Home > Economic policy > Greens economic policy, part 2

Greens economic policy, part 2

July 29th, 2004

The discussion on the Greens’ economic policy has been really great, and very helpful to me. Its helped me in working the short extract I posted into an opinion piece for the Fin, which came out today (posted below the fold). I’d like to thank everyone who took part in the discussion – in more or less subtle ways, they’ve helped to improve the final article.

As we approach an election, it’s natural to focus attention on the major parties competing for government. But in a bicameral system, minor parties play an important role, and should not be ignored. With Brian Harradine having announced his retirement, and One Nation set to disappear from the scene, it is safe to confine attention to the Democrats and the Greens.

The Democrats’ electoral support has fallen to the point where it is unlikely that they will elect any Senators this time round. Nevertheless, they have four long-term Senators, and will probably hold the balance of power in the Senate. Fortunately, they are, as far as economic policy is concerned, a known quantity.

Over the time that they have held or shared the balance of power in the Senate, the Democrats have made a substantial, and generally positive, contribution to economic policy. They have avoided ideological extremes, while generally providing a left-of-centre alternative to Labor.

Either at this election or, more probably, in 2008, the balance of power in the Senate will pass to the Greens. There is also a possibility, admittedly remote, that the Greens might hold the balance of power in the Lower House.

It is therefore, important to subject the Greens economic policy to the same scrutiny as those of the major parties. I approached this with a mixture of hope and trepidation; hope because the Greens have generally been willing to take a principled stand on the issues and trepidation because the economic policy platforms of minor parties frequently contain large elements of wishful thinking, small-group hobby horses and plain irrationality

It turns out that trepidation is unnecessary. The Greens economic policy is one of the most coherent and intellectually-defensible documents of its kind ever put forward by an Australian political party (at the opposite end of the political spectrum, the 1992 Fightback! program was similarly coherent and substantially more detailed). At the level of broad principles, it begins with the recognition that economic policy must be financially, as well as environmentally and socially, sustainable.

Far from seeking cheap popularity by arguing for both tax cuts and increased public expenditure, the Greens have insisted that new public expenditure must be financed by higher taxes. In addition, they observe that public sector debt should be matched by adequate capacity to service debt, and that dubious financial expedients like the use of privatisation to reduce measured debt should be avoided. There is even a commitment to a consistent application of accrual accounting, something that the major parties have promised, but not delivered.

As the example of Fightback!shows, the fact that a policy is coherent and well-argued does not mean that it will commend itself to everyone. In fact, precisely because the Greens have ducked the usual soft options and evasive formulas, it is easier to find points on which to disagree.

Supporters of market-oriented policies and unfettered competition will reject the policy outright. It is a traditional social-democratic policy, based on values of equality and community, of the kind that Labor might have put forward before it became more concerned about aspirational swinging voters than about its core supporters.

On the other hand, radical Green supporters will be disappointed to find that there’s no hint the view that growth in the production and consumption of goods and services is undesirable in itself, a view put forward most recently by Clive Hamilton in Growth Fetish. The stated objective of the Greens policy is ‘to maintain and enhance the collective net wealth of the nation, including non-monetary economic and social assets’, which implies support for economic growth, correctly measured to take account of environmental and social assets.

My own main point of criticism relates to the policy on foreign investment, which is couched largely in terms of old-fashioned economic nationalism. What is needed here is a more sophisticated analysis of the strengths and weaknesses of global capital markets, to back up the case for policies such as a Tobin tax.

In most electorates, a vote for the Greens will have purely symbolic significance, and it will be the allocation of second preferences between Liberal and Labor candidates that really counts. Moreover, it is doubtful that many Green voters will be motivated primarily by concerns about economic policy. Nevertheless, anyone who decides to vote for the Greens on the strength of their support for the environment and opposition to war should be encouraged to know that they are also choosing a party with a policy that is economically as well as socially responsible. If only the major parties could claim as much.

