When the political class adopted Neoliberalism, it effectively transferred significant amounts of political power, the democratic power of governments, to private corporations.
We need to take it back! (Hans)
David McKnight makes the case for a people power that doesn’t scapegoat immigrants or minorities.
Here’s a quick quiz. What do the following political figures have in common: Pauline Hanson, Bill Shorten, Donald Trump, Jeremy Corbyn and Bernie Sanders?
Answer: all have been accused of populism. Whether they’ve bashed banks, billionaires or boat people, they’ve been damned as populists. Yet these political figures come from wildly different parts of the Left and Right. Can they all be populists?
Mostly, when I hear people damning someone as a populist, they are talking about a right-wing version. But it’s not that simple. In this book, I argue that a progressive version of populism exists too.
A progressive populism takes up the genuine economic grievances of everyday Australians without scapegoating migrants or minorities in the way Donald Trump and the proBrexit forces have done. In fact, a progressive form of populism is the best way of defeating the racist backlash of right-wing populism because it addresses the social and economic problems which partly drive the rise of right-wing populism. As well, it asserts our common humanity, whatever diversity we also express.
I first discovered populism when I began teaching investigative journalism in the late 1990s at university. I had some understanding of the subject already, having worked on the ABC’s investigative TV program Four Corners. Like other journalists, I knew about the role of investigative journalism in the Watergate scandal of the early 1970s. However, to teach it as an academic course I needed to know about its historical origins. I found that investigative journalism (originally called muckraking) began in the United States around 1900 during what Americans call ‘the Progressive Era’. It was called this because it was a period of radical ideas and activism about social reform. One expression of this was the emergence of a new political party, the People’s Party, in 1890-91. It stood for the interests of ordinary people farmers and workers against the ‘robber barons’ in the privately owned banking, oil and railway industries. Friends and enemies alike described the approach of the People’s Party as Populism and its supporters as Populists.
The muckraking journalists were crusaders on issues which they shared with the Populists. For example, in his book The Jungle, writer Upton Sinclair exposed the dangerous and filthy conditions endured by the Chicago meatworkers. Years later his book was recognised as one of the forces behind the introduction of food safety laws. One of the first female muckrakers, Ida Tarbell, exposed the ruthless practices of Standard Oil in crushing rival companies in a series of articles published in McClure’s Magazine, and eventually a book, The History of the Standard Oil Company. Today, Standard Oil is better known as Exxon and remains a ruthless corporation. Lincoln Steffens’ book The Shame of the Cities exposed the corruption of political machines linked to gambling, prostitution and bribery. Other muckrakers attacked the role of big money in government and the power of Wall Street. Their journalism, I realised, was a key contribution to the progressive causes shared with the Populists.
The key idea of the Populists was that the interests of ordinary people were in conflict with those of the elite. Some of the Populists had conspiratorial ideas about money and power but their movement was a powerful challenge to aggressive, unregulated big business. Having been on the Left of politics since my teens, I found this history of a forgotten reform movement fascinating. its goals of economic and social justice for ordinary people are still relevant today.
Years later I rediscovered American populism when I read a book by journalist Thomas Frank, What’s the Matter with Kansas? Published in the wake of the election of George W Bush, his book pointed out that Kansas, now a conservative Republican state, was once a centre of radical activity. One Kansas town produced a socialist newspaper, Appeal to Reason, which sold hundreds of thousands of copies. In the 1890s its farmers, driven to the brink of ruin by years of bad prices and debt, held huge meetings where Kansas radicals like Mary Elizabeth Lease urged the farmers to ‘raise less corn and more hell’. From this situation, the People’s Party emerged as the enemy of the ‘money power’ and as an alternative to both Democrats and Republicans. It advocated publicly owned railways and banks along with a progressive income tax on the rich. For this, Frank tells us, they were reviled ‘for their bumpkin assault on free market orthodoxy’.
