Dead Wrong: Latham’s recipe for killing what’s left of Labor

“Not dead yet: Labor’s post-left future” Quarterly Essay 49
By Mark Latham, Black Inc $19.99

Former leader of the Labor Party, Mark Latham, has made a name for himself as a crazy and occasionally violent maverick. With his Quarterly Essay #49 “Not Dead Yet: Labor’s post-left future” Latham has produced something in the same vein.

His “Labor outsider” status allows Latham to articulate views that are widespread amongst the current generation of Labor politicians (and very close to Kevin Rudd’s), but are rarely articulated so clearly.
Latham’s essay proposes a program of reforms to the Labor Party that in reality would extend and deepen Labor’s 30-year rightward shift. The results are offensive from start to finish.

“There is now just one question for Labor parliamentarians to ask: what would Keating do?”

The central argument in Latham’s essay consists of a call for Labor to embrace the “Keating settlement”: code for neo-liberalism. Latham congratulates Keating for accepting “the inevitability of profit-based economics, dispensing with Labor’s long-running delusion that the system could be planned, regulated or manipulated for other purposes”.

Latham celebrates Keating’s policies of financial deregulation, removal of tariffs, National Competition Policy (that forced government departments to compete against the private sector), and “productivity-linked wage increases”, i.e. enterprise bargaining, that trade conditions for wage rises. According to Latham these reforms led to the creation of a “miracle economy”.

He asserts that Keating’s neo-liberal policies created:

“…the policy settings for twenty years of low inflationary growth and unprecedented wealth creation. For the first time, suburban workers grabbed a significant slice of Australia’s economic expansion.”

But Keating’s “miracle” boom of the mid-1990s was no miracle for Labor supporters. It was built on enforced wage restraint, over 10 per cent unemployment, and dramatically increased inequality. Latham is right that Keating’s legacy is at the heart of Labor’s problems, but not in the way that he thinks.

As Solidarity has previously argued (see issues 50 and 51), it was precisely Labor’s free market policies that shifted power and wealth away from workers and to the rich.

“Not Dead Yet” opens with an account of the implosion of Labor’s branch membership. In the 1930s there were 150,000 members, 50,000 in the 1990s, and a mere 11,665 members (Latham’s estimate) in 2011. Branch life has been reduced to a rump, with grave implications for Labor’s capacity to mobilise for elections. Latham blames Labor’s factional system and the influence of union leaders. Again here he is dead wrong.

The facts show that the downturn in both Labor membership and in the primary vote both start in the Hawke and Keating years, and have never recovered. The sharpest decline was under Keating himself, who only won the 1994 election because the Liberals managed an even more right-wing campaign that featured a GST (a policy Keating himself had previously supported). When Keating lost in 1996 Labor’s primary vote of 38.75 per cent was a record low not seen since Scullin’s 1931 austerity Depression election.

Now Gillard, who managed to bring down Labor’s primary vote to 29 per cent in April this year, can only dream of the support Labor had during its historic 1996 thrashing. But this is just the latest manifestation of the rot that started when Hawke and Keating’s introduction of neo-liberalism began to erode Labor’s social democratic base.

The course Labor set in the 1980s has continued, but not thoroughly enough for Latham’s liking. He criticises Rudd’s 2009 essay in The Monthly, “The Global Financial Crisis” for its anti-neoliberal rhetoric.

But Rudd’s essay in fact goes out of its way to hail Hawke and Keating’s government as the quintessential social democratic government, saying they “pursued an ambitious and unapologetic program of economic modernisation. Their reforms internationalised the Australian economy, removed protectionist barriers and opened it up to greater competition.”

In fact Keating-worship is one of the things that unites Labor politicians, left and right, something Latham is oblivious to. Bizarrely, Latham describes Labor’s post-war Chifley government and the Whitlam administration as “anti-capitalist” (if only!).

Just as strangely, he seems to think Wayne Swan is a closet socialist, condemning Wayne Swan, Euromoney’s “Finance Minister of the Year 2011”, “as a Labor partisan…never truly comfortable with a system of profit-based capitalism”!

But this mostly reveals how seriously right-wing Latham really is.

