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Bob Hawke built the Australian economy and the Australian Labor Party. RIP.


Neither of the claims in my title are particularly controversial. But it's worth keeping a sharp focus on just how important they are. Bob Hawke has, I think, a good claim to being a unique figure on the left in Western politics - certainly in the 'Anglosphere' politics that, in Australia, we mostly pay attention to.

Here is inequality in Australia and the United Kingdom since the 1970s.










Obviously if you look at the US the story is even worse. Australia was far from immune to problems of poverty and inequality, and they have certainly got worse since. But we just didn't experience skyrocketing inequality in the 1980s in the way that America and Britain did.

The reason for that is summed up in one of Bob Hawke's last public statements:
It is a blatant denial of history for Scott Morrison to allege that the Labor Party cannot manage the economy when he knows the design and structure of the modern Australian economy was put in place exclusively by the Labor Party.
In Australia, the programme of modernising economic reform that we broadly call neoliberalism was initiated and managed by the left. Of course people reasonably disagree about whether that neoliberal turn should have happened at all, and more particularly about whether we should be drastically rethinking it in the current era.

But it's striking what a difference it made that the reform agenda happened under a left-wing government. The Hawke government did the modernising work it felt was necessary. Some of it rings of the agenda Reagan and Thatcher pursued: floating the dollar, relaxing financial regulations, getting rid of micro-regulation in many parts of the economy.  On some of its reform points the case against is not really arguable; on others - finance, for example - it can be very strong. Crucially, though, the fanatical tax-cutting and union-busting of the US and UK was left out.

Instead of bringing inflation down through strike-breaking and ultra-tight, employment-destroying monetary policy, Hawke tackled it with a formal agreement with unions - the Prices and Incomes Accord - that held down inflation, reduced unemployment and saw increases in pension and unemployment benefits, childcare funding and housing assistance. The Labor government did cut some taxes - the top income tax rate fell from 60% to 47% - but also introduced new ones, a capital gains tax, and (briefly) restrictions on negative gearing for property investors.

This was Third Way politics with a point. It was arrived at out of conviction, not out of despair at the dominance of a Thatcher or Reagan. It kept labour at the centre of the political economy, rather than doing everything possible to neuter it. It was a left economic politics that was genuinely modern and bold, rather than using the slogan of modernising change as a cover for capitulation to the right. The Labor Party was dominant in Australia for more than a decade as a result, because it convinced people that the left was more trustworthy not only on social justice but also for economic management.

There were left critiques of Hawke's ALP at the time, and there are plenty now. I'm not even that determined to argue that those criticisms are wrong. We should just remember, though, that the actually-realised alternative in the countries most similar to Australia was not refusal of economic reform or triumph of a labourist left.

This is not just a story about the 80s. The Howard government undid a lot of the good work of the Hawke/Keating years and brought Australia closer to a Thatcherite position. But you can still see the benefits in the labour movement of what Hawke did in those years. I've now witnessed two British elections (plus a new state of permanent and chaotic campaigning), and although nine years of Conservative government have introduced a raft of new restrictions on union activity, there is no Change The Rules campaign and no political party promising to meet its demands.

For all that the Fair Work regime needs to be replaced, it was the progressive alternative to a much worse set of proposals, and the result of an election in which the ALP proudly and openly campaigned to deliver on trade union demands, and won. For all that Bill Shorten is undeniably on the right of his party, he has run on a platform that's far more ambitious and labourist than those in the centre of the British Labour Party - let alone, god knows, the Democrats - would ever tolerate.

Bob Hawke did that.

Happy election day.