No.11 Summer 2016

Ordering Australian capitalism: property, fetishism, debt and social order

Government must not form a counterpoint or a screen…between society and economic processes. It has to intervene on society as such, in its fabric and depth. Basically, it has to intervene on society so that competitive mechanisms can play a regulatory role at every moment and every point in society and by intervening in this way its objective will become possible, that is to say, a general regulation of society by the market.

– Michel Foucault on the neoliberal project[2]

This article is concerned with how social and economic stability are created and maintained in Australia, although some aspects draw on and are relevant to the situation in liberal capitalist states internationally. It first looks at how private residential property creates a particular social structure, contributes to capital accumulation and enforces market dependency on the population. It then explores the way that property is only one aspect of a broader market colonisation (viewed through the lens of commodity fetishism) of individual, society and the state; a process that shapes subjectivities and institutions to reflexively mimic market operations. It looks at the role of financial debt in creating a disciplinary order that reinforces “government of the self”, understood as the way capital rules in liberal capitalist regimes, and outlines some political ramifications in the context of the collapse of the workers’ movement.

I try to navigate the tensions between the particularities of the neoliberal era and its political expressions, and the universal processes and problems immanent in free market capitalism. I suggest, following others, that while there have been significant intensifications of certain processes, there has been no great rupture with the past. I also comment on some of the instabilities in Australia as the debt-fuelled quarter-century economic boom approaches its limits.[3]

Property and market dependency

What the Australian cherishes most is a home of his own, a garden where he can potter and a motorcar… [A]s soon as he can buy a house…he moves to the suburbs… A person who owns a house, a garden, a car and has a fair job is rarely an extremist or revolutionary.

– 1951 Australian government publication[4]

Private residential property is one of the most important institutions of Australian capitalism. It geographically atomises the working class and structurally underpins the family. It is a means of discipline and exploitation through mortgage debt. It is a site of capital investment and speculation, and an engine of economic growth. Our cities are among the most suburbanised and sprawling in the world. The urban maps were largely constructed in the late nineteenth century, as corridors formed around newly-established train lines pushing out of the CBDs. Detached housing with gardens soon became the model form of home,[5] although the majority of the working class remained centrally concentrated, often in slums. More than 40 percent of households were occupied by owner-occupiers by the turn of the century.[6] The distribution of private allotments of land had always been part of the colonial project, with varying degrees of success.[7] In Western Australia, the colonial secretary in 1911 described homes as “fortified castles for the working man” – a gesture toward the social and economic stability that property was meant to provide.[8] Private provision of housing for the labouring class was institutionalised by the Harvester judgement of 1907, which included the price of shelter in the basic wage and underpinned the “wage earners’ welfare state” for the next century, establishing that workers would provide housing for themselves through the market.[9]

The second Great Depression, the consolidation of the Stalinist dictatorship in Russia and the rise of communist parties in the West prompted certain reformers to consider more fully the role of property in social engineering. In the US, Frank Lloyd Wright unveiled his plan for Broadacre City in 1935, proposing “all redistribution of land – a minimum of one acre going to the childless family and more to the larger family” as the basis for the idyllic rural city wherein “individuality…must thrive. Unwholesome life would get no encouragement”.[10] William Levitt, a real estate developer known as “the father of American suburbia”, allegedly said: “No man who owns his own house and lot can be a communist. He has too much to do”.[11] Joseph Lyons and, above all, Robert Menzies were the political pioneers in this part of the world. Menzies’ “forgotten people” address to the middle classes in 1942 (from opposition, after serving his first term as PM) spoke of “homes material, homes human, and homes spiritual”. In Menzies’ view, ownership was the way to foster patriotism through people gaining “a stake in the country”, to promote self-reliance “by self-sacrifice, by frugality and saving” and to create a material base for anti-collectivist individualism in a society strictly ordered by the state. “The home is the foundation of sanity and sobriety”, he said; “it is the indispensable condition of continuity; its health determines the health of society as a whole.” [12]

Sub-division, suburban sprawl and relatively high rates of ownership facilitated by government subsidies predated the Second World War. Under Menzies, the ideal of the self-sufficient home as locus of family and nation was given reality as post-war reconstruction took shape and the long boom took off. Housing shortage and fears of a relapse into economic crisis prompted the establishment of the Commonwealth State Housing Agreement (CSHA), which dispersed funding for the construction of housing stock, initially rental properties only, primarily on large suburban estates. From the mid-1950s, “the main aim of the CSHA was to encourage home ownership via the provision of low interest loans to home builders and the sale of houses on highly concessional terms”.[13] Some 30 percent of all Commonwealth funds were set aside to promote owner-occupation. Between 1945 and 1960 about 900,000 new dwellings were completed. Public housing was also sold to tenants at this time: between 1956 and 1963, the NSW Housing Commission sold 80 percent of all houses that it built.[14] Australia built the highest home ownership rate in the world – growing from just over 50 percent of households in 1947 to 70 percent 14 years later; it has hovered around that level ever since, dropping only slightly to about 67 percent in recent times.[15]

There was a tussle between traditionalist and modernist architecture (the latter championed by Robin Boyd), which reflected the contradiction between the conservative aspiration to domesticity and more progressive-thinking experimentation. The modernists pushed open-plan living, which broke down the compartmentalised inner spaces within the home and gestured to new ways of organising domestic life. Yet they still took for granted cohabitation and home as a site of the nuclear family, albeit one which embraced innovation. “Architecture and town planning were regarded as scientific disciplines based on principles that were unchallengeable”, write Tony Dingle and Seamus O’Hanlon. “Houses should be, in Le Corbusier’s famous phrase, ‘machines for living in’ … [each would] look like a laboratory.”[16] The point is that the way the housing stock has been structured created stability in particular ways, regardless of the architectural design. Fiona Allon writes:

“[H]ome” became a central organising index of identity at multiple levels… This metaphorics of home was consciously and deliberately employed to construct ideas of individual autonomy and self-actualisation as well as dominant narratives of citizenship, national identity and nation-building. By conflating the inner values of the personal self with the imagined community of the national self, these links allowed a particular conception of national belonging to occupy a place of “profound emotional legitimacy”.[17]

There is no evidence to suggest that home ownership provided the basis for political conservatism in the way that Menzies and other right wing politicians hoped. (If it had, the industrial upsurge of the late 1960s and early 1970s would not have been possible, occurring as it did at the peak of owner-occupation). Residential property nevertheless has become a key social anchor. As an atomised unit of society, it reinforces the alienated existence of capitalism, encourages the fragmentation of the working class and shapes domestic life in a way that is almost impossible to avoid. The structure of housing stock is designed to entrench cohabitation and provide a material base for the family. For a long time it went hand in glove with marriage. An important aspect of establishing capitalism was embedding free contract socially to aid its economic naturalisation. Marriage, as a legal agreement regulating inheritance, mirrors and helps naturalise the contractual nature of capitalist life, underpinning the family as an economic unit that provides the next generation of workers from whom profit is extracted. It often is said to be the “cornerstone” of the family. That has not been true in the West for decades. Property is much more important. Plenty of people choose not to get hitched and this by and large is irrelevant to social reproduction because an urban geography built for cohabitation has been firmly established. Those who proudly affirm their independence from the constraints of married life, who eschew the formal recognition granted by the state or the church, nevertheless find a “partner” and bow to the contract of the estate agent or the financial institution, whose endorsement is more difficult to obtain. (Any two drunks can have their nuptials witnessed and confirmed by an Elvis impersonator in Vegas; the bank will make a much more sober and detailed assessment of your life before approving a mortgage.)

