{"id":14401,"date":"2011-05-06T17:37:01","date_gmt":"2011-05-06T07:37:01","guid":{"rendered":"https:\/\/billmitchell.org\/blog\/?p=14401"},"modified":"2011-05-06T17:37:01","modified_gmt":"2011-05-06T07:37:01","slug":"time-for-progressives-and-unions-to-abandon-labor","status":"publish","type":"post","link":"https:\/\/billmitchell.org\/blog\/?p=14401","title":{"rendered":"Time for progressives and unions to abandon Labor"},"content":{"rendered":"

\t\t\t\t\nUp-coming Budget<\/strong>\n\nThe Sydney Morning Herald article (May 6, 2011) – Budget spending cuts to help RBA avoid rate rises<\/a> – examined the prospects for next Tuesday’s federal budget.\n\nWe read that:\n\n\n

\nThe federal government next week will unveil spending cuts aimed at assuring a return to a budget surplus, helping the Reserve Bank contain inflation at the expense of growth in the economy’s 20th year of expansion …\n\nMr Swan has described it as a “tough” budget as the government tries to deliver a surplus in the year ending June 30, 2013, to improve its reputation for fiscal stewardship …\n\nAustralia will tighten fiscal policy by 3.7 percentage points of gross domestic product in the two years through 2012, the second-steepest reduction in deficits in the world, the International Monetary Fund predicted last month. GDP rose 0.7 per cent in the fourth quarter, accelerating from 0.1 per cent in the previous three months.\n<\/blockquote>\n\n\n\nYou would think that inflation was escalating sharply and that labour underutilisation rates were are historic lows. You would think that real GDP growth was pushing well above trend and straining capacity.\n\nNone of those empirical realities are being enjoyed by the Australian economy (or its citizens).\n\nThe explanation is to be found in politics and ideology rather than economics.\n\nWhile they are claiming that austerity is important for economic management, the reality is that they promised a surplus a few years ago without any context because they wanted to sound more neo-liberal than the conservatives. Both sides of politics have conditioned the electorate to believe deficits are bad and surpluses are good.\n\nThe ideology underpinning this nonsense is exactly that which led to deregulation and other legislative outcomes that led to the financial crisis.\n\nThe Australian Labor Party Government is so keen to shed their image as social democrats that they are even more hard-line these days than the conservatives. It is a very damaging position to take. They should instead be extolling the virtues of the deficits they created to fight the slump associated with the financial crisis and educating the public on the need for continuous deficits in times when the external sector is in deficit (which is always is in the Australian context).\n\nUnfortunately, it is now proposing to squeeze households which are already carrying record levels of debt and growth can only continue under these circumstances if the private domestic sector takes on even more debt.\n\nThis is exactly the sneaky austerity strategy that the British government is pursuing. Please read my blog – I don’t wanna know one thing about evil<\/a> – for more discussion on this point.\n\nThe Sydney Morning Herald says that the changes hinted at already in the Budget will:\n\n\n
\n… add to a drag on consumer spending after households boosted savings rates in the aftermath of the global financial crisis.\n<\/blockquote>\n\n\n\nIn yesterday’s blog – When ideological blinkers lead to denial<\/a> – I showed how rapidly retail sales was declining in Australia as private spending remains very subdued.\n\nThe Sydney Morning Herald quotes a leading bank economist:\n\n\n
\nThe main impact of the budget on the economy will be quite contractionary in terms of growth …\n<\/blockquote>\n\n\n\nSo even the inflation-obsessed private bank commentators are acknowledging the pro-cyclical nature of the proposed Labor Budget.\n\nSo what gives?\n\nHistory of ALP<\/strong>\n\nThe ALP describes its beginnings on this page – Our Foundations<\/a>. You can also see its version of its history on this page – Labor History<\/a>. This Wikipedia<\/a> page is also interesting.\n\nThe early roots of the party come out of the development of trade union in the 1860s before federation. The problem was that the power elites controlled the legislature and thwarted the attempts by unions to improve the circumstances of the workers.\n\nThen came the 1890 maritime and shearers’ strikes which were dealt with harshly by the employers. As a response to the industrial defeat at the hands of capital, the striking shearers formed the Australian Labor Party in 1891.