But the Berlin Wall fell more than a quarter of a century ago, 9/11 happened fourteen years ago, and the global financial crisis happened seven years ago. The world has changed, capitalism has changed, people's priorities change, and so social-democratic parties and their objectives must change too. The old agendas simply won't suffice. Labor has to stop listening to the critics who say it has diverged too far from the path of St Bob and St Paul, and start addressing the here and now, and the future.

Where are those answers to be found? That's easy: in history, including the history of the Labor Party prior to 1983. As a speechwriter, one of my heroes is Cicero. In his book
Orator,
in which he sought to rouse Marcus Brutus to save the Republic from the chaos of the 40s, Cicero provided us with a line that should be every political historian's motto: ‘To be ignorant of what happened before you were born is to remain forever a child.' Greatness requires deep historical knowledge, according to Cicero. You can't be insightful or persuasive if you don't have the ability to make comparisons with past events and eras. Lack of a broad historical perspective produces a moral shallowness, a narrowness of purpose and a crippling inability to inspire. Worst of all, it leaves you poorly equipped to respond to change. This, Cicero tells us, is the power of history. (And that, incidentally, is why speechwriters are invariably historians.)

Reforming the economy to lift productivity worked as a framing objective for Labor between 1983 and 1996, and no doubt it will remain an important tool of Labor governments in the years ahead, because, as I have mentioned earlier, efficiency and productivity are moderately important policy objectives, though much overrated. But productivity cannot remain the Labor Party's religion, and it cannot remain the sole measure of Labor's success. The Hawke/Keating mythologists are, in my view, the pied pipers of the ALP, leading the party into a deep and dark place, one lacking in moral purpose, from which it will be hard to find an exit. Labor's future success – and, potentially, its survival as the dominant party of the Left – lies in pursuing a much broader and more timeless objective. In short, it lies in rediscovering a moral and political language capable of appealing to a majority of its party members, supporters and voters. The managerialists' message won't suffice.

It all starts, I believe, with an effort to change the way we conceive and express our political and social problems. As I have stated, the economic reform ideology that brought on the great revolution of the last thirty years has hardened into a rigid formula that is robbing the ALP of its true purpose. And an overreliance on managerialist forms of reasoning has left us incapable of addressing the problems we face, causing our analysis to be channelled down narrow paths and our responses to be shallow and needlessly destructive.

We have become governed by the philosophy of the bulldozer, clearing the litter of human emotion, community cohesion and history from the path of economic reform, rather than considering how we can build on the past and ensure that economic change can be channelled to the benefit of society. So we need to enrich our thinking and our talk with insights from areas such as morality, history and aesthetics. By making a conscious effort to stop dismissing people's lives as ‘outcomes', to avoid using tautological maxims like ‘what gets measured gets improved', ‘productivity is almost everything' and ‘GDP × C = B', and to stop using unhelpful epithets like ‘rent-seeker' and ‘Luddite', we can begin to think and speak in ways that give us a chance of addressing the problems facing us. Five ways of thinking can aid this.

First, thinking morally.
We have to recognise that losers matter, and that the losers from change have just as many rights as winners. Throughout history the cause of the underdog has generally been the morally superior one: Spartacus against the legions of Crassus, African slaves against cotton planters, the Tolpuddle Martyrs against the threshing machine, Ned Kelly against the colonial police, Bernie Banton against the mining giants. Until very recently in our history, this belief in the moral superiority of the underdog and the loser has been at the heart of our culture: witness Jimmy Barnes' ‘Working Class Man'. Can we really say with any confidence that this type of sentiment dominates now, especially when millions of underdogs are being pulverised by a changing economy?

In the world of creative destruction, only the winners from change seem to matter and to have economic and social rights – it's as if the losers magically cease to exist, and the condemnation of whole suburbs to poverty for several generations is not a fit subject for moral judgment. The unproductive have only themselves to blame. We are urged to celebrate as ‘lifters' the entrepreneurs whose technologies throw people out of work, and to condemn as ‘leaners' those who have worked tirelessly and conscientiously for their employers, only to have the rug pulled from under them. With the redefinition of trade unionists as corrupt, rent-seeking scroungers, targeted by a royal commission, this process of redefining the working class as the economic enemy is now all but complete.

Why is this important? Because it is only by acknowledging the moral shortcomings of economic and social change that we might advance beyond the morality of the early 1800s. It might be remembered that the Labor Party itself – in fact, the social-democratic movement worldwide – was a movement created by the losers from the disruption of the late Industrial Revolution, and that those losers, acting together, managed to create a future that few would dispute has improved life for the overwhelming majority. It's from the losers that real change comes, not from comfortable winners, even if they're well-meaning do-gooders who think they can tweak the market to help the poor.

Second, thinking historically.
We need to recognise that the past and the present have rights and should be respected. This, at first blush, seems a strange thing to say; after all, how can a period in time possibly have rights? It is not a living thing. So what do I mean by it? Simply this: that our policymakers have too few qualms about destroying the industries and communities the nation has built up over many years if an economist tells them that doing so will make us wealthier in the future. If productivity demands it, just crush it flat. They should pause and reflect a lot more.

In the most extreme form, this represents an inverted form of Marxism. They want people and communities to get out of the way of history. Remove all restraints on the market, or else! Stop complaining about the car industry shutting down and your once beautiful suburb descending into welfare-supported decay, they say, because by ripping away support for these things, we're creating a wealthier future. Your poverty is your children's wealth (or, at least, the wealth of somebody else's children in some richer suburb closer to the city). It might be pointed out that Stalin offered the Ukrainian peasantry much the same deal: stop standing in the way of the new economic revolution; stop holding up the future; get with the program. Here we have the philosophical essence of creative destruction: a historical and moral vacuum which heartless ideologues can fill with their crazy schemes to remake the world. And it turns out to be a historical ploy that is as false as it is shallow. Its origins are worth examining.

We're awash these days with the Big Picture. Narrative – that's the key to good communications, isn't it! Once upon a time, these narratives were formulated by historians. Years ago, for example, when asked what they intended to read on their summer holidays, our political leaders would almost invariably say, ‘The latest volume of Manning Clark's
History of Australia.
' Whether, once they got to the beach, they actually read Manning Clark or the racing form guide was immaterial; the point was that they needed to give us a sense that they understood the river of history and where its mighty course was taking us. Nowadays, they're more likely to tell you they're reading the latest brace of books about the Great Australian Economic Miracle by senior newspaper columnists. This is because, today, our nation's grand narrative is told almost exclusively by economic journalists. The odd serious-minded economist who once helped lead policy from within the PM's office has a go, but usually fails to reach the bestseller lists, even in the high-brow indie bookshops. Such works tend to tell the same story: How We Made the Transition to a Modern Market Economy and Became the Envy of the World (and How We Will Continue to Make It as Long as We Forget All that Nonsense about Equality).