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The Third Way Is Still Alive

Could Corbynism come to Australia? Don’t count on it — neoliberalism runs deep in the country's Labor Party.

Labor Party leader Bill Shorten delivers a speech during the Australian Labor Party 2016 Federal Campaign Launch at the Joan Sutherland Performing Arts Centre on June 19, 2016 in Sydney, Australia. Lisa Maree Williams / Getty

In his recent Jacobin article, Osmond Chiu compares the Australian Labor Party (ALP) with its British counterpart, suggesting that the ALP’s right wing represents a bastion of Third Way social democracy. Correctly noting the danger of a resurgence of this failed approach, Chiu suggests that the ALP left represents an alternative. Not to put too fine a point on it, but we disagree.

Granted, the ALP and the British Labour Party are both labor parties. However, as labor parties go, the ALP is a geriatric with a drinking problem while British Labour is a healthy, open-minded, principled party with a bright future. Corbyn is the absolute boy. The ALP is absolutely beyond reasonable hope.

You could argue this wasn’t always the case. Either way, Osmond Chiu’s article “The Third Way Isn’t Dead Yet” doesn’t help us understand how the wheezing, morally vacuous old husk of a party that is the ALP got that way — let alone how we can make good on our shared desire to see the end of antipodean neoliberalism. Of course, in the spirit of solidarity, we wish Challenge Magazine — Chiu’s left-Labor faction magazine — the very best. If his strategy succeeds, we’ll see him in a local Labor branch. We will shout him a pint while we eat humble pie.

But we believe in an alternative (in our view, much more plausible) socialist strategy. To reply to Chiu, we will first look at Australian Labor’s “special way.” In our view, the only special thing about it is that Labor introduced neoliberalism in Australia when the conservatives could not. Second, we will dispute the viability of changing Australian Labor from within. As Camus said, we must imagine Sisyphus happy. But this doesn’t mean we should take on the Sisyphean task of reforming Australian Labor.

Australian Labor’s “Special” Way

It’s true that Australia has historically enjoyed a reputation as a “working man’s paradise.” If there is any one reason for this, it is not the ALP, but rather the fact that Australia was sent the dregs of the British aristocracy and the cream of the British lower classes. You had to be a truly inbred and hopeless aristocrat to be passed over for colonial service in one of the jewels of the imperial crown and instead sent to Australia. On the other hand, only the finest Fenians, Chartists, trade unionists, socialists, and republicans were sent here in chains — gifting Australia a rich tradition of class struggle and solidarity.

The foundation of the Australian Labor Party and the achievement of the first workers’ government in the world were indeed hard-fought triumphs. Yet these were not won without compromise. More often than not, the ALP moderated or undermined strikes and imposed industrial order on an otherwise militant labor movement. In the early twentieth century, support for White Australia, mandatory arbitration, and other anti-worker policies discredited the ALP and resulted in mass recruitment to the Industrial Workers of the World, and later, to the Communist Party of Australia, which was the largest Communist Party per capita in the Anglophone world.

Perhaps this will be regarded as ancient history. So, to understand the Australian Labor Party today, you have to begin with the constitutional coup that brought down the government of Gough Whitlam in 1975.

Following the defeat of the supply bill in both houses of parliament, Whitlam was sacked by the Queen’s representative in Australia, Governor General Sir John Kerr. Convention was cited to justify this, but the real reason was the elite’s resentment of Whitlam’s progressive, social-democratic legislative record.

The crisis provoked by this coup was probably as close to a revolution as Australia has ever come. In the 1970s, Australian union density was above 50 percent and the radical left was at its zenith, following the anti-Vietnam War movement. Whitlam’s advice to mass rallies of seething, angry workers was to “maintain the rage” until a new election. What should have been a general strike of epic proportions in defense of a democratic government instead became a demoralizing rout. We have still not recovered from that defeat. The emerging narrative discredited Australia’s most ambitious and effective reforming government as profligate and unstable. Thus, Malcolm Fraser, a millionaire grazier and Liberal Party leader, won power.

If there is one constant in the Australian Labor Party’s long and varied history, it is an unerring commitment to deriving the worst possible lesson from each and every defeat. Having also witnessed the toppling of the Allende government in Chile, the ALP decided that their mistake was not excessive caution, but excessive radicalism.

