An Economy is Not a Society Read online

  Other books in the Redbacks series:

  Battlers and Billionaires:

  The Story of Inequality in Australia

  ANDREW LEIGH

  Why We Argue about Climate Change

  ERIC KNIGHT

  Dog Days: Australia after the Boom

  Ross GARNAUT

  Anzac’s Long Shadow: The Cost of Our National Obsession

  JAMES BROWN

  Crime & Punishment: Offenders and Victims in a Broken Justice System

  RUSSELL MARKS

  Supermarket Monsters: The Price of Coles and Woolworths’ Dominance

  MALCOLM KNOX

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  Published by Redback,

  an imprint of Schwartz Publishing Pty Ltd

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  Collingwood VIC 3066 Australia

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  Copyright © Dennis Glover 2015

  Dennis Glover asserts his right to be known as the author of this work.

  ALL RIGHTS RESERVED.

  No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means electronic, mechanical, photocopying, recording or otherwise without the prior consent of the publishers.

  The National Library of Australia Cataloguing-in-Publication entry:

  Glover, Dennis, 1964– author.

  An economy is not a society: winners and losers in the new Australia / Dennis Glover.

  9781863957472 (paperback)

  9781925203363 (ebook)

  Economic development—Australia. Government productivity—Australia. Australia—Economic policy.

  Australia—Politics and government—History.

  338.994

  Cover design by Peter Long

  Cover photograph by Roger Howard

  Photographs on pages 15, 20 and 23 by Wolfgang Sievers; used with permission of the Pictures Collection, State Library of Victoria

  CONTENTS

  INTRODUCTION

  Dark Vision

  CHAPTER 1

  Places of the Heart

  CHAPTER 2

  The Suburb That Was Murdered

  CHAPTER 3

  Ground Zero

  CHAPTER 4

  The Lost Revolution

  CHAPTER 5

  History to the Defeated

  CONCLUSION

  To Really Care

  ACKNOWLEDGMENTS

  NOTES

  To Toby and Teddy,

  just so you know where you’re coming from.

  It is not now as it hath been of yore;—

  Turn wheresoe’ere I may,

  By night or day,

  The things which I have seen I now can see no more.

  —WILLIAM WORDSWORTH

  INTRODUCTION

  DARK VISION

  Thirty years ago, Australia’s self-styled economic reformers began a revolution that they won and the little people lost. This revolution devastated numerous once affluent working-class communities like the one in which I grew up, turning many of their inhabitants into something entirely new: the non-working class. Like all revolutions, it produced a grand reform narrative that portrays its leaders as heroes and those who oppose them as naive and self-interested reactionaries. This one-sided narrative must now be challenged.

  At the heart of this tired revolution – which lurches along, led by the managerialist class it placed in power – is Joseph Schumpeter’s concept of ‘creative destruction’: the idea that in order to create a new economy, we must continually annihilate the old one. The task now is to rid ourselves of this heartless and morally barren concept and rediscover our moral voice so we can build a country that is once again worthy of us.

  When you think about it, creative destruction is an ingenious piece of doublethink. By smashing things up, it claims, we are actually building them, and the people whose little world is being smashed should thank us for doing such a good job of it. The demolitionist becomes the engineer, the economist becomes the hero, the pig stands on two legs. But, we should ask, can an economic theory exist in the absence of a moral position? And if it can’t, what is the moral position of creative destruction?

  In an aside in his famous history of the great economists, The Worldly Philosophers, Robert L. Heilbroner – who studied under Schumpeter at Harvard – gives us a clue. He tells us that in the late 1930s, after the Wall Street Crash had delivered power to the Nazis and created the preconditions for World War II, Schumpeter’s students were regularly shocked to hear him ‘declare, with obvious enjoyment, that depressions, far from being unmitigated social evils, were actually in the nature of “a good cold douche” for the economic system!’ The Great Depression a good thing? The inventor of creative destruction seems to have had all the morality of a pyromaniac.

  The idea of creative destruction is presented to us as reason itself, and far superior to the romantic nostalgia of those who protest against it. But is creative destruction really better? Is it based purely on reason? Or is it motivated by a dark vision of humanity? Does it have its own bleak – or, more accurately, shallow and banal – conception of life and how it should be lived? Let’s find out. Let’s investigate the economic reformers’ idea of creative destruction from the point of view of some of those on the receiving end.

  Where should we start? At home.

  When Australian economists turn to economic reform, something strange happens: they reflexively start talking about China, the way a man cheating on his wife can’t help but mention his mistress. ‘Look at this aerial photograph of modern Shanghai,’ they say. ‘Look at it glitter, look at it gleam! There, in China – that’s our future, and creative destruction will help us reach it.’ I want them to talk about Australia for a change – not just the bits they can see from their business-class window seats as they depart for the cities of Asia, or the abstractions represented on their PowerPoint slides. Specifically, I want them to talk about the places where a lot of the destruction took place, like my old home town, whose fate, sadly, is not unique.

