Treasurer Jim Chalmers
Treasurer Jim Chalmers (Image: AAP/Mick Tsikas)

Treasurer Jim Chalmers must be getting some sort of kick out of the calm-but-hysterical treatment that his little piece on Australia’s future is getting from the News Corpse crew.

The essay in The Monthly, “Capitalism after the crises”, is nothing much. It’s the notice of intention by the treasurer and the Albanese government to create a “values-based capitalism” in Australia, and it’s in the spirit of Kevin Rudd’s essay in the same publication 15 years earlier, “Howard’s Brutopia“. But Rudd’s piece was a real essay with a core, driving argument, which sought to portray the Howard government as Hayekian ideologues, and not the practical conservatives they claimed to be. 

“Howard’s Brutopia” was part of Rudd’s repositioning of Labor, the party he’d taken over, when it was flat out of ideas and looked like it would be forever. Chalmers is no Rudd, and one could generously say it’s a brave try. It’s not really an essay. Though it seems Chalmers wrote it all himself, it reads like a speech written for him, to be given to a regional conference of financial managers in Cloncurry, and with a bit of Heraclitus from BrainyQuote bolted on to both ends. 

The op-ed writers of The Australian have managed to get out of the piece that Australia will become some sort of soviet dystopia in 18 months. Good luck to them, because I can’t get anything so specific. There’s a bit of stick for the Coalition about a “wasted decade” and for following the “Washington consensus” (it wasn’t), then some clippings about steering social investment, and finally three priorities for a “values” recovery.

Fields of vision

What are the three values? A transition to a green and renewable economy, creating a society and an economy of resilience, and shaping a society with less inequality and more opportunity. How do we do that? By strengthening our institutions! We need to get beyond the misallocation of the neoliberal market. Ah! Picking winners? Actually:

Defining priorities, missions and challenges — not ‘picking winners’. 

Ah. Partnerships are cited, such as the Clean Energy Finance Corporation, which already exists, and the Investor Roundtable, which already exists. Also:

We will try to expand the role for impact investing too. Across the social purpose economy, in areas such as aged care, education and disability, effective organisations with high-quality talent can offer decent returns and demonstrate a social dividend.

Can they indeed? It’s amazing they don’t do so already. How will this be done?

“The options for large, broad new programs are limited”, so these strategies “typically involve an element of partnership”. Heh. Start hiring some tendering experts, the private-public partnership gravy train is underway. 

So we have an intention and a boast to create a values revolution in Australian capitalism and society, which will rebuild society ready for fresh global disasters and plunge a dagger into the heart of inequality. How will we do this? Mainly with a reheated Blairism. “THINGS” — sing it with me — “CAN ONLY GET BETTER…”

The notion that a middling government in a small state can reinvent capitalism is ridiculous, of course. Given Chalmers appears to have ruled out any creation of state-owned/run enterprises, it all comes down to how much regulation and how many incentives you offer, and how much of a free hand the private side of these partnerships will have.

If you’re going to raise the mandatory standards in aged care, for example, you’d better be ready to fill some supply gaps fast, because the only reason a lot of people are in the industry is for the super-profits. Going to fill it with private, impactful investment of socially progressive capital? Good luck with finding enough of that.

This is the problem with the “values-led capitalism” Chalmers is spruiking. It’s the delusional Pollyannaism beloved of the Labor right and aimed squarely at the left. It goes right back to rerum novarum of 1891: the notion that capital can be tamed to social ends and harmonised, and power relations left undisturbed. 

But capitalism can’t have (qualitative) values, overall, since its mechanism of action is the pursuit of greatest returns. Capital is the surplus of particular firms made abstract, as money, to flow anywhere. The more you try to steer it to “value”-chosen ends, the more you risk racking up bad returns, until that risk becomes a certainty. The very thing you’ve gone to capital and the market for is the thing you’re not letting it do.