In 2015 and 2016 I found myself hearing commentators talk about the rise of modern forms of populism during the looming US presidential election. Both Donald Trump and Bernie Sanders were referred to as populists. Sanders had opened his campaign with the statement: ‘This country and our government belongs to all of us, not just a handful of billionaires’. It was a modern echo of the progressive side of the American populist tradition. Although he didn’t win the Democrats’ presidential nomination, Sanders shifted the political agenda and challenged the untrammelled power of the wealthy in the name of ordinary people.
Trump, a right-wing populist, represented the worst aspects of popular prejudice. Yet he won. Like many others, I was stunned as I read the first online news reports announcing this. How could it have happened? One of the most illuminating insights came from Thomas Frank, who argued that Trump’s populist campaign on economic issues was far more important than most people realised at the time and had been the key to him winning crucial states. The abandoned factories and crumbling buildings in cities devastated by free trade deals had created a ‘heartland rage’ that swamped the Democrats.
All of this was ‘the utterly predictable fruit of the Democrats’ neoliberal turn’, he said. ‘Every time our liberal leaders signed off on some lousy trade deal, figuring that working-class people had “nowhere else to go”, they were making what happened last November, Trump’s win, a little more likely.’
Such sentiments inspired this book. And all of this is relevant to Australia because both our Labor and Liberal politicians have, in recent decades, largely accepted the principles of deregulation, privatisation and small government, together known as neoliberalism. In part, this book is an investigation into the failures of these principles in Australia.
The final reason for writing this book is more personal. I grew up in a single-income, bluecollar family with my mother suffering from a severe mental illness. Yet we survived and thrived thanks in part to a strong public sector, especially in health and education. This public sector was grounded in the major parties’ consensus that it was both morally obligatory and economically sound that important public services should be equally available to all and provided collectively. Now this consensus is being broken apart and discarded. This is not some misty-eyed memory about a non-existent golden age, an error often made by right-wing populists when they equate the White Australia Policy years with better conditions overall. Australia is a better and more open society today, not least because it is more culturally diverse. But in terms of simple practical things such as expecting a secure wellpaid job, social services and a home to live in, we are going backwards.
When I started researching this book in the wake of the shock Trump victory and the vote for Brexit I was already a critic of neoliberalism. But as I probed more deeply I grew angrier and angrier. My research revealed that the orthodoxies of deregulation and privatisation, regarded as supreme common sense by the political and economic elite, are radically transforming Australia. The gulf between billionaires and the poor is widening as old egalitarian Australia crumbles; deregulated banks have become parasitic to the rest of the economy; corporate tax avoidance is out of control; and our pay and conditions are being eroded. As it had with me, this has angered many ordinary Australians. Some falsely blame migrants and refugees while others rightly blame a corporate and political elite. To change things, we need to rebuild a new progressive agenda which unites ordinary Australians against these elitedriven policies.
Of prime importance in such a renewed progressive agenda is genuine action on the biggest danger of all, irreversible climate change, which will hit ordinary Australians first. A progressive populist approach aims to unite Australians in the broadest possible new movement one that will provide the necessary people power to avert the worst kinds of changes in the future. Nothing less than the survival of humanity is at stake.
THE POLITICS OF POPULISM
We forced discussions on issues the establishment had swept under the rug for too long. We brought attention to the grotesque level of income and wealth inequality in this country and the importance of breaking up the large banks, we are stronger when we stand together and do not allow demagogues to divide us by race, gender, sexual orientation or where we were born.
US presidential candidate, Bernie Sanders
The establishment complains I don’t play by the rules. By which they mean their rules. We can’t win, they say, because we don’t play their game. We don’t fit in their cosy club. We don’t accept that it is natural for Britain to be governed by a ruling elite, the City and the tax-dodgers, and we don’t accept that the British people just have to take what they’re given.
British Labour leader, Jeremy Corbyn
With Donald Trump’s successful campaign to win the US presidency and Britain’s decision to ‘Brexit’ from Europe, we suddenly began to hear a lot of the word ‘populism’ in the political discourse. At first it was used to describe the attack Donald Trump made on illegal Mexican immigration when he announced his candidacy for the Republican nomination in mid 2015. With his trademark bombast, he declaimed, ‘When Mexico sends its people they’re not sending their best They’re sending people who have lots of problems They’re bringing drugs. They’re bringing crime. They’re rapists’. He then added, ‘and some, I assume, are good people’. His call to build a wall on the US-Mexico border (‘which Mexico will pay for’) became a recurrent theme of his campaign and later, his presidency.
