Civilising Global Capital: New Thinking for Australian Labor
by Mark Latham
Allen & Unwin, 1998
"Formidable" is the adjective that comes to mind when confronted with Latham's tome. It is neither textbook nor essay, but a working politician's compilation of what he believes is happening to the world and how Labor needs to respond.
Its greatest strength is that it has been published, its greatest weakness is that much of it will remain unread. The electorate is the better for knowing that there are real thinkers in Parliament, but Latham's thoughts will need to be distilled if they are to generate the renewal he seeks on the left of the political divide.
The strength outweighs the weakness, because the fact is that the book does signal the intellectual renewal of Labor, much like the one that swept through the party in the late 1960's, led by Whitlam, Dunstan, and Hawke.
What is Latham's message? Essentially, that social democrat political parties interested in a fairer society have fewer tools to work with than previously. The Labor party cannot even aspire to control the means of production, distribution, and exchange, and the great ameliorator the welfare state, has whiskers on it.
What is to be done? Accept the reality of the global market, and prepare the citizen's to cope with it! This is essentially Jack Stanton's -- read Bill Clinton's -- appeal to the unemployed shipyard workers in the film Primary Colors. An appeal to help people develop the muscles "between their ears".
Latham wants to help prepare the people for this life's work not through the coddling of the left's nanny state, or the brutality of the individualism of the right. He seeks a "radical" centre where public provision of assistance must be reciprocated by personal responsibility, including a heightened sense of responsibility towards each other and not just through the intermediary of the state.
This is a desire for collective action using non-state solutions, and could be a big swerve away from the social justice or welfare rights brigade who assert the right of one class of person to the resources of another in the name of fairness or equality, or even choice. The problem with welfare rights is that they are resource rights and require the consent of the payer. They are anti-democratic. This is the Eva Cox view of the world, give us what we want so we can make everyone happy. Trouble is it makes some people profoundly unhappy if you tax them and deny them the ability to even question what the money is being used for.
The assertion that people need a "social capability" to make their own way leads Latham to suggest that the welfare state "one size fits all" assumption should be abandoned. He argues that "the role of the state ... is to ensure that people have a platform of citizenship on which to stand". The question is does this mean a designer label welfare state, where everyone's tastes can be catered for? I can see more categories of provision, and more public servants to service them. What about black, Muslim, disabled, lesbian, vegetarian, young women's legal centres?
Fortunately, in the battle of the new communitarian socialists I think Latham comes down on the side of the democratic left, he certainly ditches the Cox view of the endless demands on the taxpayer, as of right, and in that lies his potential for broad appeal.
On the tax side of the equation Latham again seeks the democratic solution, to restore public confidence in the integrity of the tax regime. If you can raise peoples' confidence in the purposes to which taxes are applied and in the manner in which you raise them, you are a long way towards obtaining office. Latham's pet scheme is just that, a progressive expenditure tax. It aims to shift the incidence of tax from earning to spending, and apply a highly progressive tax to consumption. This overcomes a principal Labor objection to the consumption tax, its flat rate. Under PET those taxpayers with the highest level of consumption would pay the highest proportion of tax. A slug to the idle rich.
I don't know enough about tax to argue the point, and as it has never been implemented anywhere in the world it is certain not to appear in Labor's policy speech later this year. Nevertheless, Labor better get its thinking cap on if it is to be in the tax debate, you cannot win by being idle. And that is Latham's other major message, Labor has to know what it wants to do in office if it wins.
The real test and the real measure of the book occurs at its middle, the chapters on income inequality, economic exclusion and employment creation. The solutions -- a dual wages system and spatially defined job creation through public sector spending, the creation of economic cooperatives and the imposition of corporate responsibility need careful scrutiny. In my student days I had the pleasure of discussing the role of trade unions and wages policy with Colin Clark (the only Australian economist quoted in Keynes General Theory ...). Basically his view was that the wages of Australian workers would have risen at about the same rate in the absence of unions as with them. In other words, at least in the long run, economic not political factors determine wages.
This is the question for Labor, just how much can political intervention achieve in the absence of economic reform? Apart from the need to be seen to be doing something, maybe not much. This is not to say that the market place is about to deliver a fair share of national income for all participants, it almost certainly will not. The trick is to ensure a gain-sharing model that does not lower the total amount of earnings available for distribution. The various schemes applying to declining regions for instance smack of resisting regional adjustment to the economy. It is more sensible to have workers move to where the jobs are than to subsidise jobs in the areas where the workers live. Part of that logic also is that wage rates will have to vary between regions.
Latham has set out on the journey of a lifetime. In the words of Robert Michel's, "democracy is a treasure which no one will ever know by deliberate search. But in continuing our search ... we shall perform a work which will have fertile results".
I wish Mark Latham a rich harvest.
ADVERTISEMENT
No comments:
Post a Comment