What became of the populist left?

In a memorable moment in the 1983 election Malcolm Fraser, suggested that if people got a Labor Government they’d have to keep their savings under their bed. Bob Hawke responded that the commies were already under the bed. Back then Hawke could tap into a collective consciousness about the foibles and silliness of his right leaning opponents. All that anti-communism had become a figure of fun and an offence against the ‘political correctness’ of its day.

But back then the term ‘political correctness’, if it existed at all had no currency, and its currency marks the success of the Right’s war on the left sensibilities residing in popular culture. There are various left sensibilities remaining there – cultures change slowly – but in terms of political economy it seems that the any left leaning ideas within the ‘commonsense’ of the electorate have been hollowed out.

One upshot from the mining tax episode seems to be that there’s nothing there any more for the left to appeal to.  Here the government is with a tax to sell that’s a left wing populist’s dream.  In fact it’s a quality tax, which will raise economic output whilst raising lots more revenue. Throw in the fact that it’s notionally levied on companies, not voters, and that indeed they’re the ones most likely to bear its incidence (in contrast to most other taxes like company tax for instance), that it falls disproportionately on billionaires and foreign companies and you can see its appeal to a left of centre Government.

Yet when Rudd emphasised its incidence on foreigners and rich people for a day or so, it didn’t seem to earn him any brownie points from the hoi-polloi to offset the explosion of outrage about the Politics of Envy by those whom God sent to lecture us on such things.

In any event the speed and ease with which vested interests have managed to turn this into a bleeding sore for the government suggests more than that the government could have done a better job both building the case for the new policy and explaining. That much is clear.  But even if it had, something seems to have changed in the last decade or two.

Sometimes, like Krugman, I get surprised that the left of centre parties are so reluctant to score populist left points. After all, a viable left, one would imagine would be some alliance between its high and low brow adherents (with some obvious tension between them).  Meanwhile it seems that the right has been very successful in, with their own brand of cultural nationalism displacing the politics of greater economic equality, particularly in the US but also in Australia. (Back in the UK, David Cameron seems to have a sunnier more productive take on such things, but it’s too early to tell how that experiment will turn out.)

I suspect that if senior political figures from the left were bolder and less apologetic in occasionally endorsing the populism of the left, those themes might get greater currency. God knows Howard’s advocacy in Australia did wonders for the nationalist populism of the right.  But politicians are usually incremental, pain minimising creatures. Like dodgem cars, they buzz around trying to head for the open spaces, and when they find themselves boxed in, or worse still when they bump into something which seems solid, they head off in another direction.

Whatever happens, the unfortunate likelihood is that ALP leaders will lick their wounds vowing to antagonise the wealthy even less than they already have.

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26 Responses to What became of the populist left?

  1. Kevin Rennie says:

    You do want you can: Mining Windfalls A Taxing Problem

    I don’t think the jury is in on the Mega Mining Profits Tax. I felt the winds changing a little during the last week. The images of billionaires on the barricades didn’t hurt. Unfortunately, the commercial mainstream media don’t seem interested in analysing the tax itself. They see it as a chance to undermine Rudd. Come to think of it, aren’t they in the same club as our mining magnates?

  2. Matt C says:

    Nicholas,

    Does the success of the Your Rights at Work campaign not disprove your point? YRaW was surely founded on appeals to people’s sense of ‘justice’ and ‘fairness’ in the workplace, surely populist left ideas.

    Also, how do you know that populist left appeals are not succeeding in this case? Polls show that support and opposition for the tax is roughly equal (although with significant State-by-State disparities). We don’t know the counterfactual; without the populist left arguments for the RSPT, support for the tax may be significantly lower. Certainly the comments sections of mainstream news sites (a repository of populist sentiment of all stripes) contain a fair number of people parroting the anti-miners line.

  3. Nicholas Gruen says:

    Perhaps you’re right Matt,

    If I were to argue the toss, I’d say that the ‘your rights at work’ campaign was focused on people’s sense of economic self interest and there was an immediate connection with their lives. So in that sense it wasn’t high ideology, just appealing to their vested interest.

