What Howard and Thatcher can teach Shorten

The ETS gives Bill Shorten a rare opportunity to make a Hawke-like conviction call on the economic interests of his country.

Western civilisation took a nasty turn in the early 20th century. From selling ‘things’ to each other, we began selling ourselves.

Psychologist and social theorist Erich Fromm identified this cultural shift, largely spurred by the growth of the marketing industries, as the birth of the ‘marketing orientation’.

"The marketing character,” wrote Fromm, "adapts to the market economy by becoming detached from authentic emotions, truth and conviction."

Fromm wasn’t arguing that marketing communication is bad, per se. Rather he was suggesting that the explosion in the marketing industry, all that selling and valuing of commodities, made us feel the same way about ourselves. We nervously ask each other, “What would you like me to be today... he he?”

Not everyone exhibits this tendency equally, and in the political sphere there are individuals who stand up and say “this is unpopular, but it is the right thing to do”.

Those who escape the marketing orientation most completely are those who not only disregard opinion polls, but argue with their own party over what is ‘right’.

That might sound idealistic, but look at recent history.

John Howard did not tackle the GST to be popular. Indeed, he barely scraped home as PM in the 1998 election, which commentators dubbed the 'GST referrendum'.

It was a close run thing, but it was also one of his finest moments – he’d done what he thought was right for the country, and had taken the people from fearing and loathing a new tax, to understanding that it might make everyone better off.

Howard was advised, and believed, that the GST is an efficient tax that can raise money with minimal distortion of markets ­ – the economy works better, and the government gets to raise more revenue – which makes it possible, if desired, to redistribute some of that money to those who need it most.

The Hawke/Keating/Kelty program of deregulating the Australian economy was another example. They had to take the message to hard-line leftists that ‘protecting’ the economy was also strangling it. They controlled the unions, and the union members were better off in the long run.

Thatcher and Reagan, whose lead the Hawke government was, in part, following, made similar calls for which history is now judging them harshly. Their starry-eyed belief in the virtue of unbridled credit growth left the world with the biggest financial hangover since the Great Depression.

But were they wrong to lead their parties with such conviction?

Not a bit. Voters and commentators went with them. In a democracy it is just not good enough to blame a leader who, for all the right reasons, gets a big call wrong.

On the other hand, when the marketing orientation dominates, leaders should be pilloried. Labor’s 2013 campaign was the greatest example of this for decades.

The Labor caucus began to doubt what it was selling. Caught in a feedback loop of negative commentary over the carbon tax, the NBN, 'debt and deficit' and so on, weak-minded members of caucus began to doubt themselves.

They began to ask: “What would you like us to be today... he he?”

That lack of spine led them to re-elect a leader who they all knew had failed in the task the first time around. Imagine the same thing happening in the private sector? It’s unimaginable that a good board would say “Our CEO stuffed up, but he’s changed! Let’s get him back in!”

Both sides of politics are guilty of putting focus groups, opinion polls and voter appeal ahead of principle. Tony Abbott is in trouble with his party’s true conservatives for embracing a socialist policy on paid-parental leave in order to address, among other things, his ‘problem with women’.

His treasurer, Joe Hockey, is under fire for promising small government and fiscal conservatism (which voters liked at the election) but then getting to work on plans to borrow and stimulate the economy à la Labor.

But these are, at present, not major transgressions. The Abbott agenda is largely coherent, and in keeping with the desires of the people who voted him into power.

The real action is in the Labor Party, where leader Bill Shorten has been handed unprecedented power to reform his party.

Despite all the theatrics of the Albanese-Shorten leadership contest, Shorten has emerged victorious with much of his factional and union power bases intact. Talk of a split between Shorten and fellow factional warlord Stephen Conroy during the Rudd/Gillard struggle was more a sign of journalistic gullibility than any real fault lines in their hold on the party.

Add to that the leadership rules proposed, ironically enough, by the man Shorten had to get rid of to continue his march to the top – Kevin Rudd – and it’s clear that the ambitious Shorten has the opportunity to change Labor as much, or as little, as he likes.

The question is, will he fall victim to the deeply entrenched culture of the NSW Labor right and remain fixated on day-to-day opinion polls, or will he kick back and actually lead the party the way Hawke was known to have done in the early 1980s? Hawke, say his colleagues from those years, had the chutzpah, the leadership gravitas to talk cabinet around – to get them to do what he thought was best for the country, not best of the polls.

Shorten's first big test in this regard is on the future of Labor’s carefully crafted ETS policy (Is Labor about to vote for repeal?October 29).

The Ross Garnaut-designed ETS includes a complex web of industry subsidies designed to prevent reckless harm to numerous trade-exposed or energy-intensive industries. 

At the same time, the policy is a sophisticated attempt to change relative prices of energy sources to help Australia make a fairly unremarkable transition from carbon-emitting energy sources to lower- or non-emitting sources.

By quirk of history, it is Labor that ended up promoting a market-based approach to pollution reduction, while the Abbott-led conservatives plumped for a bureaucratic command-and-control approach.

While that might confound lefties and righties alike, it gives Labor another Hawke-like opportunity – Shorten can choose to define modern Labor as continuing the tradition of the accords between Hawke and the union movement, by arguing with his own party that it should not back down on harnessing the power of the market to help Australia set up for a carbon-constrained global marketplace.

He could tough out a series of bad polls, safe in the knowledge that an overwhelming majority of economists think the ETS is the cheapest way deliver carbon pollution abatement.

Or he could go to water, like Kevin Rudd did on several issues – boat arrivals, the carbon tax, developing northern Australian –  during the disastrous election campaign of August/September and ask voters, “What would you like us to be today... he he?”

During the election campaign, Rudd promised to bring forward the end of the fixed-price 'carbon tax' phase of the ETS. Okay, that was a promise. But Abbott is now hectoring Shorten to support a full repeal of the ETS, to replace it with a dud policy that some future government will almost certainly have to replace with market-based system. Uncertainty piled on uncertainty.  

Representative democracy was never designed to be government-by-focus-group. Strong leaders, with strong visions that are not subject to the ebb and flow of opinion polls, give voters real choices. And having voted on those choices, we are all responsible for that kind of country they produce. 

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles