Back in 2005, Nick Gruen wrote a useful post about the components he liked of the three ideological elements of our political culture: liberalism, conservatism and social democracy. In practice, all major political parties tend to be a mix of the three, but with differing emphasis.
I’d call Labor conservative liberal social democrats; social democracy placed as the noun because that I think is the party’s animating force. People join Labor because they want more equality. Some can be quite conservative and others quite liberal on social issues, and Labor has in the past proven itself capable of major liberal economic reforms. Rudd proclaims himself an ‘economic conservative’. But these ideas complement or modify the party’s social democracy, rather than being the core of what Labor is about.
Under Howard, the Liberals have been social democratic liberal conservatives. For him, conservative ideas were most important – family, Queen and country, so conservatism is the noun. While I think the argument that Menzies was more liberal than Howard is nonsense, this is not because liberal ideas are what drove the former PM, but because he largely took as given the large social changes of the last 40 years.
In some ways, as I argued this time last year, the surprising aspect of Howard has been his social democratic leanings – his interest in Australian egalitarianism and the belief that social cohesion depends partly on income redistribution. But social democracy is the adjective; income redistribution has been aimed at supporting families in particular rather than lower-income Australians in general. And unlike self-described social democrats, Howard has (at least in theory) been acutely aware of the dangers of welfare dependency.
All of these ideologies will continue to play a role in the post-Howard Liberal Party. I suspect conservatism will still be the noun, what motivates most of the rank-and-file and many MPs, and social democracy’s place is secure out of political necessity even where it is not viewed with much ideological enthusiasm. The question for people like me is to what extent the adjectival power of liberalism can be revived within the party.
Liberalism is dead in industrial relations; much has been achieved since the 1980s but the public wants no more and is now deeply conservative on the issue. It’s alive in education – people are choosing alternatives to public education, but again we hit very powerful conservatism on more radical measures (the record of public education in helping the poor is so bad that I don’t think it deserves to be called social democratic, and support for it owes more to conservatism – Andrew Leigh and I will be discussing this in a blog debate next week). In health too, people are ideologically wedded to the public system even while fleeing to private hospitals themselves.
There are political feasibility challenges for the Liberal Party in these issues, though Labor’s ideological commitment to permanently dysfunctional public services gives them chronic problems that Liberals can exploit in a ‘we are better managers’ sense.
The area where I see possibilities is tax. It is in a down part of the issue cycle now, but I expect it will recover. Political stereotypes favour the Liberals on tax. It is a crucial policy battle for those of us who want a strong and independent civil society. It is funding with strings attached as much as prescriptive legislation that is taking the nanny state further and further into the lives of Australians.
I’d prefer the Liberal Party to be social democratic conservative liberals, taking on Labor’s conservative liberal social democrats. But given where we are at, social democratic more-liberal conservatives is probably more realistic.
Andrew Norton 
Hi,
That was a great post. Insightful, though provoking.
Thanks
Matt
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Both parties history of liberalism in office is so small as to almost be irrelevent.
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Great post Andrew.
Apart from the obvious debates around ideas and policies, the Party also needs an organization rebuild not just a renovation and needs to grasp the importance of building liberal political infrastructure in this country.
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Nice post Andrew. After a divisive election we need to be reminded how similar the major parties are – as they must be, if we are to live in a stable, democratic society. People should be able to feel free to change their governments without the fear of disruption in their lives.
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I also think this is a great post. Paul Kelly’s oped today echoes many of your thoughts.
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“I’d prefer the Liberal Party to be social democratic conservative liberals” – conservative in what ways?
Not all government services are dysfunctional – I zipped along our toll-free freeways and bridges coming to work, listening to ABC FM.
People can be ideologically wedded to public health but have private health cover just because the public system hasn’t been adequately funded.
But I too am hoping that Labor will surprise us all and radically change the tax system – to something much, much simpler and much, much more progressive. That engaging Paul Krugman mentioned tax in his Background Briefing lecture:
“how has it been that during this period of rapidly rising inequality, we’ve seen the top tax rates fall. But back when that socialist Dwight Eisenhower was President, the top marginal tax rate was 91%…”
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Hankering for the good old days, Russell – that must make you some kind of conservative too 🙂
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Yes, a Whitlamite kind of conservative.
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Great post Andrew.
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Russell – arguing for decreasing inequality implies that a) you believe in bringing down the rich to meet the poor and/or b) you believe in bringing up the poor to meet the rich. Extra taxation achieves a) but only achieves b) if you think that more or better services will significantly improve the lot of the poorest.
