Can labour parties reform, or will they drag their societies down with them?

[Published 5 Jan as The Keating and Blair consensus has failed at Independent Australia]

Another election lost by labour, this time in Britain. The Blairites have their long knives out and will no doubt fight to drag the UK Labour Party back to the right. The Australian Labor Party is still gasping like a stunned mullet after its own loss, with no indication that it can manage anything beyond continuing to pander to anyone who might still reluctantly give it a preference. With their focus on tactics and personalities, most politicians and commentators miss the big news.

Neoliberalism has failed, comprehensively.

The English-speaking labour parties tried the free-market path to prosperity, imagining they could tame the beast’s lust for concentrated wealth enough that some would be left over for the average battler. The strategy has doubly failed. Neoliberalism has delivered only feeble prosperity with high inequality, and the labour parties have demolished their constituencies.

That free markets delivered prosperity is a myth. The Keynesian social democracy of the postwar decades delivered in Australia GDP growth averaging over 5% with unemployment averaging a minuscule 1.3%. Inflation was a moderate 3.3%. In the neoliberal era growth has been only 2-4%, unemployment rarely below 5%, and there have been several severe financial crashes.

The alleged superiority of neoliberalism was only ever relative to the 1970s, which were disrupted by a quadrupling of oil prices and the US fudging the costs of its war in Vietnam. In Australia the neoliberal deregulation of banks gave us a boom in business debt through the 1980s that collapsed in 1990 into the worst recession since the Great Depression, the Keating recession we did not have to have. We avoided recessions since by running up huge household debts and by Rudd and Swan briefly spending directly into the economy, in violation of the neoliberal faith.

Those who still chatter about Australia’s alleged miracle run of nearly 30 years without a recession usually don’t mention the present anaemic state of the economy, growing barely at the rate of the population and therefore stalled or going backwards as far as your average punter is concerned. Young people, especially, can no longer afford a house or a tertiary education.

The neoliberal trickle-down story is a myth. It never shows up. It fails because the wealthy put much of their wealth into unproductive asset speculation and luxuries for themselves, not into productive investment. This keeps the financial markets and housing prices high, but our economy has been hollowed out. We are left with being China’s quarry.

The right-wing neoliberal parties of Thatcher and Howard set upon the industrial unions with a vengeance, so it is almost comical now to see the Morrison government’s continuing obsession with the last feeble vestiges of union power. But Labor and Labour also undermined and defanged the unions, and allowed industries to wither and collapse with little help for displaced workers.

In place of real jobs people are offered the gig economy, with no security and a likelihood their wages will be stolen as well. Yes the nature of the economy has changed, but the employed still have common interest against the owners of capital, as Adam Smith himself well understood in his day.

It is hardly surprising the former workers of the industrial regions are surly and mistrustful. When a strong man comes along and promises to smash the system that has screwed them, they listen. If he also names scapegoats they can hate, they cheer. They may eventually realise their mistake, but by then the strong man may have closed off any escape route.

It is not in the nature of institutions with long histories, such as labour parties, to fundamentally reform themselves. Jeremy Corbyn was unexpectedly thrust into power and he tried to reform, but he could not pull off that huge challenge. Having much of his own party, most of the other parties and most of the media including the BBC against him certainly did not help.

If the old labour parties persist in clinging to their old stories and their fading hope of power they will only further impede the great transition that our societies desperately need, as indeed they have been doing for some time. The alternative, just to be clear, is a police state that will fail to stave off collapse and anarchy.

Awake people have no option but to go around the old parties, by voting for new and constructive parties or, in the absence of that option, by finding constructive Independents willing to actually represent, govern, and tackle the great existential challenges now facing our societies. There are small signs of it happening in Australia.

2 thoughts on “Can labour parties reform, or will they drag their societies down with them?

  1. Richard Swinton

    Hear, B****y Hear!! Well said, Geoff. The trap the left has fallen into is that neo liberalism still demands that they cow tow to the system. But, as you said, neo liberalism is in its death throes and the likely finish is a fascist state with the powerful trying to hang onto power. Scomo is already doing the setting up of fascism quite well – increased security, demonising what ever group seems suitable for his ‘quiet Australian’ supporters.
    We need to rebuild democracy – stifle the parties and their dependency on donations from the wealthy, and support independents who represent their constituents rather than the party. real time immediate announcements of donations; no donations from corporations, only individuals and limited to,say, $5000.
    And more use to be made of the digital platform to conduct mini referenda on big issues.
    I’m getting sick of parliamentarians representing their party ideologies rather then their constituents. And the Government should govern for the whole population, not just their supporters. Let’s face it, the coalition only just scraped in and commands less than 50% of the votes, yet they behave as if they had the full support of the population!! Even stuck on coalition voters don;t agree with some important policies that the coalition push – ‘head in sand’ climate change attitudes, for example.
    Oh, and the recreation of a an impartial bureaucracy with the Govt having NO power to change bureaucrats. Thats enough for now.


  2. Richard Swinton

    Oh, and all parliamentary votes to be secret ballots – THAT would put the cat amongst the pigeons!!
    Richard Swinton



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