Andrew Leigh

In the Global Mail today, I have an article that expands on the argument kicked off in my first speech: that Labor is the natural party of both egalitarianism and liberalism. I'm an economist, not an historian, so thanks to a raft of people, including Dennis Glover, Emily Murray, Tim Soutphommasane, Macgregor Duncan, Louise Crossman, Troy Bramston, Dennis Altman, Damien Hickman, Nick Terrell, John Hirst, Nick Dyrenfurth, Judith Brett, David Lowe, Michael Jones, Barbara Leigh and Michael Leigh for valuable comments on earlier drafts. Note that several of these people strongly disagreed with my conclusions, so responsibility for errors of fact and argument are mine alone.

And yes, I haven't missed the irony of praising the Global Mail for not raising the opinion/news ratio, and then writing a essay for them. In my defence, editor Lauren Martin does an excellent line in arm-twisting.

(Comments on the Global Mail website, please.)

Labor’s Best Strategy: Become A Party For True Liberals

By Andrew Leigh

The Global Mail, August 27, 2012

In December 2007, there were 445 Labor representatives in lower houses across federal, state and territory parliaments. Before the August 23 NT election, there were 305. In less than five years, 140 Labor parliamentarians — one in three — have lost office.

At the same time, Labor is shedding members. In the 1950s, more than one in 100 adults were ALP members — now it is less than one in 300. The trend is common to other Australian political parties, and to political parties around the globe. Across the developed world, mass parties are under threat.

For the Australian Labor Party, one of the world's oldest progressive parties, a sense of realism about the challenge shouldn't diminish a sense of pride in our achievements. Significant migrant inflows and strong economic growth allow Australia to undertake reforms such as a price on carbon pollution and building a National Disability Insurance Scheme.

But we must also recognise that parties need to renew. For the Labor Party, I believe that our renewal may be drawn from an unlikely source: by becoming the party of egalitarianism and social liberalism. Liberalism means standing up for minority rights, and recognising that open markets are fundamental to boosting prosperity. To borrow a phrase from journalist George Megalogenis, Labor needs a commitment to markets and multiculturalism.

To recognise why Labor's future should include liberalism, it's first important to say something about Labor's past.

Exiled in the Polish town of Poronin in 1913, Vladimir Ilyich Lenin had plenty of time on his hands. Having already spent three years in a Siberian jail, he was biding his time until he was able to return to Russia. So the man who would soon serve as Russia's first Communist leader turned his attention to the antipodes.

Like many progressives around the world, Lenin was struck by the way the Australian Labor Party had swept into parliament. Just a few months after the party's formation in 1891, Labor won 36 out of 141 seats in the NSW Legislative Assembly. In 1899, Labor won government in Queensland (it lasted a week). In Australia's first national elections, Labor won 14 out of 75 seats in the House of Representatives. In 1903, Labor's share of the vote doubled. In 1904, Chris Watson became Labor's first Prime Minister. Other parties were struck by the strength of support for Labor, and by the energy and youth of its leaders.

And yet Lenin was puzzled. In 1913, he wrote:

"What sort of peculiar capitalist country is this, in which the workers' representatives predominate in the Upper House and, till recently, did so in the Lower House as well, and yet the capitalist system is in no danger? … The Australian Labor Party does not even call itself a socialist party. Actually it is a liberal-bourgeois party, while the so-called Liberals in Australia are really conservatives."

A century on, and Lenin's characterisation of Australia's two major parties stands up better than most of his ideas. Unlike many other commentators, Lenin discerned that Labor was not solely driven by a belief in egalitarianism. Even in its early decades, the ALP was also a party of social liberalism.

In my first speech to parliament, I argued that the Labor Party stands at the confluence of two powerful rivers in Australian politics. We believe in egalitarianism: that a child from Aurukun can become a High Court justice, and that a mine worker should get the same medical treatment as the mine owner. And we believe in liberalism: that governments have a role in protecting the rights of minorities, that freedom of speech applies as much to unpopular ideas as to popular ones, and that all of us stand equal beneath the Southern Cross. The modern Labor Party is the heir to the small-L liberal tradition in Australia. As my friend Macgregor Duncan likes to put it, "Labor is Australia's true liberal party".

Alfred Deakin was one of the earliest Australian leaders to make the distinction between liberals and conservatives. Deakin argued that liberalism meant the destruction of class privileges, equality of political rights without reference to creed, and equality of legal rights without reference to wealth. Liberalism, Deakin said, meant a government that acted in the interests of the majority, with particular regard to the poorest in the community.

