A response to @pollytics

I recently read Possum Comitatus’ latest post, “Australian Exceptionalism”. And it’s been troubling me for a few days now, which must be the sign of a good post. Possum is a far more skilled blogger than I so I’ll leave it to the marsupial to give you the guts of the argument that Australia is:

[a] low tax nation with high quality, public funded institutions. A low debt nation with world leading human development and infrastructure. The wealthiest nation in the world where even though our rich get richer, our poor have income growth so extraordinary that it increases at a faster rate than the rich expect to experience anywhere else in the world but Australia. A nation where we enjoy the highest minimum wages in the world.

The first claim is that according to the major indicators of economic success Australia is pretty freakin’ awesome. We are the land of milk and honey (and gold and iron ore).

The second limb of Possum’s argument is that this is no mere accident but due to “30 years of hard, tedious, extraordinarily difficult policy work that far, far too many of us now either take completely for granted, or have simply forgotten about”. For Possum there is one overriding political implication: “we’ve actually solved most of the big problems that other nations are still grappling with”. But this is not utopia, and we are not angels (well I know I’m not at least).

Possum is a philosophical liberal, and he is viewing Australia through such a framework. For Possum, the growing gap between the top 10 percentile and the bottom 10 percentile are not a problem. The same policies that have caused this have also apparently increased the gross wealth of the least well-off. This is a clear application of Rawls’ Difference Principle (see A Theory of Justice (1971)) whereby inequality is justified where it advantages the poorest. This is one way political liberalism justifies the private and unequal control of capital. Inequality allows the cream to rise to the top and benefit everyone. Looking at prosperity from such a liberal perspective leads one to emphasize the role of the individual. Possum locates the cause of world-beating prosperity to 30 years of hard policy work, or in other words the leadership of Hawke/Keating/Howard and a narrow group of policy wonks.

Sitting in this garden of plenty our liberal Possum is equally mystified by the rise of a Right seemingly decoupled from reality, and the continued bleating of the broad Left. As Zizek wrote “[t]he problem with liberalism is that it cannot stand on its own”. Rather it relies on a network of collective values it corrodes as it develops. The result of 30 years of liberal economic policy application is the emergence of an unhinged fundamentalist Right, and a Left resistance to this corrosion. That or we are just a nation of irrational whingers.

But this post is not just a political critique of Possum’s empirical economic analysis. Rather, it a critique of how Possum’s liberal analysis has led this marsupial to miss three giant elephants sitting in our room and having tea together.

(1) Private debt – Australia is chocked up with private debt. But the liberal dichotomy between public/private means that for Possum this is not really an issue. In response to a comment Possum wrote,  “I didn’t mention private debt as I’m talking about public policy”. Ignoring at once (a) how deliberate public policy choices have contributed to rising underlying asset prices and levels of private debt (capital gains tax anyone?), and (b) how quickly a seemingly private problem becomes a public problem when it affects the right people. Remember that thing recently when the private debts of a bunch of American mortgage holders became an issue that threatened the very existence of everything? And then that austerity thing happened. This kind of matters when the wealth you are extolling is partially dependent on land value.

(2) Equality matters, there I said it and I’m not going to apologise for it. Once a society gets to a certain level of wealth it’s no longer a question about gross domestic product but the quality of wealth distribution that is the prime determinant of health, well-being and quality of life (you know all that stuff that economics is supposed to serve). Australia has become more unequal over the last 30 years and it causes anxiety, anger and a political backlash.

(3) Our ecological impact. As Marx wrote, quoting somebody else, “labour is the father of material wealth, the earth is its mother” (Capital, Volume 1). The natural world is not that great big never ending Other that we must strive to conquer. Rather, aside from our own labour it is the ultimate source of all our prosperity. Possum just kind of ignores all that. But we’re 20 million people on a continent full of riches, and we have a lot of what the rest of the world needs more and more. Congratuwelldone to us for so far not fucking that free kick up according to the major indicators of economic success. Any analysis of wealth though that ignores what getting the wealth did to the environment is cloistered in a bio-dome of unreality.

Yeah, in a narrow sense Possum is right, we’ve never been more loaded. But are we really prosperous or are we just preparing to put the gun to our collective head?

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10 thoughts on “A response to @pollytics

  1. Thank you for a more eloquent version of what I was thinking. On the topic of equality– it’s all about perception. In our market capitalist society we don’t demand equality, but we expect fairness. That sense of fairness has seen serious erosion recently. CEOs, corporate bigwigs, merchant bankers… have always made a bundle, but somehow it was thought they deserved it. That no longer necessarily holds true (for numerous reasons), and will be increasingly unpalatable if economic conditions worsen and the lower income earners inevitably feel the pointy end of a recession. Politicians of both major parties (as well as Possum) would be foolish simply to dismiss the Occupy protests.

  2. Godfrey, I love your tone. Would you mind doing a bit of a layman’s guide to corporatism vs capitalism? I saw Ron Paul take Michael Moore to task for (in Ron’s opinion) confusing the two. Both it seems have some serious bones to pick with Corporatism. While it’s (at least hopefully) a long way from where we are (but perhaps not), it is interesting to look at this development in the US: http://politicalvelcraft.org/2011/11/14/u-s-sheriffs-rise-up-against-federal-government-sheriff-threatens-feds-with-swat-team/. Will the US self-implode into tribalisation or are they seeking a world war to galvanise the population. I don’t know whether I’m making sense, but I am seeking a clear understanding of whether we are indeed travelling this badly.

    1. Hi Matt – my layman’s guide to corporatism vs capitalism is probably overly simple. It’s this – it’s a matter of degree. Both involve the use of state power to enforce the private control of capital. One is honest and overt about it. The other is not.

      1. lol, so you don’t think there’s a healthy balance? Like how do we ignore the role that mum and dad investor might have played? Or do you feel that they aren’t a major part of the problem?

        I guess it’s a pretty complex web

  3. There is some truth in both your Possums and your arguments but you are both burying your head in the sand (but in different ways).

    Basically your right Australia is incredibly lucky to be blessed with a lightly populated highly resourced country and hasn’t stuffed it up. You are also somewhat right about private debt. When the wheel turns Australia will be in a world of hurt.

    Now for where your wrong. Firstly Australia has done a sensational job of creating an equal society. I am not sure what more we could have done to promote equality with out substantially reducing our total wealth. More importantly apart from keeping the country lightly populated there is not much Australia can do to prevent us becoming more unequal. That is simply a fact of living in fast paced global environment.

    The situation with the environment is actually pretty similar. Our environment is pretty good. Although again its simply because we live in a lightly populated continent, again we got lucky.

    Australia really is the lucky country but there is no guarantee the luck will continue

    1. Interesting comments. If you would like to see some really quality information about Australia’s relative performance about creating an equal society, and how much the wealth creation/distribution trade-off really matters, I suggest you read “The Spirit Level”.

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