ga('send', 'pageview');
John Passant

Site menu:

October 2012



RSS Oz House



Subscribe to us

Get new blog posts delivered to your inbox.


Site search


My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole

Sick kids and paying upfront


Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)



How do we get a future that works?

We all want a future that works—for ourselves and for future generations. We want jobs, freedom from poverty, decent education, healthcare and housing. But with capitalism in crisis, John Molyneux in Socialist Worker UK asks whether the system can really provide these things

The economy has crashed but is this really a ‘crisis of capitalism’?

For more than four years the whole world has been trapped in an economic crisis. It is the worst since the Great Depression of the 1930s and there is no real sign of recovery.

All “official” economic forecasts show Britain’s economy shrinking this year. The average prediction for next year is negligible growth of just 1 percent. So we can expect more attacks on workers’ living standards.

There is continuing stagnation across the world. Even China, the most successful economy of recent times, is slowing down.

As the revolutionary Karl Marx argued, instability is an inherent part of capitalism. The system always goes through booms and busts—economic peaks and troughs.

But the roots of this crisis date back decades. As the boom that followed the Second World War came to an end, bosses’ profit rates started to fall.

For many years this decline in profitability was masked by a huge credit bubble. It was easier for capitalists to make money by lending their funds through the financial system rather than by investing directly.

But that credit bubble couldn’t keep expanding forever. And when the bubble burst five years ago, the entire global banking system broke down. Since then it has been bailed out again and again. But it still hasn’t been fixed—because the capitalists have no idea how to fix it.


Isn’t it just that the wrong people are in charge of the economy?

It’s certainly true that the wrong people are in charge. In Britain it’s the arrogant, greedy Tory toffs who despise working people and are busy making the rich richer and the poor poorer.

They and their cuts agenda are truly appalling and should be got rid of as soon as possible. But unfortunately, the Tory shower is not the root of the problem.

The global economic crisis began before the Tories came in back in 2010—and it started in the US on Wall Street, not in Britain.

True, in America the wrong people were in charge too—George Bush and the dreadful Republicans. But the replacement of Bush with Barack Obama didn’t solve the crisis or make things better for ordinary people.

In Greece, Pasok, a party like Labour in Britain, was in office from 2009 until 2012 without making the slightest difference. It was the same story in Spain where the PSOE (Spanish Socialist Party) governed from 2004 until 2011.

In France, millions voted for president Francois Hollande, believing him to be a great hope for the left. But he has continued the policies of austerity.

It is already clear that a Labour government in Britain led by Ed Miliband would do the same. Getting rid of vicious right wing governments is a good first step—but it is not enough in itself.


But what if governments stopped pushing neoliberal austerity policies?

There are many on the left who argue the problem is that all the parties, including Labour and similar parties across the world, have adopted the outlook and policies of what is known as neoliberalism.

Neoliberalism is the idea that all aspects of society should submit to the harsh laws of the market—of profits and capitalist competition.

It argues that the markets can be left to themselves and will ensure the most efficient use of economic resources. If the government tries to help people cope, it just makes matters worse. “You can’t buck the markets,” as Margaret Thatcher used to say.

This was a deliberate ruling class project to try to get out of capitalism’s crisis of profitability by increasing the share of wealth going to the rich.

Opponents of neoliberalism, like many on the left of the Labour Party, point out that this leads to ever growing inequality and poverty. They add that austerity only makes the crisis worse by decreasing ordinary people’s spending power.

This is all true. But it is usually followed by proposing a solution, Keynesianism, that won’t solve any of the economy’s basic problems.


Can’t governments spend their way out of the crisis?

The idea of increasing government spending to get out of a recession is known as Keynesianism. It is named after the economist John Maynard Keynes, who argued for a huge programme of public works to stop the depression of the 1930s.

The Eton-educated Lord Keynes himself was an anti-working class snob. But his ideas were enthusiastically accepted by most economists, until they switched to neoliberalism.

Today his ideas have been taken up by some on the left, including the majority of the union leaders, who want to protect working people.

As socialists, we have some things in common with people who want to invest for growth. They want huge building projects such as schools, hospitals and housing—and so do we. The difference is that we don’t believe these things will restore the system’s profits.