As Lyn Richards notes, “a home is a ‘family home’. Whilst family life changes rapidly, there seems amazingly little change in the ways people link home to private family life, and the proper steps on the family ladder.”[18] If anything, property’s place in the national psyche has been strengthened as it has become naturalised, even if the associated utopias, such as domestic bliss and suburban paradises, have not often materialised. Richards surveyed the composition and aspirations of inhabitants of a new suburb in a capital city in the 1990s. She noted typical attitudes toward ownership. “I suppose it’s the Great Australian Dream; we always expected to own a house or own property, so we just bought”, one respondent said. “It’s the done thing… It just sort of came naturally. The obvious thing is to buy a house and own it.” Another similarly said, “I don’t know that I could give you a reason for wanting to. I suppose it’s just like, as they say, the Great Australian Dream. It’s just something you do.”[19]

This is not simply a ruling class conspiracy. Many factors influenced the increase in ownership. After the Second World War there was an estimated 300,000 dwelling shortage. A 1949 Gallup Poll found that one quarter of metropolitan houses contained an extra family or individual who would have moved out if alternative accommodation had been available.[20] So people often had to fend for themselves (about one third of all houses constructed in the 1950s were owner built).[21] Rent controls resulted in landlords selling stock to make money in other ways. Full employment, cheap and expanding finance, cheap and plentiful land, and, often, the desire to escape the slums, combined to make ownership attractive and achievable for many workers. We might, then, view owner-occupation as a rational choice in these circumstances. The point is that people’s choices were radically constrained, and their preferences constructed by the age. The government was deliberate in how it subsidised accommodation, and privileged private ownership above all other options. The result, whether owning or renting, was market dependency. More than 90 percent of all households were dependent by 1970.[22]

Another way that the home provided stability was through property emerging as “a privileged or ‘protected circuit’” of capital. “Housing production”, Mike Berry writes, was “cast as one element of a broad program of post-war reconstruction in which the new Keynesian economic policy tools were to be directed towards managing the aggregate level of economic activity in the economy as a whole”.[23] About 80 percent of all building activity in the first seven years after the war was housing construction.[24] The construction industry had economic multipliers – wholesale and retail trade and manufacturing in particular as houses were fitted out with whitegoods, carpeting, furniture, etc. Lawns required mowers and hoses. Manuel Castells noted that the family home was “the perfect design” for maximising consumption, which was individualised and more fully commodified as mass production reduced costs and diminished people’s need to maintain the non-commodity domestic economy (such as vegetable gardens and chook runs).[25] The finance, insurance and real estate industry expanded. So did advertising. A mass of infrastructure to support the suburban expansion was established – water, sewerage and electricity – although it didn’t reach all areas.

The inner suburbs remained overcrowded, primarily with newly-arrived migrants; there was little space for the lower rungs of the working class in the suburban dreaming. While ownership mostly remains out of reach for the bottom 40 percent of households (and increasingly so), the determined structure of domestic life, the growing divide between the private realm of the home and the social world of work, market dependency and the commodification of the private sphere are a reality for all.

Commodity fetishism and governmentality

[I]n commodity-capitalist society separate individuals are related directly to each other…as owners of determined things, as “social representatives” of different factors of production. The capitalist “is merely capital personified”. The landlord “appears as the personification of one of the most essential conditions of production”, land. This “personification”…indicates a very real phenomenon: the dependence of production relations among people on the social form of things (factors of production) which belong to them, and which are personified by them.

– Isaak Rubin[26]

The immanent logic of the commodity form is self-expansion. In late capitalism, the market penetrates deep into our personal lives; a process which establishes a fractured world of self-managed, self-interested social units. Michel Foucault, in one of his 1979 Collège de France lectures on the writings of Alexander Rüstow (the German economist who in the 1930s coined the term neoliberalism), commented on the latter’s goal of

constructing a social fabric in which precisely the basic units would have the form of the enterprise, for what is private property if not an enterprise? What is a house if not an enterprise?… In other words, what is involved is the generalization of forms of “enterprise” by diffusing and multiplying them as much as possible… It is a matter of making the market, competition, and so the enterprise, into what could be called the formative power of society.[27]

This is a lasting vision. It is not simply that people are geographically organised and atomised in housing units that can be accessed only through the market: home as enterprise expresses market rationality through itself and its occupants. As an illustration, take the twenty-first century explosion and mass following of “home improvement”-style shows such as The Block, DIY Rescue, Backyard Blitz, Changing Rooms, Better Homes and Gardens, Location Location, Auction Squad, Hot Auctions, Grand Designs Australia, House Rules, Hot Property, Renovation Rescue, The Living Room and Reno Rumble. The Block producers select couples (naturally) to transform dilapidated units into profitable investments. These shows often highlight the difficulties many people face in gaining a home, and the fact that financial security is fundamentally linked to property ownership – both as “roof over the head” and as capital gains. Yet the notion of “improvement” that pervades the programs also has an internalised character. It’s the emotional investment so obviously outlaid by the couples that can be seen in the frequent tantrums, tears and tales of the hardships of life that will be overcome with a stake in the market. Participants are not simply improving the property. They believe that they are improving themselves by improving their dwelling; proving their worth to society by adding to the economic value of a home – a sign of their entrepreneurship, efficiency and therefore value as human beings. The logic of self-expansion is intimately played out as Menzies’ “homes human and homes spiritual” find expression through the augmentation of exchange value. This is the extreme edge of commodity fetishism, the process by which the relationship between producers takes on the character of a thing, and through which the objects of production come to dominate their creators – not only in the producers’ minds, but in reality as the market dominates humanity. Residential property, at least in Australia due to the long established commodification of housing, is one of the most important institutions through which this fetishism operates because it is the site of social reproduction; a place of intimacy, consumption and recuperation that people understandably want to be more than simply habitable, but appealing.

A number of writers, including historian and philosopher Philip Mirowski, and political theorists Wendy Brown and Maurizio Lazzarato, have drawn on the concept of “governmentality”, derived via Foucault’s exposition of the rationality of neoliberalism, to explain the peculiar ways in which the market integrates human subjects.[28] Lazzarato, for example, writes:

To govern…does not mean “subjugating, commanding, managing, ordering, normalising”. Neither physical force nor a set of prohibitions, nor even a body of norms or behaviours, governmentality incites the individual to establish an environment that forces him, through a “series of flexible, adaptable rules”, to react in one way instead of another.[29]

Governmentality is critiqued in different ways by those who use the concept. For the purposes here, it is understood as the multiple ways that capital rules via, for want of better words, infiltration or colonisation, which is another way of thinking about commodity fetishism. To the extent that the latter concept has explanatory power in terms of a governing rationality, I think it best understood as rule in the absence of great social and economic crisis. The more the market becomes embedded in social life – the more internalised its relations become – the more social stability is obtained via the automatic reflexes of the subjects being ruled, rather than by more obvious means of coercion (such as heavy policing, which still is deployed against groups that haven’t assimilated).

Private residential property clearly is not a unique expression of this process; market rationality is disseminated throughout all areas of life. A peculiar feature of late capitalism is the way a human being is its own object of production – “human capital” – becoming, in the words of Mirowski, “an arbitrary bundle of ‘investments’, skill sets, temporary alliances (family, sex, race), and fungible body parts”.[30] Workers are dominated by their own attributes, which become defining characteristics of existence, thereby seemingly burying humanity beneath curriculum vitae. The growth and evolution of education and training partly illustrates this. Originally, higher education was opened to the working class because of capitalism’s increasing need for an educated and skilled labour force. Increasingly, however, as demand increases and more certificates are required to find work, higher education is degraded, stripped of its critical components, and students are churned out as highly-indebted products. Wendy Brown writes:

[S]ubjects…are configured by the market metrics of our time as self-investing human capital… Human capital is constrained to self-invest in ways that contribute to its appreciation or at least prevent its depreciation…knowledge, thought, and training are valued and desired almost exclusively for their contribution to capital enhancement.[31]

Each line on a CV is the system’s measure of our worth not because the courses and training are necessarily useful and have increased a prospective employee’s skills (though of course many do), but because they are a marker of the entrepreneurial spirit of the candidate: someone who is prepared to self-invest.