\n\nBy 1899, the first Labor government took office in the State of Queensland. The federal organisation formed in 1901 and ran a platform of democratic socialism although the substance of that ideology has always been questionable despite the popularism.\n\nThe commitment to socialism was not very well defined though and the party was not dominated by left-leaning trade unionists. It is often thought that trade unions provide most of the funds for the ALP while the corporate sector funds the conservatives. Examining the data will give you a very different picture of the funding sources and distribution of the major parties.\n\nWhile a few years old now (2006) this study – Political finance in Australia: a skewed and secret system<\/a> – will realign perceptions of these matters.\n\nThe fact is that the corporate sector provide a higher proportion of the ALP funds than the unions and only slightly less in absolute terms than what it contributes to the conservatives.\n\nVladimir Lenin made the following observation about Australia in 1913 (In Australia, Collected Works<\/em>, Progress Publishers, Moscow, Vol. 19):\n\n\n
\nWhat sort of peculiar capitalist country is this, in which the workers’ representatives predominate in the upper house, and until recently did so in the lower house as well, and yet the capitalist system is in no danger?\n\nThe Australian Labor Party does not even call itself a socialist party. Actually it is a liberal bourgeois party, while the so-called Liberals in Australia are really conservatives.\n\nCapitalism in Australia is still quite youthful. The country is only just taking shape as an independent state. The workers are for the most part emigrants from Britain. They left when the masses of British workers were Liberals …\n\nThe leaders of the Australian Labor Party are trade union officials, everywhere the most moderate and capital-serving element, and in Australia altogether peaceable, purely liberal.\n<\/blockquote>\n\n\n\nThat assessment resonates today.\n\nBut the links between the trade union movement and the ALP via the factions and paths for union leaders to move into Parliament are well-defined.\n\nThe ALP home page says:\n\n\n
\nLabor is committed to its future partnership with the trade union movement. The Australian Labor Party was born out of the trade union movement and its struggle for a secure, decent and dignified life for working people. In partnership with the labour movement, Labor governments in the past have achieved great things for working Australians. Labor is committed to protecting and advancing the rights of working families, including their rights to join trade unions, to organise in the workplace, to bargain collectively and to exercise their right to strike.\n\nThe trade union movement is one of the largest and most representative community movements in Australia, representing millions of Australians and their families. Our partnership with the trade union movement remains crucial for Australia’s future. We believe a strong trade union movement is not only good for delivering more cooperative workplaces, but it can also assist in strengthening our goals of a more equitable and democratic Australia. In government, Labor is committed to a constructive partnership with the trade union movement to build a stronger and fairer Australia.\n<\/blockquote>\n\n\n\nThe reality is that the trade union movement has been losing its way for years now and it is not only because it has been seen as a blokey club with racist, sexist and homophobic overtones. My view is that the unions have lost support because they haven’t been doing what their principle raison d’etre calls for – to protect workers and their families.\n\nInstead, trade unions have allowed the party that is meant to represent their interests – the ALP – to government as if it is an agent of capital. History tells us that the periods when the ALP have been in government workers endure real wage cuts, loss of wage share and entrenched unemployment.\n\nPlease read my blog – A new agenda for our union movement<\/a> – for more discussion of this point.\n\nData trends<\/strong>\n\nThe Australian Bureau of Statistics (ALP) released the latest data for Employee Earnings, Benefits and Trade Union Membership, Australia<\/a> today which provides information about “the distribution of weekly earnings of employees, their entitlement to core employment benefits such as paid leave (paid holiday, paid sick, paid long service and paid maternity\/paternity leave), superannuation contributions made by employer on behalf of employee, and trade union membership.”\n\nThe data shows that:\n\n\n