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  1. Geoff
    July 29th, 2004 at 11:05 | #1

    It was interesting to see the debate on the Greens’ policies and the comparison with the ALP. I think it is exaggerated to regard them as miles apart on certain things, but there remain certain important differences between them that would make a comparison difficult. On economic policy, the Greens support policies that put them to the Left of the current ALP (though they are more or less in line with traditional Labor policies, since abandoned). However, it would be wrong to brand them “extreme” or “left-wing” because they don’t favour outright nationalisation or a Soviet-style command economy, as Marxists tend to. However, their concerns for over-development, logging and uranium mining put them at odds with the ALP and some trade unions. In foreign policy terms, they are in line with traditional Labor policies in their support for the U.N. and international cooperation, but their opposition to foreign bases and their support for nationalist movements in places like Palestine and Aceh (policies Labor have NEVER supported) put them well to the Left of the ALP. And in social policy, the Greens “liberal” attitudes on many things, from refugees to feminism to gay rights, puts them to the Left of the ALP [while I concede that there is strong support for these issues from sections of the ALP, it remains inherently problematic for Labor, whose conservative tendencies, combined with the social conservatism of workers, exacerbates this]. You could argue that the Greens’ views are largely influenced by the new social movements, and represent an alternative for many voters who in the past may have been ALP left-wingers or communists. If anything, they have been sensible in pursuing admirable economic policies, and avoiding ridiculous anti-materialism.

  2. Tom DC/VA
    July 29th, 2004 at 11:50 | #2

    John – that’s quite good this time around.

  3. MB
    July 29th, 2004 at 11:53 | #3

    I think the Greens’ general outlook is to the Left of the ALP, particularly in terms of foreign policy, the environment and social questions like refugees. They have been smart to drop anti-materialism, which would have surely kept them confined to the margins of politics, in favour of sensible economic policies, since abandoned by Labor.

    To some extent, the Greens have become a haven for disaffected left-wingers who see the Greens as the only mainstream party willing to champion “left-wing” policies (the so-called “Red Greens”). In another life, these people might have been ALP left-wingers or communists.

    The Greens are then in the process of transforming themselves from a single-issue party, into a broad assortment of tendencies to the Left of the ALP. If they succeed remains to be seen. Much will depend, I think, in seeing whether or not they lapse into anti-materialism again.

  4. Paul Norton
    July 29th, 2004 at 11:56 | #4

    “On the other hand, radical Green supporters will be disappointed to find that there’s no hint the view that growth in the production and consumption of goods and services is undesirable in itself [snip]”

    Those of us who’ve looked at the relationship between economic activity and ecological sustainability have discovered that the net effect of measures for environmental protection and regulation in developed economies has been to slightly *increase* economic growth and employment. An excellent source on this question is “The Trade-Off Myth” by Eban Goodstein.

    Further, a serious program of ecologically driven restructuring of the Australian economy could easily be designed to have positive spinoffs in conventional economic terms, and to address regional and sector-specific employment problems. This is a recurring theme in much of the policy and research produced by the ACF, the Australia Institute and (in its initiatives on the environment) the AMWU.

    I also tend to agree with the argument of Andre Gorz (amongst others) that economic growth is necessary to provide funds for investment in ecological restructuring and related R&D, and to finance things like income support, retraining and other adjustment assistance for workers in affected industries.

    All that said, I think there remains room for debate about whether economic growth is ecologically sustainable in the long run, and what would constitute a workable program for the transition to a steady-state economy (as originally proposed by John Stuart Mill and revived by Herman Daly).

    (NB: Just to declare my bias, I’m a member of the Queensland Greens.)

  5. Peter Murphy
    July 29th, 2004 at 12:41 | #5

    Firstly, I’m glad John did the article for the Fin I asked about. Different emphasis, yet just as true. Good on you.

    One thing that you could have added is to emphasize how much Australian economic growth walks hand in hand with Australian ecological sustainability. That may be obvious to some of the Fin readers, but not to all. I could mention the Murray-Darling basin, or the Great Artesian Basin, soil salinity and soil erosion. These are problems that affect Australia more or less directly.

