THE LIGHT ON THE HILL
Noel Pearson
Ben Chifley Memorial Lecture Bathurst Panthers Leagues Club Saturday 12 August 2000
In recent times I have been thinking about the social problems of my people in Cape York Peninsula. The nature and extent of our problems are horrendous. I will not reiterate the statistics here tonight, suffice to say that our society is in a terrible state of dysfunction.
In my consideration of the breakdown of values and relationships in our society - I have come to the view that there has been a significant change in the scale and nature of our problems over the past thirty years. Our social life has declined even as our material circumstances have improved greatly since we gained citizenship. I have also come to the view that we suffered a particular social deterioration once we became dependent on passive welfare.
So my thinking has led me to the view that our descent into passive welfare dependency has taken a decisive toll on our people, and the social problems which it has precipitated in our families and communities have had a cancerous effect on our relationships and values. Combined with our outrageous grog addiction and the large and growing drug problem amongst our youth, the effects of passive welfare have not yet steadied. Our social problems have grown worse over the course of the past thirty years. The violence in our society is of phenomenal proportion and of course there is inter-generational transmission of the debilitating effects of the social passivity which our passive economy has induced.
In considering the sad predicament of our people and the role which passive welfare has played in the erosion of our indigenous values and relationships, I have had cause to think about passive welfare provisioning and welfare policy generally in Australia. Thus I have also been considering the history of the Australian welfare state, its origins and its future.
The historical experience of my people in Cape York is different from that of mainstream Australians. I will therefore talk about two histories: the history of your mob and my own.
Before I do so, let me first say that my historical and social discussion has been assisted by some of the analyses of the early international labour movement. I am therefore thinking about class. I refer to "class" in Australia because its existence cannot be denied - it is a historical and contemporary fact, even if the term has lost currency, indeed respectability, in public discussion today. Indeed the Australian Labor Party talks no more about class, let alone class struggle. The C word has departed from the rhetoric of the official left. This is understandable, but regrettable.
It is understandable because the political philosophy of the Left in Australia has changed and the notion of the struggle between classes is seen as antiquated, divisive and ultimately fruitless given the apparent inevitability of stratification in a free market society. This notion is after all associated with a political and economic system that is now discredited with the collapse of communism.
However it is harder to understand the abandonment of class in our intellectual analysis of our society and history. How can we pretend that class does not exist?
If the policy prescription - large scale expropriation of private enterprises - that followed the class analysis of the early international labour movement was wrong, it does not mean that all aspects of the analysis are therefore invalid. Indeed, whenever there is public discussion of the widening social and economic divide in our country - as The Australian did in its recent series - we are faced with the fact that there are class cleavages in our society. And yet our policy debate is largely conducted as if class does not exist.
Classes are treated as political constituencies and labelled with evocative and provocative terms such as "the battlers" and "the mainstream" and "the forgotten people" and "the elites". The theory of the dynamics and operation of class society, as explained in the analysis of the early international labour movement, has been largely discarded. It does not inform policy.
But I find that I cannot so easily avoid such analysis in seeking to understand the predicament of that lowest underclass of Australians: my mob. For it explains our predicament in a way that the prevailing confusions do not.
Recently, I read the comments of a prominent young indigenous sportsman who has been speaking out, in his own way, about his views on the oppression of indigenous people in this country. In a blunt statement this young man said:
"Today's government and society are trying to keep us down, keep us in our little place, and take away our self-esteem, take away our pride ... They want to kill us all and they're still trying to kill us all."
Most indigenous Australians would understand this feeling, even if they would not articulate their sense of oppression in the same way. Most indigenous Australians know the sense that every time we try to climb we face daggers of impediment, prejudice, difficulty and strife.
My own thinking is that this viewpoint is to be explained by understanding the structures of class which operate to keep our people down. There are structural reasons why we occupy the lowest and most dismal place in the underclass of Australian society. There are structural reasons why all of our efforts to rise up and to improve our situation - are constantly impeded. The concept of race has been coopted by the mechanisms of class to devastating effect against the interests of black Australians. It means that even among the lower classes the blacks have few friends because the whites focus their Hansonesque blame and resentment upon the blacks, who are either to be condemned for their hopelessness or envied for what little hope they might have.
>From my acknowledgment of the reality of class society you should not infer
that I am a proponent of socialist or indeed any economic policies. I
do not propose, indeed I do not have, any economic policy for the country.
My preoccupation is to understand the situation of my people, which
necessitates an understanding of class.
But first I want to analyse the present situation of the lower classes of Australia generally, and the historical origins of the present situation.