Labor and the unions

According to Latham the Labor Party’s “organisation is split in two, with the party above suffocating the party below.” If this statement referred to the domination of the party by the Parliamentarians or the Labor Party machine riding roughshod over rank-and-file members and sidelining union affiliates, Latham would be quite right.

But instead Latham claims that the unions represent “the party above”. This is the second central argument in Latham’s essay. Latham would love nothing more than for Labor to sever its formal ties with the trade unions and model itself on the US Democratic Party.

His argument hangs on the belief that the decline in Australian union membership to 18 per cent results from fundamental changes in the economy that have shrunk the working class.

According to Latham, Keating’s reforms created a new “aspirational class” of self-employed and empowered information-wired workers. Here Latham regurgitates sociological claims of a new economy, or information economy, that were popular in the 1990s.

In fact as new Australian Bureau of Statistics data shows, Latham’s favourite “workers”—the self-employed—are in sharp decline, falling by 130,000 between 2010 and 2012 to a total of just 980,000. In the same period the working class grew by almost 290,000, to 9.45 million.

Contrary to Latham’s argument declining union organisation does not stem from objective changes in capitalism.

In fact the cause of the fall is the very period of Labor government that Latham idolizes—Labor’s wage-suppressing Accord of the 1980s. Union membership as a proportion of the workforce fell from over 48 per cent to below 31 per cent during Hawke and Keating’s years in office, and has kept falling.
Indeed there is no objective reason why unionisation rates have fallen in recent decades.

Neo-liberalism has created more precarious work compared to the post-war period of capitalist expansion (see article on page 21). But this is often exaggerated and in any case precarious working conditions are no worse than the conditions in which Australia’s labour movement was built in the late 19th and early 20th Centuries.

Besides, winning permanency and shorter hours should be the life-blood of unionism. Manufacturing—once the bedrock of the union movement—has declined, but there is no objective reason why unionisation rates have not grown in the service sectors that have come to dominate the economy, and which include higher education, health and communications.

Perversely, the decimation of union density provides Latham’s evidence that Labor should jettison any idea of representing the interests of workers, drop the unions, and concentrate on running (he means “serving”) capitalism.

But it was Labor’s determination to run the system, and the union officials’ willingness to subordinate the interests of their working class membership to their role as negotiators, that has resulted in the declining numbers and power of the labour movement.

Rather than a relic of the past, the unions represent the only thing going for Labor, and the potential for it to rebuild its relevance in the lives of working people.

In arguing to more fully embrace Keating’s neo-liberalism and ditch the unions, Latham’s essay provides a crystal-clear account of what Labor could do to permanently wipe itself off the political map. It is a “how-to” guide for Labor to continue in its devastating 30-year path of self-destruction.

Resting on this rotten foundation, the other proposals in Latham’s essay are a litany of reaction. Wherever Labor has gone to the right, Latham wants it to go further!

According to Latham, the problem with Rudd and Gillard’s “education revolution” is that classroom teachers are not subjected to enough testing and schools aren’t forced to compete with one another.

The problem with NSW Labor is that some of their leaders opposed electricity privatisation, and some even supported refugees. Latham embraces the elitism of those who “blame the victims”—insisting that people are poor because they make bad choices and have a “feral” culture of welfare dependence.

Latham suggests that Labor’s demonisation of Aboriginal culture and attacks on Land Rights haven’t gone far enough with the NT Intervention. Welcome to the upside-down world of Mark Latham!

Too much of Latham already infects the Labor leadership. Parliamentary Labor, many years ago, abandoned its traditional “Labor values”, its social democratic commitment to reforming capitalism and regulating the economy for “other purposes” to increase equality, full employment, accessible housing, and health and education for all.

It is precisely this rightward shift in Labor that has turned Australian politics into a look-a-like contest over who can get the best surplus, target welfare recipients or have the harshest anti-refugee policy.
This is the hard truth behind the Gillard government’s inability to get “traction” with the electorate.
If anyone wants to know why Labor is heading to lose the September election, read Latham’s essay.

The hope for Labor still lies with the rank-and-file and the unionists who vote for it. Instead of trying to kill off any of Labor’s last hopes, it would be much better if Latham stopped pretending and simply joined the Liberal Party.

By Jean Parker

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