Nor was his abuse limited to Mexicans. After a Muslim US citizen committed a terrorist attack in San Bernadino, California, Trump called for a ban preventing Muslims from entering the United States, at one point including those who were American citizens currently abroad. Trump’s campaign received what seemed to be a certain death blow in October 2016, when the Washington Post revealed an audio tape of his boast that, because he was ‘a star’, he could grab women ‘by the pussy’ and get away with it.
By the normal rules of elections in the United States and elsewhere, his popular support should have shrunk. Trump’s coded appeals to racism, crude misogyny and calculated abuse should have fatally wounded his bid for the White House. But his popular support grew and Trump eventually attained the most powerful position in the world. In office, he has confirmed the worst expectations, responding to North Korea’s threat to the United States with a warning that North Korea ‘will be met with fire and fury like the world has never seen before’, a thinly disguised threat to unleash a nuclear war.
How did we get into this situation? Trump’s election victory owed a lot to two factors. One was his economic populism, which criticised free trade and globalisation. This received a warm response from many working Americans. He threatened to withdraw the United States from the North American Free Trade Agreement. He promised to impose high tariffs on runaway US companies which moved production overseas. He threatened restrictions on imported Chinese goods. Globalisation, he said, helped ‘the financial elite’ while leaving ‘millions of our workers with nothing but poverty and heartache’. All the while he targeted the states hardest hit by economic globalisation. Much of this was downplayed or never reported by both social media and the traditional news media, which preferred to concentrate on his more colourful outbursts and tweets.
The second key to his victory was his skilful use of social media, which he credited with being a way to counteract what he called the ‘fake news’ propagated by mainstream news media. On Facebook and Twitter his popularity eclipsed that of Hillary Clinton and it was there that he circulated his own ‘alternative facts’. The algorithms of social media, which suggest news based on past activity, transformed this popularity into self-reinforcing echo chambers of Trump supporters. And all of this was fed by the crisis in traditional journalism, whose capacity to report news had been eroded by the power of that selfsame social media.
The election of Donald Trump has taken us all into a new and dangerous place. If it had been an isolated incident it would not matter so much. But it was far from that. A few months before Trump’s election, Britain went to the polls to decide whether or not to leave the European Union (EU). The vote was voluntary but the turnout was high. More than 30 million people voted, with a majority in favour of Britain’s exit, styled Brexit. Another victory for populism, said the commentators.
The British vote to leave the EU spanned traditional Right and Left and drew support from unexpected places. While the ‘Leave’ vote was highest in traditionally Conservative areas, it was also high in some working-class Labour strongholds. For some, voting to leave the EU was a protest against the economic effects of the globalised economy, with its problems of unemployment and low wages. For others, their main concern was the immigration which had ensued from open borders. ‘We want our country back!’ was a common cry. Donald Trump, then campaigning for president, hailed the Brexit vote as a ‘great victory’ and drew parallels to his own opposition to ‘rule by the global elite’. A new populist Right was on the move globally.
Soon populism seemed to be everywhere. In Europe the established parties saw their dominance challenged by right-wing populism. In France in 2017 the antiimmigrant and anti-Muslim National Front achieved 34 per cent of the presidential vote, its highest yet. That same year the far right Alternative for Germany won an unprecedented 13 per cent of the vote and 90 seats in the Bundestag. In the Netherlands Geert Wilders’ xenophobic Party for Freedom advanced in the 2017 general elections.
In Australia too Trump-style political disaffection is taking hold. A reputable study by academics at the Australian National University (ANU) shows that key indicators, including satisfaction with democracy, trust in government and loyalty to major parties are at record lows among Australians. The study was conducted following the July 2016 election and found that only 26 per cent of Australians think the government can be trusted (the lowest level since it was first measured in 1969). Forty per cent of Australians were not satisfied with democracy (the lowest level since the period after Gough Whitlam was dismissed in 1975); and there was a record low level of interest (30 per cent) in the 2016 election.