The two major influences on the lives of your mob have been industrialisation and the emergence of the Welfare State. During the stage of the industrialised market economy when the Welfare State was developing, the lower classes consisted mainly of a huge, homogeneous industrial army and their dependents. Since they lived and worked under similar conditions and were in close contact with each other, they had both the incentive and the opportunity to organise themselves into trade unions and struggle for common goals. They possessed a bargaining position through collective industrial action.
Many of your great grandparents and their parents were members of this industrial army, and they got organised to insist on a fair deal for working people and their families.
At the same time it was in the objective interest of the industrialists to ensure that the working class didn't turn to radical ideologies, and that the workers weren't worn down by the increasing speed and efficiency of industrial production. Health care, primary education, pensions, minimum wages, collective bargaining, and unemployment benefits created a socially stable and secure working class, competent to perform increasingly complex industrial work, and able to raise a new generation of workers.
These two factors, the organisation of the workers and the objective interest of the industrialists, produced an era of class cooperation: the Welfare State. The support and security systems of the Welfare State included the overwhelming majority of the citizens. The welfare ideology predominated in Australia during the long period of bipartisan consensus founded on what Paul Kelly called in his book The End of Certainty "the Australian Settlement", established by Prime Minister Alfred Deakin just after Federation and lasting up to the time of the Hawke and Keating governments in the 1980s.
At this point let me stress two points about the Welfare State that developed in Australia from 1900.
Firstly, the key institutional foundations of this Welfare State were laid down by the Liberal leader, Alfred Deakin. As well as the commitment to a strong role for government (what Kelly calls State Paternalism) it included the fundamental commitment to wage conciliation and arbitration which became law in 1904. Throughout most of the twentieth century the commitment to a regulated labour market enjoyed bipartisan support in this country. Whatever complaints the non-Labor parties harboured about organised labour, there prevailed a consensus about the necessity and desirability of a system of labour regulation in this country, right up to the government of Prime Minister Malcolm Fraser. It is important to remember the bipartisan consensus around the general shape of the Welfare State established in the early 1900s.
Secondly, it is also important to remember that the Welfare State was the product of class compromise. In other words it arose out of the struggle by organised labour - it was built on the backs of working people who united through sustained industrial organisation and action in the 1890s. It was not the product of the efforts of people in the universities, or in the bureaucracies or even parliament. Whilst academics, bureaucrats and parliamentarians soon came to greatly benefit from the development of the Welfare State - and they became its official theorists and trustees - it is important to keep in mind that the civilising achievement of the Welfare State was the product of the compromise between organised labour and industrial capital.
When the Arbitration bill was introduced into Parliament, Deakin spoke of this compromise as "the People's Peace". He said:
"This bill marks, in my opinion, the beginning of a new phase of civilisation. It begins the establishment of the People's Peace...which will comprehend necessarily as great a transformation in the features of industrial society as the creation of the King's Peace brought about in civil society...imperfect as our legal system may be, it is a distinct gain to transfer to the realm of reason and argument those industrial convulsions which have hitherto involved, not only loss of life, liberty, comfort and opportunities of well-being."
The Social Democrats have given three reasons for defending the Welfare State:
Firstly to counteract social stratification, and especially to set a lower limit to how deep people are allowed to sink. People with average resources and knowledge will not spend enough on education and their long term security (health care and retirement), and they and their children will be caught in a downward spiral, unless they are taxed and the services provided. This is the main mechanism of enforced egalitarianism, not confiscating the resources of the rich and distributing them among the poor, because the rich are simply not rich enough to finance the Welfare State, even if all their wealth were expropriated.
Secondly to redistribute income over each individual's lifetime. This is often performed not on an individual basis (those who work now pay some of older peoples' entitlements and will be assisted by the next generation), and there is some redistribution from rich to poor, but the principle is that you receive approximately what you contribute (in the case of education you get an advance).
Thirdly because health care and education (the two main areas of the public sector of the economy) can't be reduced to commodities on the market, because health care and education are about making everybody an able player on the market. In other areas of the economy you can then allow competition.
Classical welfare is therefore reciprocal, with a larger or smaller element of redistribution.
But now, alas, the circumstances that gave rise to the Welfare State have changed.
The modern economy of the developed countries, including our own is no longer based to the same extent on industrial production by a homogeneous army of workers. The bulk of the gross domestic product is now generated by a symbol and information-handling middle class and some highly qualified workers. These qualified people have a bargaining position in the labour market because of their individual competence, whereas traditional workers are interchangeable and depend on organisation and solidarity in their negotiations with the employers. A large part of the former industrial army is descending into service jobs, menial work, unemployment. Many of their children become irrelevant for economic growth instead of becoming productive workers like their parents and grandparents.
