I note Robert Manne's view during the campaign that this election is a watershed, and that Labor has to win lest economic spiritualism and social justice be destroyed. I think there is very little, of a fundamental nature, at risk in this election. But perhaps there should be.
At present two sets of leading ideas, one economic and one cultural, are under attack in the electorate. These are loosely labelled "economic rationalism" and "political correctness". One Nation is essentially the political manifestation of this attack. The political proponents of both sets of ideas are finding difficulty in selling their wares, their creators are feeling estranged from the electorate, and the electorate from them. The major parties are beating a strategic retreat, Labor from economic rationalism, the Coalition from political correctness, or more accurately, the cultural agendas of multiculturalism, reconciliation and social justice.
This rejection of the elites has taken place against a background of major changes in what government does. In 1972 when Whitlam took office total government expenditure was 34% of GDP. Within this, 10% of GDP was the workfare sector, government business enterprises, utilities and so on, 12% of GDP was the transfer sector, welfare, health, education and income transfers. By the time Howard came to government in 1996, total government expenditure was 42% of GDP, workfare was 7% of GDP, and transfers 21% of GDP (See my publication "Workfare State to Transfer State", August 1998).
The implications of the new climate for each set of ideas are quite different. For example, economic rationalism has been the most bitterly criticised because it has offended not only those directly affected in the remnants of public sector employment but by those who want a larger slice of the transfer state (including jobs in the workfare state). On the other hand, political correctness, or its critique has an ability to touch the untouchables. It is the tool that will help open up the debate on the rationale of the transfer state.
Just how big do we want this thing to become? Not just in terms of dollars and number of recipients, but in the number of causes for which money is transferred. Here it is more accurate to talk of compensation. Moneys that flow to a person or group of persons that, in the absence of some law would not otherwise do so. This expands the definition to all those elements of victimism that have exploded in recent years. In other words, the criticism becomes all the more powerful because of the very success of new categories opening up in the market.
The declining part of the job of government, workfare, has been subject to stringent criticism in the last few years, it has been so partly because of the need to hold down overall government expenditure. The driving force was not Pusey's economic rationalists, but the necessity to fund the needs of the transfer state. Some hard questions have been asked of the workfare state, like why a government should run an airline or a telephone company. Where the answers have been inadequate, the functions have ceased to remain in public hands.
For example, is "nation building" a government activity? It probably is in an infant state where the state can aid capital accumulation, viz post-war reconstruction, high immigration, the Snowy Mountains and so on. But in a more mature state, capital accumulation is taking place all by itself. The state-sponsored nation building obsession shared by Labor and Malcolm Fraser is outdated. The mature state accumulates very little capital, rather it directs consumption.
The sequel to the stringent criticism of the workfare state is just beginning. The transfer state now has to justify itself. This has started to manifest in myriad ways -- user pays, work for the dole, provision for self-retirement, means testing and so on. More broadly, should government promote "the" civil society, or should it allow "a" civil society to grow, if that is what the society strives for. If democracies' strength is based on an active citizenship for example, then we may well ask, active at what? Gaining a slice of collective resources?
It seems we all want compensation, and the ideas machine keeps thinking of new causes (new products) to sell. The best products at present lie in the UN, like the rights of indigenous peoples, as if their cultural survival is more important than anyone else's. But how do you preserve a way of life? The intellectual left could not care less about the poor white males who constitute the Hanson base and their way of life, they seek a more romantic view of history; green, black , pink, purple, anything but white. But now that we are tribalised as never before and have a great diversity of victims, what are we to do?
Its the same answer to the question of what to do with the overcrowded school curricula that threaten to choke our childrens' minds and cause them to be unable to read and write. We go back to basics. We have to agree on some collective mores that rise above tribalism. For example, as Donald Horne reminds us, multiculturalism does not mean that we have to like each other, just be unprejudiced. Our common purpose should not be built on a cultural terrorism that says we have to love those we may dislike, whether it be women in the workforce or homosexuals. We should of course take no action to prejudice the ambitions of either. There is more than a subtle difference.