This process shifts the ground from older notions of the self as inner-essence or collective identity, and unified, creating ever greater tension between what is inwardly experienced and outwardly presented as “true identity”. All down to the most intimate aspects of human existence are scrutinised over whether they can contribute to capital accumulation, human or otherwise. The market and competition have become so deeply embedded in social life, so seemingly natural, that it is difficult to disentangle humanity from commodities, human nature from corporate operations. This underpins the callous behaviour that so often is on display between one person and another even when money is not at stake – the calculus of seeing others only as things is pervasive because that’s how everyone is treated in the system. Because it is implicit in capitalist society that what is unmarketable is worthless, a whole generation judges its worth by its capacity to match the artificial forms of fashion models or the carefully cultivated images or skill sets of superstar athletes and singers. Yet in the world of Photoshop and the new eugenics of the “next top model” or “biggest loser”, everyone is found wanting. An example of the painful confidence trick “human capital” represents is captured every other night on reality TV. Every third person breaks down in the humiliation of finding out that what they privately love and enjoy so much – that intimate expression of the self, as many confide in the judges – is considered a public horror due to a perceived inability to “move units”. The impact of transforming human existence and intimacy, as George Monbiot notes, has resulted in

a spectacular rise in certain psychiatric conditions: self-harm, eating disorders, depression and personality disorders. Of the personality disorders, the most common are performance anxiety and social phobia: both of which reflect a fear of other people, who are perceived as both evaluators and competitors – the only roles for society that market fundamentalism admits… Those who end up at the bottom of the pile are assailed by guilt and shame. The self-attribution fallacy cuts both ways: just as we congratulate ourselves for our success, we blame ourselves for our failure, even if we have little to do with it.[32]

Even here, there is no escaping the logic of atomisation. Profound social alienation is medicalised, attended through a psychological lens and thereby individualised. The collapse of the labour movement means that many see no alternative to retreating into their inner self. Remedial therapy is the order of the day. There is no escaping the inadequacies – which are the source of anguish yet, perversely, seem to offer potential salvation: where imperfection exists, there is always a service or product available to improve it. Our smiles, our skin tone, our body shapes, our insecurities – everything can be “improved” to make it exploitable to some commercial end: self-help, dieting, cosmetics, therapies, supplements flourish as “the new forms of individual government”.[33] And the more inadequate people feel, the more distant perfection seems, the more extreme the products become – the total manipulation or effacement of bodies through extreme dietary and exercise regimes or plastic surgery. This “work on the self” expresses the dynamic of commodity fetishism, but here, the human, as object of manipulation, does not augment its economic value. Rather, its perceived (and in a sense real) social worth is enhanced.

Debt, state and social control

Credit appears to run counter to the market and the capital-labour relation. It makes it seem that social relations between people are no longer inversed in a social relationship between things… Commodity fetishism (“the alien, material force”) no longer seems operative since man is directly confronted by his fellow man by giving him “trust”… With credit, Marx tells us, alienation is complete, since it is the ethical work constitutive of the self and the community that is exploited. Trust, the condition for action, becomes universal distrust, turning into a demand for “security”. The circulation of private debt…presupposes, in the guise of another person’s recognition, a preliminary distrust, since the other person is a rival, a competitor and/or a debtor.

– Maurizio Lazzarato[34]

The social power of the market is intensified through the accumulation of debt, which more fully ties people to the exploitation of the workplace, restricts their freedom and transfers wealth from labour to capital.[35] Ironically, while homeownership (and, increasingly, education) is the key to most people’s financial security, the only way to enter is to become burdened for life: debt has become the prime adjunct to property, through which the social structuring mechanism is transformed into a financial chokehold. Lazzarato’s work in this area is valuable. “The debtor is ‘free’,” he writes, “but his actions, his behaviour, are confined to the limits defined by the debt he has entered into… You are free insofar as you assume the way of life (consumption, work, public spending, taxes, etc.) compatible with reimbursement.”[36] The debtor not only must strive for gainful and stable employment for decades to come, but is at the mercy of fluctuating interest rates, small movements in which, when debts are substantial, can add significantly to monthly repayments. Lazzarato draws on Marx’s 1844 “Comments on James Mill”, which is worth quoting from at length:

In the credit system, of which banking is the perfect expression…the life of the poor man and his talents and activity serve the rich man as a guarantee of the repayment of the money lent. That means, therefore, that all the social virtues of the poor man, the content of his vital activity, his existence itself, represent for the rich man the reimbursement of his capital with the customary interest… One ought to consider how vile it is to estimate the value of a man in money, as happens in the credit relationship…

Credit is the economic judgment on the morality of a man. In credit, the man himself, instead of metal or paper, has become the mediator of exchange, not however as a man, but as the mode of existence of capital and interest. The medium of exchange, therefore, has certainly returned out of its material form and been put back in man, but only because the man himself has been put outside himself and has himself assumed a material form.

Within the credit relationship, it is not the case that money is transcended in man, but that man himself is turned into money, or money is incorporated in him. Human individuality, human morality itself, has become both an object of commerce and the material in which money exists. Instead of money, or paper, it is my own personal existence, my flesh and blood, my social virtue and importance, which constitutes the material, corporeal form of the spirit of money. Credit no longer resolves the value of money into money but into human flesh and the human heart.[37]

This is an emphatic rendering of credit: consciousness shaper, ethically normative, and leveller that seems to dissolve class divisions under its own social power; an affirmation of Solomon’s quip that “all things obey money”.[38] Marx’s recognition that debt becomes an internalised social power conveys in a particular way the ever increasing domination of capital. It is also testament to the fact that we are not looking at a qualitatively new phenomenon. We are apt to think of the “neoliberal turn” of the late 1970s and early 1980s as a specific and in many ways pragmatic response to the breakdown of Keynesianism in the face of stagflation and depressed profitability in an increasingly globalised economy. On one level, that is true, particularly if our gaze is focused on policy settings. Yet the rationality that is a feature of this era is not so much a definitive break but an intensification of the market’s colonisation of the self – particularly in Western societies where the enforcement of neoliberal policy did not require dictatorship.

It can be objected that access to credit is a source, or reflection, of existing economic power. This is true and can readily be seen in the distribution of household debt. For example, 70 percent of mortgage debt and 80 percent of investment property debt in Australia is held by the richest 40 percent of households (judged by income), while the bottom 40 percent of households hold only 10 and 8 percent respectively.[39] These figures highlight that the project of transforming each person into a “stakeholder” butts up against capitalist reality. As Redgum’s “Critique in G” notes, “There’s a bastard called the economy and it keeps poor people poor.”

It is not enough, however, to focus simply on individual or household debt. The domination of finance and the reconfiguration of the state conspire to imbue debt with a social character through the reconfiguration of the state into a creditor-type institution in its relation to society, which imposes discipline arguably in a more coercive manner than private finance, particularly over those pushed out of the labour force. Financial deregulation began in the early 1970s. At the time, significant controls were in place to manage monetary policy, limit bank lending, allocate credit to priority areas of the economy, direct funds to government and maintain a stable exchange rate. The shift to market-oriented means of regulation brought with it a certain path dependency. Ric Battellino, former deputy governor of the RBA, noted in a 2007 speech that the removal of interest rate controls

ended up having far-reaching consequences. It led to a sequence of changes, each one begetting the next, until 13 years later virtually all controls on banks had been removed, foreign banks had been allowed to enter the market and the exchange rate had been floated… Our experience was that the removal of one set of controls often put pressure on other controls. This meant that the reform process, once it had begun, developed its own momentum.[40]

Since that time, the finance industry, trading debt and shifting value, has grown dramatically. Financial system assets as a proportion of GDP rose from about 100 percent in 1985 to 150 percent by the early 1990s and peaked at more than 350 percent around 2007.[41] There was money to be made, but this wasn’t simply about immediate profits. Peter Jonson, former chair of the Life, Investment & Superannuation Association of Australia, noted in a 1996 speech that deregulation meant

[d]riving a financial wedge into an economy with endemic budget deficits and a highly regulated labour market… The reformers pushed on – expecting the financial wedge to discipline both governments and Australia’s entrenched industrial relations club… [F]inancial deregulation has linked us closely to international financial markets, and participants in these markets provide unforgiving dispassionate evaluation of domestic economic policy – thus “keeping the policy makers honest”.[42]

