A Man Of His Time


Somewhere I read that you know you’ve succeeded in politics, not when you’ve changed your own side but when you’ve changed your opponents.

If the results of the US elections — both presidential and congressional — were not enough to convince you of the swing to the left across the Western economies, look no further than last week’s speech to the National Press Club by the federal Opposition leader, Malcolm Turnbull.

Turnbull, a former merchant banker who pocketed around $50 million in a golden handshake from Goldman Sachs, now believes in taming the obscene excess of corporate executives, by giving shareholders a binding veto over their pay packages. The Prime Minister, Kevin Rudd, had earlier blasted corporate bosses for their excess.

The real test of Turnbull’s commitment to reining in the free-for-all on mahogany row is, of course, whether he is willing to support what all sensible governments did during the most sustained economic boom in modern history — from the post-war years to the oil shock of the early 1970s — and tax the mega-rich more effectively. But in the meantime, his willingness to countenance some fetters on corporate greed shows just how far the centre of politics has shifted to the left. The public has long been repulsed by the self-serving nature of corporate chieftains, but popular revulsion has reached new heights, with 92 per cent demanding government controls on CEO pay.

And yet to suggest, as I did precisely a year ago that we needed to empower shareholders against CEO greed, and that the economic rationalist experiment had faltered, was to engage in heresy.

The realists on the right hate but concede this sea change. Oliver Marc Hartwich, of the Centre for Independent Studies, shudders at the political shift and fears its consequences for his side, writing in the Sydney Morning Herald recently: "Big government is back on the political stage with a vengeance … Nowadays, one can argue for a cap on executive pay, for a ban on short-selling, and for nationalising banks and insurance companies, and still feel part of the political mainstream. Two or three years ago, such proposals would have only been heard on the fringes of the political spectrum."

The Wall Street Journal‘s editorial board, the incubator and marketeer of free market fundamentalism, acknowledged before the election what an Obama/Democratic sweep would mean for the political landscape. The Journal trembled in anticipation of "one of the most profound political and ideological shifts in US history. Liberals [the US term for the centre-left]would dominate the entire government in a way they haven’t since 1965, or 1933. In other words, the election would mark the restoration of the activist government that fell out of public favour in the 1970s."

But others on the right are in denial, with one columnist citing a throwaway line from the authoritative US researcher Andrew Kohut that there was no evidence of a swing to the left in the US election results. The problem with relying on Kohut’s analysis is that he was referring to the results of ballot initiatives in which the anti-gay marriage proponents won narrow victories. In the same breath Kohut says: "On the other hand, we see in the exit polls more people saying they want an activist government."

I had always been taught that an activist, interventionist government was a hallmark of the left. But if Kohut, and the conservatives who cling to his analysis, want to redefine progressive taxation, higher minimum wages, universal healthcare, the partial nationalisation of US banks, Keynesian deficit spending and caps on executive excess as "centrist", that’s a healthy development in politics. As Hartwich has conceded — with a grimace, no doubt — scepticism of free markets is now a mainstream position.

I have always considered same-sex marriage, abortion-on-demand, drug law reform and liberal attitudes to crime, not left-wing but libertarian causes. Just as I have long predicted a swing away from libertarian economics, I have never posited a swing towards libertarian social policy. However desirable it may be for many progressives to permit same-sex marriage as a basic equity issue, it would not change the fundamental power relationship in the world today, which is, to put it bluntly, about guns and money. A socially libertarian society can be as unequal and unjust as a neoliberal, neo conservative world.

The results in the California ballot initiatives are instructive. A ban on same-sex marriage was carried narrowly, 52 to 48 per cent, but voters endorsed big-spending public works projects to build high-speed rail between Los Angeles and San Francisco and expand children’s healthcare.

In California, where the car has long been king and where the citizens’ tax revolt began in the 1970s, the public is endorsing "big guv’ment".

These developments suggest that traditional progressives who believe in the historic mission of challenging concentrations of economic and political power (I cannot emphasise that enough) are pushing against an open door. They not only have public opinion on their side, but, if Malcolm Turnbull’s change of heart is any indication, they also have their opponents on their side.

One of John Howard’s greatest achievements — in the political, not public policy, sense — was realised not when he was in government but when he was in opposition. In the mid 1980s, as Bob Hawke and Paul Keating shed much traditional Labor policy on public ownership and redistributive tax, and careered toward the centre, Howard chose not meet them there, not to contest the same ground, but to drag the political debate to the right. He was remarkably successful. By the early 1990s, Labor was dancing to Howard’s signature tune of liberalising industrial relations.

When Howard said, at his lowest ebb, "the times will suit me", he knew that when the free-market tide initiated by Ronald Reagan and Margaret Thatcher finally lapped at Australia’s shores, he would be there to catch the wave.

This is the one lesson Kevin Rudd and federal Labor should learn from the man they vanquished.

Cometh the hour, cometh the man.

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