The recent federal election in Australia saw the conservative opposition coalition lose further seats in parliament building on their disastrous 2022 result. The coalition is made up of conservative urban types (the so-called Liberal Party) and the National party, which represents the rural lobby. The Nationals are essentially climate-change denialists and because the Liberals require them to have any hope to govern, the smaller rural lobby can dominate policy choices. To convince the Nationals to adopt a net-zero by 2050 stance, the Liberals had to agree to propose a shift to Nuclear power, which was neither realistic in a logistical sense or economic in a cost sense. The electorate clearly rejected that option at the recent election. Now the Liberals, who are facing an existential crisis after the devastating loss, has to make a choice – stick with the Nationals and jettison net zero or break the Coalition and pitch a climate policy that will be acceptable to voters. The problem is that neither option will deliver them electoral success. Progressives are enjoying some rare schadenfreude over this conservative dilemma. It seems that the British Labour Party has got itself into a similar dilemma, with pressure from the Right-wing Reform Party to water down its climate policy. But what is more interesting in the UK setting is the role played by Labour’s former Prime Minister, who is also now attacking ‘green’ stances. I predict that will not end well for Starmer and Co. Fortunately, the Australian Labor party, which is also in government is sticking to a more ambitious climate agenda, although, even then, it is not ambitious enough. However, governments that are pursuing a net zero agenda must provide security for communities and regions that will bear the brunt of the policies introduced. The resistance to change that political forces such as Reform UK exploit can be easily offset if governments accompany their net zero agenda with a Just Transition framework. However, there is an absence of policy development in that area.

At the end of World War 2, the Western nations were beset with paranoia about what the USSR might be planning. The West had essentially relied on the Soviet armed forces to defeat the Nazis through their efforts on the Eastern front, after Hitler had launched – Operation Barbarossa – which effectively ended the – Molotov–Ribbentrop Pact – signed in 1939 between Germany and the USSR. Following the War, the ‘spectre of Communism’ drove the Western political leaders to embrace social democracy and introduce policies that created the mass-consuming middle class in most countries, which was seen as a bulwark against the development of a revolutionary working class movement and any further spread of Communism. While the interests of capital hated the welfare state and the rise of trade unions, they saw these developments as a means to protect their hegemony in the new world and the uncertainty that the – Cold War – engendered. Mass consumption was akin to Marx’s claims about religion being the ‘opium of the people’ and it has been a dominant part of life in advanced nations in the Post War period. It is one of the reasons that people think a degrowth strategy can never be embraced by the political class because it would confront a population besotted with material accumulation and consumption. However, research from Japan suggests that a strategy designed to reduce material consumption will not “reduce individual happiness and collective wellbeing” (Source) and a decoupling between growth and human happiness is indeed possible, which means the political class, if they are courageous enough, can introduce policies that promote degrowth.

Last Friday (October 6, 2023), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – September 2023 – which showed payroll employment rising by 336,000 and the unemployment rate stable, after rising 0.3 points to 3.8 per cent in August. I posed the question last month when employment growth had slowed considerably and unemployment had started to rise whether this marked a tipping point. My answer, given the extra data that resolved some of the uncertainty about last month’s data, is that I don’t think it did. In September 2023, the data suggested a very steady labour market – employment growth above the average of the last 9 months but just enough to keep pace with the labour force growth. Participation was constant as was the employent-population ratio. All signs of stability. The disturbing fact though, was the renewed failure of nominal wages growth to transalate into real wage gains for workers. The relatively modest real wage gains over the last few months as the inflation rate has declined evaporated. The question that mainstream economists need to answer is how come the significant interest rate rises have not seriously impacted the labour market performance? I know why. But their textbooks do not!

The Australian Bureau of Statistics (ABS) released of the latest labour force data today (June 15, 2023) – Labour Force, Australia – for May 2023. The May result reverses two consecutive months of weaker results from the Labour Force survey. Employment rose by 75.9 thousand (a strong monthly result), participation rose by 0.1 point to a record high, and unemployment fell by 16,500. But one month is not a trend and it should be emphasised that there are 10 per cent of the available and willing working age population who are being wasted in one way or another – either unemployed or underemployed. That extent of idle labour means Australia is not really close to full employment despite the claims by the mainstream commentators. I am waiting for the RBA governor to claim the fall in the unemployment rate justifies further interest rate increases. It doesn’t but since when has logic and facts got in the road of his agenda.