The process was also internally driven, as governments adjusted their programs to suit the needs of capital accumulation in an increasingly internationalised economy. Privatisations were one part of a broader shift to bringing down tariff walls and capital controls and opening up greater sections of the economy to competition and human life to its effects. Powers were transferred from democratically accountable (in whatever limited way) governments into the hands of unelected bureaucrats, whose mandates were narrowly set by neoliberal managerial and economic prerogatives. Gabrielle Meagher and Susan Goodwin write of this general reconfiguration of the state:

[R]ationalities and practices from the private sector are brought into the internal operation of public sector organisations themselves. Often called the “new public management”, these processes have sought to introduce “market discipline” into how public sector organisations run themselves, and into their modes of coordinating their relationships with the external organisations they increasingly fund and regulate to provide services… [Marketisation] is a process through which the institutional logic of the market is crowding out the associational logic within (and carried by) non-profit organisations and the bureaucratic and democratic logics within (and carried by) the state.[43]

All major areas of state provision become subsumed: health, aged care, education, retirement, welfare and community services.[44] Other institutions have emerged in the last decade and a half, such as the Productivity Commission and the Parliamentary Budget Office, which advise governments on how best to apply neoliberal calculus. On top of this is the colonisation of the public service by adherents of neoclassical economics.[45] As market logic penetrates the operation of the state, the latter acts to create social debt. The power of international markets and the state’s increasing reliance on them for validation and funding, combined with its own evolution, act to devolve responsibility for social welfare down to the home, family and individual, recasting them in the process. Lazzarato writes:

[T]he welfare state not only intervenes in the “biology” of the population (birth, death, illness, risks, etc.), it requires ethico-political work on the self, an individualisation involving a mix of responsibility, guilt, hypocrisy and distrust. When social rights (unemployment insurance, the minimum wage, healthcare, etc.) are transformed into social debt and private debt, and beneficiaries into debtors whose repayment means adopting prescribed behaviour, subjective relations between “creditor” institutions, which allocate rights, and “debtors”, who benefit from assistance or services, begin to function in a radically different way, just as Marx foresaw… In order for the power of debt over the subjectivity of the welfare user to have its effect, the logic of individual and collective rights must be replaced by a logic of credit (investments of human capital)…

Each individual is a particular case which must be studied carefully, because, as with a loan application, it is the debtor’s future plans, his style of life, his “solvency” that guarantees reimbursement of the social debt he owes. As with bank credit, rights are granted on the basis of a personal application, following review, after information on the individual’s life, behaviour, and modes of existence has been obtained.[46]

Lazzarato for a period was a researcher and activist with the Coordination of Intermittent and Precarious Workers of Île-de-France. One welfare recipient related concretely how being a client impacts even those who are resistant:

The skills assessments, for example, they ask you to do all the time – and whatever you might think it’s supposed to be about. There is always a part of it that intrudes on your personal life…a kind of assessment of your life where you start to ask yourself questions, you think about yourself, like a kind of invasion of privacy couched in really appalling language, but that still makes you think.[47]

The new welfare management scheme introduced by the Australian government is extending such intrusion into the lives of welfare recipients by introducing “data mining technology to monitor” spending and instituting controls over entitlements. The Healthy Welfare Card will, according to the government, “render the cash system that preceded it an irresponsible social experiment”. The new social experiment being undertaken, proposes

a debit card through a responsible financial institution of choice, using the MasterCard or Visa system, [which] would be issued to all people receiving welfare payments. This would include these Australians in the mainstream financial world of everyday life. The card would confine welfare and intended spending to essential goods and services… It would ensure that people enjoy inclusion in the mainstream financial system and it would assist individual responsibility.[48]

Increasing marketisation does not mean the withdrawal of the state – that is a misdiagnosis. Tom Bramble, for example, in a previous article in this journal, was wrong when he wrote that neoliberal theorists fantasise about the state retreating.[49] The neoliberal state does not recoil; it is reconfigured under the rule of the economy. The German neoliberal pioneers of the 1930s and 1940s espoused ordoliberalism (“ordered liberalism”), recognising that the market is not a natural and spontaneously organised institution, but a fragile human construction in need of protection. It is an objective, not a given. So we have economic liberalism that is not laissez-faire, but legally ordered by an interventionist state. As Franz Böhm put it in 1937: “The principal requirement of any economic system worthy of the name is that political direction becomes mistress of the economy in its totality as in its parts; the economic policy of the state must master the whole of economic development both intellectually and materially”.[50]

The foregoing developments and processes undermine democracy by substituting economic and managerial prerogatives for political deliberation. We are familiar with the phenomenon of corporate influence shaping government policy, illustrated, for example, by the comments of a former policy adviser to the Victorian Liberal government: “It is standard practice that [government] staff are instructed to provide a list of the corporations that have been consulted in the preparation of a policy brief. Ministers talk about new proposals needing to have ‘weight behind them’. ‘Weight’ here is just a euphemism for ‘corporate approval’. Bring a proposal that has not been pre-approved by the business world to the minister, and it will not get looked at.”[51]

The broader issue, however, is the transformation of democracy. The late political scientist Peter Mair labelled the process a “hollowing out”: a decline in engagement in official politics; a decline in party identification and affiliation; declining voter turnout and rising electoral volatility; policy convergence of the parties historically associated with the labour movement with the conservative parties of the rich; and how governments have either ceded power to or had their mandates undermined by unelected capitalist institutions such as the World Trade Organization, the World Economic Forum, the International Monetary Fund, etc. Just as the population retreats into personal life, political parties and their leaders retreat into the state for legitimation, financing and stability.[52] As they do so, Brown notes,

democracy becomes purely procedural and is detached from the powers that would give it substance and meaning as a form of rule… [It] becomes divested of politics, defined either as the handling of power or as struggle over common fundamentals or goals. Thus democracy reformulated by governance means that participants are integrated into the process of benchmarking, consensus building, policy making, and implementation.[53]

Political incorporation

Don’t talk to me about politics, I’m only interested in style.

– James Joyce[54]

Perhaps the greatest triumph of the liberal regimes of late capitalism has been to infect opposition to themselves with their own logic(s) – anti-democratic, anti-political and mirroring market operations. The embedding of market rationality in the social world, the emptying of political content from the parliamentary sphere and its replacement with managerial governance, the increased atomisation of society and the collapse of the labour movement have created the conditions for expressions of resistance that are hyper-personalised and, in the words of Wendy Brown, “full of ranting and posturing, emptied of intellectual seriousness”.[55] These processes offer stability in a limited but purposive way, by channelling resistance into strategic dead ends. Frequently, opposition appears as a reflexive rendering of neoliberal economic rationality, substituting the “arbitrary bundle of investments” as a measure of social worth with its particular bundle of oppressions (or identities) as a measure of political legitimacy and tending to reflect the social alienation and indifference (or outright hostility) to politics that neoliberalism has fostered:

Above all, governance reconceives the political as a field of management or administration… As problem solving replaces deliberation about social conditions and possible political futures, as consensus replaces contestation among diverse perspectives, political life is emptied of what theorists such as Machiavelli took to be its heart and the index of its health: robust expressions of different political positions and desires. For Machiavelli, such expressions were the very essence of political liberty and also prevented the differences and the energies inherent in the political body from becoming toxic.[56]

