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Globalization and the Decline of Australian Protectionism

  
 
Jack Fear
00:42 / 22.08.01
An interesting essay on globalization and its discontents with attention to Australia—a country largely thought of (here in the States, at least) as a model first-world economy in the Eastern hemisphere—as simply Texas with a koala or two. But the history involved—a history of which I am admittedly woefully ignorant—means the real picture's a bit more complicated than that, and globalization turns out not to be just a third-world issue after all... quote: [T]he globalization debate is anything but abstract in Australia. In the 1980s, this country inhabited by just 19 million souls made a profound decision to open itself to the rip tides of the world economy.... It's possible to know the verdict here on globalization. Most Australians have accepted it in broad outlines. That is why neither of the two major parties is proposing to throw up protectionist walls. But many in this robustly egalitarian society are troubled by the uncertainties the new economic order has introduced into their lives. ...

Historically, Australia was one of the most protectionist countries in the world - and proud of how it innovated on an old form. Under the terms of what writer Paul Kelly has called ''the Australian Settlement,'' industrial leaders in search of protection created social peace with a militant working class by creating a system of ''protection all around.''

The Australian model consciously linked the interests of business and workers. Protection, wrote the historian Stuart Macintyre, ''was available only to employers who provided `fair and reasonable' wages and working conditions.'' In many ways the model worked well. It created a hybrid capitalist system that made economic equality a hallmark and home ownership widespread. Guarantees of work that paid well served for some time as a partial substitute for the welfare state.

But while Australians were generally well off, the country failed to enjoy the growth rates of other wealthy economies. In a famous speech in the mid-1980s, Labor's Keating warned that without economic reform, Australia would become ''a third-rate economy'' and ''a banana republic.''

Hawke and Keating thus tore down protectionist barriers, curbs on foreign investment and foreign banks, and let the world financial markets determine the value of the Australian dollar. Within limits, it was deregulation all around.

On balance, the new system has worked and the economy has grown. Australia's conservatives - they are led, just to confuse Americans, by the Liberal Party - took power under Prime Minister John Howard in 1996 and are, if anything, more committed to market reform than Labor. Howard's great innovation was a goods and services tax, known as the GST, which sought to move taxes away from income.

It is still controversial, though some form of it is likely to survive a Labor victory. What's interesting now is that Labor, the initial engine of economic change, may return to power because of the public's uneasiness with the fruits of change.

''We're positioned as the people who want to continue the economic restructuring,'' says Peter Costello, the nation's treasurer, who is heavily touted as the future leader of the Liberal Party, ''and Labor is positioned as the party that wants something of a pause.''

Kim Beazley, the Labor Party leader who will become prime minister if his party wins elections likely to be held in late November, still supports the broad Hawke-Keating legacy. But he says Labor's job is to address those who haven't benefited from it.

Voters most taken up in ''the backlash against modernization,'' he says, are flowing to third parties, including One Nation, a group Pat Buchanan would find congenial. But a larger group, he says, ''are the people who have missed out as a product of the change in Australia's economy. They're not actually backlashing. They're asking: `What about us?'''

Few write off Howard, a politician who has spent a political lifetime upending all who dared underestimate him. But Labor leads in the polls. It was buoyed this weekend by an unprecedented showing and a 9 percent swing its way in a regional election in Australia's Northern Territory.

And however the election comes out, the central importance of Beazley's ''What about us?'' constituency defines the state of globalization politics in the democracies.

Voters don't want to stop the world so they can get off. They want some help so they can hang on.Interesting stuff. if a necessarily superficial overview for a US audience...

Australian contingent: fill in between the lines. What was life like under the "Australian Settlement"? It sounds something like the cradle-to-grave care touted by Scandinavian socialism, with a spin of Japanese-style, I guess you'd call it "corporate socialisms"—guaranteed lifetime employment and such. Accurate? (Maybe I should be asking your parents, instead of you )

What sort of changes have been wrought by the opening of the markets; the usual greater division between rich and poor, I'll wager, and a spike in homelessness, too: but any changes in societal attitudes, the erosion of the sense of community obligationseen under Thatcher and Reagan in the 1980s? Is Australian society as "robustly egalitarian" as all that? How "militant" is the working class? Where do you fall on these issues?
 
 
the Fool
04:24 / 23.08.01
quote:Originally posted by Jack Fear:
(Maybe I should be asking your parents, instead of you )


Actually thats pretty true. I grew up in the newly deregulated world so I can't really speak for what it was like before.