The test of the validity of sectional claims should be measured against the national interest, as the majority interprets it, with the Rawlsian proviso that the national interest does no harm to minorities. For example, if a government fails to promote indigenous reconciliation as the indigenes want it, who wins in the test I have suggested? Perhaps not proceeding with reconciliation may harm the national interest, then again it may not harm indigenous interests at all. It will more likely deny their leadership the absurd over-exposure they have "suffered" in the last 10 years.
The test is not fail-safe because it is subject to the opinions of interest groups, one big and one small, both an amalgamation or approximation of views, and both reliant on the fashionable ideas of the day. A permanent sympathy for the underdog becomes hard to sustain when everyone wants to claim the mantle. And legislating for permanent sympathy invites the sort of strength of reaction that we now see in the electorate. If no one is allowed to win then everyone loses. This is the problem for the "culturalists", it is not possible for everyone to agree on what is "just", and imposing the view of some minorities who, at present may have the ear of the elite is not permanent or correct, its just a political position, a win for the moment.
The fight between the rights of minorities and the majority is nothing more than the assertion of some rights against others. Only at its most fundamental can there be an agreement that minority rights should be protected, and these rights will tend to be the same rights sought by the majority; free speech, the right to own property, a fair trial and so on. They do not spread to resource rights or compensatory rights. If a political party wants to use taxpayers money to give to others it will have to do so with the agreement of the majority. The only authority to allocate such funds comes from an elected government. The attempt to construct a rationale for the collection and distribution of moneys other than on the basis of consent is doomed. The role of the law is only to ensure consistent application of laws, and uphold the most basic of civil rights, rights which at the end of the day can only be secured by the agreement of the community.
Take the example of a resource right, does the public subsidy for childcare induce women into the workforce, if not what is its purpose? If it is an insult to suggest that womens' desire to work is not a fundamental part of their revolution, then why subsidise the revolution? The fact is childcare is a battleground between parents as to who shall care for their children. To be sure the odds are uneven, it is usually more costly for the man to forego income, and so the mother is the more likely to take the role of chid carer. This is less so in the last 10 years.
On what basis should the government intervene in this private debate between parents? The rationale for the public subsidisation of childcare for the middle class must at the very most be seen as a transitional phase. When the earnings of men and women begin to equate, the subsidy that allows partners to avoid the hard choice of who should work and who should stay home, should then be withdrawn. That time is fast approaching and of course many parents have made that decision (or, through unemployment of the male been forced to make it). The same would not apply to the working poor, but that is an issue of choice. The subsidy to the poor is also not permanent. It is withdrawn if they reach sufficient income to pay their own way. The key here is the measure of "pay their own way". The measure that should apply is that the second family income should be entirely consumed by the cost of childcare before any consideration is given to a subsidy. If the subsidy is more generous than this there is a subsidy to the income of the family per se, not specifically for the choice of working and not caring for children full-time.
We have a compensation mentality which has us seeking to extract money on any basis we can, whether a pension, a tax subsidy, victim compensation or special needs. Seeking compensation from the society is seeking compensation from each person in the society. It requires more than a bare or fleeting majority, it cannot be locked in by constitution, it has to be proved constantly. To say there is an end point, a permanent and just solution is an invitation to totalitarianism.
So many areas of private life have become politicised in recent years, like childcare and family relations. It has bred such a complex and contradictory set of rationalisations to justify the interventions that they will have to be de-constructed and scrutinised, just as has occurred for the workfare state.
The outcome may well be a society more at ease with itself, less focussed on the management of the third of its income that is joint, more focussed on individuals. The cost of the desire to share every grievance, erase every imperfection is beginning to mount. We can opt for a wholesale withdrawal of government from the public sphere, which would suit the wealthy and the right, or we could beat a strategic retreat and find clear air, which would help the poor and the left.
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