The study’s lead researcher, Professor Ian McAllister, said that we are seeing ‘the stirrings among the public of what has happened in the United States of the likes of Trump, Brexit in Britain, in Italy and a variety of other European countries, it’s coming here and I would have thought this a wake-up call for the political class’. Australian conservatives, hoping to take advantage of this disillusion, welcomed Trump’s victory, with Tony Abbott tweeting: ‘Congrats to the new president who appreciates that Middle America is sick of being taken for granted’. Mining magnate Gina Rinehart urged Australia to follow Trump’s lead and Andrew Bolt told his audience: ‘The revolution is on!’ Very much part of this phenomenon, Pauline Hanson’s One Nation party achieved an unprecedented four seats in the Senate in the 2016 election.
But what is populism?
To many, ‘populism’ is a shorthand term for pandering to people’s baser instincts, exemplified in Trump’s campaign and his presidency. It inflames a desire to blame ethnic and religious minorities; it is a lust for cheap popularity and it is a phony hostility to the Establishment and to ‘the elite’, such is the common understanding. Populist leaders are seen to be posing as outsiders and as representatives of the underdog. Above all, populism is regarded as a right-wing phenomenon.
But it’s not that simple. This book argues that a progressive version of populism exists too. A progressive populism fights for the genuine economic grievances of everyday people without blaming minorities or migrants. In fact, a progressive populism is a very good way to neutralise this sort of scapegoating because it addresses the social and economic problems which partly drive the rise of right-wing populism.
Populism is a notoriously loose description of a political stance. In many ways it is a style of doing politics rather than a series of particular policies. Some people think populism means trying to be popular, but this is misleading. The words populist and populism come from the Latin word for ‘the people’ (populus) what today we’d call the public. The meaning survives in the expression vox populi, the voice of the people. Generally speaking, populism is a style of politics which frames politics as a conflict between the people and an elite. But the identity of the people and the nature of the elite can vary widely. On this basis populism can be either a right-wing or a left-wing phenomenon. In some countries today, the traditional battle between right and left is being channelled through a populist filter.
Academic Margaret Canovan conducted one of the early studies of populism. She argues that there are two broad strands to populist movements. The first is rural, based on organisations of peasants or farmers, a kind which typically emerges when these people are confronting modernisation. The second is characterised by highlighted tensions between the elite and the grassroots. This can take the form of ‘idealisations of the man in the street or of politicians’ attempts to hold together shaky coalitions in the name of “the people”’. Canovan concludes that populism can take right-wing or left-wing forms but that ‘all forms of populism without exception involve some kind of exaltation of and appeal to “the people” and all are in one sense or another anti-elitist’.
The American writer John Judis, author of the recent book The Populist Explosion, also argues that populism is ‘not an ideology but a way of thinking about politics’. He too supports the view that populism can exist in both left and right forms. Left-wing populists champion the people against an elite or establishment (as in Occupy Wall Street’s slogan about the One Per Cent versus the 99 per cent). Right-wing populists are against an elite ‘that they accuse of coddling a third group, which can consist, for instance, of immigrants, lslamists or African American militants’.
Judis notes that the original US People’s Party was formed in the 1890s when Kansas farmers united with an early workers’ organisation and challenged the existing establishment of Republicans and Democrats. The People’s Party developed policies against monopolistic railroads and greedy banks and in favour of progressive income tax and expanding public controls. As one populist writer said, they aimed to get rid of ‘the plutocrats, the aristocrats, and all the other rats’. To the Australian Labor Party, emerging in the same tumultuous decade of the 1890s, the US People’s Party was something of a model and there were early proposals to call the new Australian party the People’s Party, rather than the Labour Party.