Deakin's Australian version of liberalism drank deeply at the well of the British Liberal Party. In the late 19th century, Deakin's speeches frequently noted that the British Liberal Party was a positive force that sought to resist and overturn economic and class privileges throughout society. To Deakin, two of the British Liberals' greatest achievements were the legalisation of unions in 1871 and removal of 'religious disabilities' tests levelled against non-conformists and Roman Catholics.

As a member of Victoria's pre-Federation parliament, Deakin began sketching out the parameters of antipodean liberalism. Deakin was a great supporter of the Anti-Sweating League meetings, highlighting the exploitation of women's labour (or 'sweating') in that state's factories. He introduced into parliament the first factory act in Victoria, regulating hours and providing compensation for injury. And in his campaign for Federation, Deakin's vision and idealism helped the movement overcome setbacks and bypass the blockers.

On race and trade, Deakin's views were shaped by the time. He supported discriminatory migration policies and high tariff walls. Looking to the Asian region, he saw only danger. When I read back through Deakin's writings, I find myself thinking (perhaps naively) that if he had better understood the role that migration and trade could play in alleviating poverty, he might have been a Keatingesque internationalist. Given Deakin's extraordinary career, sparkling writing, and strong political philosophy, it's surprisingly easy to amputate his more illiberal views.

In the early years after Federation, it was conceivable that Deakin and his supporters might make common cause with the Labor Party. As Troy Bramston has pointed out, Deakin argued in 1903 that "more than half of [Labor's] members would be Liberal Protectionists". In 1906, he said that Labor and the Liberals were united on "seeking social justice", with the only difference being that Labor wanted reform to proceed "faster and further".

By contrast, Deakin regarded the Anti-Socialists and hard Conservatives as little more than wreckers brought together by their "attitude of denial and negation" to progressive reform.

When George Reid began to take his party down the anti-Socialist route in the 1906 election, Deakin said that his platform amounted to nothing more than a "necklace of negatives" (a line that echoes down the decades, even if it was a mite exaggerated).

In another speech, Deakin said the forces of conservatism were: "a party less easy to describe or define, because, as a rule it has no positive programme of its own, adopting instead an attitude of denial and negation. This mixed body, which may fairly be termed the party of anti-liberalism, justifies its existence, not by proposing its own solution of problems, but by politically blocking all proposals of a progressive character, and putting the brakes on those it cannot block."

But with the conservative-liberal 'Fusion' in 1909, Deakin's liberals finally made common cause with the conservatives. Much as he might have wanted to ally with the ALP, there was little appetite for such an alliance in Labor ranks. Moreover, Deakin felt uncomfortable with the tightly binding 'pledge' that Labor candidates were required to sign. The difference seems trivial in an era when all political parties requiretheir parliamentary representatives to implement their party platforms.

If anyone needed proof that the scales of history could have tipped the other way, they need only have looked to UK politics after World War I, where the collapse of that country's Liberal Party led to a surge in electoral support for British Labour. Bramston calls Fusion in Australia "a marriage of convenience … in order to counter and challenge the rise of Labor".

Since its founding in 1944, the Liberal Party of Australia has regarded itself as the rightful heir to Australian liberalism. Addressing its inaugural meeting, Robert Menzies said "We took the name 'Liberal' because we were determined to be a progressive party, willing to make experiments, in no sense reactionary, but believing in the individual, his rights and enterprise, and rejecting the Socialist panacea."

According to Senator George Brandis, Menzies never once used the word 'conservative' to describe his party. In 1960, Friedrich Hayek wrote his famous essay Why I Am Not a Conservative. At the time, most in the Liberal Party would have agreed with him.

Yet under the leadership of John Howard, liberalism ceased to be the raison d'etre of the Liberal Party. Instead, Howard argued that the Liberal Party was the custodian of two traditions: "It is the custodian of the Conservative tradition in Australian politics. It is also the custodian of the progressive Liberal tradition in the Australian polity". Howard, who had once said, "I am the most conservative leader the Liberal Party has ever had", was breaking with his party's liberal past. As George Brandis has noted: "Alfred Deakin, Robert Menzies, Harold Holt, John Gorton, Malcolm Fraser were all happy to describe themselves simply as liberals. Howard was the first who did not see himself, and was uncomfortable to be seen, purely in the liberal tradition."

Current Liberal leader Tony Abbott has taken the Liberal Party further down the conservative road, writing in Battlelines: "'Liberal National' might actually be a better description of the party's overall orientation than simply 'Liberal'."

By 2010, Abbott had further watered down liberalism, nominating three instincts that animated the Liberal Party: "liberal, conservative and patriotic". It was a special irony that Abbott chose the Deakin Lecture as the venue to declare that liberalism's stake in the Liberal Party had been diluted from 100 per cent to 33 per cent.