New growth sectors of the economy of course absorb many people who can't make a living in the older sectors. Also, income stratification is now in many countries being permitted to increase. Employment is created at the cost of an increase in the number of people on very low wages. But even if mass unemployment is avoided, the current economic revolution will have a profound effect on our society: it will bring about the end of collectivism.
The lower classes in developed countries have lost much of their political influence because of the shrinking and disorganisation of the only powerful group among them, the working class proper. The shift in the economy away from manufacturing, and economic globalisation which makes it possible to allocate production to the enormous unregulated labour markets outside the classical welfare states, have deprived the industrial workers in the developed countries of their powerful position as sole suppliers of labour force to the most important part of the world economy. The lower classes are therefore now unable to defend the Welfare State. Nor is there any longer any political or economic reason for the influential strata of society to support the preservation of the Welfare State.
Those who have important functions in the new economy will be employed on individual contracts, and will be able to find individual solutions for their education, health care, retirement and so on, while the majority of the lower classes will face uncertainty. And the Welfare State will increasingly be presented as an impediment to economic growth.
In Australia the effects of this revolution and the dismantling of the 80 year old Australian Settlement, have been alleviated by the compromises between the traditional Australian social system and the economic internationalisation that was carried out during the Hawke-Keating years. These successive Labor prime ministers presided over this transition in the Australian economy, and they sought to introduce reform without destroying the commitment to the welfare state. Labor eventually lost the 1996 election but the earlier endorsement of the electorate of this compromise to a large extent forced the coalition parties to be more cautious about dismantling the welfare state, notwithstanding their preferences.
But the story does not end here. The welfare state will continue to face pressure to retreat. As I have said, it will increasingly be presented as an impediment to economic growth. You do not need me to tell you this.
When I consider the history of your people, I am struck by the ironies. Few Australians today appreciate their history. They do not realise that the certainties they yearn for were guaranteed throughout the twentieth century by the Welfare State to which the great majority of Australians were reconciled and committed. They do not realise that this civilising achievement was founded on the efforts of organised labour. Instead of appreciating the critical role that the organised labour movement played in spreading opportunity and underwriting the relatively egalitarian society which so many Australians yearn for today - organised labour has been diminished in popular esteem. It has come to be demonised, and whilst working people have a proud story to tell - of nation building no less - this is not understood by Australians today.
The second irony concerns the sacrifices that working people and the organised labour movement made during the painful transition period in our country that occurred from 1983 - and the complete lack of acknowledgment in the historical understanding of the Australian community of this. Wage restraint underpinned the reform processes pursued under Prime Ministers Hawke and Keating. If these reforms were essential and have underpinned the current economic performance of our country - what credit did the working people get from the responsibilities that they shouldered for the sake of the national economic interest? The irony is that rather than taking the credit for the outcomes of the economic reform process during this period (when incomes declined and profit shares surged) the organised labour movement ended up being perceived as retarding economic performance, and the call for labour market 'flexibility' never abated. Indeed the pressure mounted and continues today. At the end of the day, organised labour was left between a rock and hard place: responsible for economic reform, but unable to claim credit because many workers wondered whether the sacrifices had been worth making.
That is the origin and the present predicament of the Australian Welfare State, upon which your people have relied for generations and whose future is of critical significance to the prospects of your children.
The predicament of my mob is that not only do we face the same uncertainty as all lower class Australians, but we haven't even benefited from the existence of the Welfare State. The Welfare State has meant security and an opportunity for development for many of your mob. It has been enabling. The problem of my people in Cape York Peninsula is that we have only experienced the income support that is payable to the permanently unemployed and marginalised. I call this "passive welfare" to distinguish it from the welfare proper, that is, when the working taxpayers collectively finance systems aimed at the their own and their families' security and development. The immersion of a whole region like Aboriginal Cape York Peninsula into dependence on passive welfare is different from the mainstream experience of welfare. What is the exception among white fellas - almost complete dependence on cash handouts from the government - is the rule for us. Rather than the income support safety net being a temporary solution for our people (as it was for the whitefellas who were moving between jobs when unemployment support was first devised) this safety net became a permanent destination for our people once we joined the passive welfare rolls.
The irony of our newly won citizenship in 1967 was that after we became citizens with equal rights and the theoretical right to equal pay, we lost the meagre foothold that we had in the real economy and we became almost comprehensively dependent upon passive welfare for our livelihood. So in one sense we gained citizenship and in another sense we lost it at the same time. Because we find thirty years later that life in the safety net for three decades and two generations has produced a social disaster.