The ALP accepted Fraser’s victory. Fraser was, however, unable to push through austerity. This task fell to the ALP’s Bob Hawke and later, Paul Keating. Chiu concedes that Hawke introduced neoliberal measures, including privatization, currency deregulation, and the introduction of tuition fees. Yet this omits the most significant concessions to capital. The Prices and Incomes Accord proposed a trade-off: it asked unions to restrict their wage demands in return for a “social wage.” The result was the co-option of the union bureaucracy and wage stagnation, as promises of a rising social wage evaporated.

While promoting the Accord, Hawke upheld a ban on secondary boycotts and solidarity strikes introduced under Fraser. Worse, industrial action (the right to which had been won in practice during the 1960s) was restricted to “protected” bargaining periods occurring in union workplaces only every four years. Arbitration was once more made a mandatory precondition to strike action. These restrictions shifted power away from the shop floor and towards the union bureaucracy, giving them the illusion of strength while undermining their grassroots support, from which the power of every union stems. This incentivized loyalty to the ALP and ultimately, to neoliberalism.

Union bureaucrats, overawed by their seat at the table, conspired to undermine their own power. These same bureaucrats celebrated their newfound powerlessness as a triumph of sensible industrial policy. The most obsequious were rewarded with parliamentary careers.

Today, strikes must be approved by a secret ballot. A “yes” vote may be overturned by the judges of the Fair Work Commission, who lean strongly towards employers. The Hawke government had no compunction about suppressing illegal industrial action. The only two times that the armed forces have been used against strikers in Australia were under Labor governments: first in 1949, against Communist-led miners and secondly, in 1989, against pilots. The most radical union in the country, the Builders Laborers Federation, under nonaligned Communist leadership, resisted industrial compromise; for this, it was de-registered by the Hawke government and forced to amalgamate with the conservative miners, forestry, and electricity unions.

These facts explain the precipitous drop in union membership, from above 50 percent in the 1970s, to the 40 percent that Chiu cites in the early 1980s, to the 14 percent that he cites today. If wage improvements are won by strike action, it makes sense to join a union. If strikes are illegal but bargaining is mandatory, this empowers the union bureaucracy and promotes rank-and-file passivity. Thus, union density falls. The sole beneficiary of these reforms was Australia’s capitalist class, which has enjoyed decades of uninterrupted prosperity and growth in profits. Today, the only unions in Australia that have demonstrated a capacity to grow and score victories are those which are unafraid of militancy.

The ALP under Hawke and Keating paved the way for Australia’s most vicious conservative leader, John Howard, who came to power in 1996 amid deep bitterness towards Labor. Following his defeat in 2007, we saw three Labor prime ministers: Kevin Rudd, Julia Gillard, and Kevin Rudd. Each in turn (the second Kevin was the same as the first, albeit much shorter lived) pursued the familiar strategy known as triangulation. Rather than pursue a reformist vision, the party chased swinging voters while making itself a small target on other issues. This has meant that the federal ALP has lost the ability to lead or argue, let alone fight. In power it has proven singularly incapable of any kind of reform agenda, let alone one that might reverse dramatically growing inequality. Gough Whitlam achieved more in three years than the ALP achieved under three prime ministers.

Perhaps the biggest price of this strategy has been more than a decade of racism and inhumanity toward refugees.

Although mandatory detention of refugees was instituted by Labor in 1992, the Liberals bear most responsibility for the confected and xenophobic narrative that Australia is in danger of being swamped by refugees. The Labor Party capitulated and tailed this argument. This lent the narrative credibility. So, desperate to appeal to growing numbers of racist voters, the ALP began to compete with Liberals in a race to the bottom. In 2012, then-PM Julia Gillard reopened the offshore detention centres on Manus Island and Nauru. One recent consequence of this has been increasing numbers of refugee children suffering from traumatic withdrawal syndrome, as they are pushed to such depths of depression that they become catatonic. This is a cancer that rots the soul of the nation.

We grant that Labor politicians do not relish this cruelty, unlike their Liberal Party counterparts. But their failure is no simple lack of imagination or character — although these are in abundance. Just as it is necessary to explain, in materialist terms, why Tony Blair supported a war so obviously criminal and misguided, it is necessary to explain why the ALP has followed the Liberals down this path. The narrative we have presented so far supplies just such an explanation: having systematically disempowered their base, they have evacuated the political terrain. The ALP, since the 1980s, has sacrificed any ability to fight for or construct working-class hegemony. The typical Labor voter exists on a spectrum ranging from ashamed to mortified. With such a demoralized base and lacking the means or the understanding to turn this around, all that is left to the ALP is to continue pursuing the votes of right-wingers and racists. When they have managed to win power, it has been due to the depths of loathing for the Liberal Party and because the ALP pitches itself to the Business Council of Australia as a stable and responsible alternative government. Far from opposing this, the most prominent representative of the federal ALP left wing, Anthony Albanese, has advocated this approach more enthusiastically than the Right.