What is occurring today is the undoing of the Fusion movement — the divorce of liberals and conservatives. Small-L liberals like George Brandis and Malcolm Turnbull are distinctly in the minority. Ironically, the Liberal Party's "Modest Members" are anything but self-effacing, with its representatives expressing views that often bear little resemblance to the open-market ideas of Bert Kelly in the 1970s. It is little surprise that genuine liberals like Malcolm Fraser and John Hewson spend more time criticising than praising the party they once led.

A century on from the conservative-liberal fusion, Deakinite liberalism is back on the auction block. Increasingly, the Liberal Party is defined by what it stands against, rather than what it stands for. The spirit of progressive liberalism —described by Deakin as "liberal always, radical often, and reactionary never" — is in need of a new custodian.

Labor has always contained a liberal strain — partly indebted to Chartist and Fabian traditions, but also influenced by the type of social liberalism that Deakin and his followers advocated in the later nineteenth and early twentieth centuries. This fact was not lost on astute foreign observers, such as Lenin. Australian philosopher Tim Soutphommasane argues that the social democracy of Anthony Crosland and H.C. Coombs owed more to liberalism than Marxism, summing up a review with the words, "we are all liberals now, comrade".

Throughout the 20th century, social liberalism joined together many of Labor's achievements. Broad-based income taxation under Curtin. A Race Discrimination Act under Whitlam. Trade liberalisation and a floating dollar under Hawke. Enterprise bargaining and native title under Keating. Removal of much of the explicit discrimination against same-sex couples under Rudd. Carbon pricing and disability reform under Gillard. Whether through support for individual liberties or the belief in open markets, social liberalism has a prominent place in the story of the Australian Labor Party.

And yet Labor's future is still up for grabs. The debate over the future of the British Labour Party has seen many reject the economically-liberal reforms of the Blair years. Labour leader Ed Miliband has engaged parliamentarian Jon Cruddas to conduct the party's policy review. Cruddas writes beautifully about his party's proud traditions. He also points out the vacuity of polling gurus like Philip Gould — whose caricatures of "Mondeo Man" and "Worcester Woman" drew more from advertising agencies than political philosophy.

But Cruddas also throws away too much that is valuable. In his yearning for Labour to reconnect with Britain's romantic and patriotic traditions, he is too ready to discard market economics and social liberalism. I fear that British Labour is making the same mistakes Kim Beazley's opposition made in the late 1990s, when the ALP distanced itself from many of the economic reforms of Hawke and Keating, and advocated illiberal policies such as abolishing the Productivity Commission.

Labor will always be the party of egalitarianism. Too much inequality can tear the social fabric, threatening to cleave us one from another. A belief in equality is deeply rooted in Australian values, and underpins policies such as progressive income taxation, means-tested social spending, and a focus on the truly disadvantaged. This marks Labor apart from many in the Coalition, who maintain that inequality does not matter, that economic outcomes have more to do with effort than luck, and that government can do little to reduce poverty.

But in also taking on the mantle of social liberalism, Labor would be stating our commitment to open markets as the most effective way of generating wealth. Labor would be pledging ourselves to the belief — grounded in the reforms of Hawke and Keating — that tax cuts are preferable to middle-class welfare. In social policy, we would engage in more of what Franklin D. Roosevelt called "bold, persistent experimentation". We would be at least as concerned about the nation's low entrepreneurship rates as the decline of manufacturing. We would permanently reject impediments to international trade. And we would acknowledge the power of market-based mechanisms to address environmental challenges, from water buybacks in the Murray-Darling basin to a price on carbon pollution.

A commitment to social liberalism would also pledge Labor to an open and multicultural Australia. Listening to the first speeches of Labor members, I sometimes wonder what my party's founders would have made of the paeans to multiculturalism and migration that are common to almost all Labor maiden speeches in recent years. Many of Labor's founders regarded Asia's peoples as the biggest threat to their living standards. By contrast, social liberalism recognises that Australia benefits from immigration (including circular migration).

It also acknowledges that national growth isn't like the Olympic medal tally: prosperity in China, India and Indonesia will boost Australian living standards too.

The modern Liberal Party is not the party of liberalism. Instead, it is the creature of John Howard, and his intellectual heir Tony Abbott. It is, in the words Tim Fischer once used to describe his favourite High Court judges, a party of "capital-C conservatism". And that leaves social liberalism free for just one party: the ALP. It is time for Labor to grasp this mantle with both hands: becoming the party not just of egalitarianism, but also of liberalism.

Andrew Leigh is the federal member for Fraser, and a former professor of economics at the Australian National University.