Those involved in progressive activism will recognise immediately the effects – politics absorbed with “process”, devoid of any contest of ideas and mimicking the contentless proceduralism of technocratic governance, through which everyone is conceived as a “stakeholder” and conflict avoidance is paramount. I recall the tail end of the short-lived radicalisation of the anti-capitalist mood of the early 2000s. A significant section of the activists were hostile to applauding speakers (both in meetings and on platforms) because it was deemed intimidating for those who didn’t get clapped. Instead, there was the phenomenon of clicking fingers – a far less offensive gesture of approval. This was not the end of it. Next was jazz hands as a sign of agreement. What should have been serious political deliberation degenerated into what must have appeared to an outside observer as some sort of chorus rehearsal for a Broadway musical. Or take the Occupy movement as it manifested in Australia. In Melbourne, there was an infatuation with consensus, which led to hours-long group meetings that went nowhere – justified by appeals to “real democracy”, but in effect an exclusionary mechanism guaranteeing that those with the time to spare could empty the majority of participants from the theatre of debate. It also guaranteed that when the left introduced arguments for a specific course of action, they could be rendered inconsequential through a right wing minority paralysing proceedings. This anti-political authoritarianism reportedly found its ultimate expression in Spain and Greece, where left groups and even unions were banned from bringing their banners or distributing their publications in some of the square occupations during the Indignados and Movement of the Squares. Everyone was to be the depoliticised individual, in a move that channelled Milton Friedman’s dictum that, in a truly liberal society, “[y]ou can have a high degree of social freedom, and a high degree of economic freedom, without any political freedom.”[57]

Today, it seems as though any serious debate threatens to challenge the framework of administrative order that has been constructed by those claiming the greatest stake in a campaign’s outcome. The debilitating results are tragic, as the so-called “maturity” of calm, process-led meetings turn into their opposite – everyone wounded by someone else’s opinion. This is the poison of anti-politics. Louise O’Shea writes, “This trend is ubiquitous at Australian universities. For example, it is now standard practice at the National Union of Students annual Queer Collaborations conference for participants to be required to sign an undertaking that they will not argue with other participants at the conference, because such behaviour might cause offence or make others feel unsafe.”[58]

The situation often is a swamp full of moralistic insincerity that is obsessed with identity and spends its time “calling out” the imperfect attitudes of working people as a precondition for political collaboration or solidarity. US campuses seem to be where these processes have reached their extreme. Activist and blogger Fredrik deBoer noted with frustration concrete examples of how these toxic politics can play out:

I have seen…a 19-year-old white woman – smart, well-meaning, passionate – literally run crying from a classroom because she was so ruthlessly brow-beaten for using the word “disabled”. Not repeatedly. Not with malice. Not because of privilege. She used the word once and was excoriated for it. She never came back…

I have seen…a 20-year-old black man, a track athlete who tried to fit organising meetings around classes and his ridiculous practice schedule (for which he received a scholarship worth a quarter of tuition), be told not to return to those meetings because he said he thought there were [sic] such a thing as innate gender differences. He wasn’t a homophobe, or transphobic, or a misogynist. It turns out that 20 year olds from rural South Carolina aren’t born with an innate understanding of the intersectionality playbook. But those were the terms deployed against him, those and worse. So that was it; he was gone.

I have seen…a 33-year-old Hispanic man, an Iraq war veteran who had served three tours and had become an outspoken critic of our presence there, be lectured about patriarchy by an affluent 22-year-old white liberal arts college student, because he had said that other vets have to “man up” and speak out about the war. Because apparently we have to pretend that we don’t know how metaphorical language works or else we’re bad people. I watched his eyes glaze over as this woman with $300 shoes berated him.[59]

Alternatively there is the demobilised and disorganised “be the change you want to see” liberal ethos – the politics of self-help dressed up as social intervention. This is a manifestation of powerlessness. In the absence of mass social struggle, it can seem more meaningful to just address those things within our control, which are limited and local. Yet it can also be interpreted as an economic reflex, the political expression of the classical economists’ moral justification for greed: that when every individual pursues their own self-interest, the greatest welfare will accrue to society as a whole. Worse is the reflexive appeal of sections of the broad left to the authority of the very institutions that embody capitalist power – the police and university administrations, for example – to shut down the offending subjects.

We are apt to frame “identity politics” within the bounds of the destitution of organised labour. But just as neoliberalism should not be viewed as a total rupture with capitalism’s past, so should identity formation and its politicisation be viewed with reference to the universalism of the liberal regime, rather than with reference to our particular period. Wendy Brown, in a stunning piece penned in the early 1990s, with great insight problematises identity formation under the liberal state. She poses questions:

[W]hat are the logics of pain in subject formation within late modernity that might contain or subvert [the aim of achieving emancipatory political recognition]? What are the particular constituencies – specific to our time, yet roughly generic for a diverse spectrum of identities – of identity’s desire for recognition that seem as often to breed a politics of recrimination and rancour, of culturally dispersed paralysis and suffering, to disdain power rather than aspire to it, to disdain freedom rather than practice it? [What are the] ways in which certain emancipatory aims of politicised identity are subverted not only by the constraints of the political discourses in which its operations transpire but by its own wounded attachments[?][60]

Her argument is that the naturalisation of capitalism combined with a liberal order that constructs a plurality of identities which remain oppressed under the lie of “we” – the mirage of unity under the liberal (capitalist) state – results in an “identity politics…tethered to a formulation of justice which, ironically, reinscribes a bourgeois ideal as its measure”:

[T]he articulation of politicised identities…require, rather than incidentally produce, a limited identification through class. They necessarily rather than incidentally abjure a critique of class power and class norms precisely because the injuries suffered by these identities are measured by bourgeois norms of social acceptance, legal protection…and social independence. The problem is that when not only economic stratification but other injuries to body and psyche enacted by capitalism (alienation, commodification, exploitation, displacement, disintegration of sustaining, albeit contradictory, social forms such as families and neighbourhoods) are discursively normalised and thus depoliticised, other markers of social difference may come to bear an inordinate weight. Absent an articulation of capitalism in the political discourse of identity, the marked identity bears all the weight of the sufferings produced by capitalism in addition to that bound to the explicitly politicised marking.[61]

These realities – the particularly toxic nature of progressive politics in the twenty-first century and the universal problem of politicised identity formation in liberal capitalist states – pose challenges for the left. Most social struggles today display the same fragmentation as exists in the social world – each struggle seemingly isolated and competing for public attention. The world is experienced as multiple oppressing forces; grievances and oppressions proliferate due to capital’s atomising, dividing and compartmentalising powers, which are nevertheless underpinned by a singular goal: capital accumulation. Marxism’s totalising theory in this context can be equated with authoritarianism by those who are blind to the ways in which neoliberal economic totalitarianism has become deeply imbedded in their own political outlooks and practices. The problem is not of Marxism, but is one that Marxists must confront: the fact that “unity” in our society is deployed cynically, and whose content is always assimilation to the capitalist order under or within the capitalist state.

The radical left can see that the problems with current political culture are linked to the broader collapse of the labour movement, but our forces are too small and marginalised to have an impact on the objective situation. Apart from localised campaigning, important but insignificant in the scheme of things, our job is to react to developments and argue for an alternative politics that fosters hostility to capitalist institutions and the ruling class, and pushes toward working class unity. The task of theory/resistance is to understand, not accommodate to, let alone reinforce the logics of anti-politics and politicised identity. The dominant progressive political culture often pushes against such a project because it reflects the broader decay of social solidarity.

Bubble, toil and trouble

There are a number of areas of instability that have been generated over the last decades as a result of the forgoing developments. Here it is worth mentioning three.

Menzies’ “foundation of sanity and sobriety” for family and national life has generated significant stress and vulnerability due to the tremendous amount of debt that has been taken on by households. The Hawke-Keating governments increased both the amount a household could borrow and the number of households eligible to take out a loan. And from the late 1980s interest rates began falling. Along with the increased supply and availability of credit, a series of tax changes and government incentives over the next decades, combined with rising real wages, pushed more and more money into residential property. Negative gearing was reintroduced in 1987, capital gains tax was halved for property sales in 1999 and first homeowner grants were introduced in 2000. Today, annual indirect housing subsidies total more than $12 billion per year as governments continue to push people into market dependency.[62] The result has been increased speculation and increased prices. Economists Ryan Fox and Richard Finlay noted in 2012:

Nationwide, dwelling prices in Australia have risen significantly over the past four decades, with particularly rapid increases over the periods 1987-1988 and 2001-2003. Over 1987 and 1988, average dwelling prices increased by around 30 per cent relative to consumer prices, while from 2001 to 2003 they increased by 50 per cent relative to consumer prices. Moreover, the cumulative rise in dwelling prices since 1970 has been more than twice that for construction costs, indicating that factors besides the cost of building a dwelling have driven up dwelling prices.[63]

Between 2012 and 2015, the total value of residential dwelling stock rose by 22.7 percent – or more than $1 trillion, about $1 billion per day on average.[64] That’s extraordinary given Australia’s GDP is just $1.6 trillion.

