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When we went wrong

Paul Keating, prime minister of Australia (1991–1996). Image from The Punch.

There’s a lot of internetz about how current governments are run for the benefit of the plutocracy, and this is both true and worrying for anyone still in favour of free and open democracies. But let us not forget when it started, and how we ignored the warnings. In Australia we have a prime minister who is systematically destroying our environment, our welfare support network, and various sundry other infrastructures that made Australia a good place to live, not to mention the inhumane manner in which his government is treating refugees. But this did not start with Abbott. In fact it did not start with Howard, Abbott’s conservative predecessor and enabler.

This all started when a socially progressive party became neoliberals. The single person most responsible for the parlous state in which Australia now finds itself is a darling of the left: Paul Keating. It began in 1980. Paul Keating was Australia’s treasurer under Bob Hawke, a right leaning unionist who defeated the conservatives is a manner that resembled the last real social progressive of his party, Gough Whitlam in the early 1970s. Hawke was okay, I suppose, but Keating swallowed the Hayekian line whole, and started to introduce the ideas that conservative economists had been floating for a while.

Keating floated the dollar and began the introduction of a foreign idea to the Australian polity: “user pays”. Under his government, the universal health care system was wound back so that private insurance was required by those who could “afford” it (meaning the middle class), while at the same time introducing fees on education to replace the free system that even Hawke’s predecessor, the conservative Malcolm Fraser had preserved from Whitlam.

When Keating was prime minister, his immigration minister, the left faction Gerry Hand introduced mandatory detention for refugees, who had until then been permitted to live and work in the community.

Worse, Keating failed in three policy areas: media laws, public communications, and privatisation. He “saved” the government from having to support public infrastructure by selling it off, either to investors (the rich, in other words) or to companies (corporations, in other words). This then became the watchword for later governments.

When he privatised telecommunications, he allowed on company to control what was then called the Public Telephone Network – the cabling and exchanges of the phone system. This meant that every other competitor had to go cap in hand to a company whose interests were not served by allowing free and fair access to the infrastructure. And they exploited this mercilessly, making competitor customers wait for weeks if not months to connect them. Had Keating kept the infrastructure in one public authority, and made the commercialised companies buy from that authority, we might have a world class communications network by now.

He caved in to the media interests and failed to prevent monopolies. Now nearly all media in Australia is run by Murdoch or his subsidiaries (with ”competitors” that follow his lead), and independent media is almost nonexistent. Consequently the public are systematically misinformed about everything from global warming to political alternatives.

The Hawke-Keating government also destroyed one of the world’s best education systems, collapsing trade and vocational education into universities, and forcing them to raise fees, in the so-called “Dawkins Revolution”. This hurt traditional university education, and also vocational education (I worked for one of the latter institutions, and what were generally industry-relevant courses became academised as the lecturers strove to make their way in academe).

Now Australian education is among the most expensive in the world, rivalling American costs of getting a degree. This has had the effect of making it very hard for young people to get a career.

I could go on. Keating is lionised by the Labor Party as the last really successful Labor PM, but in my view he was nothing better than a right wing plant who was driven by the neo-liberal agenda and ideology, and I blame him for the bulk of bad policy in Australia. He made Howard and Abbott possible.

It is time Australia rejected the legacy of Keating. Both the major parties in Australia are corporatists, and treat the common wealth of Australia as the economy, the whole economy and nothing but the economy. After a reaction to this corporatism, both the major parties had a kick back in a senatorial by election. They now are asking why. If you ask me, it is because of Keating’s legacy, ruining a free country for the benefit of the plutocrats.

It is time to support and vote in the so-called “minor parties” and retake our country back. The “commonwealth” of a nation is the shared infrastructure, both physical and social, that really does “float all boats”, not economic growth as such.


  1. “…current governments are run for the benefit of the plutocracy…”

    So is there a realistic alternative? You seem to be pining for the style of government that dominated from 1945-1980. It sounds like Australia went through a similar evolution as the USA (correct me if I’m wrong). Perhaps the shift was more pronounced in Australia.

    I guess the question is why the government abandoned those policies. Was it the emergence of bad ideology? Was it a conspiracy of plutocrats that took control of the state? Was it greed? I don’t think they really explain things. The big question is whether the post-war system was sustainable.

    Your memory is longer than mine, but from what I’ve heard of the 1970s, the economic system was demonstrably unsustainable and that unsustainable drove the Reagan era reforms.

    I think political arrangement was likewise unsustainable — the state (at least in the USA and Europe) was always a plutocracy, but the plutocrats paid more attention to the welfare of the masses in the post-war era. This conscientiousness was driven by the exceptional situation of the era — the memory of the Great Depression and the electoral success of the socialists; the ideological competition with the USSR, and the rapid expansion of the market for American goods. I don’t see how everyday electoral politics is capable of making the elite watch out for everyone else.

    The narrative that your present above seems to imply that it’s just an ideological shift (among the electorate), and if the well-meaning masses (i.e. not the racists) once-again embrace a welfarist ideology again, everything will be fine. Is that the goal here?

    • No, the point I am making is that we made the economy – an abstraction born of accountancy – more important than the rights and welfare of real actual people about this time, and now Australia is reaping the fruits, rotten and poisoned as they are, of this shift in emphasis.

