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Edition 56

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Essay

Economic illiterates

Rewriting the rules of the game

THE YEAR I was born, Paul Keating dropped Australia’s corporate tax rate by ten percentage points. As I started primary school, it dropped six more. When John Howard received his ‘mandate for the GST’, I was busy calling my friends on three-way chat. That same year, the corporate tax rate took another hit.

This was the backdrop to my childhood and adolescence. Enormous wealth generated by the resources boom and landmark social and environmental reforms, which combined to disguise an era of asymmetrical progress. The political left was fierce and proactive on issues of social and environmental justice. Meanwhile, it was ad-hoc, muted or, at worst, complicit in working against progressive economic reforms. This is how we millennials have found ourselves confronted with a series of intense, unprecedented economic factors that are working to stack the odds against us.

The realisation that we are a generation of young people whose lives will be worse off than our parents is gaining traction. But a status quo that has served a lot of (powerful) people really well is not going to end until it is stopped. Broad-based economic literacy is going to be critical if we millennials are going to rewrite the rules of the game.

 

MY MOTHER WAS a teacher and a fierce advocate of public education. My father headed up a charity. So it was public servants and do-gooder types who were invited round on Saturday afternoons to drink chardonnay in the sun and discuss the bold social reforms of the Hawke–Keating years. There was much to celebrate. The Franklin River was saved, so too the Daintree. The Sex Discrimination and Equal Opportunity Acts became law. Native title was enacted. Australia showed global leadership with the earliest and most progressive government response to HIV/AIDS.

But while my parents and their friends toasted these successes, Australia’s traditionally left-wing Labor Party aggressively privatised public assets and removed regulatory protections in the name of ‘economic reform’. They reduced both corporate and personal income tax. And while they softened the blow with Medicare and some taxes targeted at the top end, the pattern was soon clear: the broad left would tolerate hardline neoliberal economic ‘reform’, insofar as progress continued unabated on the social and environmental issues of our time. This model, pioneered by Hawke–Keating, is the story of left-wing political parties from the ’80s onwards in Australia (and in much of the English-speaking West).

Soon came the Howard years, and the opportunities for chardonnay dried up. The activist left sprung into action against the worst of the 1996 budget, the GST, WorkChoices and some flagship privatisations. But when it came to the income tax cuts for the top end, super tax concessions, cuts to capital gains tax, more privatisation, more deregulation and reducing the corporate tax rate (again), well, the left had its hands full. We were boldly pursuing landmark campaigns on restitution for the stolen generations and land rights, ending LGBTI legislative discrimination, envisioning an Australian republic, fighting for paid parental leave and oral abortion medication – not to mention making hay out of Howard’s refusal to sign the Kyoto Protocol.

Among the activism of the broader political left then, we see a clear pattern of a muted economic agenda coupled with a strong, proactive humanistic and sustainability one. Australians stopped paying their union dues and went into hibernation on economic progress. Rightfully, the working class, as a privileged political subject, gave way to a much wider array of identities and oppressions; rightfully, that is, until it gave way altogether. Somewhere along this trajectory, it became politically palatable (and then prudent) to identify as a social progressive and economic conservative. This was, after all, what a ‘responsible economic manager’ looked like.

In this way, a movement of social transformation became an uncomfortable defender of the status quo.

 

IT WAS RIGHT about here that we millennials were getting out of school, reading more widely, beginning to take notice. While we weren’t all left-aligned, we were significantly more progressive than the population at large. Polling in October 2007 showed that 73 per cent of eighteen- to twenty-nine-year olds planned to vote for a fresh-faced Kevin Rudd. This is compared to the 43 per cent of Australians who voted Labor on election day. The subsequent collapse of the youth vote for Labor between the 2007 and 2010 elections saw a corollary swell in support for the Greens. The ALP’s disastrous antics had only succeeded in driving young people further to the left.