The price rises in turn created greater demand for credit. Private debt as a proportion of GDP had been rising from the late 1960s. From the late 1980s it climbed faster. From having one of the lowest household debt-to-income ratios in the 1980s, Australian households now are among the most indebted in the world. Before the long expansion began in 1991, the average household debt-to-income ratio was less than 50 percent. Today it is more than 150 percent. Until recently, when the Australian Prudential Regulation Authority announced limited measures to reduce the amount of lending for speculation, none of this had been considered particularly problematic.

The Reserve Bank has fuelled the growth in credit by maintaining low interest rates in response to low levels of investment in other areas of the economy and because the wealth effect generated by rising prices created a virtuous circle as the commercial and residential construction industries boomed. Corporate profits in the construction and rental and real estate service industries increased ninefold between 2000 and 2014.[65] In the years prior to the financial crisis of 2008-09, annual housing and business credit growth both peaked at more than 20 percent. Retail and supplier businesses were beneficiaries, both of the increase in total income and the spending driven by rising asset prices. Wholesale trade profits have quadrupled, and in retail they have grown five-fold since the early 2000s. The boom was sustained by rising real wages for every segment of society and strong population growth, and supplemented by the mining expansion. A 2014 Reserve Bank research paper estimated that the latter, over the course of a decade, increased real per capita household disposable income by 13 percent.[66]

Yet the growth model has some characteristics of Ponzi finance: debt-driven speculation based on rising asset prices. With debt servicing costs lower than the capital gains of the assets, more money floods into the market, further inflating prices and the amount of debt required to “buy in”. In Ponzi finance, the exuberance continues only as long as the asset prices continue to appreciate. If and when they fall, the virtuous circle becomes a vicious one as assets are sold off while debts are called in. The scale of debt is astronomical. Between 2002 and 2015, the mortgage holdings of National Australia Bank, ANZ, Commonwealth Bank and Westpac increased by 388 percent, 435 percent, 475 percent and 554 percent respectively.[67] The Commonwealth’s Financial system inquiry reported in 2014:

An overall asset value shock…within the range of shocks experienced overseas during the GFC, would be sufficient to render Australia’s major banks insolvent in the absence of further capital raising. In reality, a bank is non-viable well before insolvency, so even a smaller shock could pose a significant threat.[68]

The IMF estimates that a 10 percent fall in house prices would reduce household wealth by 30 percent.[69] It was noted earlier that debt is distributed unevenly, with most held by wealthy households. Nevertheless, a significant proportion of the working class (often referred to as “middle Australia”, which we can loosely define as households with an income above the bottom 40 percent and below the top 20 percent) is highly indebted. Reserve Bank figures show that more than 40 percent of these households have a home mortgage and one in 10 hold investment property debt.[70] According to a joint report by Digital Finance Analytics and Monash University Centre for Commercial Law and Regulatory Studies, the proportion of households that are “not able to meet their financial commitments as they fall due” jumped from 23.5 percent to 31.8 percent between 2005 and 2015. The proportion that are financially distressed, (those that are “not meeting their financial commitments as they fall due, and are also exhibiting chronic repeat behaviour, and have limited financial resources available”) has increased from 13.5 percent to 21.3 percent.[71] One saving grace of the housing market is that, because many of the buyers are in it for a home, rather than a portfolio, they won’t necessarily turn into sellers if prices drop. Another is that there has been no proliferation of “low doc” loans and therefore no development of a subprime time bomb. However, investment loans now make up close to 40 percent of all home loan approvals. And nearly two-thirds of those are interest-only loans.[72] Home and market intertwined as enterprise threatens the current model of accumulation if capital gains turn into capital losses (as has been the case in Perth and Darwin), if wage growth stalls, or if interest rates or unemployment rise significantly.

There are risks even outside of Ponzi finance. Luci Ellis, head of the Royal Bank of Scotland Financial Stability Department, told a 2015 real estate symposium:

Something can pose systemic risk even if it is not that risky in and of itself, because its impact on the system is large. That is certainly the case for the housing market…[which] is a large fraction of household wealth; the housing services provided by the housing stock represent more than 20 per cent of household consumption, much of it implicit in home ownership…

The sheer size of these asset classes helps explain their interconnection with the financial system, another aspect of their systemic risk. Property is not just a large part of household and business balance sheets. Property-related exposures of various kinds are often large parts of bank balance sheets… And since the financial sector touches every other in some way, the sectors that matter to the financial sector will have disproportionate ultimate effects on the rest of the economy…

We do know that there are strong correlations between strong upswings in credit, measured in a variety of ways, strong growth in property prices, and subsequent bad events.[73]

A second aspect of instability is related to the urban geography of class. Suburbs are not simply sites of home security, they are class-structuring centres. Some years ago, Leonie Sandercock wrote:

If we define “real income” as command over resources, it is clear that real income is a function of locational accessibility – how close you live to employment opportunities, schools, beaches, welfare services. Access to these can only be obtained at a cost… Poorer households have a very limited choice of location. As the spatial form of a city is changed…so also is the cost of access to different things for a household at a given location and hence both the distribution of real income and property values in different locations.[74]

Working class communities, within which existed natural bonds and associations, were long ago fragmented by the geographical expansion of suburbs. The twenty-first century boom has accelerated the process in our largest cities, where people have been priced out of the inner areas.

The sprawl is creating suburbs with few amenities and which can be more than an hour’s drive from the CBD. Often they were packaged as oases of certainty and security. But in these isolated satellites, people’s frustrations often are inaudible to the rest of the city. The 2015 Delivering Sustainable Urban Mobility report notes that Australian cities – particularly Melbourne, Sydney and Perth – face deteriorating conditions of life due to the ever-growing infrastructure deficit, estimated to reach $350 billion by 2025, and the poorest being pushed to the margins. “Fringe developments are characterised by low housing and low employment density, limited (if any) mixed-use development and poor access to public transport”, the report notes. “Together this increases distances between where people live and where they need to travel for work, shopping, socialising and recreating.”[75] An SGS Economics & Planning paper estimates that “[f]or those in Sydney’s inner-east and lower North Shore more than 40 percent of the city’s jobs are within a 30-minute drive at peak hour. But for those in large areas of the city’s west and south-west just 5 percent of the city’s jobs are within a 30-minute peak hour drive”.[76] The growing segregation between the gentrifying inner-urban areas and those of the beltways will likely be exacerbated in the coming decade as government revenues face increasing pressures – particularly if government housing policies continue to generate glaring inequalities, which are noticeable in the dramatic declines in home ownership rates among the bottom 20 percent of the population over the last 30 years: a more than 30 percent drop for those aged between 25 and 34, almost 20 percent for the 35-44 segment and more than 10 percent for 45 to 54 year olds.[77] Ghettoisation is a potential result.