  2. I know next to nothing about the history of Australian politics, but I note that a lurch to the right occurred all across the Western world in the 70s so that the names we associate with this change in particular countries may not matter very much. In the U.S., for example, people talk about the Reagan revolution, but on key issues of political economics—deregulation, for example—Jimmy Carter’s administration showed the way. For that matter, the trend to a less progressive tax system began with Kennedy. To explain what happens, it is necessary to look at general causes that operate internationally. I can think of at least four:

    1. During periods of great economic expansion, it’s rational for the wealthy to pursue a rising-tide-raises-all-boats strategy. When the expansion ends, as it did in many countries in the 70s, the game changes to musical chairs. It makes more sense to concentrate on getting a bigger piece of the pie when the entire pie isn’t going to get that much bigger.

    2. The ideological potency of Communism dissipated long before the fall of the Soviet Union. The fizzling out of radicalism in the 60s meant that economic elites no longer had to worry about a challenge from below. Why not take more if you can?

    3. Mass armies gradually became obsolete. No state could afford to field properly trained and equipped armies on the scale of the World Wars or even Vietnam. That meant that state actors didn’t need the people as much as they once did. Formerly Tsars and Kaisers had to made compromises with populism to maintain military strength—even in the U.K., the expansion of the franchise was promised and delivered as a payoff for submitting to a universal draft. The end of the great wars was also the end of the age of democracy, i.e. the period during which the masses mattered to the powerful.

    4. Technological change altered the ratio of capital to labor. Certain highly trained workers became more valuable, but generic workers much less so. Just as the people have become less valuable as soldiers, they have become less valuable as workers. Exploited workers have leverage. A great part of modern humanity isn’t even exploited, hence the general sense of powerlessness.

    • I agree with all this. But Australia (and Canada) seemed to resist these merciless forces better than others. What we are now seeing is the culmination of what happened in the 80s even in social democracies.

    • Item 4 also involves the mobilization of labor in the “third world” countries. There was basically an infinite supply of scabs to break the unions in industrial countries, and this excess was sustainable as long as there were large pools of under-utilized labor in close proximity to industrial facilities (e.g. Mexican migrants to the USA; Chinese migrants to industrializing cities). Fortunately, this supply of under-utilized labor is being dried up, and we’ll never see another expansion of the capitalist workforce like what happened over the past 20 years

      • I think the mobilisation of cheap labor was the root cause for the decline in employment and the middle class in the west, simpliciter. And there will always be (relatively) cheap labor to exploit.

  3. Brian Brian

    Hi John,

    I admit that I wished Gillard had a bit of Keating in her last year. I remember (maybe I imagined it?) that Keating would get on Alan Jones or whoever’s show and give Jones and punters a blast of his withering assessments when they were gooses. I would’ve loved to have seen Gillard give Jones, and idiots who were spouting lies such as ‘she said there’d be no Carbon tax, but she’s got a carbon tax’ a good serve.

    Keating is lionized a bit for the Redfern speech I think. I didn’t like him at the time, but I was in the country, and the people I associated with were fairly ‘redneck’ as was I, so he was obviously the evil guy.

    I think you’re correct about labor selling out. Once the party of workers, now just another corporatized party of the big-wigs and moneyed.

    • In the sense that Labor is a less worse alternative to what we now have, yes, Gillard should have been more aggressive. But in the end it really doesn’t matter. All conservative do is what the “progressives” would have done in a longer time frame, that’s all.

      • Brian Brian

        Yeah, they don’t make progressives like they used to. If they ever did.

        • Oh they make progressives okay. They don’t make progressive parties. Any party will soon become the slave to vested interests under our present system.

  4. kelskye kelskye

    “Now Australian education is among the most expensive in the world, rivalling American costs of getting a degree.”
    One thing I’m curious is how the Australian system compares to others. I went through the university system about a decade ago, and for the most part it didn’t cost me anything at the time to get the degree. The main cost was student fees and textbooks. I did rack up a healthy HECS debt, which I’ve been paying off after entering the workforce, but at the time it was essentially an invisible cost. Even now it’s a few percent off my gross income, which was only noticeable when I first crossed the threshold.

    Though I was recently looking into doing a masters degree by correspondence, but the amount of debt I’d accumulate put me off. But, again, I have no idea how this really compares with the rest of the world.

      • Brian Brian

        Whatever you do, don’t do a masters by correspondence. I started one, got no support from faculty, just a standard ‘I understand your problem, mmm llal lalalala look! a distraction” and $2500 per semester per unit. A cash cow for the Uni. I dropped out after 3 units because of the workload with little guidance and no time because of newborn. The tax department has been on my back ever since. I earn enough to be taxed well, but barely enough to pay a mortgage, keep wife better half and two kids plus sundry pets fed out in the outer burbs. I really should not have started that masters. It’s been a problem and will be for a while longer paying it off, and for nothing…/end rant!!!

        • kelskye kelskye

          Thanks for sharing that, Brian. I was thinking of the correspondence route, partly because I work fulltime and would be using my spare time to study, and partly because it was my old university. You’re confirming some of the fears I had about signing up.

      • kelskye kelskye

        Thanks for that, John. Puts what I survived on (~$9000 a year for four years, plus 20K HECS debt) into some perspective.

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