We do not oppose the idea that the ALP might be changed from within on moral grounds. The ALP has in its time been associated with depths of reprehensibility — as well as being home to generations of fighters and socialists. The same is true of the British Labour Party. But while the latter was taken over by Corbyn, this will not occur in the ALP. The historic narrative we have presented so far is half of the explanation for why not. What follows is the other half.

I Tried to Change Labor From Within and All I Got Was This Stupid T-Shirt

As prime ministers go, Whitlam was about the best we’ve had. It’s true, as rusted-on Trotskyists will remind you, that he was from the right wing of the party and built his career destroying the radical ALP Socialist left in Victoria. Even so. He introduced historic reforms that brought Australia into the twentieth century. The memory of Whitlam is something the Left in Australia should lay claim to, though not, of course, without a healthy dose of realism.

Whitlam isn’t coming back. Chiu’s hopes that the Labor left will lead the party towards a bright Corbynesque future are admirable but misplaced. His warning that a Labor victory will be hailed as a victory by the right wing of the world’s social-democratic parties and held up as a “viable, moderate, alternative model” is not. The former hope is undeniably desirable, the latter warning undeniably true.

Chiu’s reform wish list is a pretty good start. We can get on board with reversing privatization, re-funding social services, public investment in housing and infrastructure, and other measures to reverse inequality. We can also jump on the bandwagon of real action against climate change, reform of the banking system, re-empowering the unions, and media reform to combat monopolies. It’s a little concerning that Chiu overlooks the questions of refugees or aboriginal Australians — a silence characteristic of the Labor left — but we are willing to grant that this may have been an honest oversight. It must be hard to remember every item on a wish list so crowded and optimistic.

What Chiu fails to address, however, are the prospects for his vision emerging. As erstwhile dialecticians, we note that aims cannot be separated from circumstance, without being doomed to failure. So, we find ourselves in the strange position of asking a reformist to be realistic: after all, the implementation of a socialist agenda must be based on an analysis of the social structures and conflicts produced by the material conditions of society.

There are two problems with Chiu’s wish list. The first is that it is not shared — not even in part — by the most progressive representatives of the ALP left. The second is that for the Labor left to achieve the platform he optimistically spells out for them, the party would need to undergo a momentous internal change.

On the first point, the recently reelected Daniel Andrews state government in Victoria is a good case study. Victorians can rightfully celebrate the defeat of Matthew Guy, a Liberal candidate reminiscent of a Scorsese film character executed for snitching in the first half-hour. Guy led a campaign that revolved around law-and-order hysteria, anti-African and anti-migrant racism, and promises of deep cuts and privatization. The fact that he was resoundingly unpopular shows that Victoria is a progressive state.

It is true that Daniel Andrews is the most progressive premier in the country. It is also true that his first term is viewed favorably by a majority of the electorate — this is what led to his landslide victory. Yet, his left credentials deserve scrutiny. For example, he has brought in legislation strengthening renters’ rights, including restrictions on rent bidding, a cap on bonds, and guaranteeing the right to own pets and hang pictures on the walls, among other things. Yet, in the last decade, rents have grown at double the rate of an average household income. Seen in light of this harsh reality, token reforms are cosmetic at best and insulting at worst.

Indeed, despite a very healthy state budget, Andrews has presided over a regime of privatization. In 2016, he sold the Port of Melbourne on a fifty-year lease for over $9.7 billion. Despite this windfall to the budget, the majority of his signature infrastructure projects are public-private partnerships. Again, cosmetically progressive measures conceal neoliberalism.