A third aspect of instability relates to the democratic “hollowing”. The result is most noticeable in the ALP, the branch structure of which former leader Mark Latham described as “an empty shell”.[78] It is reflected in Australian Electoral Commission figures, which show that the federal minor party vote has steadily climbed from the 1970s to be one in five votes in the House and one in three in the Senate. Along with that expression of dissatisfaction, the informal vote has risen and the voter turnout declined. If the 1990s average for these had been maintained, there would have been some 700,000 extra valid votes cast at the 2013 election. These figures tally with other surveys and indicators showing high levels of indifference towards or disaffection with what passes as “official politics”. The Australian National University’s Trends in Australian Political Opinion survey finds that fewer and fewer people bother discussing election campaigns or try to convince others how to vote, and that volatility (judged by the percentage of people who always vote for the same party) has significantly increased.[79]

The hollowing is also illustrated by popular political attitudes. The annual Lowy Institute Poll of social attitudes has for a number of years found that only a minority of 18-29 year olds prefer democratic government. One quarter to one third say that “in some circumstances, a nondemocratic government can be preferable”; another quarter say “it doesn’t matter what kind of government we have”.[80] In the 2014 poll, the 40 percent of respondents (all age groups) who disagreed with the statement that “democracy is preferable to any other form of government” were asked why. Three quarters agreed that “Democracy is not working because there is no real difference between the policies of the major parties” and “Democracy only serves the interests of a few and not the majority of society”. Sixty-four percent agreed in some way with the statement “I have become disillusioned with Australian politics and think another system might work better”. Almost 10 percent of the population agreed that “a more authoritarian system where leaders can make decisions without the processes of democracy achieves better results”; another 16 percent had sympathy with that statement. In one of the most affluent and stable countries in the world, several million people prefer authoritarian government and others, particularly young people, are open to it because they think it might be more responsive to the needs of the people.

Politically, this makes for a potent mix: anti-democratic leanings combined with increasing resentments linked to disaffection and disengagement with the political system and the state, high and rising youth unemployment and lack of opportunity in the suburbs. The mix could manifest in different ways: drug abuse, suicides, interpersonal violence, riots and rage – not simply moral rage against a world that should be better for everyone, but the destitution-fuelled rage against an impossible situation or against scapegoated minorities.

The anti-political sentiments noted previously, and one-sidedly, as toxicity, do have the potential to be expressed as anti-system politics (and acknowledged by anti-establishment rhetoric from politicians). The insincerity and hypocrisy of liberal democratic rhetoric has created in many people’s minds a link between dishonesty and politics. More space could open to the left if anti-representative democracy sentiments combine with progressive social struggles – as has been the case in Europe.[81] However, as philosopher Jason Stanley points out:

[T]here is a way a politician could appear to be honest and nonhypocritical without having to vie against other candidates pursing the same strategy: by standing for division and conflict without apology… In short, one could signal honesty by openly and explicitly rejecting what are presumed to be sacrosanct political values. Such politicians would be a breath of fresh air in a political culture that seems dominated by real and imagined hypocrisy. They would be especially compelling if they demonstrated their supposed honesty and sincerity by explicitly targeting groups that are disliked by the voters they seek to attract. Such open rejection of democratic values would be taken as political bravery, as a signal of sincerity.[82]

Clearly, far right populism and, in some areas, fascism, have made ground in the West over the last decade. In Australia there could now be an opening for a return of far right populism – the space for which, since the rise of One Nation in the 1990s, has been squeezed by the Liberal Party’s turn to extreme racism in its immigration policies. Inequality is high and rising, living standards for the poor are projected to fall in the coming decade and Islamophobic bile in the media is out of control.[83] The latter is having a significant impact. The Australian Human Rights Commission 2015 consultation report notes:

Discrimination and vilification directed at Muslim Australians was consistently raised as significant concerns in the consultations. Many participants labelled anti-Muslim discrimination a daily or regular occurrence… The level of anti-Muslim sentiment in Australia is highlighted by the Scanlon Foundation’s 2014 Mapping Social Cohesion report, which indicated that 25 percent of respondents self-report as having “somewhat negative” or “very negative” attitudes towards Muslims… Other research suggests that this number may be as high as 50 per cent.[84]

Exactly how politics plays out is hard to tell. Certainly there would seem to be the potential for greater political polarisation as the boom ends.

If you don’t fight, you lose

The structuring of the class and capital’s colonisation of the self – through property, market dependency, commodity fetishism, debt, and so on – appears as the dissolution of class beneath the weight of multiplying grievances. It may be the case that people are increasingly encouraged to view themselves as individual entrepreneurs whose identities are shaped by the conglomeration of attributes we inherit or put on our resume. But there are definite limits to the social power of capital. Our wants and desires have been constructed in multiple ways. But, fundamentally, our consciousness is moulded collectively by work, which remains a social act that tends to break down individualism and open the potential for solidarity and resistance to exploitation and oppression.

Popular attitudes to particular government policies are also crucial. Former Labor prime minister Bob Hawke talked about the need to reform “deeply entrenched attitudes”.[85] Those attitudes – demands for spending on public hospitals and education and for decent pensions, etc. – have never been fundamentally recast in Australia. Just as the project of transforming each person into a “stakeholder” butts up against entrenched inequality, the pushing of market rationality to extremes butts up against collective sensibilities, which are the legacy of past struggles – witness the upsurge of hostility to former prime minister Tony Abbott’s 2014 class war budget and the shock it delivered to the establishment, which all but deserted the government when it became clear that it wouldn’t get the measures through the Senate.[86]

The obvious problem is that the decline of the workers’ movement has left our side with a serious deficit in “institutional weight” – organisations with some sort of infrastructure that can channel discontent, give it theoretical coherence and organise large numbers of people to fight. The decline leaves a sense of powerlessness and reinforces people’s isolation. One ramification is that, within the working class, there is less ability to push back against the ideological assault. The effects are noticeable in many parts of the West. Take the testimony of Jayne Maltman, one of 30,000 sacked Woolworths workers in Britain in 2009, who told Guardian reporter Stephen Moss: “We found out on TV…that we were going to close. We just carried on as normal, and it wasn’t until we actually came out and we were all upset when we signed our last bits of paper that we thought, ‘Well, why did we go quietly?’ Why did 30,000 of us go quietly?”[87]

On the other hand, when people’s expectations of how the world should be are dramatically at odds with how they experience it, they can be propelled to action. Today there is potentially more energy available for new rounds of struggle. Those who are more politically inexperienced, disorganised and less disciplined can move more freely. They might harbour fewer concerns about the ramifications of losing a fight, whereas more experienced hands might remember previous defeats and be more cautious about kicking back against the bosses. Capital seems to always be winning, but its rule is shown to be precarious every time resistance rears its head. There is immense power bestowed on those who engage in a simple refusal. The localised “no”, which might be uttered collectively in a small strike, shows that even seemingly insignificant examples furnish extraordinary results in terms of reviving confidence. One worker who participated in a four-day wildcat strike in a Melbourne warehouse in 2015 related the transformative effect:

The computer is recording how much work you do. So if you stop for a couple of minutes, you have to make it up at the end of the shift. The computer tells you which box to pick and where, so your interactions with workmates are limited. If you happen to be passing each other you might say a few words. But if you don’t pick enough boxes, then your performance rate will be under 100 percent and potentially you will be targeted by management.

It was completely different after the strike – and it was only a partial victory. I can’t imagine what the mood and the level of confidence would have been like if we had carried through what we actually had the industrial strength to do: win all our demands.

But the mood was still just unbelievably electric. People who you didn’t really know before, who you had just met on the picket – one person will see someone they have just met [on the picket] and go over there and just talk to them. A couple of others will want to know what’s going on, and before you know it you’ve got four or five transporters sitting at an intersection that nobody can pass. So there’s an impromptu stop work already. That would have happened 20, 30, 40 times on the first day we went back.

And management just humiliated themselves. It was like they were just grovelling – coming around, telling embarrassing jokes, trying to get in on the “we’re all friends now” atmosphere. I mean they were going around offering lollies! Usually, it is a sackable offence to get caught eating on the floor.