As Kevin07 took office, I was completing my first year of a Bachelor of International Studies. As politics majors, my cohort were as you might expect. We sneered at realpolitik. We had conflicted feelings about the UN. We were greenies, feminists, POC, LGBTIQ. The dominant themes of our world order were the flagging US hegemony and Samuel Huntington’s ‘clash of civilisations’. We shared a fierce ambition to change the world.

But our politicisation was taking place in a unique economic context. The neoliberal project was all but complete, with demonstrated bipartisan commitment to the cause. The economic policy debates of the nation were raging within the hegemonic confines set by neoliberalism – and so too were our discussions at the uni bar. While our predecessors spent their university days debating a mixed-economy welfare state, a post-work world and true economic democracy, the full extent of our economic ambition was the Swedish welfare state.

When the global financial crisis hit – a once-in-a-generation opportunity to outline a strong, coherent economic alternative – neoliberalism’s oft-repeated ‘There Is No Alternative’ had ensured we were ill equipped to advocate for, or even imagine, a different way. A few of us dutifully turned out at Occupy protests, and then we got back to work: refugee vigils, climate-change marches and DIY rainbows – there was so much to be done. The point here is not that these tactics weren’t worthwhile, but simply the predictability with which economic issues failed to rate as priorities for my generation – in line with the broad pattern established for us during the previous two decades.

When the worst of the GFC passed, the pundits regrouped and successfully blamed the recession on government spending and deficits. Neoliberalism brushed off the dust and kept on walking.

 

I AM GRATEFUL for the colossal fuck-up that was the 2014 budget. Together, Tony Abbott and Joe Hockey did what the global financial crisis could not. A budget widely condemned as cruel and unfair, which explicitly targeted young people, catapulted a generation of economic illiterates into the weird wide world of tax and transfer.

At this time, I was a fresh-faced campaigns assistant at online progressive campaigns organisation, GetUp! In 2014, GetUp! was in its eighth consecutive year of independent issues-based advocacy. The majority of our staff were (well) under thirty, and the media had us pegged as one of those New Age, social media youth organisations. GetUp! rolled out digital tactics across the full gamut of hot-button progressive issues. That is to say, climate change, the Great Barrier Reef, marriage equality, refugees and some limited work on gender and Indigenous justice. But for almost a decade of online campaigning, we had barely uttered the words ‘tax’ to our million-strong list.

Thanks to Abbott’s fundamental misread of the national mood, GetUp! was thrown into the deep end of a reactive, broad-based, multi-issue economic campaign. For the first time, the organisation allocated significant resources to economic matters with campaigners working across the Medicare co-payment, university-fee deregulation, the Newstart waiting period and more. Internally, we began to forge connections with relevant peak bodies, think-tanks, unions and academics.

For many young progressives, Tony Abbott was like the creepy stepfather in our economic coming-of-age story. His gross overreach magnified the perverse assumptions at the heart of current orthodoxy, thereby sparking the economic awakening we so desperately needed. On a personal level, my eyes were opened to grave economic injustices that had simply failed to rate as priorities for most of my political life. I was all Neo-coming-out-of-the-Matrix: bald and blind and covered in slime, trying to claw Hockey’s $7 GP fee out of the base of my skull.

Meanwhile at GetUp!, as my colleagues and I went through a crash course in economic literacy, our broader membership base began to rank addressing economic inequality and protecting our social safety net as top priority campaign areas (where they have remained ever since). As soon as we’d all had a chance to catch our breath, the inevitable questions emerged: how did we get here? Why do we tolerate this abysmal status quo? And what can be done to change it?

 

WORKING IN FEDERAL politics, I often hear people lament the short-termism of modern-day Australian political thinking – beholden, as it is, to three-year electoral cycles. In many ways, the reality is much more dire. The modern measure of political success is a budget ‘on track to surplus’. This sees our politicians spending six months every year sowing the seeds for the May budget, and the next six preparing for the Mid-Year Economic and Fiscal Outlook. The lives of everyday Australians have become so alienated from this artificial process that the interests of the ‘budget’ have come to override the interests of ‘people’. This has become Australia’s new political common sense.