This progressive strand within American populism re-emerged in 2015-16 when Bernie Sanders competed with Hillary Clinton to become the Democrats’ presidential candidate. At the start of that campaign he was seen as little more than an eccentric, rumpled, 70-plus year old running an unusual campaign. One newspaper described him as a ‘grumpy grandfather type’ who ‘embraces his reputation for being gruff, abrupt and honest and promises to be bold’. As time went on, observers began to note the cheering, youthful crowds that he drew, his calls for a ‘political revolution’ and his strong social media campaign on Facebook.
Although he did not win the Democratic nomination, Sanders surprised everyone by doing well enough in the battle for the presidential nomination to win 23 primary and caucus races to Clinton’s 34. With no big corporate donors, he raised millions of dollars in small donations from a growing support base, especially from the young. Most surprising of all were his campaign’s public statements and appeals. Sanders attacked ‘the One Per Cent’ of super-rich people who had benefitted enormously from the globalised economy while others struggled to survive. In one speech at Liberty University, he said: ‘In my view there is no economic justice when the 15 wealthiest people in this country in the last two years saw their wealth increase by $170 billion’. It was a fact he repeated all through his energetic campaign.
Another Sanders target was the deregulated banking system that had caused the global financial crisis. Sanders charged: ‘Wall Street used their wealth and power to get Congress to do their bidding for deregulation and then, when Wall Street collapsed, they used their wealth and power to get bailed out’.‘ The contrast he pointed out in several speeches was with the 41 per cent of American workers who didn’t take a single day of paid vacation in 2015 and with the third of workers in the private sector who cannot even claim paid sick leave.
Like Trump, Bernie Sanders was also widely regarded as a populist, reviving a long American tradition in which the central conflict is seen to be between the people and the elite.
Sanders happily described himself as a democratic socialist and pointed to the socialdemocratic states of Scandinavia as models. In his platform, Sanders said he supported: a national public healthcare system; an end to corporate welfare; abolishing fees for college degrees; a full employment policy; raising the minimum wage to $15 an hour; and preventing ‘greed and profiteering of the fossil fuel industry’. The money to achieve these aims was to be raised by compelling wealthy individuals and corporations to pay their fair share of tax.
All of these policies, advocating a stronger role for government, effectively rejected the decades-long dominance of the ideology known as neoliberalism the ideology of small government, of globalising in the form of deregulated markets and of faith in market forces to guide and manage the economy.
Progressive populism in the Sanders mould attributes today’s social and economic problems not to migrants or minorities nor to the ‘politically correct’ mainstream media, but to the failure of neoliberal policies. And because progressive populism addresses the forces driving the rise of right-wing populism, it is the most effective antidote.
The political theorist Chantal Mouffe is not surprised by the rise of right-wing populism:
In a context where the dominant discourse proclaims that there is no alternative to the current neoliberal form of globalisation and that we have to submit to its diktats, it is small wonder that more and more workers are keen to listen to those who claim that alternatives do exist, and that they will give back to the people the power to decide.
And this is just what Trump promised. Unlike the campaign of Hillary Clinton, issues of economic injustice featured heavily in his winning campaign. Just a few days before the November election, Trump told a huge crowd in an aircraft hangar in Pittsburgh: ‘When we win, we are bringing steel back, we are going to bring steel back to Pennsylvania, like it used to be. We are putting our steel workers and miners back to work’. Trump touched a raw nerve. No steel mills now exist in Pittsburgh and hundreds of thousands of steelworkers had lost their jobs since the 1980s, in part due to freer global trade. Whether Trump was sincere in (or even capable of delivering) his promise to bring steel jobs back to Pittsburgh is not the point. Identifying economic grievances and blaming them on free trade and globalisation is almost unprecedented by a Republican candidate. More importantly, it was a challenge which Hillary Clinton, as a long time supporter of neoliberal free trade, could not rebut. As it turned out, Trump did win in Pennsylvania. It was one of the three ‘rust belt’ states that made the difference to victory or defeat in the presidential election.
Both Trump and Sanders were outsiders in US politics. Both denounced the domination of big business and the banks and blamed them for much of US economic woes. Both based their campaign on appeals to ordinary Americans and both were described as populists. Unlike Trump, Sanders was a progressive populist. When he talked about the elite and the establishment, he meant the economic elite and the corporate establishment. Unlike Trump, Sanders did not scapegoat immigrants or ethnic minorities.