We want working class people to have jobs—and we want to build things because they would be useful for ordinary people. Keynes wanted to be a doctor to capitalism, healing the system when it was feeling poorly.

But his arguments to boost economic demand don’t even work on the system’s own terms. Crisis begins in production, not with demand.

Capitalism only knows how to recover through inflicting the pain of a crisis on ordinary people. And Keynes certainly can’t help us get rid of the rotten system for good.


But isn’t capitalism the best we can hope for?

There have been many economic systems in world history. And capitalism is certainly more powerful than the feudalism it replaced.

As Marx himself said, capitalism has “accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts and Gothic cathedrals”. Just think of the level of complexity behind an airport or a computer.

Yet capitalism also generates mass misery. A generation of young people in Britain are on the scrapheap as youth unemployment stands at a million.

The picture gets dramatically worse when we look at the world as a whole. There are nearly a billion people going hungry.

Most shocking perhaps is the obscene level of inequality. According to the World Bank, the richest 1 percent of people in the world own as much as the bottom 57 percent. The three richest people in the world have wealth that exceeds the total amount produced by the 47 poorest countries.

Capitalism brings all sorts of other problems as well. The crisis has intensified the drive for competition. This gives rise to racism, the threat of fascism—and ultimately the horrors of war.

That’s not to mention the threat of climate change, caused by capitalism’s systematic plunder of the planet’s resources for short term gains. To tackle these problems we need to overthrow capitalism.


Will we ever be able get rid of capitalism?

It’s not as far fetched as it sounds. Capitalism has only been around for a few centuries—and there’s no reason to think it won’t itself be replaced in the future. And it’s workers that have the power to do it.

Workers’ labour produces everything under capitalism—including the bosses’ profits. Whether you work in a factory, an office or a shop, if you’re not a boss then you’re part of the working class. The whole system rests on your work.

Of course from day to day it doesn’t feel like that. Working class people can often feel downtrodden and bullied, and feel as though we have no power at all over society. This is what the system does to us.

But when we fight back we get a glimpse of how things could be different. Mass marches such as the one in London this weekend can show us how much power we have.

More importantly we can see it every time workers strike. A strike, workers collectively withdrawing their labour and shutting their workplace down, proves that without us the bosses are nothing. It points the way to how workers could bring about a socialist revolution.


Is socialism possible?

The 1917 Russian Revolution was one of the greatest events in world history. Unfortunately however the revolution failed to spread, opening the door for a new elite of privileged bureaucrats to take over.

Instead of workers’ control over society, the Soviet Union into a state-run form of capitalism. When we say “socialism” we mean something very different. Socialism is about workers themselves creating a new society.

It is about the working class democratically planning production and distribution, based on human need instead of the drive for profit.

Today we’ve seen mass revolutions bring down dictators in Tunisia and Egypt. Their struggles show that revolution is far from an impossible dream.

Whether it’s food, housing or any of the other things needed for a decent life, there is already more than enough in the world for everyone. We live in a world of plenty—the problem is that it’s in the hands of the rich.

In a socialist society there would be no need for anyone to go without. That really would be a future that works for us all.



Comment from Spiro
Time October 18, 2012 at 9:50 pm

Beautifully thought out as usual John..Hope that we have progressed to a state where the usual scum that adulterates and usurps peoples revolutions will not be allowed to do the same when the next big one happens.

Comment from Will
Time October 18, 2012 at 10:05 pm

I would’ve preferred to have read an essay as opposed to the answers to your own questions. Everyone can answer their own questions.

Comment from Kay
Time October 19, 2012 at 6:49 am

I was watching a debate the other day about capitalism and its problems. The most pro-capitalist (US) member of the panel made the point that for capitalism to work well, there should be no bail-outs. In other words, companies such as Lehmann Brothers should have been allowed to go bankrupt, and definitely should not have been propped up by government funds. He criticised the fact that failed business people were allowed to continue and prosper. He also had the view that this ‘too big to fail’ concept is wrong. He said that also applied to entire countries – Greece should be allowed to ‘fail’, just like Iceland ‘failed’ and has now bounced back better than ever. He was completely against any bail-outs at all.

