Capitalist crisis and the myth of Australia's 'fantastic quality of life'

The defining feature of Australian politics today is the ongoing retreat of the organised working class. In the face of the serious economic crisis, there is no mass expression of a working-class alternative. The class-collaborationist leadership of the trade union movement is unwilling and incapable of challenging the ruling class “solutions” to the crisis: pay cuts, shorter hours and other measures demanded by the bosses, supposedly to “save jobs”.

In the face of the environmental catastrophe facing the planet, the focus of mainstream political debate shifted to a falling out among thieves in the Coalition. Meanwhile, the fundamental flaws of the carbon trading scheme remain unchallenged by the unions, the environment peak groups or the Greens. Compare the situation in Australian politics to the international stage, where the working-class alternative was posed sharply by Venezuela’s socialist president, Hugo Chavez, at the Copenhagen Climate Summit.

Capitalism is in crisis, but it can overcome the crisis if it is able to force the costs onto working people. The propaganda machine is in overdrive to convince working people that Australia has avoided the impacts of the economic crisis. The core message of most of this PR is “don’t panic; keep spending” — dig yourself deeper into debt to keep the system afloat. But the commentary is contradictory because they know that the system is not out of the crisis, and they also have to convince working people to bear the burden in the longer term, to advance the idea that our interests are tied up with the survival of capitalism and with the “national interest”.

Take this example in a December 24 Australian article titled “We aren’t just larrikins” by a researcher at a bourgeois think-tank, the Centre for Independent Studies: “That Australia is one of very few countries to survive the global economic crisis relatively unscathed is hardly news. Many Australians also take for granted they live in a prosperous and vibrant nation with a fantastic quality of life, and which is a good place in which to do business”. The author’s explanation for this alleged “fantastic quality of life” is that “governments since the 1980s had modernised Australia to make it a leader in the industrialised world”.


What he means by “modernised” is the gutting of social services and welfare, widespread privatisations and a massive shift of wealth from wages to profits. This was part of an international trend as capital worked to claw back the ground that it had to concede to workers under pressure of the widespread social upheaval of the 1960s and ’70s.

In Australia, these attacks were carried out under a Labor government with the compliance of the union leadership under the Prices and Incomes Accord, agreements between the government and the class-collaborationist leadership of the ACTU. Any union that stepped outside the framework of this agreement, like the Builders Labourers Federation and the pilots, was smashed.

As unions’ fighting capacity was strangled by the Accord, their membership declined and union structures were decimated. Union membership fell from 51% in 1981 to 39.6% in 1992. By 1992, the number of work days lost in strikes had dropped to its lowest level in 30 years. This decimation of the unions was what laid the basis for the ongoing roll-backs and the anti-union attacks under the Howard government. It is this that the bourgeois propagandists are talking about with their slippery code words like “modernisation”.

No matter how much they rip out of working people, they can’t avoid the contradictions inherent in their system. When the latest crisis hit in 2008 and panic was setting in, one of the central themes of the reporting and bourgeois analysis was that they did not know how their own system works. You had liberal journalists and commentators begrudgingly acknowledging that only Marx could explain the crisis.

Now that they think that they’ve weathered this round and there’s no immediate pressure to provide answers, they’ve picked themselves up, dusted themselves off and returned to the script. Back to the sales pitch: capitalism might have some ups and downs, but it’s the only system that can guarantee your “quality of life”.

Rising debt

But is it true that Australia has avoided the crisis? The government was crowing after the release of the economic figures for the September quarter, which registered a 0.5% growth. This means that, according to the widely accepted definition, Australia is the only imperialist nation thus far to have avoided a recession (a contraction of the economy for six months in a row).

Despite the crowing, they know full well that the global crisis is bound to hit harder. The economic situation in Australia is highly dependent on China and in turn on Europe and the US; no country can avoid the crisis. They also need to keep the pressure on to convince working people to accept paying for it.