The groundswell grows
The groundswell of populism soon saw Sanders joined by the leader of the British Labour Party, Jeremy Corbyn. When he began his election campaign in April 2017, Corbyn faced deep opposition from many of his fellow Labour members of parliament. Like most media commentators, they also believed that because of his leftwing history and left-wing policies he could not possibly win. And certainly he was in trouble at the beginning of the campaign, when polls were placing Labour up to 24 points behind the Conservatives.
From the start of the 2017 election campaign Corbyn framed the contest in the language of progressive populism. He described the election as a battle of ‘the establishment versus the people’ and promised to overturn ‘a rigged system’ that favoured the rich and powerful. Under him, Labour would not be part of the ‘cosy club’ whose members think it is natural for Britain to be ‘governed by a ruling elite, the City and the tax dodgers’, he said. His opponents believed such deeply controversial rhetoric was guaranteed to result in a huge loss.
But his message was straightforward and cut through the spin and PR fog of traditional political rhetoric. And these policies proved popular among the British people. Early opinion polling showed that up to 71 per cent of people supported his proposal to raise the minimum wage to ten pounds an hour. A similar proportion of the British public (62 per cent) supported his plan to raise taxes on the rich and high income earners.
Corbyn’s manifesto broke other unspoken rules of the economic consensus of neoliberalism. He argued that the railways and water supply should return to public ownership. He promised to extend free school meals by a tax on private school fees. He also urged increased funding for social housing, and his pledge to abolish university fees helped build a powerful momentum among young people, who registered to vote at unprecedented levels and voted Labour on election day.
The Conservatives had called the election, confident they would increase their majority in parliament, and Corbyn’s campaign of progressive populism destroyed their majority and almost beat them.
There were close parallels between the movements around Bernie Sanders and Jeremy Corbyn. Officials from Sanders’ campaign helped Corbyn with ideas on strategy and fundraising. Sanders himself visited Britain just days before the election campaign and drew comparisons between his own policies and Corbyn’s:
Too many people run away from the grotesque levels of income and wealth inequality that exist in the United States, the UK and all over the world Globalisation has left far too many people behind. Workers all over the world are seeing a decline in their standard of living. Unfettered free trade has allowed multinational companies to enjoy huge profits and make the very rich even richer while workers are sucked into a race for the bottom.
The spread of progressive populist ideas has not been confined to the United States and Britain. In Spain the progressive populist party Podemos emerged in 2014 and grew so rapidly that it secured 20 per cent in the 2015 elections, campaigning on an anti-austerity platform, supporting increased public spending and strong anti-corruption measures. In the 2016 election it retained its electoral support. In Greece, another new progressive party, Syriza, formed out of a coalition of left-wing and environment groups and received 35 per cent of the vote in the 2015 elections, later forming government. While the majority trend within European populism is rightwing, the significance of a new left populism should not be underestimated.
Driving the emergence of right and left-wing populism is the set of policies known as neoliberalism.
Neoliberalism became the mindset of the political class in the 1980s and was a very deliberate project to wind back the welfare state, reducing the public sphere with its public goods of health, education, transport and culture, along with the tax system which paid for it.
The neoliberal project is based on the idea that the market is the most efficient distributor of goods because it combines the profit motive and competition. It takes no account of justice, inequality or social cohesion. Ultimately this promotes the transformation of all human relationships (not just economic ones) into commercial transactions.
It was neoliberalism with its floating currencies and deregulated markets which drove the present form of globalisation. But neoliberal globalisation means much more than a loosening of trade. It means the unplanned transfer of blue and white-collar jobs from erstwhile industrial countries to less developed nations. It also means national governments are less able to control what happens in their own society and economy.
When the political class adopted neoliberalism, it effectively transferred significant amounts of political power, the democratic power of governments, to private corporations. While benefitting a corporate elite, the neoliberal experiment demonstrably failed in the global financial crisis and the effects of that failure are still with us.
