Recent attempts to rewrite history to blame the ALP's loss of office on "economic rationalism" are understandable. They are just not very plausible.
Since the 1920s, the ALP has had three key motivating ideas: economic collectivism, welfarism and unionism. Yet its only two prolonged periods in office federally (1941-49 and 1983-96) have both been based on implicit or explicit rejection of economic collectivism. The ALP's longest period in office -- the Hawke-Keating governments of 1983-96 -- was notoriously a time of privatisation and market reforms. Even Curtin's 1943 landslide was based on a promise of "no nationalisations" during that term of Parliament, while the government of his successor, Ben Chifley, came to grief over bank nationalisations and failure to abolish rationing.
It is understandable that the scale of the 1996 defeat should lead to re-assessment. Yet, the Hawke-Keating governments were re-elected four times. Far from being some electoral poison, "economic rationalism" gave the ALP its greatest period of federal electoral success ever. Nor was it defeated in 1996 by an Opposition whose official position was less friendly to market reform.
Attempts to parade the One Nation phenomena as a revolt against economic rationalism will also not wash. It was not talking about economic policies, but crime, immigration and indigenous issues which first brought Pauline Hanson to prominence. Her attempt to "broaden" her appeal by talking about economic issues came crashing down with the "Easytax" farce.
Indeed, so little connected to "economic rationalism" was the One Nation phenomena, its vote was actually lower in Victoria, Tasmania and the Northern Territory -- which had had the biggest drops in the public sector share of employment (a rough indicator of reform) -- and higher where the drop had been less (South Australia, Western Australia, New South Wales and Queensland).
True, the process of economic change has brought losers, and a sense of dislocation. It is also perfectly true that the reforms are not loved. But the facts simply do not support the claim that either One Nation was primarily a revolt against economic rationalism or that market reforms served the ALP badly in terms of electoral success.
More to the point, such reforms did not serve Australia badly either. It is precisely because the Hawke Government floated the dollar, freed our capital markets, cut tariffs and privatised, along with the Howard Government's fiscal repair job, that the Australian economy is powering along at almost 5 per cent per annum growth and has weathered the Asian crisis -- and Japan's continuing stagnation -- so well.
In a situation where, between January 1984 and September 1995, 547 infrastructure firms in 86 countries were privatised for a total value of $US357billion, we can see moves towards liberal economic reforms are a world-wide phenomena, as is well documented in my recent book The Changing Fortunes of Economic Liberalism: Yesterday, Today and Tomorrow. The ALP prospered federally by being part of that phenomena.
So, what is the lesson to be drawn from the 1996 debacle? The lesson conveyed by Pauline Hanson calling her political party "One Nation". Paul Keating PM was the worst fiscal manager of the Commonwealth budget since the Second World War, possibly since Federation, selling assets and running up debt to pay for recurrent expenditures in every single one of his budgets (something Gough Whitlam, for example, never did) to the tune of $40billion.
Yet it is hard to argue that the 1996 landslide loss was punishment of an incompetent government. It was far more plausibly a combination of "1993 delayed" -- punishment for the 1990-92 economic recession which would have been meted out in 1993 except that meant voting for a new tax -- and a sense of voter alienation from a government of special deals for favoured groups. It was the latter feeling that Pauline Hanson played on very successfully.
Since the modern Left is very much about "social justice" being conceived as special deals for favoured groups (as conservative black American economist Thomas Sowell wrote recently; if you have always believed that everyone should play by the same rules and be judged by the same standards, that would have gotten you labelled a radical 60 years ago, a liberal 30 years ago and a racist today) and is still hostile to market reforms, it naturally much prefers to find economic rationalism to be electoral poison and "social justice as special deals" to be no problem.
Unfortunately for those seeking refuge in such comforting tales, the evidence is very much that it just ain't so.
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