State of play

With the incentives rather than regulation approach of public-private partnerships (PPPs), the government and taxpayers simply get fleeced. In the UK, shonks of every sector piled into the Blair-Brown government’s PPP tenders for hospitals and schools, and the British public is still paying fees on these long-completed projects two decades later. The government knows it will be fleeced, and sees it as a way of getting the project off the state books. It knows no one will ask what we could have had for the money as direct state investment. 

That there isn’t much to this by way of a plan is obvious from Chalmers’ mention of his hometown, Logan, a fairly low-income area of greater Brisbane:

I know from my own community in Logan, south of Brisbane, how unjust it is that people who live on the outskirts of capital cities and in some regional areas experience much more inequality than other citizens. But this injustice presents an opportunity: to focus our attention on place-based initiatives where communities have the genuine input, local leadership, resources and authority to define a new and better future especially for kids.

Oh, please. You’ve ruled out major state projects, and state Labor governments have spent the past two decades selling off public housing and letting private developers design some of the worst suburbs in the world — placeless, centreless, unserviced carve-ups. You’re not going to take on the school funding stitch-up, nor raise taxes to close that gap, so the inequality of opportunity will yawn wide. That’s something to be remedied, and if you can slow the growth of inequality or even stall it in one term, you’ll be doing great. Decrease it by 10-20% and it’s a social revolution. 

But there will be no equality between the centre and the periphery — social, economic, geographical — in post-industrial capitalism, and everyone knows it. Constructing that deeply embedded inequality and the challenge of remedying it as an “opportunity” is PR spin. It usually ends up as a community centre, called something like Logan Login, public art everyone hates, and a bronze statue of a neglected, 19th-century feminist — and a tax holiday for apartment developers with some never-to-be-enforced social housing requirements.

It is true that with the rise of knowledge-based society, there has emerged a type of capitalist who wants to achieve specific social ends with what they invest in, rather than just using their profits to provide philanthropy. Andrew Carnegie burnt a generation of American workers for fuel in his steelworks, and Leland Stanford killed thousands building his railroads. Then they created libraries, hospitals, colleges and universities. But their initial interest was in nothing other than accumulation by the control of physical labour. 

Striking it rich

The fortunes of today, in the knowledge sector, are made by people who didn’t have to break strikes and drive penury to make them. They have often been formed more by intellectual curiosity and interest, which then became fantastically profitable, than they have been by a narrow focus on commerce. 

But such people, as we have seen in the case of Elon Musk, are capricious, rapidly taking to the life of accumulation and power and steering their engagements by it. Mega-rich “impactful investment” may become the tail wagging the dog. Why do I have the feeling that the Atlassian guys will be redesigning aged care on a “smart” basis?

What other sources of social reinvestment are there? “Conscious” ethical capital — the investment funds people sticking their money in to avoid tobacco, rapacious forestry, etc — is relatively minor. Superannuation funds? The great promise of the postwar era was that workers’ pension funds could be used as a form of social (actual) capital, directed by governments as representatives of majority working-class societies to what would be a managed, invested transition to social democracy and then socialism.

But we have set up our superannuation system and its funds to be cultural engines of the exact opposite result. By ensuring right from the start, in the 1990s, that Australian super made its investments in the sharemarket rather than in directed nation-building, the Keating and subsequent governments set up the expectation that such funds would pursue the maximum return, no matter what it was investing in. Many people might ask “Well, how else could super funds be invested?”, and the answer is: socially, with a steady rate of return, possibly below the market maximum, with a degree of explicitly developed understanding that super was investing in the country’s good. 

The chance of switching over to that social imperative in any substantial form has been reduced by a generation of sharemarket orientation. It has laced the union movement into the system of capital accumulation, removing its capacity to represent its members assertively, with the result that union membership has fallen to 12% of the workforce, and will be in single figures in the life of the Albanese Labor government.