    There’s certainly almost none of the economic populism about ‘our resources’ that there was in Whitlam’s day – which is not entirely a bad thing obviously, but it’s partly a bad thing.

  4. billie says:

    I think that people are starting to loudly dispute the Mineral Council claim that the RSPT tax will destroy the mining industry.

    Many people still believe there are “dole bludgers” and “welfare cheats” despite experience of acquaintances being retrenched, children in part time jobs till age 28, whereas previous generations were working by age 14 or 21 with a university degree. Even a casual brush with Centrelink for employment matters makes you wonder how “dole cheats” can prosper on $234 a week.
    I imagine that as life becomes harder,
    – it takes longer to get to work,
    – jobs are less secure,
    people have become meaner and more selfish – less inclined to expend energy on social justice, and perhaps even frightened to draw attention to themselves

  5. chrisl says:

    We aren’t left or right anymore, we are aspirational.
    We want social justice and land rights for gay whales but we do want our superannuation to keep going up.
    We dutifully read The Age and SMH and then read the glossy free magazines with their advertisements for fast cars and slow food.
    We are Yuppies

  6. Andrew Norton says:

    I think Matt is right. I did a comprehensive analysis of the IR and and WorkChoices polling and concluded that self-interest could not easily explain most of the opposition.

    The analogy between WorkChoices and the mining tax is that in each case the government of the day targeted a rich, powerful, and well-organised group with a massive vested interest in the outcome – the unions in the case of WorkChoices, the mining companies in the case of the mining tax. Neither had anything to lose from a massive fight.

    Attacks on less well-organised groups would not get such a response.

  7. Pingback: The SPT shouldn’t be such a tough sell : Core Economics

  8. Corin says:

    A fiend of mine said this recently:

    The market reforms of the Hawke-Keating-Howard era changed the country forever. Nearly everyone was exposed to competition of some kind. Nearly everyone has a stake in wealth creation through either home ownership, direct share ownership, super, or all three. In a sense, we have become more comfortable with income inequality. All of those things make it harder to run hard on a redistribution of resources than was once the case.

    In my view, that has decimated the barricade Left in Australia. I mean hardly anyone doesn’t have a stake in some form of wealth creation and those who don’t are wanting a stake.

  9. Mr Denmore says:

    Corin, most people remain wage slaves, though. The average superannuation balance is less than $70K. Their “wealth”, such as it is, tends to be tied up in highly geared and illiquid residential property. The vast bulk of the self-employed are sole operators that have virtually bought themselves a job but without the safety net of super and 4 weeks paid holiday and sick leave.

    The aspirational thing is an illusion created by Howard and forcing people into economic situtations in which they actually exercise less control over their lives than before. So now they side with capital against labour, victims of a false consciousness that encourages them to believe they are entreprenuers and risk-takers when they are mostly slaves to their mortgage and their blackberries.

    Sooner or later they will wake from this slumber and realise they have been had. In the meantime, that they are siding with foreign billionaires against a tax that would actually sustain the benefits of the mining boom longer than otherwise is one of the great wonders of this decadent fag end of capitalism.

  10. Corin says:

    Mr Denmore, I drafted ALP’s contractor policy in 2007, so obviously I take a different view of their choice. I also note now that they are considering tax changes (the 80/20 rule) I think are political madness since. However, I accept the wealth is geared, but geared wealth is also strangely more suspect to ‘shocks’ which means low interest rates become even more politically necessary. I think the RSPT is a reasonable offering to the aspirational but only where there is far more comprehensive tax reform of company tax with a lower rate than 28%.

  11. Nicholas Gruen says:

    Re the discussion above on Krugman, here he is bemoaning the long term fiscal irresponsibility of American politicians at the same time as calling for more stimulus. Fair enough, but there’s nary a word on how to square these two views. My view is that only institutional development can do it. If you’re not arguing for it, you should be a little less strident about the need for more stimulus.

  12. Ingolf says:

    You’re right, Nicholas; Krugman has a habit of running arguments in isolation on this topic.

