Compare and contrast

Here is a piece published in the AFR yesterday.

I.

Just as Marshall McLuhan argued that, in media the medium was the message, one can say something similar about style and substance in politics. The style is the substance or at least comes to determine it. The political history of the last generation particularly the contrast between Bob Hawke’s and John Howard’s styles illustrates my point.

Their rhetoric notwithstanding, Hawke’s and Howard’s economic ideologies weren’t far apart. Each sought prosperity through a vigorous market, and each supported substantial income redistribution. But the quality of governance differed considerably in ways that suggest lessons for the future.

II.

Lack of resources and timidity in the face of inevitable scare campaigns ensure that opposition platforms are painfully incomplete blueprints for government. But the style of government influences the subsequent development of that platform for good or ill.

Three crucial and related elements of political style depend on whether:

  • unity or division is emphasised;
  • there is a cult of the strong leader as opposed to the leader being seen as an orchestrator of wider forces; and
  • the extent to which populist themes dominate political rhetoric

Hawke provides us with the archetype of one style. Seeing himself as the conductor in an orchestra more than the strong man at the helm, his style was self-consciously inclusive. Of course he was happy to use populist themes, but much of his political energy was dedicated to persuasion, to arguing a principled case for economic reform.

By contrast Howard saw himself as the strong leader, and his instincts were populist and nationalist. As a result his reign was remarkably free of policy momentum. And that robbed him of political momentum. Remarkably for a politician governing during a long boom, each election saw Howard come from well behind, needing to pull a rabbit from his hat.

III.

The centrepiece of Hawke’s economic strategy was tackling both inflation and unemployment simultaneously by reducing real wages and doing so by agreement with the unions rather than with economic contraction. Despite widespread scepticism (such policies had failed elsewhere) things fell into place with great felicity.

Like all successful PMs Hawke had his luck. But his consensus was the template on which a rich new style of politics developed. A highly productive relationship grew around the framework of the Accord. The unions delivered lower disputation and wage restraint. Treasury and the central agencies sold the new Government a backlog of economic reform that the previous government had baulked at.

Though not formally part of the structure, business leaders were also involved in the process. These new nodes of ideas and influence existed in a productive and dynamic tension with one another so that within a few years the Treasury, the ACTU, some business peak bodies and the Government each under the sway of competent and pragmatic leaders were working very productively together.

Within just five years of Hawkes election, the process of microeconomic reform had been articulated in a wide-ranging and mature form and it continued to unfold as governments committed and then implemented new policies over the next decade. And on the back of the revenue from rapid growth, the Government bought continuing wage restraint, economic reform and major increases in transfers to poorer households.

IV.

By contrast Howards accession to power was much less constructive. Sacking six departmental heads at the outset, his Governments relationship with the bureaucracy was serviceable but not particularly creative or productive. And while its relationship with business was close and sympathetic, business wasnt a particularly useful partner in developing and implementing a political agenda.

Where Hawke enjoyed an extended honeymoon lasting beyond his 1984 re-election, Howard was in trouble within his first year. Introducing gun control and slashing expenditure showed political courage, but policy was a series of episodes rather than the unfolding of a growing policy vision.

Within twelve months of Howard’s taking office, there was increasing alarm at his directionlessness. In this circumstance Howard took his economic policy vision, off the shelf as it were, promising the GST that Hawke and Fraser had shied away from. Though his subsequent re-election was inevitably regarded as a vindication, it was a difficult election to lose. And Howard lost it on votes, though he held sufficient marginal seats to retain government.

A leader with greater policy vision wouldnt normally have needed this grand gesture, and had he done so, might have tried one that toyed less ardently with political suicide.

V.

To use the ungainly terminology of our time, Hawkes strategy was triangulation, Howard’s, wedge politics.

Coined by Bill Clinton’s advisor Dick Morris “triangulation” involves a leader presenting themself as someone above and between above partisan politics finding a creative but commonsensical course between left and right. As Katherine West used to observe, for quite some time Prime Minister Hawke appeared above the ruckus and between the left and right.