Richard Denniss, chief economist at the Australia Institute, uses the term ‘econobabble’ to describe the impenetrable stream of economic jargon that has overrun Australian political discourse. In his book of the same name, he describes how the language of economics has come to operate as a linguistic sleight of hand. Take as an example this statement: ‘Markets reacted angrily today to news the government is considering tightening thin capitalisation provisions.’ Put another way, this could read: ‘Rich overseas investors reacted angrily today to news that they might have to pay tax on profits they earn in Australia.’ Evidently, words matter. The seemingly objective language of neoliberal economics obscures the way it serves certain interest groups.

Many of us working in progressive politics have so internalised this ‘common sense’ (or given in to it) that we struggle to operate outside of it. When journalists ask us why we don’t want a marriage plebiscite, we scream ourselves hoarse about $160 million in wasteful spending. When challenged about the budget impact of an increase to hospital funding, we leap to our feet espousing the benefits of a healthy labour force to power a twenty-first-century economy. Meanwhile, we trot out all manner of economic experts to talk about how widening inequality hurts ‘growth’ or how transitioning from the fossil-fuel era will offer a range of ‘economic opportunities’.

When we validate growth as an end not a means, when we use market-centric claims and a rhetoric of ‘choice’, or when we recognise the intrinsic worth of people only insofar as they perform their function within the economy, we are adopting the language of our oppressors. In doing so, we ensure that any response will be circumscribed by neoliberal orthodoxy. That we won’t, for example, have progress unless it is at least budget neutral. Plus, in appropriating the language of neoliberalism, we inadvertently work to reinforce the rules of a system that is fundamentally at odds with where we are trying to go. These are arguments that have been made time and again by cognitive linguists George Lakoff and Anat Shenker-Osorio.

The economic policy settings for a truly just and equitable society are clearly incompatible with neoliberalism. We need to transition urgently away from fossil fuel consumption, even where it comes at an economic cost, if we’re to avoid the worst ecological impacts of climate change. We need a strong health system to care compassionately for the sick and the elderly, because the intrinsic worth of a human being extends beyond their economic contribution. And we don’t want a plebiscite on marriage equality because the queer community has made it abundantly clear that they don’t want equality on those terms.

The challenge then, for everyone who cares about a fairer, more progressive and environmentally sustainable Australia, is to figure out how to articulate an alternative vision that puts people and the environment ahead of the interests of the economy. To do this, we must break with economic orthodoxy and expose the complete lack of evidence upon which much of our economic common sense rests.

 

IN THE LEAD-UP to the 2016 federal election, ABC put out a pithy list entitled ‘6 things Vote Compass reveals about voters’ views on negative gearing’. Number two read: ‘A quarter of people in the eighteen to thirty-four bracket said they “don’t know” who should be allowed the property tax break. To give you some perspective on this, we often don’t include “don’t know” data in the Vote Compass result charts because the numbers are so low.’ One in four young people do not have an opinion on negative gearing despite a broad consensus that negative gearing is one of the key factors locking this exact demographic out of the housing market. This is the biggest challenge we have faced in our economic campaigns work at GetUp!: ensuring a base level of economic literacy about the issues we campaign on.

New economic literacy then must combine two distinct elements. First, it must incorporate the ability to reject and dismantle entrenched common sense tropes. To challenge the scientific authority and disciplinary privilege of economics. To critically analyse that which is conventionally understood as ‘economics’ but is in fact a fabricated system that falsely represents resources (natural and human) as secondary inputs to a financial system. To recognise how the rules of the current system too often work to reinforce the position of a privileged few. And with these revelations, we will begin to craft a new paradigm that focuses on how the economy can help sick people, rather than how sick people are bad for the economy.