It was slightly less like that the following day and slightly less the day after that and so on. If you don’t maintain some sort of organisation going back into the workplace, the mood will inevitably drift back from the high of the picket because, well, the boss still owns the workplace, and manages it, and controls you to the extent that you do or don’t have that organisation. If we could maintain that organisation, people could maintain their confidence because they would have real power.[88]

The generalised refusal on display in mass struggle bears its own particularity – إرحل, Οχι, ¡Ya basta! – yet conveys a universal human yearning. In these outbursts we witness the promise of a unity that reaches beyond the limits of liberal capitalism’s false “we” – unity in diversity (race, sex, gender, religion, language, colour and so on) through the actual struggle for workers’ power. In Australia, the key task is to stoke the spirit of defiance and resistance that points in this direction. The will to fight is usually there, somewhere, in everyone. It’s just that sometimes it has gone quiet, is underconfident or overwhelmed. That’s why things can so quickly turn in the right circumstances – when someone gives a lead, others can be stirred to action. Even if the results are not world shattering, they can help lay the basis for the future by drawing in new people who would otherwise have few options but to turn inward and accept things as they are.




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Narefsky, Karen 2014, “The suburbanisation of the US working class”, Jacobin 15-16, autumn.

Pennington, Alison 2015, “The financialisation of social reproduction: the case of the Australian housing system”, unpublished dissertation, Department of Political Economy, University of Sydney.

Reserve Bank of Australia 2006, Financial Stability Review, March.

Reserve Bank of Australia 2014, Financial Stability Review, September.

Reserve Bank of Australia 2015, “Household debt – distribution”, Statistical table E7,

Rubin, Isaak 1990 [1928], Essays on Marx’s Theory of Value, Black Rose Books.

Sandercock, Leonie 1975, Cities for Sale, Melbourne University Press.

Soutphommasane, Tim, Ting Lim and Anna Nelson 2015, Freedom from Discrimination: Report on the 40th Anniversary of the Racial Discrimination Act, Australian Human Rights Commission.

Troy, Patrick 2004, “The structure and form of the Australian city”, Issues Paper no.1, Griffith University urban policy program.

Yates, Judith and Mike Berry 2011, “Housing and mortgage markets in turbulent times: is Australia different?”, Housing Studies, 26 (7-8).



[1] This is the first part of a two-part analysis of Australian capitalism.

[2] Foucault 2008, p145.

[3] My thanks to Dave Eden for pointing me in the direction of the writings of Maurizio Lazzarato and Wendy Brown, who have already articulated better than I could some of the things I have been trying to think through. Dave, Alison Pennington, Sandra Bloodworth and Louise O’Shea also offered valuable comments after reading the draft.

[4] Quoted in Allon 2008, p66.

[5] Troy 2004, p6.

[6] Berry 1999, p106.

[7] Hillier and O’Lincoln 2013, pp149-80.

[8] Government of Western Australia Housing Authority 2012.

[9] Ex parte H. V. McKay, Transcript of Proceedings in an Application to the Commonwealth Court of Conciliation & Arbitration, Melbourne, October 1907; Yates and Berry 2011, p1133; Pennington 2015, p26.

[10] Quoted in LeGates and Stout 1996, pp378-9, 381.

[11] Narefsky 2014.

[12] Menzies 1942.

[13] McIntosh and Phillips 2001.

[14] Greig 1995, p38.

[15] ABS 2013-14; Kryger 2009, table 1, p2.

[16] Dingle and O’Hanlon 1997, pp34-5.

[17] Allon 2014, p14.

[18] Lyn Richards, “Suburbia: domestic dreaming”, in Johnson 1994, pp115-6.

[19] Richards, “Suburbia: domestic dreaming”, p116.

[20] Dingle and O’Hanlon 1997, p41.

[21] Greig 1995, p71.

[22] Berry 1999, p111.

[23] Berry 1999, pp108, 109.

[24] Greig 1995, p36.

[25] Quoted in Greig 1995, p17.

[26] Rubin 1990, p21.

[27] Foucault 2008, p148.

[28] See Mirowski 2013; Brown 1993; Brown 2015; Lazzarato 2011; Lazzarato 2013.

[29] Lazzarato 2013, p11.

[30] Mirowski 2013, p59.

[31] Brown 2015, p177. Emphasis in original.

[32] George Monbiot, “Sick of this market-driven world? You should be”, The Guardian, 6 August 2014.

[33] Lazzarato 2011, p95.

[34] Lazzarato 2011, pp56-7.

[35] The average home loan size in New South Wales, for example, is about $380,000. According to the National Australia Bank online loan repayments calculator, paying that money back at just 4 percent interest over 30 years costs $653,000. That’s an additional $273,000 – almost four years’ work for someone on the average full-time male wage.

[36] Lazzarato 2011, pp29, 31.

[37] Marx 1844.

[38] Ecclesiastes 10:19: “For laughter they make bread, and wine that the living may feast: and all things obey money”. An alternative rendering of the passage carries the more sarcastic “and money has an answer for everything”.

[39] International Monetary Fund (IMF) 2015, p15; Reserve Bank of Australia (RBA) 2015.

[40] Battellino 2007.

[41] Reserve Bank of Australia (RBA) 2006, p50; Donovan and Gorajek 2011, p29.

[42] Jonson 1996.

[43] Meagher and Goodwin 2015, pp4-6.

[44] See, for example, Meagher and Goodwin 2015.

[45] Cottle and Collins 2008, p4.

[46] Lazzarato 2011, pp130-1.

[47] Lazzarato 2011, p134.

[48] Commonwealth of Australia 2014b, pp104, 107.

[49] Bramble 2014, p68.

[50] Quoted in Foucault 2008, fn18, p153.

[51] Katie Wood, “Who really rules Australia?”, Red Flag, 26 June, 2013.

[52] Mair 2013.

[53] Brown 2015, p127.

[54] Quoted in Brown 1997, p49.

[55] Brown 2015, p39.

[56] Brown 2015, p127.

[57] Quoted in Mirowski 2013, p40.

[58] Louise O’Shea, “Germaine Greer and the new ‘left’ authoritarianism”, Red Flag, 3 November 2015.

[59] Fredrik deBoer, “I don’t know what to do, you guys”,

[60] Brown 1993, pp390, 391.

[61] Brown 1993, pp394-5.

[62] Lucy Groenhart and Nicole Gurran, “Home security”, table 7.1, figure 7.1, pp237, 242, in Meagher and Goodwin 2015.

[63] Fox and Finlay 2012, p15.

[64] ABS 2015b, table 6, p16.

[65] ABS 2015a.

[66] Downes, Hanslow and Tulip 2014, figure 4, p10.

[67] Lindsay David, “Banks have treated our housing market like a Ponzi scheme and it’s about to bust”, The Guardian, 20 August 2015.

[68] Commonwealth of Australia 2014a, pp42-3.

[69] IMF 2015, p19.

[70] RBA 2015.

[71] Digital Finance Analytics and Monash University Centre for Commercial Law and Regulatory Studies 2015, table 1, p7.

[72] RBA 2014, p49.

[73] Ellis 2015.

[74] Sandercock 1975, p2.

[75] Armstrong et al 2015, p21.

[76] Matt Wade, “Life in Sydney is getting better – for some”, Sydney Morning Herald, 13 October 2015.

[77] Pennington 2015, figures 3.8 and 3.9, p39.

[78] Latham 2005, p40.

[79] McAllister and Cameron 2014, pp9, 14.

[80] See the Lowy Institute polls for 2012, 2013, 2014, 2015. programs-and-projects/programs/polling.

[81] See, for example, Lorenzo Del Savio and Matteo Mameli, “Anti-representative democracy and oligarchic capture”, OpenDemocracy, 16 August 2014. antirepresentative-democracy-and-oligarchic-capture.

[82] Jason Stanley, “Democracy and the demagogue”, New York Times, 11 October 2015.

[83] Ben Hillier, “Murdoch hates speech goes proto-fascist”, Red Flag, 27 April 2015.

[84] Soutphommasane et al 2015, p60.

[85] Quoted in Cottle and Collins 2008, p4.

[86] Ben Hillier, “Even the Liberals’ mates are turning”, Red Flag, 29 August 2014.

[87] Stephen Moss, “It wasn’t until we signed our last bits of paper that we thought, why did we all go so quietly?”, The Guardian, 6 February 2009.

[88] In conversation with the author. For an account of the strike see Jerome Small, “Inside a Melbourne warehouse strike”, Red Flag, 16 August 2015.