I think the experiences of many migrants demonstrates that our safety net and services are not too bad at achieving equality of opportunity. So goal b) is likely to be not ineffectual, but inefficient.
There is also the implicit assumption in some people’s minds that money given to the rich is “dead” – splurged on luxuries and contributing nothing to social capital. The reality is that a higher percentage of tax cuts to the rich is likely to be invested than spent. Wealth is not always unproductive. Even savings “locked away” in a bank increase the supply of money for investment (by more than the amount saved).
I’m not suggesting that the system shouldn’t be more progressive, just that there is a trade-off involved, and it’s not simply Malcolm Turnbull’s yacht versus an orphan’s evening meal. I don’t think we should set an aspirational top marginal tax rate of 90%.
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Also, interesting that you should mention ABC FM as a functional public service. It may “work” well (deliver good content) but its contribution to inequality is likely to be negative. How many poor people would listen to Jon Faine or Tony Eastley over Grubby and Dee Dee or Kyle. They’re more likely to be watching ACA or Idol over dinner than 7.30 report or Catalyst. ABC (especially radio!) targets educated middle/upper class, middle-aged/older white people in the top 50% of the income distribution.
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Ah but Leon, I think Russell would be in favour of making people watch and listen to the ABC and SBS instead of all that commercial junk (for their own cultural good, of course).
Possibly by just banning commercial radio and TV altogether?
Alternatively we could use the proceeds of the 91% tax rate to issue everyone with an opera voucher.
But at least Russell qualifies his statement with “Not all public services are dysfunctional”. I can remember Eva Cox in the Boyer Lectures opining that it didn’t matter if public services were inefficient, the important thing was that they were public.
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Eva Cox for the ABC Board !
Leon just as Turnbull’s millions are working productive wonders for the ultimate benefit of the poor, so those “educated middle/upper class, middle-aged/older white people in the top 50% of the income distribution” ABC radio listeners have a progressive influence on policy and its implementation far beyond their numbers. Just as well then that they’re well informed and well balanced thanks to the ABC.
BG – SBS IS commercial television so I no longer watch it.
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Andrew, I too found your post stimulating but frankly a little confusing. You have given me a choice between calling myself a “conservative liberal social democrat” or “a social democratic liberal conservative”. I am neither of these! Let me explain why.
I assume ‘liberalism” is about individual freedom, and “social democracy” is about greater equality. By equality I have in mind ‘equality of opportunity” – giving everyone an equal chance to succeed in life or at least an equal chance to rise up the ladder. By ‘social democracy’ I have in mind strong opportunity-enhancing public investment in education, health, employment programs and social infrastructure (not passive redistribution).
With these definitions, the conflict between liberalism and social democracy is much diminished. In my liberal social democracy, some people have less freedom as they pay higher taxes but others have more freedom as they are better able to realize their full potential. The productive base does not suffer as a result of government involvement. I do not accept that public investment is intrinsically or even generally ‘dysfunctional’.
As you see, I am able to regard myself either as a ‘liberal social democrat’ or as a “social democratic liberal”. The two are much the same in my books.
The term ‘conservatism’ just muddies the story for me. I associate conservatism with moral issues such as on gay rights, drugs and abortion and civil liberties. I am far from being a conservative on these issues so that makes me ‘liberal’ in that sense too.
As to what the ALP stands for, I don’t know. Kevin Rudd’s fiscal conservatism boils down to ‘small government’. It means no tax increases relative to GDP and no net government borrowing. Unless Australia continues to benefit from a mining revenue bonanza, this amounts to a fiscal straightjacket. It will cripple Rudd’s attempt to deliver greater equality of access on health, housing, education and employment. Labor has raised huge expectations which it cannot deliver.
I am glad to see the back of Howard’s social conservatism, neglect of social investment and assault on dissent – and I expect the Labor government will do better on all three fronts – but not by much! So social democrats will be disappointed. On top of it, Labor will prove unlucky on the economy and will be blamed for the slow-down. So I fear the Rudd government will run into political turbulence very quickly. I sure hope not but the seeds are there.
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I think there are taxonomy problems in this thread.
I’d argue that the centralised industrial relations system that lasted for much of the 1980s was a conservative institution. Look at the objections to the Keating reforms of the late-1980s, let alone those introduced subsequently by Howard, and you see the same jowl-wobbling outrage about Barbaric Travesties and Our Beloved Institutions as one might expect from, say, David Flint on the monarchy.