The slight growth in the economy was in part fuelled by increased household spending — and increasing debt. The Australian reported on December 27 that debt on mortgages, credit cards and loans now stands at $1.2 trillion, up 71% in five years. Reserve Bank figures show that personal debt now equals 100.4 per cent of Australia’s GDP, one of the highest ratios in the developed world.

At the end of 2007, the Reserve Bank estimated that there were around 13,000 borrowers 90 days or more in arrears on their home loans. Today that figure has almost doubled to 25,000 and, as interest rates, unemployment and underemployment are expected to grow, this is bound to keep climbing.

While unemployment decreased slightly from October to November, from 5.8% to 5.7%, the reports generally focus only on the immediate figures, the monthly changes and how they compares to what was forecast. So the November figures were commonly reported as “better than expected” because “financial markets” were estimating 5.9% unemployment. Never mind that it is still a 1.3% increase on the same time last year, or that underemployment rose from 5.9% in May 2008 to 7.8% in November 2009.

In manufacturing there were 77,000 jobs lost in the year to October (Adelaide Advertiser, October 25). The decline in manufacturing has been a long-term trend since the 1970s, but the economic crisis also gives cover for many companies to carry out long-planned job cuts and closures.

While most working people are drowning in debt to try to buy the happiness that consuming allegedly brings, this “fantastic quality of life” is a world away from the millions of people living under the poverty line. Academics debate what this “poverty line” is, but according to the Salvation Army, if the same methods of determining poverty are used as in the UK, 3.8 million people in Australia live in poverty — 19% of the population.

Nearly 27% of people over the age of 65 in Australia have incomes below the OECD poverty threshold. Nearly a quarter of a million people who are looking for work have not had substantial work for a year or more.Each night there are more than 100,000 people homeless and about 100 homeless families that cannot find places in refuges.

Racist myth

The “fantastic quality of life” in Australia is a myth, and it is a racist myth which denies the Third World living conditions in Indigenous communities and the deep social disadvantage born of dispossession and systemic racism and violence at the hands of the state. Life expectancy is 16-17 years less for Indigenous people; 53% of indigenous men die before the age of 50, compared with 13% for the population as a whole. Infant deaths among Indigenous children account for 23% of all infant deaths. Aboriginal men are locked up at a rate five times greater than black men were in apartheid South Africa.

This social reality predates the most recent crisis. While the super-profits ripped out of the Third World benefit a layer of working people in this country, the alleged “fantastic quality of life” is a myth and always has been. It is an ideological tool to keep working people struggling to achieve the unachievable, trapping them in unpayable debt that dampens any impulse to radicalism. It forces people to work until they drop, literally: the Age reported on December 17 that more than 500,000 people say they intend never to retire. And in the last year, the number of people declaring themselves retired has shrunk by 65,000.

A report released in November (“Something for nothing — unpaid overtime in Australia”) also found that the threat of unemployment and the struggle to “get ahead” has workers in Australia doing an average of 70 minutes of unpaid overtime a day. This equates to six and a half weeks’ work a year and is the equivalent of 6% of all economic activity in Australia — a $72 billion rip-off to add to the “fantastic quality of life” of the bosses. Meanwhile, the use of racism, sexism and homophobia is intensified in an attempt to shift the blame for the struggles faced by working people and to sow divisions among the oppressed.

Crisis of leadership

While crisis, poverty and social devastation are inherent in capitalism and while the objective interests of working people can be met only by a revolutionary reorganisation of society along socialist lines, there remains a crisis of leadership of the working class. The objective need for socialism is not matched by the preparedness of the working class or its leadership. This is a long-term contradiction, but one which is exacerbated in this country by the decades-long retreat of the working class — a retreat that has been led by the class-collaborationist leadership of the trade union movement.

