August 2016


The message was clear

By Richard Denniss
Brexit, Trump and the federal election show how the old categories of left and right are crumbling

Pauline Hanson is back in parliament, the United Kingdom has voted to leave the European Union, Donald Trump wants to build a wall along the United States’ border with Mexico, and the neoliberal agenda is failing badly at ballot boxes around the Western world.

The old world order of the Washington Consensus has broken apart more quickly than a new one has been built, but the lack of a clear path forward in no way diminishes the significance of the collapse in public support for free trade, trickle-down economics and the privatisation of essential services. The new “right-wing” populists are hostile to all that the neoliberals held dear.

The extent of the shift in public sentiment has been concealed by the chaos of new parties and new paradigms, which are being blamed, or credited, for the tumult. But it is not democracy that is in chaos, but rather the futile attempt to cram rapidly changing political alignments into the centuries-old categories of left and right.

Take Brexit, for example. One of the Leave campaign’s most prominent voices, Nigel Farage, best known for his anti-immigrant politics, shamelessly argued that the UK’s financial contribution to the EU should be spent instead on improving publicly funded health care. This “left-wing” priority resonated across the political spectrum, and the political establishment spectacularly underestimated the potency of the issue. It was of symbolic importance, as was Britain’s migration program. The population voted for the promise of a national government that protected its people as well as its borders.

Was Brexit a win for the “conservative right” on the issue of sovereignty, or was it a loss for the “libertarian right” on free trade?

Was Brexit a loss for the “post-material left” and its humanist European project, or was it a win for the “working-class left” in its pursuit of a more protectionist approach to industry policy and better funding for the National Health Service?

No wonder the world struggled to interpret the fears and desires of UK citizens.

Here in Australia, the political class, strapped into the left–right straightjacket, found its recent election result equally difficult to decode, despite the clear swing away from neoliberalism and towards government intervention. The prevailing logic might be that because Pauline Hanson is no Green she must be right wing, but that makes about as much sense as suggesting that if you don’t drink lattes you must like Earl Grey tea.

Since election night, Senator Cory Bernardi has argued that the million-plus conservative voters who abandoned the Coalition and parked their vote with “right-wing micros” were pleading for Malcolm Turnbull to heed the wisdom of the conservatives in his own party. Let’s leave aside the fact that a large proportion of those voters subsequently preferenced the ALP ahead of the Coalition, and that Nick Xenophon identifies as centrist. The problem with Bernardi’s claim is that the senators who are stealing his party’s votes are clearly hostile to core neoliberal tenets. They oppose big-business tax cuts, they are sceptical of free-trade agreements, and they strongly support Medicare and other public services. Others oppose fracking (Hanson) and live sheep and cattle exports (Derryn Hinch), and want to protect Australian manufacturing (Xenophon).

Many in the media were critical of the election campaign, perhaps because the number of policy “announceables” did not expand to accommodate the eight-week duration. But while the lack of daily policy trinkets to scrutinise might have given journalists less to talk about, it likely gave voters more time to think about the big choices they faced, which were as clear as they were significant.

It has been a long time since Australia last saw an election campaign revolve around such conflicting agendas. While Australian elections are always willing contests, the ferocity of the attack ads has often masked the similarities of the policies on offer. Back in 2007 Kevin Rudd proudly depicted himself as John Howard the Younger. He even criticised the arch conservative for being fiscally irresponsible. This year Bill Shorten had a different strategy, and the former union leader who wanted to collect more tax and spend more on services was no small target.

Shorten’s great success was to define the ground on which the campaign would be fought. He spent eight weeks asking voters whether they would rather give a tax cut to businesses or spend the money on public health. The Coalition just won the election and completely lost the debate. The one substantial policy they proposed, big tax cuts for big business, was rejected by voters and will be rejected by the Senate. Not even the business community seems determined to keep fighting for it. The public are clearly nervous about their jobs and their health care, but they clearly don’t trust trickle-down economics to protect either of those things.

Greens leader Richard Di Natale has described the ALP and the Coalition as the Coles and Woolworths of Australian politics. It’s a good line, but like the labels of left and right it conceals as much as it reveals. New fights about protectionism and sovereignty now roam freely across the old battlelines. Neoliberalism is simultaneously under attack from a “left-wing” major party and “right-wing” micros. The “broad church” of the Coalition seems to have no idea how to respond. As its members are assailed on multiple fronts they can’t even agree on who is friend and who is foe.

The Coalition has always found it difficult to explain why “control of our borders” applies only to asylum seekers and not to the regulatory standards of the products that come into Australia under free-trade agreements. The same cannot be said for the protectionists like Hanson, Xenophon and Jacqui Lambie, whose views on trade and industry policy align far more closely with those of the Greens and the left of the ALP than with those of the Coalition.