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Being highly prescriptive to high- and low-income earners, both in terms of workplace regulation and tax, doesn’t work. Being laissez-faire to both doesn’t work either. If we take it as given that the industrial relations reforms that Labor will actually introduce won’t be exactly as they’d said before the election, then you’re likely to see a strong social justice element for workers earning below a certain amount (say $80k p.a.), with a strong liberal element for those earning above that.
Fred, you are assuming that only the public sector can deliver these services, and I think that’s a mistake. You seem to imply that unless Rudd directs the public sector to deliver these services directly, then he will not get political credit – and I think that’s a mistake too. Rudd can create an environment in which investment in these areas yields returns (even if he ends up doing so in a market environment where there are few other options for significant returns), for which he could receive appropriate voter recognition.
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“Russell – arguing for decreasing inequality implies that a) you believe in bringing down the rich to meet the poor and/or b) you believe in bringing up the poor to meet the rich. Extra taxation achieves a) but only achieves b) if you think that more or better services will significantly improve the lot of the poorest.”
Alternatively, a) results in the rich taking their money and/or their brains overseas and away from the tax net, leaving the burden to fall on the middle classes, most of whom need the money taken from them to raise the next generation.
As regards the ABC, thanks to podcasting and website transcripts we now have a situation where many hundreds of thousands of people overseas have access to ABC Radio National programmes for free, while those who aren’t interested at all in the ABC are forced to pay for it.
But imagine the reaction if you suggested that Radio National become a subscription service.
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Jeremy – can I recommend the Paul Krugman lecture, it’s all about the decline of the middle class!
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Uninterested in the “rich will go overseas” hypothesis. Perhaps even richer people will flock in to take their place if public investment makes this a desirable place to live.
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“if you think that more or better services will significantly improve the lot of the poorest.” – well, if I had bad teeth that I couldn’t afford to fix, I’d be glad of more and better services, wouldn’t you?
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As for overseas ABC listeners – shame on you Jeremy for having no cultural pride. I’m all for a bit of cultural imperialism and surely it’s good for attracting just the right sort of person to Australia?
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Fred
No offense but you’re a leftist redistribtionist who thinks he knows better than the people themselves in terms of what is good for them.
Equality of opportunity is a nice sounding term, however if you don’t want to spell out exactly what it means it is simply an empty slogan.
I have seen what you mean by this term in previous writings when you praise the socialist nations of Scandinavia. Sorry if I’m not impressed, especially when it comes with
a 63% tax ratet.
Yes they do have a low unemployment number. However if we simply remove the finagling in terms of what they define as unemployed and recognize that they have set total factor wages below the clearing rate *. We can see what it is in a better light. It’s socialism.
*there is nothing that says we can’t set a centralized wage at or below the clearing rate and have low unemployment rates as we did this in the 50’s and 60’s. But that’s hardly market determined and would be outright distortionary.
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“a leftist redistribtionist who thinks he knows better than the people themselves in terms of what is good for them”
JC, given that there are Labor governments federally, and in every state and territory, couldn’t it be said that people are looking for a bit of leftist redistribution?
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‘”[T]hose “educated middle/upper class, middle-aged/older white people in the top 50% of the income distribution” ABC radio listeners have a progressive influence on policy and its implementation far beyond their numbers. Just as well then that they’re well informed and well balanced thanks to the ABC.’
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Okie dokie. Well, at least you’re honest: the unconstrained, progressive vision of things requires that there is a class of educated, informed, progressive people who can guide the bland, suburban masses towards enlightenment.
Unfortunately, I happen to think those people who just get on with life with their families have as much dignity as informed, culturally “switched on” people like you and I. I’d be happier if you just said “it’s an important social institution”, but to suggest that we need the class of “informed” elites it breeds is, to me, mildly-self-righteous vanguardism (especially since Crikey, broadsheets, etc. are provided by the private sector).
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“I happen to think those people who just get on with life with their families have as much dignity as informed, progressive people ” – – of course they have as much dignity, they’re just not as well informed.
I didn’t say that “we need the class of “informed” elites”, but realistically you know that there are people more informed than others (‘elites’ is a tricky word) because they like to be informed, and wouldn’t you hope that policy makers are well informed? Why do people who do like to be informed value the ABC over the broadsheets and Crikey, do you think?
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Russell,
Perhaps we need an Australian aristocracy to keep the peasants in line? The proletariat not smart enough to realise the class war? Need a cadre of committed socialists to lead the masses (into the concentration camps)?
The proletariat are too busy working to pay for plasma TVs and McMansions to be bothered with your “progressive” agenda, which is why Rudd got elected on a “steady as she goes” platform, not a Whitlam-type reform agenda.