There may be an undercurrent of collective orientation remnant in the Australian people, but since 1991 governments of both parties — with the exception of Rudd’s brief tenure — have done everything they can to privatise Australian life paths, and the calculations that individuals make about their welfare, for themselves and their families. 

That there is some sort of residual collective undercurrent has been shown by the success of Daniel Andrews’ governments in selling big public projects to Victorians, with the very visible rail crossing replacements leading the charge. But this was touch-and-go at the start, as construction down the Frankston line disrupted suburb centres for years before there was anything to show. Once there was, the polarity reversed, and the Andrews government could paint the Liberals as a do-nothing, directionless party.

But that was done through old-fashioned, Board of Works-style state construction (even if actual construction work is subcontracted). No public-private partnership boondoggle; no logos on the brontosaurine crossings as they rise above the old suburban streets. The rail-crossings project was effective as it showed investment could be state-run, as well as clear, purposeful and directed to shared social ends, as it was in actually getting faster train and traffic times. If only the same could be said about the Metro tunnel and the Suburban Rail Loop, both real estate value capture exercises with a train attached. 

Super-profits resources tax: bold and beautiful

So what could the Albanese government do to get the socially directed capital it needs to make a better society and repair the damage of a decade of waste and right-wing sabotage of good governance? It has renounced any increase in taxes on individuals, to the howl of progressives who would like well-paid nurses, builders and teachers to cough up more because corporations won’t pay tax. (OK, calm down. I think some part of the stage three tax cuts should be renounced too. But not all of them, and I don’t think it will happen in any case.)

If the Albanese government was really up for a fight, it would push for a super-profits resources tax and shift the tax assessment process on corporations from profits to in-country turnover, and mobilise the country’s left and progressive base — unions, NGOs, Greens, the far left — to get behind it. 

There would be huge social and political support for this, which could completely overwhelm the organised resistance of capital, if it were properly mobilised. If the big resources players threaten to quit, just set up state firms to take over the leases and, as an added bonus, put in a plan to manage down extraction in line with green goals.

Countries as diverse in their governance as Norway and Saudi Arabia manage to make this work, and have thus amassed trillion-dollar funds. Only we schmucks let the private sector take the cream, give it tax credits up the wazoo, and make Gina Rinehart rich enough to lecture us all on not working hard enough.

The Labor leadership doesn’t want to mobilise any public energy of that type, because it is a government wholly devoted to the management and facilitation of capital — as I noted within a few months of its accession to power, and as Chalmers’ essay has usefully owned up to. It fears that any release of such social-political energy would challenge the tight hold on the party of a leadership that, with the ousting of Kim Carr, is now wholly devoted to the facilitation of private capital — even if some of it is “impactful investment”. It fears energising the Greens, as well as the creation of social movements in Labor seats that will produce “red dog” left independents to match the teals. Chalmers’ essay is an announcement of a strategy of political control as much as it is of economic planning.

What could one reasonably expect from a Labor government in the 21st century that was going to truly mobilise social energy for reform, without seeing it as wise or possible to revive the Grain Elevators Board and the Queensland state-owned butchers’ shops network?

If there was genuine will to kickstart social and economic change within the state, a socially progressive government would have to introduce a system of parallel economic activity accounting. This would involve maintaining the GDP measure for the purposes of global compliance, instituting a broader accounting of social-economic activity, which takes in all of GDP, and including measures of distributed innovation — e.g. local power networks that decommodify renewable power circulation, the non-paid activity of homemakers and carers, the innovation potential of research at Australian public universities, the cultural creation of individual and networked creators outside the commodity system, and so on.

There are plenty of ideas about how to measure all this. 

Whither happiness?

This is not something like a Bhutan-style “happiness” index — which Chalmers seems to gesture in a celebration of the “wellness economy” (he expresses annoyance that the Coalition laughed at him about yoga and incense for this; he then replies that yoga is a huge industry these days. I’m with the Coalition on this one). The purpose of that is to freeze social relations in place, as aristocratic pre-modernism. The purpose of “social activity” accounting is to show how much is being done outside of the market, and of the increasingly rent-seeking behaviour of a globally stagnating capitalism. 

