You want to stop people from turning to divisive figures who peddle hatred? Ensure they have a decent standard of living, writes former treasurer Wayne Swan.
Far from history being over, it seems like the battle of ideas has only just begun. The election of Donald Trump, the UK’s exit from the European Union and the rise of nationalist parties such as the National Front in France, the AFD in Germany and of course, One Nation and their fellow-travellers in the Liberal and National parties in Australia have completely shattered the notion that support for trickle-down economics, particularly labour market deregulation and discriminatory trade agreements, is “settled” in Western democracy. Indeed, recent events suggest that a majority of voters have been stewing in ominous silence for the past two decades as their countries were transformed without their consent.
But while Brexit and Trump provide a stinging rebuke to major parties that cling to the trickle-down agenda in the US and the UK, the Australian experience has, so far at least, been more inclusive. While Australia can learn a number of lessons from what is happening overseas, our closest allies can learn some important lessons from us as well.
The first lesson is that rising inequality is the major threat to economic growth in developed countries. Unless economic policy is aimed at securing inclusive growth that delivers benefits to those outside the 1% it is now clear that a majority of voters will block that reform. The thing that now scares the working class the most is a bigger dose of free-market capitalism.
The second lesson for all politicians is that voters no longer fear the wrath of “the markets” if they refuse to swallow the bitter pill of trickle-down tax and trade policies. The idea that the cure for unemployment, poverty and regional decline is another dose of trade agreements and tax cuts is dead. Working-class voters now fear the medicine of neoliberal reform more than they fear the problem of slow growth.
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