The union movement is quite militant. More militant when Labour gets into power. Which is odd, but understandable. When Labour is in power (our moderate left wing-ish major party) we usually get increased amounts of industrial action and strikes. Mainly because the ALP has a lot of ties to the unions and so has more sympathy for their causes. However this doesn't win much sympathy with the electorate, who often see this as weak, often ends with a change of government if unions get too cocky.

More later, I'm real tired. Hard putting big posts together.

Surely this is up Bananapant's alley? Mr Bananapants? Where are you?
 
 
Jackie Susann
22:09 / 24.08.01
The unions were more militant under Labour because the Libs brought in really restrictive Industrial Relations laws when they took office. Union membership is declining (globally), but the bigger unions are still players in Aust politics.

Generally, yeah, I'm too young to remember the good ol' days (I think there are some serious rose-coloured glasses in the article's account of em though). As best as I can tell, they were less like any sort of socialism (why do americans think everything that's not exactly like their system is socialism?) than a variation of the New Deal for a smaller and less economically/ militarily powerful nation. It was tightly connected to racist immigration policies.

The main political change with the lapse of protectionism (alongside the obvious fucking over of everyone-but-the-rich) was the creation of an intesely disillusioned bloc of older Labour voters who've formed a big chunk of the constituency for neo-populist right/racist politics (Pauline Hanson's One Nation Party).
 
 
Cavatina
10:42 / 26.08.01
The term 'Australian settlement' appears to be one coined by Paul Kelly himself as part of gaining some political capital for the Right - it's not clear to me whether he's talking about the 80's, or whether he's talking about the way Australia has put together its own way of doing things since Federation. If he means the 80's he's referring to what it was like at the time of 'the Accord', which was a manifestation of that process by which, in the post-1945 boom, employers and the ruling class came to terms with the labour movement. The New Right resented what they saw as compromises and the Hawke-Keating government (disastrously) stole their some of their clothes by deregulating banking and international transactions and lowering protection. The Accord aimed at keeping industrial peace in terms of wages and conditions, but interest rates were very high and this began to undermine home ownership and the prosperity of lower and middling groups. Corporate and public downsizing was the beginning of the rot.

The process of deregulation has led to the wholesale selling off of the few private assets which were still Australian-owned and large proportions of the public infrastructure. The latter sell-off has been accompanied by rising consumer prices rather than the falling prices promised by proponents. So yes, the gap between the irresponsible rich and the poor has widened immensely, and homelessness has risen. People do want the rot to stop. They are under no illusions about globalization.

However, Pauline Hanson & her One Nation Party are but an overblown shadow. The fact is that they got 917 votes at last week's election in the Northern Territory (one of their alleged heartlands) compared to 7401 in the previous NT election. If people are turning to a third party, it's the Democrats or the Greens. In WA the Green vote (preferences) determined the election, not One Nation. Part of Australia's 'settlement' is compulsory voting; so these results are a more reliable indicator than they would be in some countries.
 
 
agapanthus
11:06 / 26.08.01
I'm new to this thing, so please excuse my lack of posting ettiquette . . .

Jack,thanks for posting this quote from what is a cursory, if not fairly accurate broad-brush stroke account of recent Australian history. Below, while not exactly being a very focussed response to the questions you pose, might give you some sense of aspects of Australia and its recent history, through my particular glasses . . . ramble on!!!

'The Australian Settlement', that Rupert Murdoch's man, Paul Kelly, alludes to is a fair summation of a fairly strong current in industrial relations up to the mid 1980s.
However, maybe a bit of background first:
(albeit, with my rather limited knowledge)
In a referendum, recently, Australians voted against a form of republic that would've moved the head of state from performing a largely ceremonial role, in the name of the Queen of the UK, to performing the same role in the name of parliament/the Australian Constitution, where parliament would've elected the 'lame duck' President.

Why the vote against? Conservative fear of severing links to Anglo-traditions, and the more democratic-republican resentment at having no direct vote for a President.What could be seen as split along a fundamental social schism in Australia: British vs Irish Australians . . .

Despite globalisation ("Friends" was the highest rating show on a week to week basis for a number of years, I did teacher training at a high-school where students wore Nike-swoosh ear rings)many Australians remain wedded to 2 core social allegiances: Irish/working class/catholic and Anglo/middle to ruling class/Protestant.
This core antagonism and 'dialectic' in Australian society, while certainly now only one of many, polarised and drove Australian social, industrial and political relations up until the Baby Boomer/affluence politics of the 70s.