As the expression suggests, wedge politics focuses on dividing one’s opponents or their constituency. At least where its been most devastating, wedge politics has appealed to populist sentiment. It appeals to the idea of a nation or a national culture besieged either from without as in the case of terrorism and asylum seekers, or from within as in the case of the culture wars against effete elites who are seen to court nihilism, relativism and cultural disintegration.

Now these sentiments can make a good speech. In the right circumstances, they can win an election. But they are expressive not deliberative. “We decide who comes here and the circumstances under which they come” is ill suited to the unfolding of a coherent policy platform.

Of course all democratic politicians juggle tensions between popular sentiments and policies that must be more carefully considered. Yet, not surprisingly, political strategising dominates the mind of most professional politicians. And where wedging is at best a distraction from the policy substance of governing, triangulation is a political strategy which is about policy rather than value laden gestures. It facilitates a constructive integration of political strategy and rhetoric and policy development. Populist wedging frustrates it.

Further, though a government practicing triangulation frequently steals its opponents’ policies, its focus remains itself. To the extent possible in the chancy game of politics, it remains the author of its destiny. By contrast wedge politics is reactive both to evolving events and to its opponents. Thus, although one can think of some exceptions to this generalisation, while Hawkes broad strategy was to marginalise his opponents as irrelevant, Howards approach was to exploit opposition weaknesses, so much so that his own conduct was often shaped by little more than the desire to draw his opponents into political dilemmas.

VI.

If his first year in office left onlookers wondering what he was trying to achieve, Howard’s last year was an apotheosis in which the style of sledging and wedging his opponents had become the substance. What policy direction there ever was had leached away, overtaken by a clearing of the policy decks (numerous policies being hurriedly reversed to neutralise the Opposition’s policy advantage) and a symphony of improvised attacks on its opponents.

Howard improvised one political feint after another. The only time I can remember when I had less knowledge of what alarms and excursions might turn up in the next day’s papers was during the chaos that was the Whitlam Government.

With the recent AWB scandal leaving the Governments distain for the principles of ministerial responsibility fresh in the mind, the Minister for Environment got tangled up in the governments attack on Kevin Rudd. With the Government in high dudgeon about Rudd meeting persona non grata Brian Burke, the Minister turned out to have done the same thing quite appropriately in his ministerial duties.

At this point the principles of Westminster Government appeared, like some digitised folkloric creature in a Harry Potter Movie with nothing but its uncanny weightlessness to give away its essential unreality. The minister resigned. His Prime Minister said he’d done nothing morally wrong. Others in his party said that in resigning hed done the right thing. The minister, smiling and magnanimous, was transparent about his party’s motivation which was to clear the decks for intensified attacks on the Opposition Leader. And so the once grave principle of ministerial responsibility reasserted itself one last time under Howard, this time transformed into an ironic simulacrum of its former self – a walk-on walk-off cameo the tactical feint du jour in the news cycle.

And apparently seeking to expose divisions in the ALP, Howard managed to wedge his own party by embracing nuclear power. He then downplayed the conversion as a grateful Opposition drove home its electoral unpopularity.

The rudderless in pursuit of Rudd.

VII.

Workchoices offers a pointed example of our themes.

Though Hawke never gained control of the Senate, the style and institutions of consensus politics also helped insulate him from this kind of political overreach. The search for consensus often identified politically viable means of making policy progress while addressing the concerns of major interest groups. And once policies had been broadly agreed, the partners to the process then helped sell the sometimes difficult messages that emerged like the need to rein in expenditure, reduce real wage costs, protection and means test benefits.

In fact, as right leaning labour economist Mark Wooden observed, Workchoices itself was far from clean or coherent as labour market liberalisation. In addition to introducing new red tape and arbitrarily restricting what could be negotiated, it maintained minimum wages that were relatively and absolutely amongst the highest in the world. And it was not integrated with other arms of policy, most particularly welfare.

