The most interesting political action worldwide is happening in Europe and right now the focus is on Italy’s coalition government of left and right standing up to Brussels rules. Similar forces are at work in the United States of America. Are these working-class pressures building up in Australia? I hope so but we will learn nothing about them from the Wentworth by-election.
Plain-speaking economist Judith Sloan often appears on television. I seldom like what she has to say but I listen carefully, all the same. Her comments on Wentworth published in The Australian of 23 October are worth reading.
“When interpreting the result be clear that Wentworth has very little in common with the rest of Australia. The residents are mostly high-income, educated and wealthy …. Most Australians can only dream of the privileged existences of Wentworth residents.
“The concerns of these Australians are more prosaic – how to pay the mortgage or rent, how to cover the weekly bills, can I get to work on time, who’s going to pick up the kids, how are the aging parents getting on and so on.
“They haven’t really given climate change a second thought or wondered whether Australia’s embassy in Israel should move from Tel Aviv to Jerusalem. They don’t have time to watch the ABC and they listen to commercial radio in the car while stuck in traffic. They would like to see their footy team win the flag next year.
“A time will come, and it is arguably not too far off, when the Liberal Party has to accept that inner-city seats it has traditionally held may be lost forever. Either high-profile independents or Greens candidates will, over time, snare them…. On this basis the way forward for the Morrison Government is to run with policies that benefit and appeal to Australians who live in the outer suburbs and in regional areas, a bread-and-butter style of politics focusing on national issues rather than global ones.
“Skipping pretentious mumbo-jumbo about climate change, identity politics and the benefits of multiculturalism, the Morrison government would be wise to concentrate on the everyday concerns of average Australians. Most Australians are just trying to stay afloat and do the best they can for their families and their communities.”
Rana Foroohar is not a household name in Australia but the American-born journalist of Turkish descent is an associate editor of The Financial Times and the Australian Financial Review of 16 October did us all a favour by publishing her iconoclastic view of globalisation.
She wrote about Robert Lighthizer and Peter Navarro. These gents, likewise, are not famous in Australia but they are key figures in the here and now of American policy and their work should be studied, especially by people who can’t take Trump seriously because his low-life antics are so well publicised.
Lighthizer is the current United States Trade Representative and Navarro is a powerful figure in the Office of Trade and Manufacturing Policy, a newly created executive branch of the U.S. Federal Government.
John Maynard Keynes and his friends in the Bloomsbury Set provided a base for Sigmund Freud in England and Rona Foroohar also likes to bring psychology into her economic thinking.
“All of us, no matter how wise, have our cognitive biases. Indeed, there’s research to show that elites are less likely to part with their biases than the ordinary person. This is probably because they believe themselves to be better educated and informed than the masses, which may well be true.
“Yet many members of the elite were caught utterly unaware by Brexit and the rise of Donald Trump. These events simply did not fit the mental model of the world so many of us have worked with for the past several decades.
“So, what is the next big thing the global elite is missing? Quite possibly deglobalisation. Just as so many top corporate executives missed the rise of populism, so the global business establishment is in danger of missing the fact that a far-right/far-left consensus is building in the U.S. around a nationalist economic agenda. This is in some ways reminiscent of the shared concerns of the populist Five Star and League coalition that recently came to power in Italy.
“In the U.S. many supporters of socialist Bernie Sanders agree with Trump administration trade hawks such as Peter Navarro and Robert Lighthizer who believe that America should disentangle itself from China and pursue domestic industrial policy.
“The belief systems, agendas and specific policy prescriptions of these two camps vary widely. But the end goal is the same – they want American companies to keep more capital, jobs and intellectual property at home. Many corporate leaders I speak to are baffled by this confluence of interests. They argue that the supply chains are too complex, the Chinese domestic market is too important and other countries cannot yet offer a comparable package of workforce, logistics, infrastructure and vendor networks.
“True enough, and yet, their objections may be beside the point. The pro-labour left is seeking to slowly but surely disrupt the corporatist centre of the Democratic Party, which would prefer to go back, after Trump, to the previous era of free trade…. The underlying impulses are not going away. The young socialists and the old trade hawks are all playing a long game.”
This is Steve Bannon’s territory and there is no shortage of work for such a new force in American politics. Statistics just released from the U.S. Bureau of Census for 2017 show 45 million Americans living below the poverty line and 28 million with zero health cover.
Australia is badly placed to deal with the trend observed by Rana Foroohar. Our policies have been too wrong for too long. One of our most spectacular follies was highlighted by Dow Chemical’s senior Asia-Pacific representative, Jim McIlvenny, at a recent energy conference reported in the AFR of 10 October.
Dow Chemical advocates construction of a pipeline to take gas from Western Australia to Moomba to link up with the eastern States grid. R.F.X. Connor in the Whitlam Government proposed piping North West gas across country to build up Australian industry. A heavy campaign by the West Australian State Government defeated Connor’s plan and the gas has been exported ever since to build up the industries of other countries.
Jim McIlvenny described Australia as “an anomaly” in failing to put its national interests first and leaving its domestic industry potentially captive to overseas markets for energy prices and supply: “We look more like a country that has no energy yet we are one of the largest energy producers in the world and yet we have some of the highest energy pricing. That makes us very unique.”
Sydney consulting engineer John Blakemore appeals to the same “holistic” approach recommended by the Dow man in arguing that Australia should take a pro-active approach to manufacturing, using our natural strengths, including energy resources, and building industry along the lines of post-war Japan and Germany and South Korea’s Hyundai. (AFR letters 12 February 2012)
Every history book in my school days included a chapter on free trade versus protection. I doubt if that is still the case. The protectionists lost and free trade is the default setting. In the depths of the Great Depression owners of wireless sets in Britain had the pleasure of listening to J.M. Keynes. One of these broadcasts is reported in “The Listener” of 30 November 1932.
“Why then did I begin by saying that I sympathise with both sides? I will tell you. In spite of all that I have just said, there are some important respects in which those who are not afraid to use tariffs have a broader conception of the national economic life and truer feelings for the quality of it.
“Free-traders, fortified into presumptions by the essential truths, one might say truisms of their cause, have greatly over-valued the social advantages of mere market cheapness and have attributed excellences which do not exist to the mere operation of the methods of laissez-faire.
“The protectionist has often used bad economic arguments but he has sometimes had a truer sense of the complicated balances and harmonies and qualities of a social economic life and the wisdom of not unduly sacrificing any part even to the whole.”
Pearls and Irritations in recent days has featured entirely sensible contributions from three old hands. John Menadue (24 October) blasted away at privatisation. Who could quarrel with him? Where is the evidence for the supposed benefits of this massive fraud? Michael Keating (20 October) gave us a sober estimate of government revenue requirements and Bernie Fraser (18 October) appealed for more pragmatism and less ideology in policy formulation.
An interesting feature of the Wentworth by-election was the muted response from the ALP, of which I am a member. Even loud-mouthed professional head-kickers like Tony Burke were circumspect. Labor people know that they are guilty as sin and at least as guilty as the Liberals when it comes to the major offences of recent decades, from asylum-seekers to privatisation, deregulation, the banks and the whole neoliberal catastrophe.
The Labor and Liberal crews have paddled their boats up the same creek. Now they have lost their paddles and they are floating in the same poo.
Kerryn Phelps was the perfect independent candidate in the right place at the right time. Taking on the majors is a big task in Australia and it will be interesting to see if Kerryn’s win inspires others to step forward.
Jerry Roberts has a bad cough and is restricted to light duties, such as writing political comments.