    I have been teaching in Việt Nam, and people are often incredulous as to how sparse Australia is. (In fact, it’s the 3rd least densely populated independent country, after Namibia and Mongolia). I tend to answer “water”, or lack of it.

  6. July 29th, 2004 at 13:11 | #6

    The new Greens are in the process of establishing their credibility as a real Left wing political alternative to the ALP, by hooking together the seventies New Left cultural philosophy and forties Old Left economic philosophy.
    Readers of this blogs comments section know that I am no great fan of the New Left cultural philosophy. The experience of the past two decades has shown that the Old Right still has a thing or two to contribute to the Culture Wars.
    I would be even less of a fan of the Greens if they espoused New Left economic policies such as “funny money” schemes promoted by Jim Cairns, or “small is beautiful” Schumacherism, or “leisure society” theories of Clive Hamilton.
    But the Greens have hit the mark with their espousal of Old Left economic philosophy. This might be termed communitarian/egalitarian Keynsianism, combining a concern for community provision of social services and a focus on a more equitable division of economic resouces.
    This certainly makes a refreshing change to warmed over New Right national economic theories of liberal micro-economic reform, which have reached the point of diminishing returns and lack political popularity.
    My biggest criticism of the Greens is that they focus on ecology as the key to human well-being. This is certainly part-true, without material resources to supply our creation, and a natural environment to delight our recreation, we would be much the poorer.
    But the New Right still has a couple of aces up its sleeve. The cultural philosophy of economic globalism and tech-progressivism st one that still holds the key to human progress and happiness.
    Here the Greens are amabivalent if not hostile. Unless, and until, microbes get the vote, all political parties should make the global development of the tech-productive forces their main priority.

  7. July 29th, 2004 at 13:50 | #7

    If the Greens are hooking into 1940s ALP economics, they will undoubtedly agree with some of the stuff I saw in an old ALP song book. You know, songs like “Our fathers cleared the bush, boys”.

  8. Michael Burgess
    July 29th, 2004 at 14:02 | #8

    Most discussions on the greens supposed new found rationality and movement away from their previous moronic anti-materialistic positions miss the point. They are essentially now in the same boat as Marxist academics etc who for decades after the likes of Arthur Koestler’s book Darkness at Noon was published continued to be true believers. When they did modify their views, their message was essentially that ok we got it wrong in the past but now we have got it right and everyone else holding different views are still reactionaries. Trade unionists who opposed communist control of unions are still labelled extreme right wingers etc. The reality is that many green commentators have taken far too many years to approach anything resembling a rational form of analysis. When the greens start to welcome western intervention in the likes Afghanistan and even start lobbying to intervene in the likes of Sudan, Iran and Burma I might start to take them seriously. Oh, and an apology by some green (and Marxist) academics and activists for the way they have reacted to individuals such as myself over the years when criticising their extremism would also be welcome.

  9. John Quiggin
    July 29th, 2004 at 14:08 | #9

    PML, I remember that one with affection. A good song, even if in retrospect our fathers might have done better to clear a little less enthusiastically.

  10. July 29th, 2004 at 14:36 | #10

    My reference to the Greens embrace of 1940s economic refers to the institutional, rather than environmental, aspects of post war economic policies.

  11. Paul Norton
    July 29th, 2004 at 16:39 | #11

    Since most of the recent post by Michael Burgess criticises Marxists for what some of them used to believe, and Greens for what he asserts (without substantiation) that we used to believe, I will ignore it as being off-topic.

    However, on the issue of whether the Greens should welcome or lobby for Western intervention (presumably including military intervention) in various non-Western countries, I’d like to quote the following passage from the Australian Greens policy on Peace and Security:

    “The Australian Greens are committed to. . . opposing military intervention in countries, unless sanctioned by the United Nations (UN) and the intervention is for humanitarian reasons.”

    The complete policy is at: http://www.greens.org.au/policies/internationalissues/peaceandsecurity

    I would also make the additional point that the Greens are far from unique in holding such a position.