Workchoices eroded wages and conditions for lower paid workers, though perhaps less dramatically than many feared. But Howard never clearly acknowledged the obvious political problem. He responded to the inevitable scare campaign with an Orwellian mix of advertising and spin seeking to highlight the positives. Even Workchoices Regulatory Impact Statement (RIS) read like a marketing brochure and was duly rejected as an inadequate appraisal of costs and benefits by the independent red tape watchdog. (As an aside, this was while the Howard Government appointed Banks Committee was coming up with a red tape busting agenda. In 2007, with a refurbished regulatory gatekeeping infrastructure in place in the wake of the Banks Report, the hastily cobbled together “Fairness Test” also fronted with an inadequate RIS).

More importantly for the fate of the Howard Government, in eliding the policy problem (the costs imposed on some) it ignored the cognate political problem.

It needn’t have been that way. Hawke’s approach to engineering lower real wages was straightforwardly negotiated with stakeholders and so addressed these issues as an integral aspect of its design. Wage restraint was sold as equality of sacrifice for the greater good of the economy and community, and other arms of policy were mobilised to compensate workers through the social wage (Medicare) and through a wage tax trade-off.

Ironically, in 1999 the Business Council proposed something in this mould. It proposed and met with the ACTU to seek support for a wage tax trade-off which would have seen the minimum wage frozen in return for tax credits to compensate low income working families. But the Government showed little interest.

If cost had been the problem or the fact that the compensation packages was highly targeted and so created some losers in childless households, this constraint evaporated as the mining boom drove soaring company tax receipts. Remarkably, during the endless embarrassment of riches that followed, the Government seemed endlessly caught short, cutting taxes in different ways in four successive years (without trying to buy reform with such measures) and improvising any number of different giveaways invariably multiples of $100 to specific groups. Beneficiaries included pensioners, self funded retirees, parents. One year apprentices got $800 notionally for their tool kit.

Had the Government acknowledged the losers from Workchoices, explained its rationale and explicitly compensated them for it, history could well have been different.

VIII.

Triangulation has been the political style of left of centre parties, whilst wedging has characterised the right. Yet there’s no logical necessity for this. It would be perfectly possible for right leaning parties to triangulate and so dominate the centre as to render their opponents irrelevant, but both here and in other countries, particularly the United States, they have practiced divisive and populist wedge politics.

In fact in Australia we’ve had three right leaning political leaders who have had powerful policy visions. They’ve not embraced wedge politics. Yet in presenting themselves as strong leaders, each has forsworn the resources the inclusion of triangulation. And each of those leaders Hewson, Kennett and Greiner was less politically successful than Howard the wedger, whilst enjoying no worse circumstances.

We’ve also had a left leaning political leader Paul Keating mix the economic policy of triangulation with a new more divisive style focused on his own strong leadership. Like the three Coalition politicians mentioned above, Keating’s style had more than a little of the crazy brave about it and, like them, his period of political supremacy was surprisingly short given his talents.

IX.

Prime Minister Rudd’s style is already emerging. Promising a new consensus across our country he’s already pre-emptively launched a process by which his Opposition number is undergoing trial by bipartisanship on Aboriginal affairs. These clues suggest that Rudd wants to be the conductor rather than the heroic leader, the uniter not the divider, the triangulator not the wedger.

But Hawke’s success was built not just on his own style, but on what it brought forth most particularly the Accord and the creative tension this established with the bureaucracy as well as institutions such as EPAC. Critics could say did say that Hawke’s corporatism was undemocratic; that the right venue for such deal making was not behind closed doors, but within Parliament under public scrutiny.

But shouldn’t governments set agendas both inside and outside Parliament? Indeed the Howard government’s failure to do so damaged both the quality of its governance and ultimately its own long-term political saleability. In any event whatever extra-parliamentary institutions and pressures an accord can produce, Parliament retains its role in forming governments and passing laws.

Indeed, at a time when the executive so dominates Parliament, when political debate is so rarely permitted to rise above the relentless infotainment values of the media, one can argue that Hawke’s centrist corporatism enriched our deliberative democracy. Although invitations to the table were at the grace and favour of the government, the conversation once there was a genuine search for solutions, something that has become increasingly rare within the stage managed public theatre of Parliament and party political combat. And once established within the Accord framework, politically difficult policy objectives like wage restraint were then sold to constituencies by the Accord partners.

