Libertarian capitalism is unsustainable

This talk was given at a community forum in Coledale on the NSW south coast. It is also on Youtube at

Today I want to look at some of the issues that go beyond the current election and look at the future of Australia, long term. Certain issues won't go away whatever side wins the current election. And unless you identify those long term issues and deal with them, then politics just becomes small scale tactical fights in which nothing of substance is achieved, and politics becomes spin and PR.

It used to be that those in Australia with a long term vision were mostly on the Left but that vision has clouded and fragmented for reason I explain in 'Beyond Right and Left'. In fact the Left, as it once was, does not exist anymore. In spite of this, social problems remain and these long term problems or trends I want to talk about today.

The first trend is the spread of the free market into every sphere of our lives. The most obvious examples of this is the Workchoice law. This law is based on the idea that the people must be forced to act as individuals -- their contract of employment should be made one-on-one with employers. The old style of collective agreements in which people form groups for self protection is effectively made increasingly impossible.

This is one issue in which Australians have finally woken up. The market principle has been forging ahead for decades but finally it has gone too far.

What it means is that we are being pushed towards a free market in labour where labour is treated as any other commodity in a marketplace -- which means it will be bought and sold at whatever price it can get. Labour is on the road to deregulation, like the finance industry and banking sector.

But labour - human labour, otherwise known as our working lives - is not like other commodities. It is special because it is attached to a human being. The price of labour -- whether it goes up or down - affects the lives and potential of human beings. Once upon a time the price of labour affected whether people live or died. Today, a free market in labour will affect not only the lives of particular people, it will also shape and fashion the kind of society we live in the future.

Perhaps the most dramatic effect of Workchoices will be the creation of large, low paid underclass - something similar to what you see in the USA - because those with least bargaining power, least education, least skill, will increasingly be at the mercy of those who want to buy labour as cheaply as possible. We can see this already happening before our eyes in the dozens of stories about people being given no choice but to sign AWAs which take away penalty rates, paid public holidays etc. The cumulative effect of this will be to create this impoverished underclass, and that will affect everyone not just those unlucky ones.

So one of the long term tendencies that we have to deal with is not just Workchoice but the creation of a different kind of Australia, a different kind of society.

But the introduction of the free market into labour symbolisess something bigger that is going on. I call it libertarian capitalism. And the emergence of this new kind of economy, this new libertarian capitalism, has raised new political issues.

The economy has always had spoken or unspoken rules which decreed that certain things were 'not done', no matter how profitable they might be. Certain areas where no go areas . For a long time these limitations were largely based on religious beliefs. The most obvious and current example of this is the spread of legalized gambling and liquor sales. The logic of libertarian capitalism which wants a free market in labour -- also wants gambling and liquor sales round the clock, 24/7. Now we have the treasuries of state government wholly addicted to this revenue. And this revenue is based on the calculated destruction of the lives of minority.

Less obvious than this the assault on the family and children from libertarian capitalism. A number of people have spoken against the commercialization of childhood and the massive drive to turn small children into consumers. And then there is the issue of working hours and family life. The time for a shared meal is often lost because both parent need to work. Libertarian capitalism pushes towards a 24/7 society in which commercial values take precedence over family values and other non-commercial values.

There is a relentless drive in the economy to commodify all human relations. Human relationships, with neighbors, with fellow students, with parents, with children, and on and on - all these are slowly pushed towards market relationships. Historically, market relations began literally in market places with the buying and selling of food and salt - but these are now penetrating far beyond the economy. So students in universities become customers and clients, so sport becomes a billion dollar industry while simultaneously physical unfitness soars, and so on. This in turn leads to the entrenchment in society of commercial values in place of older values based on tradition, religion, custom, respect and so on..

Non-material, non market relationships are devalued. Relationships of social bonding, of caring and, dare I say it, love of fellow man and woman, are increasingly taken over by relationship of buying and selling. And all of this is ultimately be socially unsustainable. .

That is to say, the kind of libertarian capitalism which is developing in Australia is socially sustainable.

An older kind of criticism of capitalism focused on poverty or inequality but today the most effective critique of new libertarian capitalism is that it damages social relationships.

Climate change & sustainability

I now want to turn to a different kind of sustainability.

We live in a society which is the richest in human history. Even in the space of my lifetime we have seen extraordinary changes. My earliest memories are of a kitchen with no refrigerator but what was called an ice box. High points in the life of my family the purchase of a car and a television set. All this is ancient history now -- we have gone far beyond the first tentative steps into consumerism.

But a central point to grasp about this extraordinarily affluent society is that, put simply, it is unsustainable. We regard our food, cars, consumer goods, as normal. But it can never become normal for the rest of the plant. If all people on earth had our lifestyle, it would take the resources of three more earths.

On a more realistic sense libertarian capitalism is unsustainable for reasons which you all know, to do with consequences of fossil fuel use heating the planet. I don't know if you are aware of the latest results of climate change but it all seems to be going much faster than the cautious scientists of IPCC suggested. We are sleepwalking to disaster.

Significantly, even within the Bush administration there is a slow shift to acknowledge the existence of climate change but to reassure everyone confidently that it can be solved by human ingenuity. In Britain there is a more realistic approach. The British economist Nicholas Stern regards the climate crisis as an example of 'market failure'. He said:

'Markets do not automatically provide the right type and quantity of public goods, because in the absence of the right kind of public policy, there are limited or no returns to private investors for doing so-Thus climate change is an example of market failure involving externalities and public goods -. All in all it must be regarded as a market failure on the greatest scale the world has ever seen.'

We will certainly need ingenuity but as Stern implies we need to restrain and tame the nature of libertarian capitalism.

Climate change poses problems of diabolical difficulty. The central one is that much of the good life which many ordinary people enjoy in societies like ours is built on unsustainable grounds. To decrease fossil fuels use and change to renewables, the price of energy must rise radically and this will undermine much of the lifestyle we enjoy. Easy to say those words but what do they mean?

We know renewable energy is expensive -- more expensive than coal fired electricity and we have not yet found a substitute for petrol which is as flexible and easy to use. If the price of new forms of energy increases it will increase the cost of every single piece of food we buy, it will increase those cost of transport to work, it will make overseas travel the province of a very small group of people, it necessitate the disruption of workplaces, industries and jobs. The truth is rather shocking, so shocking that it is hard to conceive of where it might all be going to beyond the sort term. The short term consists of say, 20% or maybe 40% of energy being sourced from renewables., but after that, who knows? We are in uncharted territory but one which involves profound social disruption, let along economic disruption.

The political problem is that no one wants to tell people this unpleasant truth. Certainly not a government or an opposition which wants to be re-elected.

But facts are difficult things. Regardless of how difficult or unpleasant the truth is, the facts of climate change are very slowly, but relentlessly, forcing themselves to our attention. The question will be how bad these climate changes will become, before we somehow get it in hand.

There are other big issues in society which I have not mentioned, but these two sets of objective circumstances - unsustainable social relationships and an unsustainable environment -- seem to me to be useful in examining the current election campaign, where it might lead, and what problems the Australian people and government face in the long term.