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Brendan – unless I was deliberately teasing (like putting the word ‘progressive’ there) you will never find me suggesting that the well-informed are better than anyone else – because I don’t think so.
But I do think being well informed is a good thing, it certainly beats ignorance.
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Ahhh, Russell, so you want the proletariat to subsidise YOUR education and YOUR consumption choices, because you think YOUR choices are good and THEIR choices are ignorant.
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Brendan, just about everyone thinks education is a good thing. As I don’t think private provision alone would make it easily accessible to all, I think there has to be public provision too – same for health etc – and I think most people, including particularly the proletariat, think the same.
I think we’ve had this discussion before.
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“Howard has (at least in theory) been acutely aware of the dangers of welfare dependency”
I think I’m going to throw up.
You must be kidding. Remember P. Costello’s comment from about 8 weeks ago where he pointed out that 40% of Australian households pay *no* net tax because of the middle class welfare handouts promoted by him and Howard.
“dangers of welfare dependency”? What the hell does that mean when nearly 1 in 2 are dependent, and Howard was directly responsible for the situation via his trienneal election handouts?
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I know we have Russell, I just wanted remind you that the ABC and universities is middle class welfare subsidised by the hard work of the majority for the overwhelming benefit of the few.
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I have to agree with JM. George Megalogenis described it perfectly on the post-election Insiders. Howard has been running welfare primarily as a loyalty program to shore up votes.
Howard’s commitment to equality is equally dubious. The biggest tax policy was introduction of a regressive GST to replace progressive tax scale.
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JM – the “acute awareness of the dangers of welfare dependency” doesn’t apply to the middle classes. Only poor people are in any danger from welfare. It works like this: aboriginals spending their welfare money on a case of VB are in grave moral hazard. If I (suburban white dullard) spend my Family Tax Benefit on a case of VB, that is unfortunate but necessary for social conservatives to continue their agenda. See?
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Andrew, I’m not sure of your terms – I don’t know what the difference between “conservative liberal social democrats” and “liberal conservative social democrats” is – is the second word the primary adjective with the first slightly varying the second?
What would a liberal social democratic conservative party be like, and what would a conservative social democratic liberal be like?
Cheers
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Andrew,
I hope when you debate education, you hopefully don’t just look at university education but school education, and analyse and consider the artificial constraints that extremely conservative Labor Governments have imposed on the types of schools and education that people are only able to choose from. Young people ought not wait until enrolling in a University to experience liberty and freedom of choice and freedom of speech and expression.
The choice is not free choice. The range of Schools is limited and very restricted. The choices are limited only to what State governments allow, and it is all just variations on the same limited, short sighted view of learning and teaching that is blind to research that does not fit biased conservative socialist Labor political objectives.
I hope you look at the artificially constrained learning and teaching that occurs in all Schools based on outdated 19th century attitudes to education by imposing usually politically and ideologically twisted curricula designed by Labor Governments’ bureaucracies. In an accessible, available information rich world, curricula of any type is simply another government imposed control. It’s not about learning or thinking or even about fulfilling the needs of students, their future aspirations or employers.
I hope that you can draw on the rationale of liberty and democratic values, if not also human rights, as they also ought to apply to young people and parents’ right to freedom (not constrained, imposed) of choice in establishing and/ or operating and / or enrolling student children in your debate.
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“JC, given that there are Labor governments federally, and in every state and territory, couldn’t it be said that people are looking for a bit of leftist redistribution?”
Russell, it could equally be said that if the hoi polloi are looking for a bit of leftist redistribution they could just as well want a coalition government. Family tax A and B, 30% rebate for private health insurance, 30% rebate for child care, subsidies for LPG conversions, first home owners grant yadda yadda yadda. This is enough to even cause Whitlam to crack a horn at the ripe old age of 90.
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‘I didn’t say that “we need the class of “informed” elites”, but realistically you know that there are people more informed than others (’elites’ is a tricky word) because they like to be informed, and wouldn’t you hope that policy makers are well informed? Why do people who do like to be informed value the ABC over the broadsheets and Crikey, do you think?’
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Yes, but you *implied* that we need a class of informed elites — or at least that the ABC informing those upper-middle to upper class people was an exemplary use of public money. I don’t see how policymakers come into this – parliamentarians and their staffers are more likely than most to have access to other quality news sources (of course, almost everyone does anyway).
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you’re right, Croc.
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Andrew, with your indulgence, can I please respond to two of the comments on my short contribution (Andrew Elder’s and JC’s), even though I am straying from your main topic?