But as its period in power lengthened, the bureaucracy’s proximity to senior politicians ensured that its influence grew at the cost of others. Australia has a first class bureaucracy and Treasury, the central bank and central agencies typically provide first class advice. But its in the nature of such agencies to promote strong orthodoxies which can blindside them and those they advise. By the end of the ALPs reign, economic reform had become formulaic and it had become all too easy for the defenders of the formula to mistake those arguing for new developments of those policies as their opponents.

Instead of letting it slowly atrophy, an alternative course was for the Accord to have deepened, for instance by broadening its agenda and its make-up. Its purposes would have changed as the issues changed for instance its role in wages policy would necessarily have been scaled back as enterprise bargaining spread. It would however have been an ideal vehicle within which to negotiate a wage-tax-trade-off of the kind discussed above.

While we debate across the trenches between left and right using weapons crafted from the experience of the US, England and New Zealand, theres a strange moat in our eye about Ireland. In fighting its way out of the economic despond of 17 percent unemployment in 1987, Ireland emulated Australia. Like us it embraced fiscal and wage restraint and it did so with an accord between government, employees and employers. But as our Accord withered and was duly dispatched upon Howard’s victory in 1996, Ireland’s social partnership grew in stature and now enjoys bipartisan support. Since 1987 Ireland has roughly doubled our own impressive per capita economic growth. It was one of Europe’s poorest countries. Its now one of its richest.

The idea that innovation in practical affairs might be central to Australia’s destiny has deep roots in our history. In the late 1930s Australian economic statistician Colin Clark expressed his own ambitions in response to John Maynard Keynes’ entreaties to Clark to return to England.

I am reaching the conclusion I want to stay in Australia. People have minds which are not closed to new truths, as the minds of so many Englishmen are: and with all the mistakes Australia has made in the past, I still think she may show the world, in economics . . . .

By the mid 1990s we were showing the world which watched and imitated our best innovations like HECS, the Child Support Agency, Rural Research and Development Corporations, welfare targeting and the list goes on. But the atrophying of the Accord, and the loss of political confidence engendered by the early 90s recession (and Keating’s more divisive style?) robbed us of confidence to build imaginatively on that accomplishment.

Today, after a long detour from which me might surely have hoped for more, the possibility presents itself anew. Though, as usual, we’re sceptical, the Government’s exploratory 2020 Summit at least suggests an appetite for the challenge. Hawke’s two summits attracted similar scepticism before the event. But both were the beginning, not the end of a process by which we built the institutions and political culture capable of meeting the challenge.

Lets hope we can do so again, and that both political parties come to sustain the effort for decades to come.

This entry was posted in Economics and public policy, Politics - national. Bookmark the permalink.

14 Responses to Compare and contrast

  1. CL's blog is back says:

    well said Good sir.

    One big problem Rudd wil lhave is that like Howard he is a micro-manager. He has good Ministers by and Large. Be a chairman like Hawkey sometimes

  2. SJ says:

    I read that yesterday, Nick, and thought it was very good.

  3. Pingback: gatewatching » Blog Archive » Outsiders - 2nd March 2008

  4. Very good article, Nick.

    But a bit of pedantry – Hawke was re-elected in 1984 not in 1985.

  5. Yes, that error was corrected in the AFR I think – and has only survived in this draft because of a strange editing process about which I won’t bore you. Will go into the article and fix.

  6. Unfortunately the error’s there in the Fin!

  7. There were some glitches in the editing. It was spotted (not by me), taken out, and because of various glitches it went back in again :(

    Long story.

  8. Pingback: Club Troppo » Missing Link Daily

  9. Pingback: Larvatus Prodeo

  10. Pingback: PollieGraph - Homelessness

  11. Pingback: PollieGraph - George Megalogenis and Kevin Rudd: Anti-culture warriors

  12. Pingback: Club Troppo » Robert James Lee Gillard (here’s hoping)

  13. Pingback: Club Troppo » Strange bedfellows: dynamic tension

  14. Pingback: Club Troppo » The people’s chamber – you heard it first on Troppo

Leave a Reply

Your email address will not be published. Required fields are marked *

Notify me of followup comments via e-mail. You can also subscribe without commenting.