  Once they do, something becomes obvious: not everyone is a winner from economic reform. Their friend creative destruction may indeed create, but it also destroys – usually the lives of other people in far-off suburbs, about whom they know little and care less; people who don’t have access to the opinion pages of the national dailies to tell us how well it’s all working out, now that the factories are gone and the unions have been broken and the public assets have been sold off and the middle classes with their private schools and private hospitals have cut free and left. These are people for whom Australia hasn’t necessarily changed for the better.

  So let’s change our focus. Let’s put away the wide-angle camera lens, walk through some back streets, disobey the ‘Do Not Enter’ signs and have a good look at the results of the revolution the economic reformers began thirty years ago. If the creative destroyers want to take credit for all that glitters and all that gleams, then they must also take the blame for all the broken glass and all the graffiti and all the rust and all the pop-up rubbish dumps that now pollute our vision.

  This is the story of what the creative destroyers have done. It is the story of a revolution that the little people lost.

  CHAPTER 1

  PLACES OF THE HEART

  Sous les pavés, la plage!

  — STREET GRAFFITI, PARIS, 1968

  You may not have heard of Doveton. Many people haven’t, including some who have lived in Melbourne their whole lives. Doveton is down the Princes Highway and the Monash Freeway, just beyond Dandenong, about thirty-five kilometres south-east of the CBD. It was once a far more prosperous place – nev
er wealthy, but a place where cars and trucks and trains and diesel engines and refrigerators and processed food were made; where mums and dads alike had decent-paying jobs; where the schools sent smart children to university even before university education became ubiquitous; where the streets were neat and tidy and the shopping strips pleasant; and where the working class enjoyed perhaps its greatest level of relative prosperity since economic history first began.

  That’s how I remember it, anyway, because Doveton is where I grew up. I know what some are going to say – ‘I’ll bet he doesn’t live there now’ – and they’d be right. Like most from my generation in Doveton, I moved out after going to university. But my family remains in the area and remains working-class, my friends from my Doveton days are still my friends, I travel there all the time, and like many others who grew up there, my heart has never left. But enough of that. I want to start by going back in time and talking about my little world, the world before the revolution, and the people who once lived in it. Let’s go back to my neighbourhood. As places go, it may not seem that extraordinary, but in an essential way its fate explains what has changed in our country and even within ourselves. Perhaps you know somewhere just like it.

  It’s 1975, I’m eleven years old and I’m playing cricket in the middle of my crescent. The nature strips are a four, and it’s a six if you can hit it over the front fence of anyone’s house. There’s no risk of getting in trouble, as everyone’s dads are at work.

  On the off side, number 28’s dad works at Perkin’s Engines, number 30’s (my dad) is at General Motors Holden, and so is 32’s – he’s a GMH line manager and the owner of a flashy Chrysler Charger, which our eyes follow every time it comes down the street. From memory, 34 and 36 were in vehicle production too, probably at International Harvester. On the on side, 27 works for Ford (I think it must have been in retail, as the Ford plants were far away), 29 is a self-employed car mechanic, and 31 is an engineer called Boothroyd – the only person in our street with a university degree; he works on the Holden design staff and is an officer in dad’s Dandenong-based Army Reserve artillery battery.

  My best friends, two of the players in our games of street cricket, were John Pandazopoulos (‘Panda’, naturally, who later became a left-wing Labor MP in the Victorian parliament) and Jimmy (later ‘Jim’, who would work his way up from apprentice draughtsman to a management role in a major manufacturing company). Panda’s dad worked as a cleaner in the same GMH plant as mine, and Jimmy’s dad ran a small garage that specialised in converting imported American cars from left-hand to right-hand drive; every week there’d be a wonderful new Chevy or Ford or Chrysler sitting in his front drive, and we often got to have joyrides in them. Later, when we turned eighteen, we drove them to local pubs on Friday and Saturday nights.

  Cars – their design, manufacture, repair and sale – gave us our bread and butter, our political direction and our social structure. They were the art we created and the delight of our little community, which centred on the primary school and neat strip shopping centre just beyond the end of the crescent, with its kindergarten and its stop for the bus that would take us to the big department stores and cinemas in Dandenong. Our mothers worked too, in little shops and in Coles and on the line in the canning and clothing factories not far away. Compared to our grandparents’ lives, ours were unbelievably affluent. We hadn’t had to survive the Blitz or get torpedoed on the Atlantic. And, knowing nothing better, we couldn’t have wanted for more.

  I’m sure you get the picture: my little valley was green, and made greener by the fallibility of memory. But even after adding in the imperfections, here was a community built for us little people, in the age before capital cut itself free from our democratic control. In it were factory managers, factory workers, small-business people, teachers and even the odd professional, all living together and sending their children to school together. No wonder our dads were in the Army Reserve: this was worth fighting for.

  It all added up to something that worked. But take the car and truck and canning factories and the nice shops out of this equation, and you’d have lost more than simply jobs: you’d be commencing a risky social experiment that only the most sophisticated and forward-thinking societies could have made into a success. But forty years ago, that was all in the future.