ANDREW ELDER, I agree that private ownership of social infrastructure, like public-private partnerships, can often work well and deliver better results for taxpayers and users. What I object to is the presumption that private ownership is always better than public ownership – which is what the freeze on tax levels and on public debt implies. Reliance on private ownership of infrastructure makes sense only if
o the project risks are predominantly commercial in character,
o there is a genuine transfer of risk,
o there is sufficient contestability in financing and service markets,
o private ownership improves managerial performance
o it does not create distortions in resource allocation (e.g in usage of roads) or bias against social infrastructure
These conditions do generally apply for self-funding economic infrastructure but they do not always apply to social investment.
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JC, I have never advocated adopting the Scandinavian model lock, stock and barrel. I have only argued that instead of moving slowly and gradually towards the US model we should tip toe towards the Scandinavian model of equality of opportunity. Despite what Americans think, the US has less income mobility and the battlers have less opportunity for advancement than the Scandinavians and the smaller European countries.
As to which direction Australians want to move, Andrew Norton is the expert but my assessment is that when Australians are simply asked (in polls) if they want lower taxes, there is always a majority saying yes. But when they are asked to express a preference for lower taxes relative to additional spending on such things as health, education and the environment, the responses are much more positive for spending. I suspect however Australians lean towards universalism rather than the targeted spending I advocate.
On government borrowing, it is true that there is probably some public hostility. But this is because politicians misleadingly call it a budget deficit and equate it with bad management and higher interest rates. Australians would respond much more positively if
• government borrowing were linked specifically to particular investment projects;
• the benefits (shorter commuting times, fewer accident risks, improved power availability and water quality etc.) were clearly spelt out;
• they were told that government borrowing for investment purposes is prudentially sound and that, if fiscal policy was well managed, it would have no adverse effects on interest rates.
By setting arbitrary fiscal targets, governments are restricting their own ability to respond to the preferences and expectations of the community.
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Good on you Derek Sheppard!
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I agree with JC’s comment on Fred’s use of the expression “equality of opportunity” in contradistinction to “equality of outcomes”. Fred, what do you mean? We already largely have equality of opportunity – it could always be increased of course, but the fact is that anyone of merit can go to school and university without paying up-front fees, can access free health services, including necessary drugs, take subsidised public transport, and get a job in a buoyant economy in order to pay their rent (which is only 3% of the value of the property in which they are living). Life is sweeter in this country for those without means than it ever has been. What is opportunity falling down at present outside of indigenous society? I struggle to understand what you are after except simply more redistribution. Why can’t the masses of tax now being paid by individuals and corporates in this country be returned to the citizens?
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Rajat, I have written a book on the subject. It is called Equality of Opportunity in Australia: myths and reality”. If you don’t want to waste your money on it, I will gladly email you a copy if you send me your email address (mine is fargy@ozemail.com.au). I think you will find it covers all your queries.
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Thanks for that offer, Fred. I’ve emailed you.
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I always thought I was a Liberal: but there are few of them about. The reference used is The EOD circa 1936, my fathers copy. Landguage changes over time and certainly ideologies are forgotten.
Liberals (note the capitalisation) were concerned with the distribution of wealth. A matter which has been alluded to in several items above, but carefully avoided in anything specific. For it is when we get down to specifics that the hip pocket nerve begins to display its, generally, superior abilities over the brain.
The mal-distribution of wealth is the major inequality in our society. The only source of wealth that human labour has is the planet, the Earth, the land. That is owned by about 5% of the worlds population. That is a big wrong. The biggest wrong there is. This land ownership is what makes corporations so powerful (rich in $$).
We need to collect the rental value of land in place of all the other 156 taxing points across Australia. Then, even houses would become affordable to many who only dream of such these days.
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A tax on land and land alone, eh?
Yendis while you have the 1936 EOD open you may want to look up the term ‘Physiocrat’.
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I wonder what the shares of Google (or Microsoft, Cisco, etc) would be worth if they only reflected the value of land upon which the Googleplex resides? I suspect about 1% of the current price. Time to go short, Yendis?
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Fred Argy/Andrew Norton
Despite the unprecedented and corrosive bile of the Luvvies and Not Happy John (or what I call Not Happy Now and Never Will Be) crowd, this is an enlightening analysis, that highlights just how close the two main parties are, and how remarkably cohesive Australian political values have been over the past generation.
Still, I remain confused about this weasel phrase “social democracy” just as I can never work out what people are talking about when they say they are interested in “social justice” issues. From my reading, what these people really mean is common garden variety Socialism.
Am I missing something? Please Explain.
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