What had been a crisis of private debt was transformed by government bail-outs into an alleged crisis of public debt. This sleight of hand reinforced the neoliberal dogma that the problem was always governments. The ideology of ‘small government’ meant that governments imposed even more stringent cost-cutting measures.
The failure of neoliberalism in Australia
The populist groundswell in the United States, Britain and Europe and elsewhere is reflected by similar movements in Australia, prompted by similar causes. In the following chapters I examine the ways in which Neo-liberalism has failed to produce a good society, as well as its role in fostering a populist backlash.
First and most significantly, 30 years of neoliberal globalisation and deregulation have produced a polarisation of wealth which has undermined Australia’s egalitarian ethos. The gulf between the super-rich and the rest of us is widening. We are becoming a more divided society with a tiny wealthy elite at one extreme and a significant group of poor at the other.
Nor is it solely a matter of fuelling material inequality. As important as inequality (and more important in the long term) is climate change. The ideology of small government and deregulation is impeding our response to accelerating climate change despite the clear warning signs in record high temperatures and the bleaching of the Great Barrier Reef in Australia. Whatever combination of market and state arrangements is best at fostering renewable energy, it will need tough government action to implement this and to defeat the power of the coal and oil industries. To support such action we need a broad populist coalition of all the diverse forces demanding real action on climate.
And just as it has in the United States and Britain, privatisation is spreading throughout Australian society, changing services that used to be provided to all citizens into profitmaking enterprises. The sale of public assets like seaports, airports and electricity poles and wires has simply created expensive monopolies. Billions have also been wasted in attempting to privatise technical and vocational education. Despite these failures, private companies are now being encouraged to move deeper into education, aged care and disability services.
Likewise, Australia has its own rust belt of closed factories and, for those in employment, jobs are increasingly casual, part time and less secure. The deregulation of Australian workplaces means that for younger workers, jobs with paid holidays and fair wages are becoming less common. And thanks to a variety of temporary overseas visa schemes a casualised, cashinhand underclass is spreading in the agriculture, retail and hospitality sectors. Such workers are exploited and their labour conditions undermine those of local workers. This is not occurring accidentally but because economic orthodoxy (backed by employers) demands this labour deregulation. The resulting job insecurity combined with low wages is one factor stoking a right-wing populist backlash based on xenophobia and hostility to overseas workers.
While low-paid workers are made increasingly vulnerable, at the other end of the scale big corporations do everything they can to avoid paying tax, a practice made easier in the globalised world of neoliberalism. In 2014, the Australian branch of the tech giant Apple paid $80 million in tax just 1 per cent of its total Australian income of $6 billion. Its rival, Microsoft, paid just 5 per cent of its income. Over several years big mining companies like BHP and Rio Tinto shifted billions through Singapore, where tax rates can be a mere 2.5 per cent. Nor is it just corporations. Some of Australia’s richest families and individuals pay little or no tax. When the Panama Papers were leaked, up to 800 wealthy Australians were associated with shell companies in tax havens like Panama. Meanwhile, ordinary Australians are left to pick up the tab for hospitals, roads and schools, effectively subsidising those who refuse to pay their share.
Finally, compounding the problem of wealth inequality, the banking and finance sector has swollen enormously since it was deregulated. In Australia we have some of the biggest and most profitable banks in the world. Together they form a rapacious oligopoly which extracts more than $30 billion in profits each year from the rest of Australia.
In their zeal to lend money, deregulated banks have fuelled a housing price boom, the result of which is that fewer Australians now own their own home than 40 years ago.
It’s now time to look again at regulating banks and the finance industry to ensure that they act in the public interest.
Overall, the spread of neoliberal orthodoxy through society has corroded many of the institutions and relationships on which citizens rely and which offer protection from the vagaries of the market. This orthodoxy has shrunk the democratic space by removing all sorts of functions from the public to the private sphere. The real meaning of ‘small government’ is that we have ended up with a small democracy, because governments are still the only institutions we have for exercising our democratic, collective voice. The zealous advocacy of theories of selfinterest, competition and small government has led to a dead end.