    Still, I enjoyed that NYRB piece more than anything else he’s done in quite awhile. Perhaps it was his wife’s influence (surely not), or perhaps it was writing for a slightly more demanding publication, but he wasn’t anything like as strident as he’s been at the NYT recently.

    This, for example, is so much more balanced about the pros and cons of government debt and stimulus than anything to be found on his blog:

    The truth is that the historical record on the consequences of government debt is sufficiently ambiguous to admit of different interpretations. We read the evidence as supporting a policy of stimulate now, pay later: spend strongly to promote employment in the crisis, but take measures to curb spending and raise revenue once the crisis has passed. Others will see it differently. The main thing to notice, perhaps, is that there is no safe path: debt has long-term risks, but so does failing to engineer a solid recovery.

    I guess the blog is just a place to promote his views and skewer his enemies. And let off a bit of steam. That’s fair enough; for the most part that’s what blogs are for.

    What’s less attractive is his readiness to attribute dark motives to his opponents, often without even beginning to address their concerns. Earlier this week, for example, after a few quotes from Schumpeter and Hayek he noted “These days, relatively few economists are willing to say straight out that they regard persistent high unemployment as a good thing.”

    This trivialised the whole matter. The most that could reasonably be said is that they might view unemployment as a necessary thing, a lesser of two evils, not as a good thing. More importantly, the quotes from Schumpeter in particular go to the heart of the dilemma faced by any open-minded, informed observer or policymaker:

    From Schumpeter’s perspective, “depressions are not simply evils, which we might attempt to suppress, but forms of something which has to be done, namely, adjustment to change.” This socially productive function of depressions creates “the chief difficulty” faced by economic policy makers. For “most of what would be effective in remedying a depression would be equally effective in preventing this adjustment.”

    A much more worthwhile conversation, it seems to me (and one to which Krugman would probably have a great deal to contribute), would drill down on these very issues. How best can the human and social costs of serious downturns be minimised without unduly jeopardising the necessary structural adjustments? And, how can these things be done without burdening the state with unnecessary risks?

  13. Nicholas Gruen says:

    Ingolf,

    re your ‘necessary structural adjustments’ quite often they are much more modest than the pain inflicted by the recession/depression. Krugman has documented how the excesses of the 20s don’t go any where near to accounting for the magnitude of the liquidation in the Great Depression.

    It’s fairly easy to be bitter about what happened in the Great Depression when people like Hayek and (I presume) Schumpeter were so trenchant in insisting on their interpretation – as it if were an interpretation of all slumps.

    Eventually Hayek’s intellectual ally and promoter in England Lionel Robbins jumped ship and decided that this was madness. But yes, as we’re seeing now, there are adjustments that need to be made, but when they’re things like large adjustments in asset prices – eg house prices – then other arms of policy can help take up quite a lot of the slack while those things adjust. (Of course they can reduce the adjustment to some extent, but that can be a good thing, preventing overshooting for one thing.)

    On this piece being more respectful of other perspectives, I agree. But Krugman is taking on quite a few people who seem unhinged.

  14. Fred Argy says:

    Nicholas, the Government should certainly have done a better job of selling the mining tax, especially as the gains from the mining tax are dissipated but the losses are concentrated in a few very wealthy individuals. But you are right to say that something else has changed – what you call the decline of the populist left.

    I read recently of research evidence of a trend towards more extreme right wing ideas during a severe recession (I forget where I read this). You can see it in the treatment of Obama in the USA, the growth of the “tea party” movement (seeking lower taxes but much lower spending), the attempt to blame the global financial crisis entirely on “helping the poor” into housing, the wide improvement in shareholding and aversion to “redistribution” in Australia, the recent upsurge against immigration (in USA, Australia) and the renewal of anti-semitism – especially in Europe.

  15. Patrick says:

    Fred, with respect, anti-semitism is not a particularly right-wing phenomenon, and especially not in Europe. Nor really is anti-immigration sentiment, either, but I think it is more than a little unfair to call anti-semitism a right-wing idea. Especially in Europe.

