The battle of ideas in Australian politics (Originally published in The Monthly, November 2006)
BY KEVIN RUDD
In the October issue of The Monthly, I discussed how right-wing Christian extremism has become John Howard’s religious handmaiden in his political project to reshape Australia. I argued, too, that the campaigns of the religious Right were one front among many in Howard’s political offensive against the Left, now known widely as the “culture war”. And, sure enough, within a week of the essay’s publication, several of the prime minister’s more prominent cultural warriors – including Andrew Bolt in the Herald Sun and Christopher Pearson in the Australian – began the counter-offensive.
Yet the culture war is essentially a cover for the real battle of ideas in Australian politics today: the battle between free-market fundamentalism and the social-democratic belief that individual reward can be balanced with social responsibility. Howard’s culture war is in large part an electoral strategy drawn straight from the Republican Party’s campaign manual. Its organising principle is fear, and it is deployed in two parts. The first of these is the conscious exacerbation of fear, anxiety and uncertainty – all of which are powerful (though, in effect, disempowering) emotions capable of overriding everything else in the human mind. The second part is to proffer the healing balm of “certainty” in the midst of all the anxiety-inducing “uncertainty”, by running a series of falsely dichotomous arguments in the public debate: tradition versus modernity; absolutism versus moral relativism; monoculture versus multiculture.
That the culture war can never achieve such certainty is beside the point, as John Howard has concluded that it is nonetheless an effective strategy. Roosevelt famously said, “There is nothing to fear but fear itself.” For Howard and the political project for which he stands, there is a twist: There is nothing to fear but the end of fear itself.
Howard’s culture war, however, also masks a deeper, more unsettling reality: that the socially conservative values at the core of Howard’s cultural attack on the Left are in fact under siege from the forces of economic neo-liberalism that he himself has unleashed from the Right. Whether it is “family values”, the notion of “community service” or the emphasis on “tradition” in the history wars, “traditional conservative values” are being demolished by an unrestrained market capitalism that sweeps all before it. This is the disconcerting reality that the Right itself must acknowledge.
The contradiction within the political Right is as old as liberalism and conservatism themselves: the ruthless logic of the market rubbing up against a tradition which holds that those with economic power have a moral obligation to protect those without it. What is different in John Howard’s Australia is that the political evisceration of the old-style Fraser conservatives – together with their communitarian cousins, the so-called social or small-l liberals – is almost complete. Nowhere is this political transformation of the Right more advanced than in Howard’s own state of New South Wales, where one moderate after another falls by the pre-selection sword.
For these reasons, it is critical that social democrats recognise that the culture war is not just a diversion. It is a fraud. There are no more corrosive agents at work today, on the so-called conservative institutions of family, community, church and country, than the unforgiving forces of neo-liberalism, materialism and consumerism, which lay waste to anything in their path. This deep split within the Right provides new opportunities for the Labor Party to argue for a comprehensive set of values that intelligently harnesses both the importance of the market and the importance of the family, community and society which markets ultimately serve.
John Howard has always been aware of the two competing impulses within the Australian Right. In 1999, he sought to synthesise the unsynthesisable in his speech ‘Building a Stronger and Fairer Australia: Liberalisation in Economic Policy and Modern Conservatism in Social Policy’:
We believe that achieving real progress towards our goal is best met through a mix in public policy which combines liberalisation in economic policy and what I would describe as a “modern conservatism” in social policy. This is unsurprising given the philosophical roots of the Coalition which I lead. We represent both the classical liberal as well as the conservative political traditions in Australia. Our priorities in economic and social policy reflect this broad perspective.
He went on:
The point is that liberalisation in economic policy and a modern conservatism in social policy are not only appropriate to Australia’s national interests as we enter the twenty-first century. They are mutually reinforcing as well. The values and priorities we bring to social policy issues provide important “points of anchorage” in a period of rapid and ongoing economic change. Economic policy liberalisation and a modern conservatism in social policy share important common values and objectives. One complements and derives strength from the other.