  Something keeps drawing me back to the crescent. A few years ago, when Dad died, I stood outside my old house and wept, but not just for him. No more fours and sixes to hit here – the fences are long gone, and the nature strips and front yards are buried under concrete and rusting cars, with only the odd weed reaching instinctively for the sunshine. The house next to mine had a dirty caravan out the front, just visible behind a collection of abandoned vehicles and miscellaneous junk, and the one opposite looked similarly forlorn. What made me shudder, though, was the sight of my own former home, where I lived until I went to university just after my eighteenth birthday in 1982. Its collection of tow-trucks, decaying vehicles and stacks of metal panelling were suggestive of a junkyard – and in fact I later discovered that it was advertised on numerous online commercial listings as just that: a commercial wrecking yard and automotive spare parts business.

  While it was unsightly in the extreme, I had to admit to a certain amount of respect for the new owners, who, after the collapse of the car industry, were at least managing to keep it alive in some way. The managers in Detroit and the economic commentators in Sydney and Canberra don’t love cars anymore, but these people did and one had to admire that. But it told you something else too: that the occupiers of my little house had gone from builders to wreckers, from manufacturers to spare parts sellers, from craftsmen to gleaners in just one generation: here is the economic progress we were told would make us all wealthier, now acting in reverse. When did it all start to go wrong? When the factories started closing down.

  In the Doveton of my memories it is permanent summer; more precisely, it is permanent Christmas. Because our parents worked at both the General Motors Holden plant (Dad) and the Heinz canning factory (Mum), my sisters and I were among the luckiest kids in town. We had not one but two factory incomes, which was enough back then for us to be among the affluent working class. More importantly, it meant we got to go the children’s Christmas parties run by the social clubs at both factories.

  There is an image of that time stamped indelibly on my memory. Back in the mid-1960s GMH had commissioned an artist to produce an advertisement for its latest EH model station wagon. It was the sort of futuristic vision you could imagine Salvatore in the art department of Sterling Cooper coming up with in an early series of Mad Men: a shiny new car, its chromed bumper bar, mirrors and other fittings gleaming in the sunshine as it whooshed down the highway, with father at the wheel, mother beside him in chic sunglasses and 2.5 children in the back, smiling at their schoolmates being left behind in the car’s wake. This was the future, and we were already living in it! I saw an image of the ad recently in a history of Holden cars.

  The Christmas parties themselves were everything a child could dream of, with showground rides, ponies, mini-bikes, concerts and a present that was really worth having. One year, Santa arrived in a helicopter. These were lavish affairs, paid for by the companies but organised by the workers themselves, although there was likely not a single university graduate or professional event planner among them. Here is a little world lost – one the workers controlled in a way almost impossible to imagine now.

  Today, when we think of trade unions, what first comes to mind are the massive industry superannuation funds that the union leaders now control. This is in some ways an advance: as Marx would surely have noted, it means the workers have at last got control of a good proportion of the nation’s capital (which is, of course, why the industry super funds are in the Liberal Party’s sights). But it hides a major loss, one probably not worth the gain of all that finance, with all its tempting corruptions for the average union official. Gone is a culture and a movement, an autonomous, self-or
ganised community with its own cohesion, living in part by its own rules and to its own rhythms, looking after its own. Gone is a time when working-class Australians controlled some of their own turf; when their unions controlled knock-off time; when holidays came in annual cycles and everyone actually got holiday pay; when overtime would pay for a new car or a new kitchen or a treat for the kids; when their shops closed for the evenings and most of the weekend and the retail lobbies didn’t complain about paying penalty rates; when life for many wasn’t reduced to a state of constant exhaustion by casual, deregulated work; when people could enjoy the festive season without being dog-tired from the Christmas Eve nightshift, and stressed out by the prospect of an early start to the Boxing Day sales. Gone is a time when life, in many easily definable ways, for a great many people, truly was better.

  The historian views the world differently, forever stripping back decades of paint and renovations with a kind of compulsion to see what lies beneath. I can never, for example, walk around London without every line of the ugly post-war buildings conjuring the Tudor or Georgian architecture that stood there before the Luftwaffe destroyed it in the Blitz – finer, more beautiful, more human. Sous les pavés, la plage! Under the cobblestones, the beach! Under the ugliness, a better life!

  A couple of examples in particular come to mind. While I was studying at Cambridge, my supervisor took me to what had been until recently a little-thought-of storage area up in the roof of his college. The removal of a false ceiling and the stripping of paint had revealed it for what it really was: a magnificent medieval reading library with a tall, oak-beamed ceiling like the hull of an upturned sailing ship. It had all been ‘modernised’ less than a lifetime before, but the memory of the original had not been passed on to succeeding generations of dons and so had been forgotten. On another occasion, a friend called Andy, an expert in pre-modern economic history, took me for drinks to an underground bar in Norwich – a rough, mean-looking place with over-loud music – to show me how it had originally been a warehouse servicing the late-medieval English wool trade. It was nothing more than a bricked cellar, in no way spectacular, but to the historian it was evidence of a way of life that had been smashed to pieces by the steam-powered loom and the coming of capitalism. Look closely, and you can find vanished worlds. Sous les pavés, la plage! In Australia, lacking in grand ancient architecture, this isn’t so easy – unless, of course, you know where to look.