    Also, since Michael is concerned about conditions in Sudan, Iran and Burma, he might like to check the following links:

    http://www.greens.org.au/mediacentre/mediareleases/senatorbrown/17064/view?searchterm=Sudan

    http://www.greens.org.au/mediacentre/speeches/senatornettle/asylumseekers/view?searchterm=Iran

    http://www.greens.org.au/mediacentre/mediareleases/johnkaye/34/view?searchterm=Burma

    He might also like to check the following link on Tibet:

    http://www.greens.org.au/mediacentre/mediareleases/michaelorganmp/15072/view?searchterm=Tibet

    Finally, since a number of commentators have made cavalier criticisms of “anti-materialism” and the Greens’ supposed one-time support for it, I would like them to:

    (a) explain what they mean by anti-materialism;
    (b) explain what is wrong with it and;
    (c) provide evidence (such as a verifiable reference or url) to demonstrate that the Greens either supported such a position at some time in the past, or still do so.

  12. July 29th, 2004 at 17:14 | #12

    Anti-materialism would be the rejection of the value of consumption. Many people (including me) think this is wrong because consumption has value in the fact that humans desire it (among other reasons). I haven’t claimed that the Greens supported such policies – but I don’t doubt that many greenies do.

  13. kyan gadac
    July 30th, 2004 at 01:47 | #13

    But John H, surely the question is not the rejection of the value of consumption but of how much consumption?

    Jack Strocchi wrote
    My biggest criticism of the Greens is that they focus on ecology as the key to human well-being. This is certainly part-true, without material resources to supply our creation, and a natural environment to delight our recreation, we would be much the poorer.

    We wouldn’t be at all, Jack, you can’t have an economy without an ecology.

  14. Brian Bahnisch
    July 30th, 2004 at 08:08 | #14

    Paul, as a Queensland Green might it not be a good tactic to put some-one other than Drew Hutton in front of the mike/camera as a spokesman? I’ve been inclined to vote green for yonks but I keep getting offered Drew. He must live hereabouts. The reason I don’t vote for him is that he is a bit loose with the lips and can be very off-hand at times. Not a good look when he clearly hasn’t adequately informed himself, especially when it relates to other people.

  15. Paul Norton
    July 30th, 2004 at 10:52 | #15

    Brian, your perspective may be influenced by the part of Brisbane you live in. In my neck of the woods we’ve had two younger Greens (Juanita Wheeler and Ben Pennings) as candidates and spokespeople in the State and Local elections, and they acquitted themselves well IMHO.

    I’ll tactfully pass on your critical observations to Drew.

  16. John Quiggin
    July 30th, 2004 at 11:23 | #16

    I’ll add my voice to Brian’s on this. I don’t have any well-defined objection to Drew Hutton, but I don’t think it’s good for a party to have the same public face for years on end. Inevitably, baggage accumulates over time, and more of it is bad than good – one remark perceived as silly gets more attention than ten sensible observations.

    Admittedly, Bob Brown has played a similar role at the national level for a long time but he’s the leader of the Parliamentary Party and a major public figure in his own right.

  17. daz
    July 30th, 2004 at 16:03 | #17

    Drew’s been a “long-time Brisbane character” (according to ABC local radio, which I guess makes him a bit like The Plastic Bag Man of Toowong) for 20 or 30 years now, so he’s someone who’s name and face sticks in the mind. He didn’t even run in either of the previous State or Federal elections, but no-one remembers either of the lead candidates/spokespeople in those campaigns (Juanita Wheeler and Sarah Moles respectively) let alone the many other spokespersons the Party’s had over the last 10 years.

    I won’t dispute the general point that’s being made about a need for change, but I do feel the need to point out that the Party is a smallish 100% volunteer organisation and it’s hard to get people who have both the knack for being the public face of the party and the time to devote to the job.

    regards

    d

  18. Paul Norton
    July 30th, 2004 at 16:14 | #18

    In response to Brian and John, I agree that a more diverse and younger set of faces for the Queensland Greens can only be a good thing. It’s something we’re working on. However it’s not obvious that this can be brought about simply by ditching Drew.