What is remarkable about these formulations is their almost mechanistic symmetry. The purported “complementarity” of Howard’s economic and social agendas is simply the stuff of ex-cathedra pronouncement. There is no analysis of how traditional social values of family, community and country are compatible with the ruthless economic utilitarianism of a market in which rampant individualism is dominant. No such accommodation is possible. Howard, of all people, knows full well there is nothing sentimental about unrestrained self-interest.
Seven years later, John Howard’s speech on the fiftieth anniversary of Quadrant magazine represents a further evolution of his economic and social project. On economic neo-liberalism, the speech is a declaration, however premature, of ideological victory – “democratic capitalism’s triumph”, to use the prime minister’s ecstatic phrase. But social conservatism itself no longer ranked a mention. In its place was the full rhetorical repertoire of the culture war: an attack on “the canons of conformity of the Left”, Australian “philo-communism” and the “fellow travellers”, the “New Left” counterculture, the struggle against “moral equivalence”, the “black-armband view of history”, the “fangs of the Left”, the “posses of political correctness”, and the “long march” of the “soft Left” through our universities.
The more purple the prose, the more loudly it was trumpeted. But nowhere was there any systematic exposition of the enduring traditional social values which in 1999 were seen to be so integral to the Howard government’s economic and social project. The Quadrant speech provided no philosophical framework for the reconciliation of the Right’s competing neo-liberal and conservative tendencies. That battle, it seems, has already been fought, and the neo-liberals have won. The speech was politics, pure and simple: a call-to-arms against a series of straw men, some old and some new. Most critically for John Howard’s real agenda, however, the speech was a diversion from the values debate in Australia between market fundamentalism and fairness. This is the debate that Howard is desperate not to have.
Classical conservatism, both in the UK and Australia, has always expressed reservations about the impact of unrestrained market capitalism. Edmund Burke, the father of modern conservatism, argued that society should be seen as an organic whole, based on reciprocal rights and obligations. Society was not a market of individuals but rather a “social fabric” in which the individual members are like interwoven threads. Benjamin Disraeli developed further this tradition of conservatism by railing at nineteenth-century liberalism’s fracturing of Burke’s organic society into “two nations”, the rich and the poor. Disraeli argued that these “two nations” had, as the historian Robert Eccleshall puts it, an “innate inability of mutual comprehension”, because those with power no longer viewed their wealth as a trust for the benefit of all. Disraeli’s brand of patrician conservatism was termed Tory Democracy, under which he campaigned for a range of social reforms, including the extension of the vote to working-class males, the legalisation of trade unions and the provision of the right to strike.
As the political scientists Terence Ball and Richard Dagger have noted, Tory Democracy “was to be the dominant form of British Conservatism under successive Tory Party leaders including Winston Churchill – until Margaret Thatcher became Prime Minister in 1979”. Harold Macmillan, for example, saw conservatism as a “half-way house” between unfettered capitalism and state socialism, and argued that Disraeli’s “one-nationism” provided a means for attacking “most vigorously the grossest inequalities which still divide our democracy”. It is this tradition of conservatism that always sought to temper the excesses of market capitalism. Contemporary British conservatives such as Michael Oakeshott have starkly warned against a “brutopia” of unchecked market forces. Equally, American conservatives such as the columnist George F Will have cautioned that capitalism unrestrained is a “solvent” that can dissolve the social fabric. Nevertheless, this tradition of conservatism finally capitulated to the Thatcher-Reagan onslaught of the 1980s, which saw the political ascendancy of neo-liberalism on both sides of the Atlantic.
In all of this, the influence of Friedrich Hayek (1889-1992), the leading neo-liberal economist, cannot be overstated. In Australia, it is writ large in the Australian Centre for Independent Studies, the Institute of Public Affairs, Quadrant and the rest of the Australian neo-liberal establishment. He is to a generation of neo-liberals as Keynes was to an earlier generation of social democrats.
