Abbott's Socialist Fantasy


"Let's be under no illusions; the carbon tax was socialism masquerading as environmentalism. That's what the carbon tax was," Prime Minister Tony Abbott told the Washington Post last week. He'll be glad then that Labor is considering returning to the capitalist coalface, with news today that they may support the repeal of the carbon tax.

Further from home, Forbes magazine reckons that German Chancellor Angela Merkel is the world’s second most powerful person. She entered politics after the fall of the Berlin wall as a champion of democratic reform and German unification. She was spokesperson for the Democratic Awakening political party (which later merged with the Christian Democrats).

She is the centre-right leader of the world’s fourth largest economy, and understands socialism better than most — she grew up in East Germany when that country was still communist. Given that background, Abbott might be surprised to learn that Merkel is actually a raging pinko.

Yes, the German chancellor must be a socialist, despite her experience in transforming Germany into one of the world’s most dynamic and open economies, because she believes that polluters — rather than taxpayers — should pay for the damage they create. That is, she favours placing a price on greenhouse gas pollution.

If we look hard enough, it seems that the halls of power of many of the world’s great polities are infested with socialist insurgents.

Take David Cameron, for instance. The grandson of a Baronet and child of a millionaire City of London stockbroker and consultant, Cameron is a graduate of Eton College who studied politics and economics at Oxford. He is now the conservative Prime Minister of the United Kingdom of Great Britain and Northern Ireland — and is an agent of creeping Marxism.

For instance, just listen to this Trotskyist agitprop from the British PM:

"If you want to get control of global emissions, if you want to deal with this issue, then the market is an effective way of doing that. It's often not enough on its own. There are changes in rules and regulations you also need to make."

What about his Chancellor of the Exchequer, George Osbourne, a man pilloried by the left for overseeing the UK’s brutal program of financial austerity? The man who slashed and burned welfare programs and public sector pay, and is a prominent proponent of fracking and environmental deregulation? Just a regular Maxim Gorky.

Finally, it is worth considering the fact that the World Bank, the IMF, and the OECD have all endorsed pricing pollution. These are three of the world’s great conservative financial institutions, famed for promoting deregulation as a means to economic growth, and are all renowned socialists.

Angel Gurria, for instance, Secretary-General of the OECD, recently gave an extended lecture at the London School of Economics laying out the case for pricing pollution. Just a fortnight ago, Jim Yong Kim, president of the World Bank, and Christine Lagarde, managing director of the International Monetary Fund, gave a joint interview in which they both endorsed the principle of market-based trading mechanisms with caps on pollution.

Whatever one’s concerns may be around Australia’s existing climate change policies, socialism cannot be one of them. In any universe that hadn’t seen years of relentless politicisation of this issue, a market-based system of pollution permits, with the dividend returned to "trade-exposed" industries and the most vulnerable Australians would be a perfect Coalition policy.

Markets respond to price signals. They would accept the orthodoxy that, excepting certain well-known market failures, the distributed intelligence of markets should be trusted to determine how a good (in this case the right to pollute) should be distributed through the economy. That is, to use the common phrase, they would accept that the government should not involve itself in "picking winners", as is actually the case in centrally planned socialist economies.

The idea that we should price greenhouse gas pollution flows simply from these ideas. The mechanism is simple: government determines the amount of pollution that will be permitted in a given period of time. This quantity is the "cap" — the limit to permissible pollution, economy-wide. Permits to generate pollution up to the capped quantity are then auctioned by the government. These permits are tradable. A system of penalties for companies that pollute without purchasing appropriate permits is introduced, along with certain complementing enforcement mechanisms.

Here’s another type of socialist action by a government. In Venezuela, the government decided that to alleviate poverty and hunger among poorer sectors of the nation, they would subsidise particular crops.

That is, farmers who volunteered to grow white and yellow corn, soy, sorghum, and sugar cane receive taxpayers’ dollars to encourage them to do so. One could even argue that the government of Venezuela took "direct action" to change the behaviour of that country’s farmers.

But substitute "greenhouse gas reduction", for "poverty", and "companies" for "crops", and you have captured — to a pretty close approximation — much of the essence of the Coalition’s greenhouse gas pollution reduction proposal, the Emissions Reduction Fund.

Perhaps comparing Venezuelan agriculture policy with Australian climate policy is a stretch. But far less so than to suggest to one of the world’s leading newspapers that by placing a cap on pollution levels and establishing trading mechanisms we are regressing to socialist dystopia.

Direct Action is a cronyistic and centrally planned policy, that will pay polluters to reduce emissions, instead of costing them if they don't. Where did Abbott get the inspiration for such a broken idea? Perhaps at — the website of the Revolutionary Socialist Party of Australia.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.