The economy then needs to be switched from being purely a commodification machine — which Chalmers endorses in his discussion of the gaming culture and industry — to one in which increasing spaces are made for the flourishing of both commercial and non-commodity, i.e. social forms of activity that contribute to the reproduction of society and its advancement in terms of increasing equality of opportunity, lessening poverty, building national capacity, etc. 

That involves things like flexibility of the working day — being able to take a 4/3.5-day week without sacrificing the possibility of a career or steady occupation — widespread affordable housing on a public/small-scale private partnership model, tax credits and incentives for non-commercial socially reproductive activity, and real changes in urban planning so new communities are centred and multi-activity, not just new dormitory suburbs. 

Such a process necessarily involves some increase of taxation on corporations that make high profits, such as resources and tech. Why? Because no matter what bourgeois economists may think, the overall rate of profit in increasingly automated societies is falling, while the profit rate rises for the most automated and extractive sectors. The result is a vast imbalance.

Half the society — including small business — is scratching, while a few corporations have essentially stolen the social surplus. By taking some of it back, and plugging it into a slow and steady opening up of non-commodity sectors of the economy, their activity measured and recognised, then a healthier, happier and more resilient society and country can be created.

It is also necessary to the eternal fiscal crisis of the state, brought about by an ageing population and the increased demands that we should get every benefit of healthcare innovation. By releasing a work-based society to more hours of supported non-commodified care, the costs circuit that is blowing the budgets of institutions such as the NDIS would be reduced. 

Life as capital

Maybe Chalmers and others in the government have some idea that this is what “values-based capitalism” means. But really it is the pathway to post-capitalism, a process that — it should be obvious — is now not merely desirable but necessary to avert continued cycles of social stagnation.

If Chalmers does have the facilitation of non-capital relationships as one possible result, it would have been good to put it in the actual essay. What we have instead is a commitment by Labor to reimagining the social and economic life of this country as nothing other than capital, with “life” as little more than a distributed dividend of its operation.

The inevitable result will be a new “race to the bottom” as government facilitates investment through credits and social rights giveaways, and a Labor-style austerity program — directed against the working poor and benefits-dependent — should the cost of servicing our accumulated debt grow too large, if interests rates continue to rise. 

Culturally and socially, the further extension of the logic of capital into every sphere of social life will further disintegrate both social connection and the psychological development that social connection builds. Child and adolescent development will be further fractured; within a decade, which Labor hopes to be in power throughout, this problem will become comparable to that of typhus and cholera in the 19th century. Bacterial diseases produced by urbanisation will have their analogy in psychological and cultural development disorders produced by totalised hi-tech capitalism. Mental health and social repair will be the major “plant” costs of such a society, and the damage in broken lives will be immense. 

Does one doubt Chalmers’s sincerity? Sigh, no, although I wonder if, like most Labor leaders, he’ll eventually be moving on to the gaming, armaments or banking industry, rather than returning to Logan. If so, always good to get in early with a vote of confidence in the understanding of society as nothing other than capital. It looks great on a CV.

Maybe the essay is not some Baldrickian plan to provide cover for the nationalisation of the 120 largest corporations and the full enactment of the Militant program, and is instead a forecast for the deepening of the problems we now face, and Labor’s sequestering of itself within a process that will force it to be an agent of austerity, deflation and stagnation — or alternatively of further atomisation and anomie.

Rudd had a genuine social democratic plan to clear the ground for in “Howard’s Brutopia”: an education revolution and a nationally owned broadband network as the core for a social democratic developmental process to contest the rule of capital.

If only Jim Chalmers was the dashing Brisbane Bolshevik the right want him to be! Is Chalmers’ plan the intent to ask capital to play nice? That is not how it plays.

Do you agree with Jim Chalmers’ economic vision for Australia? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.