  16. Patrick says:

    In fact it might even be called ‘populist-left’ as an idea as much as populist-right, in Europe at least.

  17. Fred Argy says:

    In one sense, you are right, Patrick. There are complex factors at work. Anti-semitism and anti-immigration are certainly not unique to right wing groups.

    But if immigration is taken to mean keeping out asylum seekers because they are muslims or from other ethnic groups, it is something peculiar to the Right. Anti-semitism has involved “victimisation” of particular ethnic groups (especially in a recession). In the past it has been associated with right wing extremist parties.

  18. Ingolf says:

    If you remember, Nicholas, we had a long discussion about this whole business (including the peculiarities of the Great Depression) on Troppo back in 2007. Between us, I think we covered the ground pretty well. (By the way, I was going to put a link to that thread but for some reason most of our comments are cut off after the first word or two so there was no point).

    Anyway, on the Great Depression itself, and why it was so severe, I summed up my view as follows:

    My guess is that in 1929, the US – and many other countries – were hit by something approaching a perfect storm. In addition to the normal unhappy consequences of a pretty impressive boom – which probably could have been dealt with in relatively short order — many other factors were at work: a very disturbed geopolitical environment; great economic distortions and indebtedness left over after WWI; a haphazardly constructed international monetary system where some nations, like Britain, had gone back onto the gold standard at a singularly inappropriate exchange rate; government attempts to prevent prices and wages from adjusting to the real underlying supply and demand; an overextended debt structure resulting from central bank activity unsupported by bank guarantess and at the same time forced to operate within the restrictions of the gold standard; and finally, the rapid descent into “beggar your neighbour” trade policies. It was a period, in brief, where the worst aspects of two systems collided.

    Disentangling this mess is probably an impossible task. Certainly, I’ve seen no explanation which entirely satisfies. What did happen, though, was a debt liquidation which of course fed on itself and was greatly prolonged by Hoover’s and Roosevelt’s policies. It would have been bad regardless but the combination of the above factors and subsequent government actions ensured a catastrophe.

    That still seems about right to me.

    Both the Bernanke take (if only central bankers had known then what we know now – thanks Milton – it needn’t have happened) and the general “Keynesian” one put forward by Krugman (governments must step in to do the spending that the private sector won’t) seem simplistic. I do think governments can (and should) lessen the pain and ease the adjustments, but the failure to accept that what had been seen as sustainable growth was in large part an extended debt-fueled aberration is badly distorting their current responses. A lot of gunpowder has already been wasted and the main battle, unfortunately, is probably still to come.

    You’re right, though; there are lots of people on the “austerity” side who seem a bit unhinged. Their arguments are less about economics than a continuation of the culture wars. Still, criticisms of the “liquidationists” also often tend to be a bit emotional and one-dimensional.

  19. Ron says:

    “In any event the speed and ease with which vested interests have managed to turn this (RSPT) into a bleeding sore for the government suggests more than that the government could have done a better job both building the case for the new policy and explaining. That much is clear. But even if it had, something seems to have changed in the last decade or two.”

    Labor Govt (perhaps NOT 100% perfect) but HAS acted “core left principals”: on Health , BER Schools , Nat Hospitals Reform incl Doctors & Nurses , Workchoises wind back , attempted CC ETS Bill , Paid Maternity Leave , Private Health 30% rebate windback to divert funds to Public hospitals , Tax cuts for 3 years except for wealthy , no assylum eekers Pacific Soluton , and now Supa Mining Tax

    is this an issue of false perseption ….of greater pro right MSN concentration (ABC/Fairfax’s radio/’Age newspaper/Shy News/24/7 Net ALLIED WITH higer voting ‘progrssive’ far left Greens saying any Labor Govt Reforms never enough which in tun is a negative ‘left popularist’ message

    so where is “oxogen space” for this Labor Govt to voice “popular left” messages of actions it HAS already taken eg on RSPT….majority still feel basic Aussie fairness & equity beliefs and hav not become mini capitalists