From 1949, after 8 years of Labor Party government, a new political party - the Liberal Party - took power under the Prime Ministership of Robert Menzies for 17 years.
Menzies invoked the British Empire, the British traditions at every opportunity. While settled Australians struggled to accommodate Southern and Eastern European immigrants, Menzies demonized the Australian Labor Party as being pro-communist (ring a bell?), driving the Catholic, non-secular atheist, working class into the Democratic Labor Party (DLP). "The Split", as it has come to be known, in the ALP, gave the Liberal Party, 23 years of Government in Australia, based on the refusal of DLP members of parliament to vote with the ALP.
A period in which White-British/ Anglican church values held sway over the body politic, where resource rich Australian industry could literally trade "off the sheep's back", exchanging steel, wool, beef etc for goods not manufactured here. Menzies too, lived off the sheep's back:dutiful surburban family men, whose protestant work ethic supported by equally dutiful,latest stove and vacuum cleaner wives was reinforced by their parents' tales of the impact of the Great Depression, technocrats and entrepreneurs who feared the nexus of Asian/Communist hordes (a Japanese submarine entered Sydney Harbour in WWI), and was yet to be exposed to the affluence based libertarianism of Little Richard's scream, Hugh Hefner's urbane sexual philosophy and the call to Justice of the colonised (African Americans, Aborigines . . .).
Protected (ahh! back to the topic grasshopper), economically, socially and racially, behind the white picket fences of the growing suburbs, there certainly was, for many, an Australian Settlement . . . as long as you weren't: a woman with more ambition than to roast beef Wellington with three veg on a Sunday, an aboriginal ripped from your family of origin and placed on the door-step of god-fearing white folk, gay, lesbian, in search of any sort of cultural life beyond the monchrome, a Jew that the Germans didn't kill, different . . .

From this great slumber, of the 50s and 60s, arose a democratic socialist government, elected in all its groovyness, in 1972 - the ALP's great man: Gough Whitlam. After 23 years of conservative, forelock tugging (to both the US and UK), Australia elected a government in tune with the burgeoning global times: nationalist in a way that forstered national arts, rather than merely consuming British ideals of culture, and Hollywood and Californian dreams. As a friend of mine is fond of saying, " He brought sewerage to the western suburbs!" i.e. Whitlam provided basic services, in a 1st world sense, to the poorer citizens of the body politic. He promised and delivered fully government subsidised university education, free health care and withdrawal of Australian troops from Vietnam. He set in train a social revolution, that borrowed much from the democratic socialist models of Scandinavia. But he did nothing to remove protection - we could still ride on the sheep's back . . .
Economic management, or rather perceived economic mismanagement on the macro level, became the gantry on which his government, within 3 years, would be hung. This execution, much aided by Murdoch's press, was performed by the nominal head of state- the Queen's representative: John Kerr, the Governer General (who in theory, holds ultimate executive power in Australia, not withstanding the High Court and the Constitution)who called a general election, after dismissing this Labor Prime Minister from office, based on the senate's blocking of supply - the legisltive act that giave government the funds to administer the nation!!

The citizenry elected a Liberal government for an 8 year stretch, scared of the attacks that the ALP in its 3 year stretch, had 'made' on the growing security of white middle-class suburbia. It must be said that this Liberal Government, while antagonistic to trade unions, was liberal (in your sense of the word) in social policy. It continued universal free healthcare, free university education, and promoted 'multi-culturalism' -a supportive infrastructure designed to honour the cultual life-worlds that new migrants brought to Australia, rather than attempting to assimilate these new Australians.
And so, to the Hawke-Keating years 1983-1996:
Australia's answer to the Regan- Thatcher years. (sorry Jack, to take so long, but I am very slow to get to the point). Hawke and Keating were a strange double-act; Hawke was a Rhodes scholar everyman, who rose up through Australia's peak union body The ACTU (the Australian Council of Trade Unions) through his ability to sink piss and to broker deals, to seize the leadership of the ALP. Keating was a hard-nosed party-man with ambition to burn, a taste for self-education,French Empire clocks and imported Italian suits. Hawke kept industrial peace while Keating, as treasurer (vice-President in US terms), set about learning, 'correcting'and implementing what had been Whitlam's political failure: Macro-economic management. For god's sake! it was the 80s: MTV, sharemarket spivs, selling off public assets, opening up 'markets' to competition, the Thompson Twins, Bryan Adams, bank deregulation, credit cards, world music, . . .