    The other issue is (a) whether the Queensland Greens have been seriously underachieving in elections relative to our potential and (b) whether Drew’s pre-eminence is a principal factor in any such underachievement. In our two most recent outings, we got over 8% of the popular vote in the seats we contested in the State election, and 10% for Drew in the Brisbane Lord Mayoral election. The State election compares reasonably well with the Green vote in the most recent NSW and Victorian State elections (in arguably more hospitable political environments), and both figures compare with what the Australian Greens are polling in AC Neilsen and Morgan polls. They also match what was achieved by the NZ Greens in the most recent NZ election, and are better than what a majority of national Green Parties (including many in Europe) have been achieving lately.

    Of course, if one thinks the Queensland Greens have the potential to emulate, on a Brisbane-wide or even a statewide basis, the strong performances of Green candidates in (for instance) inner-city Sydney and Melbourne local jurisdictions and in Byron Shire, these figures are disappointing. But I tend to think that this contrast is more a case of the Sydney, Melbourne and Byron Greens doing very well than the Queensland Greens doing badly. And insofar as I can identify reasons why our performance may not have matched our potential, most of them have little to do with the eminence or otherwise of Drew Hutton. Obviously I’m constrained in what I can say what I think those reasons are, outside of party forums.

  19. July 30th, 2004 at 17:25 | #19

    I have to say that it is useful to read the entire greens policy platform to take the economic policy in context. It is all very coherent, quite coherent enough for a non-economist like me to understand.

    And lets be fair, some of the accountability and transparency policies I would have no quibble at all. But taken as a whole, the Green policy is radically ambitious, and is courageous in the “Sir Humphrey Appleby” sense of the word.

    As an unambigiously social-democratic platform, it will never appeal to a mass audience but it might well be enough to get them the balance of power in the Senate.

    This will cause future Liberal govts no end of heartbreak. It means that any move to liberalise the economy will have to come from a reformist ALP govt such as the early Hawke govt.

  20. Brian Bahnisch
    July 31st, 2004 at 10:50 | #20

    Paul, I think the Greens will always have problems in country areas. My elder brother is on the land. They think of me as a “socialist”. As such I’m a curiosity, a result of a misspent youth at university. If I announced myself as a Green they’d freak out. I’d be seen as a public enemy.

    My bro has had a bit to do with greens on WAMP studies and elsewhere. He reckons they lie or get their facts wrong and often recommend solutions to problems that are inappropriote, even ridiculous. He’s an intelligent bloke and unfortunately can quote you examples until the cows come home.

    My young bro is a senior lecturer at Gatton Agricultural College and is sympathetic to the Greens. Last year they gave an honorary doctorate to a prominent green who gave a speech. She was quite offensive, saying that the contribution of agriculture to the economy was negligible and opined that we would be better off not doing it in much of Australia. The only reason there was not a walkout was because the missus on a western pollie, whose son was graduating, had his foot nailed to the floor. My bro reckons that if he’d walked most of the audience would have followed.

    Strangely the Executive Dean couldn’t see that this was a problem in the college’s relations with its clientele!

  21. Paul Norton
    August 2nd, 2004 at 11:00 | #21

    Brian, were your two brothers referring to Greens (as in Green Party members) or greens (as in environmentalists in general?

    In relation to the first brother’s experiences, I can’t really comment unless I know the specific cases he refers to in his comments. However, if he was reciting the Susan Marohasy/IPA line on water allocations I fear that he has been misled.

    As far as the “prominent green” who spoke at Gatton is concerned, if she literally stated that the contribution of agriculture to the economy is negligible then that was both incorrect and completely unconstructive when talking to a farming sector audience. On the other hand, an arguable ecological and economic case can be made for land retirement in some areas of Australia, and for a shift to different crops and farming practices in others. As always in such cases, the sticking point is that people, communities and ways of life are involved, and this calls for a participatory approach rather than pulpit-pounding.

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