    What has changed is a a new 24/7 Media , a blitz based on sensationalism , lack of detail analysis & often 200% distorted eithr pro right or in Greens case simply anti Labor most Reforms , but its effect & message is exactly th same…anti Left reforms…one can not blame Joe Public for what they do not get told truthfully as “News facts”

  20. Patrick says:

    That’s fine, Fred, I would hate you to think I was defending right-wing extremist parties. But anti-semitism at its most violent is, in Europe today, a muslim phenomenon, and at its most invidious a largely leftist phenomenon. Here it is usually dressed up as righteously indignant support for the Palestinians, but it boils down to much of a muchness.

    As for immigration, I guess that’s fine as long as we are happy describing most western countries as fundamentally right-wing. Unions are often not very pro-immigration, for example, and again this is even more marked in Europe.

  21. Ron says:

    #20
    nonsense

    Support for Palistinens from “left ” biols down to oposition to ilegal Israeli occupation of Non Israeli land CONTRARY to UN Resolution 242 , and Israel’s apartheid West Bank & brutal ‘starving’ Gazza occupations

    patthetic anti semitism “excuses” from Israeli suporters to hide these facts is today regarded with contempt

  22. Fred Argy says:

    Patrick, prejudice against anti-muslim immigration and the right of Israel to exist is largely instigated by extreme right-wing groups. They are the ones who incite the public. I know of very few anti-muslim or anti-Israel advocates on the Left who do the same.

    Ron, I am not taking sides either for or against Muslims or Israelis. Obviously they are both equally responsible for the current predicamant.

  23. Yobbo says:

    Ron, I am not taking sides either for or against Muslims or Israelis. Obviously they are both equally responsible for the current predicamant.

    By even saying this you are taking sides. You are claiming that Israelis are at fault for defending themselves from people who want to kill them. Contributory negligence due to being non-muslim in “muslim lands”, I guess.

    Ron: Contrary to popular belief, the UN is not the world police force/justice commission. There are countless examples of evil UN resolutions, not least of which are all the ones where they refuse to recognise the existence of Taiwan, because China threatens the entire world with war if they do.

  24. Ron says:

    Fred Agy
    #22

    “Ron, I am not taking sides either for or against Muslims or Israelis. Obviously they are both equally responsible for the current predicamant.”

    Fred unlike th zealot Israeli suporter (Yobbo #23) who slammed your comment with one sided Israeli arguments without even accepting Israeli IN FACT ilegaly occupies non Israeli lands that 99% of world believe she should not , your commnets whilst I don’t fully agree with , do show a more moderate view

    yes , Palestiniens often been there worst enemys despite there frustraion at being ilegaly occupied & thre land “apartheided”

    Issue is Palistiniens rite to full return of West Bank & East Jurelsm per 242 & a contigous State WITH concurent Israel reasonably getting full security for its borders

    North & South Korea hav a demiltary zone Arab League and Abbas both suport a similar DM Zone with either UN/USA troops to satisfy Israel’s rite to exist and security of its border (against there fear of a subsequent created Palistinen State threat to them)

    Israel refuses this , guaranteeing there can never be a satisfactory security option that pleases Israel , and therefore guaranteeing Israel’s “excuse to remain in ilegal occupation USA should ‘forse’ Israel to agree to this as it had leverage in aid & tech weapons she supplies Israel

    And yes I agree Fred , I’ve never run accross any anti Isreal person on religous grounds from th ‘left’

  25. Rafe says:

    I think the real danger, already in the pipeline for “democratic” Australians is that the owners of mining have so effectively sold the line that they are the “employers who employ” and that they will decide what taxes they’ll pay thank-you very much. Unfortunately the ALP in government has still not woken to this reality as the miners are telling PM Gillard to get her act together. “We’ll give you two weeks!” Abbott’s Liberals are seemingly already locked in to the miners, and if Australians vote for them to govern, we’ll all be locked into the power of international finance capital. Blackbeard’s Pirates never had it so good and shame on the “Dullard” Australian public for supporting them in the polls.

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