Generally, there has been a consensus between the major political parties in Australia since the mid 1980s: the consumer is sovereign, let the fucking market decide!Where the major parties differ in Australia is on Social policy: the Liberal Party, elected in 1996 till the present, has retreated from the Republic, the Asianisation of Australian culture and on Aboriginal reconcilliation. There has been a return to insular racism, the white suburban picket fences of the 50s and 60s, where families of religious, British subjects bunker down and dream of sporting triumphs, and less complicated times. At the same time the current government has pursued the Regan-Thatcher project of rationalisation and free-marketeering, creating an increasingly angry and disenfranchised group of Australians who while living within the social world of the fifties, as promised by our current leader, and affirmed every day on the talk-back of our own Rush Limbaughs, live also in the world of the harsh winds of the global market.
In fact, in very broad terms there are probably two discernible groups not asleep with dreams of the promises, not yet kept, maybe never to be delivered, of the free market world: the 50s suburban, white Australians who want to roam cultural and geographic space as though their Britishness gaurantees them respect if not deference wherever they go, and those who consider themselves to be of the left, but have come to be so disillusioned with the official left's, the ALP's, lack of debate, vision and cynical presidential brand of politics,
that creates policy via talk-back radio response on one morning, that debates issues in the same terms and language as dubiously conducted opinion polls, based on questionable samples, in marginal electorates . . .

Jack, there are communities in the cities of Australia, some of them are web based. And the gap between rich and poor is certainly growing at present. Obviously, I don't think that the article you quote from tells parts of the story that are equally deserving of telling, and I barely think that my rambling above captures much more than my own confused versions of events, and much less coherence.

Anyway, hope all this is of some interest to you. Afterall you do come from the land of Bob Dylan . . ."Don't follow leaders/ watch your pawking meters."
Ag.
 
 
Jack Fear
12:30 / 26.08.01
Fascinating and informative. Thanks for the in-depth responses--I may have some follow-up questions once I've had some time to absorb all this...
 
 
Disco is My Class War
08:43 / 27.08.01
Thanks to Agarchy, 'cause I was gonna post something far less historically certain and detailed, but along the same lines.

As an aside, about the 'working-class' and unions, I'd disagree with the Fool in laying blame for the lack of organised, militant union 'leadership' at the door of a conservative government. It's true that Labor has a historical affiliation with unions and a fair industrial relations record before about 1983. As explained, deregulation and economic rationalist policies have eroded that affiliation. But one of the most intense radical 'right-wing' manouvres since the Howard government was elected has been the destruction of any industrial relations legislation: there are no award wages now, decreased benefits, huge amounts of casualisation and the growth of contracting as a basic employment structure. There's also a growing push towards legislation making striking illegal, and of course a real drop in 'industrial' work and more employment in hospitality, service industries, information and data processing etc—fields which are far newer and less regulated, and has a far less chance of being unionised to start with. So 'solidarity on the factory floor' is almost non-existent, because no-one takes joining a union for granted anymore.

And of course, unemployment is worsening, and people are being treated with less and less humanity when they're actually on the dole. (See http://beam.to/dolearmy for an example of the kind of 'action' that's taking place around those issues.)

I do remember the 70's, just. My parents were members of the Labor Party (the ALP) and had been absolutely evangelical Whitlamites. One of the most touted things that Whitlam did was to make tertiary education free; before that there had been sholarships for people who didn't have the funds; most of them were teaching scholarships, though, so you'd end up being a teacher yourself. My parents just scraped in with scholarships befor the Whitlam era. Now, I owe $17,000 for the privilege to learn stuff.
 
 
Graham the Happy Scum
14:11 / 29.08.01
The silly part is that Australia is now one of the lowest taxing nations in the OECD
(Not quite as low as the US, but getting there), and boy, is it showing particularly in the health and education sectors. (Not quite as bad as the US, but getting there.)

The Whitlam government was absolutely clueless about how to run the economy, and CIA conspiracy theories about the dismissal aside (not that there isn't some good evidence to those), it was basically this which sunk them in the post-Dismissal election.

Hawke/Keating were economic rationalists almost to the same degree as the present Coalition government. Hopefully the next ALP government will have a bit more balance. not that this is a sure thing yet, though the issues I mentioned, health and education, will get a good run in the election.

Oh, and hearing what Natasha Stott-Despoja's done to various Democrat staffers since she was elected leader, I've just about completely given up on them.
 
  
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