Perhaps the most offensive example of this pattern is the Andrews government’s attitude towards public housing. In the lead up to the election, Andrews announced the construction of one thousand new units of public housing, which will be accessible to women fleeing family violence. At the same time, his government is selling off public housing (under the guise of refurbishment). Eleven government-owned housing estates are earmarked for demolition. They will be sold to private developers who will build new estates. They are to rebuild the existing public housing without any requirement that these new dwellings possess the same rooms or amenities as the old ones. Tenants have been given no guarantee of resettlement. A minority of the new dwellings constructed will be allocated as “social housing” — price-controlled housing administered by nongovernment housing associations which are not required to give tenants the same rights as they enjoy in public housing. Developers are set to make millions from this sell-off by stealth. These measures will do nothing to alleviate the 80,000-long waiting list of families in line for public housing. Once more, viewed in terms of the Andrews government’s real agenda, his superficially progressive reforms taste bitter. This is why public housing residents have been fighting through the year against Labor’s privatization by stealth.

Perhaps the most telling example is Daniel Andrews’s capitulation in policy to the Liberal Party’s racist law-and-order campaign. Just as federal Labor generally doesn’t benefit electorally from anti-refugee sentiment, Victorian Labor generally doesn’t benefit from racist crime hysteria. But they do capitulate to it. Victoria now has the highest incarceration rate since 1897. Andrews has doubled down on this by building new prisons, hiring new police officers, expanding their powers, and toughening bail conditions.

This is the best that the Labor left can do in power. It’s a long way from ending neoliberalism. Indeed, it resembles nothing so much as the “progressive” neoliberalism of Obama, Hillary Clinton, or various now-defunct European social-democratic leaders.

Even supposing that the ALP left were committed to ending neoliberalism, for such a wishful agenda to win, it would require both that party heavyweights spontaneously implement an agenda far to the left of their current positions and, to borrow Chieu’s turn of phrase, lead “a democratization of Australian Labor itself.” This would amount to political suicide for the ALP’s right-wing leadership.

Suicide, after all, requires willpower. Willpower is not an ALP strong suit. Decades of adaption to neoliberalism have guaranteed this. With a rapidly shrinking electoral base that is deeply disillusioned and cynical, the ALP has become dependent upon capital. For example, the party receives multimillion-dollar donations from finance and insurance groups such as Morgans Financial, UCover, Jones Lang LaSalle, not to mention the multitude of smaller donors such as ANZ Banking Group, Woodside Energy, Price Waterhouse Coopers, and Coca Cola Amatil. The power of capital over the ALP is such that when Kevin Rudd proposed a modest tax on super-profits in the mining industry, he was promptly sacked. His replacement, Julia Gillard, ditched the tax. From the Left, a self-described feminist and Australia’s first female prime minister, Gillard made up the lost income by cutting payments to single mothers.

These people are not like us. A cursory glance at MP entitlements reinforces this picture: salaries and pensions will tell you Labor MPs have a lot to gain from the maintenance of the status quo. The median salary in Australia is $65,577. The minimum salary for a federal MP is $207,100 with various increases available based on position, not to mention the many entitlements they receive, and a generous pension and superannuation scheme. Labor’s leader, Bill Shorten, earns $370,000 a year. Representing the people pays well.

After a career in politics spent rubbing shoulders with corporate lobbyists, Labor politicians routinely move into highly paid corporate roles. Former leaders Paul Keating and Bob Hawke moved into directorships of multiple companies and Shorten was once the chairman of Australia’s largest superannuation fund. Other factional heavyweights such as Simon Crean, Mark Arbib, and Stephen Conroy have done the same, with Conroy heading the gambling industry’s peak body and Arbib an executive of arch-capitalist James Packer’s investment company. This hardly raises an eyebrow; it’s to be expected.

Labor MPs are products of a technocratic, bureaucratized party system. In the past, ALP politicians were expected to have had a career as union militants or activists. Today, 55 percent of Labor MPs worked within the party prior to being elected, 40 percent as trade union officials. It is by no means the case that trade union officials are recruited at the shop floor: today many are helicoptered into their jobs after an apprenticeship in the dissolute gravy-train that is the National Union of Students. Others complete a law degree or are born into the job, sons or daughters of officials intent on perpetuating their minor fiefdoms. This is both cause and consequence of the historically low union density mentioned above.

These statistics belie careerism. There is a set path to positions of Labor Party power, consisting of working within union or party bureaucracies, playing the game and climbing the ladder — ensuring party players are exposed to years of bureaucratic socialization. This is why present-day ALP leaders rival Theresa May in awkwardness of mannerism and speech.

