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Issue No. 135 | 10 May 2002 |
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The Costs of War
Interview: Squaring Off Industrial: Heroes Betrayed History: At The Coalface International: Wobblies With Chinese Characters? Politics: Dancing with Trotsky Economics: You Are What You Eat Poetry: Alexander's Bragtime Band Satire: Stott Despoja Celebrates Engagement With Minor Party Review: Painting Paradise
The Soapbox The Locker Room Postcard Bosswatch Week in Review Tool Shed
 Heaps and Heaps of Hate MailNo ChoiceWho Rules Australia?No Wrap for Song Comp Abbott's Contempt
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Tool Shed The Speculator
Mark Latham this week unleashed another of his 'big ideas'. This alone should have been enough to have Laborites ducking for cover. If you've braved the weighty 'Civilising Global Capital', ploughed through the newspaper columns and endured his education agenda and survived his attack on asylum seekers, you would have known what to expect. Latham is the ALP's self-appointed moderniser whose starting premise is that collectivism is old hat; instead we need a new vision. His problem is that all too often the vision ends up reading like a treatise for the Tories. This week it was 'the ownership agenda' which Latham argues has the potential to fill what he perceives as a vacuum in the labour movement. In short, he advocates for the government subsidizing the purchase of shares of low-income families, much like the first-home buyer scheme created by Menzies and - as revealed this week - resurrected by Howard to allow pauper and millionaire alike to receive a leg-up into the property market. While Menzies may have championed his first homebuyers scheme as a 'bulwark against the Bolshevicks, Latham's idea of a first shareholder scheme is something altogether different. Home ownership is by its nature a conservative investment - one buys an asset, improves the value over time by a combination of market forces and hard work and then realisees the asset at a later date. Share ownership is altogether more speculative To Latham share ownership is "a modern expression of social justice, with its commitment to equal life chances. It gives new life and electoral appeal to the traditional values of the Labor movement: opportunity, security and responsibility. It needs to be part of our social contract with the Australian people.' The idea is nothing new, right-wing economists in the United States have long advocated for this type of idea. To his critics, Latham is advocating state-sanctioned gambling. If it's not enough to have the working people punting on the horses and the pokies to fill the public coffers, now they want us to punt on the markets. Perhaps when things get tough they can live under their chare certificates. The big winners from the Latham plan will be the brokers - and the existing shareholders whose share values will surely increase as new speculators enter the market. As One.Tel, Ansett, HIH and Enron have shown, there's no sure bet on the stock exchange. There is nothing in the proposal to channel funds into the blue chips either - what if the shares are bought in dot-commer? For lower income earners, who cannot afford a large share portfolio in which the risks are spread, this is particularly problematic. Converting share ownership into regular dividends may have looked easy to achieve in the 'nineties, but this is a more difficult decade, with major corporate collapses, like those of HIH and OneTel, and growing fears of a major economic recession emanating from the US economy. In the context of corporate collapses, workers and retirees stand to lose their lifetime savings. Indeed, the workers at Enron, not only lost their jobs but their life savings, rolled as they were into the Enron share price.
But my biggest problem with Latham agenda, is its underlying principle to individuate society as if we all start with nothing and exist to accumulate. Of course, until a few years ago, each citizen was born with a stake in a range of enterprises from the Commonwealth bank to Qantas to Telstra. That was before federal governments of all political colours got the privatization ball rolling and public infrastructure moved into private hands. For those interested in increasing community equity, a far better target would be increasing government support for superannuation payments, coupled with regulations making it a little bit easier for workers to control the investment decisions of their funds. Delivering greater support for pension savings would deliver real security for workers who know they no longer have a job for life. Taking it a step further a giving individuals greater rights to determine where those savings are invested would deliver real control. It goes back to Workers Online's original contention that Latham junked in his paper: a Labor model should not be based on greed because it will weaken Labor's long-term mission. Developing national savings strategies based on collective involvement and collective benefit is one thing. Pitching for votes by offering the punters a few gambling chips at the door, is something altogether more short-sighted. Far from being Labor's new Light on the Hill, Latham's share ownership agenda is a dousing of the flame, a desertion of the ideas of working together as a society rather than as individual players for our mutual benefit. If we give up on this we may as well all join the Liberals. Mark could do us all a favour by leading the way
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