Hayek railed against classical conservatives for standing for nothing, arguing that liberals and conservatives had merely formed a tactical alliance against communism. But his new definition of morality was itself disturbingly minimalist. In Beyond Right and Left, David McKnight outlines Hayek’s position:
Hayek defines morality as those attitudes that are necessary for, and developed within the market … These concern rules about private property, honesty, contract, exchange, trade, competition, gain and privacy. These are what Hayek understands by moral rules. The unexpected … concomitant of this notion of cultural evolution is that feelings of altruism and obligation are here seen as its antithesis, as primitive instincts from earlier hunter societies, which have to be overcome.
Because of social evolution, Hayek argued, there are virtually no shared values between societies, other than liberty and the desire for limitless material acquisition. These minimalist values were the product of social and cultural evolution which, in Darwinian fashion, “selected” those values best suited to survival in the modern environment. He explicitly repudiated solidarity and altruism in favour of private property and contract: “An order in which everyone treated his neighbour as himself would be one where comparatively few could be fruitful and multiply.”
McKnight notes that the only domains in which Hayek allows for the “primitive” feelings of solidarity and altruism are the family and voluntary associations. In Hayek’s words, “If we were always to apply rules of the extended order [of capitalism and the market] to our more intimate groupings we would crush them.” (The emphasis is Hayek’s own.) In his analysis, McKnight rightly concentrates on the central vulnerability in this philosophy: the problem that arises from the commodification of all things, that is, “the transformation of obligations based on love and altruism into those of commodity-based economic values (i.e. money)”. He describes the central dilemma:
Hayek recognised this paradoxical inconstancy, and proposed that we must simply learn to “live simultaneously within different kinds of orders within different rules – those of the markets and those of the family. We must be ruthlessly self-interested in the market and sweetly caring in the family; greedy at work and selfless at home …”
Herein lies the core challenge for conservatives, as the impact of neo-liberalism cannot be effectively quarantined from its effect on the family – and beyond the family to other sub-economic, reciprocal relationships within communities, and other social and spiritual associations. Once again, McKnight distils it best:
Rather than the two worlds existing simultaneously, one world is slowly crushing the other. Hayek’s intellectual paradigm has turbo-charged the privatised, marketised economy, which is relentlessly encroaching on the life-world of family, friends and community. The invisible hand is clutching at the invisible heart and slowly choking it. Thus the story of New Capitalism’s effect on the family is just part of a wider story of what is happening to all non-market relations between people. Bonds of respect, civility and trust between people are being weakened, and relations based on competition, self-interest and suspicion are growing.
Friedrich Hayek visited Australia in 1976 and gave an address at Sydney University in which he attacked “the atavism of social justice” and argued that notions of moral obligation were hangovers from earlier evolutionary periods. He was, at least, consistent. And, through the agency of Margaret Thatcher’s prime ministership, his ideas were propagated across the world.
Previous generations of the Australian Right have been variously dominated by old-style conservatives or social liberals: Deakin, Menzies, Fraser, Peacock and others. All supported the welfare state as a form of social insurance and an institutional corrective against market fundamentalism. This partly explains why, in the period of Deakinite Liberalism, it was possible for a number of Right-Left alliances to be formed to secure the passage of what can be described (in the context of the times) as progressive legislation. The Harvester Judgement of 1907, which legislated a minimum wage based on Justice Henry Bourne Higgins’ determination of a living wage “for human beings living in a civilised community” – defined not by market forces but rather from an entirely different values-base – is a case in point.
John Howard, though, has always wanted to overturn the Harvester Judgement (as David McKnight has noted, Howard said in 1983 that “the time has come to turn Mr Justice Higgins on his head”), and he was finally delivered his political dream when, following the 2004 election, his Senate majority enabled him to legislate away a century of hard-won protections for Australian families. But in doing so, Mr Howard is also in the process of unleashing new forces of market fundamentalism against youth workers; families trying to spend sufficient time together; and communities trying to negotiate with single, major employers experimenting with their newfound powers. Breadwinners are now at risk of working less predictable shifts, spread over a seven-day week, not sensitive to weekends and possibly for less take-home pay. The pressures on relationships, parenting and the cost and quality of childcare are without precedent.