John Howard, a long-term supporter of Brexit, described the EU as a “fundamentally flawed concept” and “an affront to the sovereignty of its member countries”, a view shared by many Australian conservatives. Writing for the Institute of Public Affairs, the home of neoliberalism in Australia, Georgina Downer, an aspiring Liberal politician and the daughter of Australia’s high commissioner to the UK, opined:

Australia, as a former British colony, has inherited and developed the very best of Britain. The English language, British institutions, the values of Western Civilization – the rule of law, personal liberty and representative government – and the common law. The decline of the British nation state and the sovereignty of its Parliament under EU overlords should be something that we, in Australia, mourn.

But while Howard and Downer echo the refrain of their conservative counterparts in the UK, on closer examination their concern for the primacy of national parliaments seems as sincere as the Brexiteers’ concern for NHS funding.

Within days of the vote to leave Europe, conservatives in the UK were heralding the newly improved prospect for negotiating a free-trade agreement with China – now that the UK had been freed from the human-rights obligations that accompanied its EU membership. What better way to show who is in charge of England’s laws than to negotiate away consumer and environmental protections with China?

The same contradiction is evident in Australia. Conservatives are dismissive of calls by the United Nations to abide by international laws about asylum seekers, yet they are deferential to demands by the World Trade Organization to accept subsidised steel dumped into our domestic market.

At its heart, this inconsistent concern with sovereignty simply reflects which groups are strengthened by international treaties and which are weakened. As a rule, conservatives like trade and investment deals that weaken the rights of Australian consumers and workers, and they dislike treaties and multilateral groupings – such as the UN and the EU – that reinforce human rights and environmental protections. John Howard urged the Brits to Brexit and then, in the same interview, commended the opportunity for the UK to negotiate new free-trade agreements with its former EU partners.

Perhaps the clearest example of the transience of conservative concern regarding sovereignty is the investor-state dispute settlement (ISDS) clauses included in agreements such as the Trans-Pacific Partnership (TPP). ISDS clauses allow multinational companies to sue nation-states for damages if they have the temerity to change their national laws in ways that might harm company profits. In the words of Professor Gus Van Harten of Canada’s York University, “[The TPP] would expand the transfer of power to ISDS arbitrators from legislatures, governments, and courts. The arbitrators would not be accountable like a legislature. They would not be capable of regulating like a government. They would not be independent or fair like a court.” Yet the silence of conservatives regarding the impact of ISDS clauses on our sovereignty is deafening.

Voters in Australia, the UK and the US want to feel secure in their jobs, to feel supported by a social safety net, and to feel part of a cohesive society. They want a government to honour the contract they signed decades ago. These people have worked hard, paid their taxes and obeyed the law, and they want something in return, when it’s needed.

Whether they are too old to feel agile, too poor to see a $100,000 degree as an investment, or just scared they might lose their job when their factory moves offshore, the voters who are fleeing the established political parties want assurance that basic government services will be there to protect their health and welfare.

Like the difficulty in placing voters on a left–right spectrum, the public disengagement with politics conceals the growing anger many feel towards those politicians who seek to ignore their plight or blame them for it.

Many of these voters have been happy to support parties who blamed refugees for the low wages and the difficulty of seeing a doctor in regional Australia. For 15 years, immigration and terrorism have been used to distract some voters from the fact that it was neoliberalism that was undermining their way of life. But this tactic is beginning to backfire on the Coalition, who once told us that asylum seekers threw their children overboard and now complain about scare campaigns relating to health.

Along with many Greens and ALP voters, there is now an army of former Coalition voters who have no faith that more tax cuts, more free-trade agreements and more privatisation will make them safe or happy. They don’t just want protection from terrorists, and they don’t just want protection for the manufacturing industry. They want protection from unemployment, illness and poverty.

Donald Trump, Nigel Farage and Pauline Hanson are all selling this new, much broader, form of protectionism to an eager audience. The fact that none of these interlopers can deliver on their promise doesn’t detract from the political significance of the neo-protectionist wave they are surfing.

There is no doubt that nationalism and racism are central to the appeal of many in the current crop of populists, but racism alone does not explain what is going on, and pandering to it would not solve the material problems that voters are demanding be addressed. In the long run, any political movement that confuses these growing demands for protection with support for more trickle-down tax and trade policies is doomed.

Australia is one of the richest countries in the world and we live at the richest point in world history, and yet we are regularly told that we cannot afford to provide the kind of government services that our parents took for granted.

Political debate has been dominated for decades by the belief that maximising the rate of economic growth is the best way to build a good society. But most voters, having spent decades immersed in neoliberal language, understand that there is a trade-off between risk and return. Most understand that it is the riskiest investments that often pay the highest dividends. Most investors, and most voters, are willing to accept lower returns if it means greater stability.

The first major party to, first, admit that the singular pursuit of rapid economic growth might place many of its citizens at greater risk and, second, offer a lot more security in exchange for slightly slower growth could redefine modern politics.

Few families would risk the health of one child to boost the earning potential of another, so why pursue policies that do exactly that to whole communities? The National Party believes we should look after regional communities. Does that make it left wing or right wing?

Old fights between labour and capital have not gone away, but the old labels of left and right have become far less helpful to the commentators trying to keep score.

Richard Denniss
Richard Denniss is the chief economist at the Australia Institute.

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