In the past, the shop floor trained working-class orators and leaders who developed a rhetorical style reflecting the best of the Australian labor tradition. Focus groups and student politics are a poor substitute, leading to robotic, bureaucratic, and monochrome politicians. Public transport upholstery has more charisma than Bill Shorten. This also explains the awe-inspiring vacuity of most ALP members of parliament. Come election day, one can find their dead-eyed candidates lurking around polling booths in cream slacks, attempting to make conversation as though they were people before half-jogging back to their BMWs after a tiring fifteen minutes on the hustings.

Although the optics of Australian Labor’s rightward metamorphosis into establishment collaborators do not differ significantly from those of British Labour, the structural impediments to reversing the trend do. Though members have a direct say in electing Labor’s leader, the membership shares its voting power 50/50 with Labor’s caucus of MPs. This makes the emergence of an insurgent outsider such as Corbyn nearly impossible. The ALP’s established politicians will close ranks to protect their interests, as the Blairites in the UK attempted. Thus, Labor’s leader will always be an insider and a member of the political class. Even the power of the trade unions in the conference ALP has diminished over the last decades, making the far more circuitous route to party reform through the unions even more implausible.

A vast change to the party’s complexion is inconceivable in one election: a Labor left would require time to build a caucus majority. Time is not the friend of those attempting to fight institutional socialization. Nor is discretion. Aspiring reformers are schooled in patience and compromise; they are told to put on a mask. In time, the face itself takes on the aspect of the mask. Those lucky few who are too genuine find themselves excluded.

For the same reason, the democratization of party process is deeply implausible. Professional politicians will not want to give up their voting power to a membership they cannot manage. The principle of democracy for democracy’s sake did not convince the bourgeoisie in the nineteenth and twentieth centuries. Nor will it convince cynical and privileged bureaucrats in the twenty-first. As the recent trajectory of social-democratic parties in Europe (such as Greece’s Pasok) has shown, such spiritually and intellectually barren bureaucrats will gladly preside over their own ruin before conceding to democracy or a genuine left.

One might suggest that the same could have been said of British Labour under Ed Miliband. However, the change to Labour’s voting system, handing one member one vote, was an astonishing strategic blunder by the Blairite faction. It was intended to reduce the power of unions and put power in the hands of what they believed was a conservative membership. Australian Labor’s establishment are not likely to repeat that error.

And at any rate, even if they were to empower the membership, for this to result in a reconstitution of the party would require the existence of … a membership. The most optimistic official estimate is that the ALP has 50,000 members. This is almost certainly untrue, as the party’s branch structure has been in deep, structural crisis for years. Some estimates as to the real, active and dues-paying membership of the ALP run under 10,000. Reliable figures are almost impossible to come by. A 2013 Crikey article suggests that the Freemasons have more members than the ALP.

The practice of “branch stacking” in the ALP is not uncommon. There are many ways to stack a branch. One is to continue to pay membership dues for deceased party members, in order to manipulate their votes in preselection contests. In the Australian Labor Party, the past does not simply (to paraphrase Marx) weigh on the living like a nightmare. The past votes against the present, guaranteeing the preselection of vapid mediocrities.

The ALP is an extreme case example of the degeneration of social-democratic and labor parties in the neoliberal age. Yet, similar pressures exist on all workers’ parties. The relative autonomy of the state and state managers necessitates that labor and social-democratic parties either build effective and combative counter-hegemony or become themselves hegemonized. The ALP, as an institution of bourgeois democracy, will forever tend the garden of capitalism, trimming neoliberal hedges in mildly egalitarian fashion while fastidiously avoiding branches and roots. The ALP will thus oscillate between pleasing its donors and struggling to find leaders with the minimum style required to temporarily persuade voters to ignore the gaping absence of substance.

Like Sisyphus, Labor’s left will forever push the boulder of internal change up the hill. But only so much progress can be made before capital and the labor bureaucracy take back control. At least Sisyphus reaches the top of the hill; even halfway would be a heroic effort with the ALP. Chiu is right: the “Third Way” is not dead. But it won’t be the Labor left that kills it. Instead, it must be killed by a new party built on socialist principles. Should Chiu tire of his endless labor, we invite him to apply for membership of the Victorian Socialists, as many disillusioned Labor and Greens members have already done. In the most recent elections, the Victorian Socialists won close to 5 percent in Melbourne’s north, with up to 10 percent in some electorates. We are a long way from implementing our vision. But just like the DSA in America, we have demonstrated the viability and realism of principled socialist organizing.