Second, new economic literacy must also denote heightened public consciousness and motivation on economic issues. The effect of being bombarded with so much jargon is that neoliberalism has successfully disassociated economics from our daily lives – when nothing could be further from the truth. Economic justice must once again be understood as relevant to our wellbeing and our futures. Young people must apply the same energy and passion to economic matters that we hold for so many important struggles of our generation.

On both these fronts, Bernie Sanders’s campaign in the US was a trailblazer. Across new and conventional media, Sanders catapulted once radical economic ideas into mainstream public consciousness, naming income and wealth inequality as the most important issues of our time. The way millennials responded to his campaign – or more specifically to the economic messaging at its heart – speaks volumes. In the 2016 presidential primaries, more people under the age of thirty voted for Bernie Sanders than for Hillary Clinton and Donald Trump combined. Sanders may not have won the nomination but he ushered in a new economic consciousness among the millions of young people who helped power his campaign.

Here in Australia, we don’t have a Bernie. But there are signs people realise the economic system is not working in their interest. In 2017, Australians of all ages are in furious agreement that we should be spending more on health, education and public transport; that Apple, Google and Gina Rinehart should pay more in tax; and that major corporations have too much influence over our politicians. Meanwhile, where the 2014 budget fightback was largely driven by the institutionalised left, more recent challenges to mainstream economic orthodoxy have been informal, highly irreverent and sarcastic – curated by and for millennials themselves.

Take, for example, the widespread online derision of Malcolm Turnbull’s proposed cut to the corporate tax rate as ‘trickle-down economics’ or the raging debate on housing affordability, culminating in the smashed avocado war of 2016. Look to Junkee, the latest ‘The Simpsons Against the Liberals’ meme or GetUp!’s Facebook page for other examples of this emerging economic cogency. In each instance, we see young people rejecting main-stream orthodoxy and asserting control over public debate. Millennials, in recognising that the economic policies that have benefited previous generations are not benefiting us, are agitating to talk about how we might fix an even bigger problem: decades of neoliberal economic policies that have prioritised profit and GDP over all else. Political parties and the institutionalised left must consider the ways they might exercise their enormous influence to support and extend this burgeoning discourse.

 

IN THE 2016 federal election, there were three million voters under thirty. Together we made up a fifth of the electorate. According to Fairfax-Ipsos pre-election polling, nearly three-quarters of young voters under twenty-four intended to vote for Labor or the Greens.

As a young, progressive voting cohort, we must bother to be educated. We must honestly acknowledge the blind spots in our political education and dare to care about the capital gains tax discount. We must support the ‘competent crazies’ – those political pundits, few and far between, who are willing to push the policy envelope well beyond the politically palatable. And we must call out politicians – with dumb memes, with tweets, and by voting against the major parties insofar as they continue to use neoliberal logic as their yardstick.

Finally, we must demand that our journalists, commentators and pundits go further than simply identifying a few policy tweaks that might ensure that our generation is able to thrive. We must call for a radical restructure of the tax and transfer system to address growing wealth and income inequality. We must demand debates on the ‘unspeakables’: land taxes, estate taxes, universal basic income, free tertiary education, a six-hour working day and a maximum wage. We must be clear that an economic plan that isn’t designed to radically overhaul taxation and housing, and which doesn’t include the words ‘wealth redistribution’, is not going to cut it.

The pie has never been so big and yet our relative slices are only getting smaller. It’s obvious to many that something must change. Indeed, alternatives are already emerging. Insurgent political players such as Trump and, at home, One Nation and some factions of the Nationals, are crafting a new economic narrative centred in nativist rhetoric and a deliberate politics of fear and mistrust. They are paving the way for more protectionist economic policies and the expansion of state power over the economy, but doing very little to disrupt well-established trends of wealth and power consolidation.

It seems to me that we’re at a crossroads. The future is ours for the taking, but it’s only a matter of time until the demagogues and reactionaries beat us to it.


From Griffith Review Edition 56: Millennials Strike Back © Copyright Griffith University & the author.

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