But this retreat has been punctuated, especially in the last decade, by brief upsurges of mass struggle: in 1998 by the maritime dispute; in 1999 by the mass solidarity movement against the slaughter in East Timor; in 2000 by the mass anti-corporate protest against the World Economic Forum; in 2003 by the movement against the Iraq war; and against the Israeli wars in Lebanon in 2006 and Gaza in 2008.

When a lead was given around issues of immediacy, there was a willingness to mobilise, including taking militant mass protest action. But these upsurges and their decline once again demonstrated the crisis of leadership. Mass struggles require leadership that can imbue a movement with a historical perspective and an understanding of the forces at play. Only in this way can a movement be sustained to achieve victory.

When the massive demonstrations failed to stop the beginning of the Iraq war, there was a lot of lamenting — “protests just don’t work any more”. This wrote out of history the real victorious movements in the past. The anti-Vietnam war movement was not successful simply because of the massive moratorium demonstrations. The size and politics of those protests reflected a much deeper-going movement, a movement that was premised upon long years of groundwork, agitation and propaganda. It was a movement that empowered working people to take political action in other spheres, triggering many of the other social movements and the militancy that arose in that period.

The period of the Vietnam anti-war movement experienced a massive increase in industrial action. The social upheaval triggered by the anti-war movement brought a widespread empowerment of working people. Throughout the ’60s and into the ’70s, unionisation stood at over 50%. On the other hand, the brief upsurges that we have seen in the last decade have been in the context of an overall retreat, with union membership gradually declining from 33% in 1997 to 19% in 2008. It is this context that we have to understand the ongoing weakness and demoralisation of the social movements. With this retreat comes a decline in class consciousness and the capacity to organise and educate.

Breakdown of solidarity

This retreat provides the context for the ongoing social decay and breakdown of human solidarity, in a society dominated by a culture of individual consumerism. This consumer culture is heavily marketed, especially among young people. Popular youth culture is dominated by deliberate and contrived banality and emptiness.

In reality, this is a foil for crass individualism and the breakdown of social solidarity through the promotion of racism, misogyny and nationalism. Disturbing evidence of this are the music festivals where you can witness thousands of young people waving the flag and brandishing their southern cross tattoos.

There is opposition to this culture among young people, but without organised expression, without a galvanising movement, this opposition is isolated and atomised. This is also why so much goes into promoting this culture of individualism. It is of course about creating new markets for the new consumables, but it is also ideological. It’s about isolating dissent amongst young people, creating the idea that you’re alone in your opposition and disgust.

The breakdown of solidarity and promotion of nationalism, racism and misogyny also prepare fertile ground for false solutions as people’s expectations from the world come up against the harsh reality of capitalism and they look for somewhere to lay the blame. It’s only a few years ago that we saw the mass expression of this racism and nationalism in the Cronulla riots (2005). The worsening experience of racism and sexism are a daily reality for many.

While there is a general retreat, this period of retreat does create a radicalisation of its own: of those who are angry at what’s been taken away, of those who can see through the barrage of individualism, consumerism and banality, of those who are angered at the poverty, exploitation, racism and misogyny.The intervention of Marxists cannot change the balance of class forces, but through initiating and intervening to lead campaigns, we can demonstrate to broader forces how to struggle. The movements that historically helped to shift the balance of class forces didn’t come out of nowhere. The popular history of movements only focuses on the high points, the large mobilisations and the stunt actions. They focus on the individuals and on the impacts within bourgeois politics. They don’t tell the story of the groundwork — the hundreds of small actions, the slow and painful building up, the failures, the setbacks and the mistakes.

That’s the background to all the victorious campaigns and movements. It’s that work that premises the victories, and it is those victories that are necessary to imbue a sense of confidence in collective action.

[This article is abridged from a feature talk, “Australian politics: The Crisis of Labour and the role of Marxist intervention”, presented at the Revolutionary Socialist Party Marxist Education Conference held in Sydney, January 2010. The full text is available at the Revolutionary Socialist Party website]