When, in his Quadrant speech, John Howard referred to Margaret Thatcher (and behind her the entire intellectual and policy architecture of Hayek) as one of the three dominant forces of the late twentieth century, he meant it. Howard has never accepted that labour is different to any other commodity: it too is something whose value should be determined on a free market. Such commodification of human beings would not have been accepted by previous generations of centre-right leaders. The Howard government’s industrial-relations legislation would have deeply offended the responsible conservatism and social liberalism of Robert Menzies, for instance. Howard has gone where none of his centre-right predecessors would have dared. Neo-liberalism’s core philosophical dilemma is that it has no answer to the relentless march of market fundamentalism into the sanctum of the family itself. The Christian churches should be concerned about where this march ultimately ends.
As John Howard takes his party further to the Right in key policy areas such as industrial relations, the opportunity arises for Labor to reclaim the centre of Australian politics, thereby reframing the national political debate. Labor also now has the opportunity to form fresh political alliances with other groupings alienated by this new form of market fundamentalism, which is blind and indifferent to its social consequences.
Social democrats take part of their philosophical inheritance from Adam Smith, as interpreted by Keynes, Samuelson, Galbraith and, in Australia’s case, Nugget Coombs. Modern Labor, following Smith, argues that human beings are both “self-regarding” and “other-regarding”. By contrast, modern Liberals, influenced by Hayek, argue that human beings are almost exclusively self-regarding. They distort Adam Smith, adopting his Wealth of Nations while ignoring the philosophical framework outlined in his Theory of Moral Sentiments. As Smith stated in Moral Sentiments, “However selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.”
Smith conceived of a market supported by a complex set of social relationships based on reciprocity, trust and civic commitment. Modern economists might describe this as the “social capital” necessary to underpin and enhance economic performance. As Peter Dougherty has noted in his recent study:
Smith emphasised the essential connections between strong, trust-building social institutions and the productive economic machinery of markets, a relation designed not only to expand wealth, but to instil virtue – to multiply fiscal as well as social capital … Smith laboured a lifetime to show how institutions and incentives could be structured to make us better producers and consumers as well as better neighbours.
This is a far broader enterprise than the destruction of social capital and institutions that Hayek saw as almost “de rigueur”. Instead it aims to assist in shaping distinctive social-democratic values that are sensitive to market realities but which, unlike Hayek’s neo-liberalism, are not subordinate to them. Neo-liberals speak of the self-regarding values of security, liberty and property. To these, social democrats would add the other-regarding values of equity, solidarity and sustainability. For social democrats, these additional values are seen as mutually reinforcing, because the allocation of resources in pursuit of equity (particularly through education), solidarity and sustainability assist in creating the human, social and environmental capital necessary to make a market economy function effectively.
By contrast, neo-liberals reject the legitimacy of altruistic values that go beyond direct self-interest. When costs – for example, environmental, social insurance and training costs – threaten to affect economic self-interest, however, they often seek to externalise them and transfer them to the state.
Working within a comprehensive framework of self-regarding and other-regarding values gives social democrats a rich policy terrain in which to define a role for the state. This includes the security of the people; macro-economic stability; the identification of market failure in critical areas such as infrastructure; the identification of key public goods, including education, health, the environment and the social safety net; the fostering of new forms of social capital; and the protection of the family as the core incubator of human and social capital. These state functions do not interfere with the market; they support the market. But they have their origins in the view that the market is designed for human beings, not vice versa, and this remains the fundamental premise that separates social democrats from neo-liberals.
It is no coincidence that when the government’s entirely self-regarding asylum-seeker legislation was recently blocked by the parliament, it was blocked by a coalition of political forces, including a conservative Christian from the National Party, long-time social Liberals, several community Independents, Democrats, Greens and the Labor Party’s full complement. Given that John Howard’s neo-liberal experiment has now reached the extreme, the time has come to restore the balance in Australian politics. The time has come to recapture the centre. The time has come to forge a new coalition of political forces across the Australian community, uniting those who are disturbed by market fundamentalism in all its dimensions and who believe that this country is entitled to a greater vision than one which merely aggregates individual greed and self-interest.