All of this spawns populisms of both the Right and Left. The crucial point of difference between them concerns the meaning of and response to globalisation. Are the problems of globalisation primarily issues of economics and economic justice or are they mainly an issue of immigrants and of changing the ethnic mix? Progressive populists are alarmed by the damage that open economic borders, which import cheap products and export jobs, do to local jobs and the national economy. Right-wing populism dredges the deepest and most dangerous emotions to reject the changing ethnic mix which results after years of relatively open immigration.
When right-wing populists define what they mean by the ‘elite’ they take aim at the progressive middle class, the so-called politically correct, who abhor racism and gender inequality. Progressive populists, by contrast, define the ‘elite’ in economic terms as the super-rich and corporate moguls. When talking about ‘the people’, progressives seek to unify the middle class and working class in an alliance for reform. Progressive populists emphasise the common ground which the majority of people share on issues of economic justice.
By focussing attention on genuine economic grievances, a progressive populist agenda can undercut the way ethnic and religious minorities are demonised.
Some see progressive populism as the natural continuation and revival of social-democratic and labour politics which have been compromised by their turn to ‘third way’ politics. One critic is political theorist Chantal Mouffe. She argues that the neoliberal consensus between conservative and once-radical workers’ parties has created a favourable ground for the rise of populism because many people feel their voices are unheard and ignored in the representative system. The problem is that this often takes the form of a right-wing populism which sees ‘the people’ defined to exclude immigrants and minorities.
On this basis many people criticise ‘populism’ negatively. She responds:
This is a mistake, because populism represents an important dimension of democracy. Democracy understood as ‘the power of the people’ requires the existence of a ‘demos’ a people. Instead of rejecting the term populist, we should reclaim it.
In this book my intention is to reclaim populism by fostering a progressive version of it which puts the interests of the common man and woman first, ahead of the priorities of a wealthy global elite whose interests and priorities have dominated for far too long.
THE RISE AND RISE OF THE SUPER-RICH
There’s class warfare, all right, but it’s my class, the rich class, that’s making war and we ’re winning.
Warren Buffett, billionaire investor
With their collective wealth estimated at $US7.7 trillion, the global elite of the super-rich are the natural opponents of progressive populism. Some of that global elite are household names in Australia. In July 2016 over 200 of them gathered for a huge celebration in the dazzling blue waters of the Mediterranean. Trucking billionaire Lindsay Fox was throwing an all expenses paid birthday party and had invited his closest friends to enjoy a cruise from Athens to Venice via Corfu. Fox’s ship of choice was Seabourn Odyssey, renting for over a million dollars a week and containing 225 luxury suites.
Lindsay Fox’s own wealth totals $2.9 billion. His fellow passengers included the mining billionaires Gina Rinehart and Andrew Forrest.
According to the Australian Financial Review’s 2017 Rich List they are worth (in Australian dollars) $10.4 billion and $6.8 billion respectively. Shopping centre king John Gandel ($6.1 billion) and retail giant Solomon Lew ($2.3 billion) also took part in the exclusive celebration on the high seas. Further down the guest list for the stylish cruise were former Liberal Treasurer Joe Hockey, former Liberal Victorian Premier Jeff Kennett, media businessman Harold Mitchell and golfer Greg Norman.‘
This public airing of the details of a party for Australian billionaires is rare. It’s not always easy to get information on the super-rich. A key source is the Financial Review’s annual Rich List. The 2017 edition identified 60 Australian billionaires, headed by the paper manufacturing magnate Anthony Pratt ($12.6 billion). The most modest billionaire (scraping in at just $1 billion) is Melbourne-based Peter Gunn, who owns PGA Group, a private investment business that holds a property empire in office and industrial blocks and is also involved in cattle production. Others among the ten wealthiest are James Packer ($4.75 billion), whose money is in casinos; Harry Triguboff ($11.45 billion), who made a fortune from building tower blocks; and Frank Lowy ($8.26 billion), the Westfield shopping centre magnate. The eighth wealthiest Australian is Hui Wang Mau ($6 billion), who made much of his money in Hong Kong property and took out Australian citizenship after studying in South Australia in the early 1990s.
by David McKnight
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