Dear Labor

Aug 25, 2020

Has anyone among your parliamentary cohort noticed that neoliberalism is a failure? Has it occurred to anyone that promoting selfishness and making people insecure is a recipe for people to turn on each other and shred the social fabric? Does anyone think it might be time to stop being Liberal-lite? Time to champion the battlers and stop pandering to the fat cats? Time for a Labor party to remember why it was founded?

The current lesson is stark. Private aged care facilities that are under-staffed, under-resourced and disgustingly incompetent at care. Insecure, untrained ‘security’ guards fail to maintain hotel quarantine, and become virus spreaders instead. That is where outsourcing and privatising has got us.

Richard Denniss, has stepped past the detailed horror stories from the aged care Royal Commission and spelt out the obvious: the problem is expecting profit maximisers to maximise care. Or even to provide adequate care. You see, the quickest way to maximise profit is to minimise costs, so you cut staff, pay them miserably, steal their wages if you can, don’t train them properly and don’t provide the resources needed to keep inmates in minimally decent conditions.

Many of the aged care owners are listed companies, and their duty is to put profits ahead of the welfare of their clients. Do you see the problem there?

Financial incentives commonly do not align with intended social objectives. It is a fundamental flaw in the whole infatuation with markets. You have to look at what the actual financial incentive is. Is the incentive to get people employed, or to keep them jumping through hoops while pretending to find a non-existent job for them?

Have you ever noticed that there are always many fewer jobs than job seekers? The ratio of seekers to jobs is never less than about three, commonly it is five or seven, and currently it is about fifteen. The Coalition, withered souls that they are, will demonise the unemployed, but you are not supposed to join in tormenting them.

Once you are alert to the problem, once you let the scales fall from your eyes, you will see examples of poorly-aligned incentives every day. Private banks make most of their profit from pushing debt onto customers. So now our households carry enormous debt loads and put our whole economy in peril. The banking Royal Commission forgot to spell that out. Excessive debt is what brought on the last financial crisis. Debt is economic fire and you can’t leave it in the hands of incendiarists.

John Quiggin and others have  been banging on for years about privatisation failures,  but have you paid any attention? Our electricity infrastructure is now so balkanised that even if a government wanted to modernise it, it would be nearly impossible. The gas companies sell natural gas to the Japanese for much less than to us, if there’s any left here to sell at all. That’s how good unregulated private enterprise is.

How many more disasters do we have to have, followed by hand-wringing Royal Commissions, before we notice the common theme?

I could explain to you that none of this should be surprising, because the theory that claims free markets are efficient and will deliver what we want is flimsy, unrealistic nonsense. But you’re probably not ready to hear that.

But, you may say, the great Labor reforms of the eighties set us up for decades of prosperity. If you look at the actual record, you will find that the financial deregulations inflated a business debt bubble that burst in 1990 and brought on what was then the worst recession since the Great Depression. That disaster set up Pauline Hanson and John Howard for their runs at power.

As for prosperity, try the postwar decades: GDP growth 5.2% per annum, inflation 3.3%, unemployment 1.3%. Those are averages. That economy was set up by Curtin and Chifley, though presided over by Menzies. The neoliberal era has never come close to those numbers. That run of prosperity was stopped by the oil embargoes and by Nixon printing money to pay for his Vietnam folly. The stagflation would have been fixed without wrecking our society, but the neoliberals stepped in with their snake oil.

Labor, for its first ninety years, was about pulling together. Cooperating. Looking out for the battlers. The fair go. That’s because people fundamentally are highly social and unregulated markets require bosses to be greedy. Hayek’s vision of selfish calculators interacting through the market is psychopathic. It is destroying our society.

If you want to counter the rise in intolerance and racism (do you?) then stop promoting selfishness as an ideal. Stop apologising for and minimising government’s role. Make it an open priority to ensure people can live in security and, in those old Labor words, with dignity. See that wealth flows fairly to those who help to create it. Stop it being siphoned off by the financial parasites.

Let Joel Fitzgibbon and his ilk go. Why were they in the Labor Party in the first place? Of course he should have the grace to quit Parliament and contest an election under his own flag. Fossil Labor?

I haven’t mentioned abominations like robodebt or incarcerating innocent people indefinitely in concentration camps, in gross violation of any concept of human rights. There are sensible proposals to end those abuses, though they are not quite as easy as dancing to the Murdoch tune.

Nor have I mentioned global warming (to give it the proper name). You clearly don’t get global warming, or you would be out-doing the Greens in your anxiety to bring on the solutions that are readily available, and that would quickly benefit everyone. Forget Paris, its deals are quite inadequate. The need is desperately urgent.

The Reef is probably a goner, and how much of our forests and farmlands will be left after two or three more decades of the warming that is already in the pipeline? Those are not just human disasters, they are huge ecological collapses. It’s our life support system. Do you ever think about how everything on this miraculous planet is connected, there in your fevered little political bubble?

If you should choose to heed any of this, you may need to seek your support from the people again, rather than taking money from the parasites and their shills. Many would love you for it, people have been desperate for real, humane leadership for a long time.

OK Labor? Can you hear?

Dr. Geoff Davies is a retired scientist at ANU and the author of Economy, Society, Nature and The Little Green Economics Book. He blogs at BetterNature Books.

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