As for this ‘ideal’ of a Socialist system where the workers rise up, seize the means of production and share the benefits amongst the workers – sounds idyllic, but I just can’t believe that it is possible in practice. Without leaders, the workers are just a mob, with mob mentality. These leaders will inevitably become the new ‘top dogs’ in the new ‘egalitarian’ society, and, because they are normal human beings, will slowly but surely start to favour their own welfare over others’. And so it begins – totalitarianism, dictatorship, capitalism, whatever… I just don’t see Socialism as practical or sustainable.

But I certainly agree that there is a widening gap between the rich and poor of the world, and the obscene wealth of the very rich should be tackled for the overall good. And when I talk about ‘obscene wealth’ I don’t mean people who just get very good incomes – say up to $500,000 per annum – I mean really rich. But because of the sheer mathematics of it all, Labor governments see fit to attack those who are merely very well off, rather than challenge the very rich who can pay for good lawyers.

Comment from ross
Time October 19, 2012 at 4:27 pm

John uses a broad brush to paint all of the free market system as beiing evil.The free market and fair competition in my view has not been allowed to operate because an elite few want total control with no competition. Rockerfeller ” Competition is a sin.” The ultimate goal by the large corporates is total control so they can stop working so hard.

John has shied away from criticism of the banking system but it in my view, is the prime source of income inequality all over this planet. The private banking system creates from nothing all the money to equal our increases in productivity,population and inflation.Our Govts then have to tax us to death to pay for infrastructure, social/medical services since they now have to borrow from this private banking system that owns our productivity.It is enslavement from which we will not escape unless these banking cartels are stopped.

China supplies 80% of new money via Govt owned banks.It has slowed from 12% growth to 7% and the West in this climate in reality is in 0% or negative growth.

When your growth gets expressed as debt,soon all the money in your economy is equal to all the debt. This is the crux of the dilemma of capitalism.All the money soon gets condensed in the hands of a few elites who now think their New World Order should prevail for them only.

With the advancement of robotics they see less need for the masses as a cheap source of labour.We in their view are,”the useless eaters” and are destroying their planet with too much consumption.This is also why they can justify their wars of imperialism taking more and more for themselves.

China,India and Russia have awoken to their plan and so too are embarking on their own imperialistic adventures.We the people will be the pawns.

Comment from Lorikeet
Time October 19, 2012 at 6:52 pm

To the vast bulk of the population, anyone earning $500,000 is very rich, even if they didn’t consider the wealth that could accumulated in interest and rent on that sort of money. Only a very small minority would be earning more.

$500,000 would buy quite a nice house in a capital city. Those who can earn a house every year should certainly be forced to share the largess.

Most people would enjoy being “merely very well off” on $500,000 a year, since there’s nothing mere about it at all.

Comment from Kay
Time October 20, 2012 at 1:39 pm

Re the $500,000 a year – it is a huge income, but compared with the VERY RICH, this is trivial, especially in the business world. They count their incomes in millions, or billions.

But, yes, it would be nice to even dream of such an income – but incomes between $100K and $500K are extremely common. The public service, academics, professionals of all sorts, tradesmen, FIFO miners, politicians – more people than you think.

Comment from John
Time October 20, 2012 at 4:48 pm

The average wage across all mining in Australia according to the ABS last time I looked was $117,000 and that included all the managers, engineers and the like. Given rents are very high the workers actual take home pay is not going to be that great, and the amount they make per employee for the Gina Rineharts is over $600,000, more than double the return to the next ‘best’ industry.

Most public servants earn below $100,000. Most academics earn below that too. Higher education is one of the most casualised workforces in Australia.

Comment from Kay
Time October 20, 2012 at 7:02 pm

Well, for starters, a humble uni lecturer earns $83K to $99K, a Senior Lecturer starts at $102K – up to $117K, and then there’s Asst Pro to $135K, and Prof to $$158. I think medical academics get loadings as well, as do some other fields of study. An AO7 in the Qld public service gets $105K, and that is still well below the executive levels which go well over $200K. In 2010, the average FIFO mining salary was $168K – plus they get allowances according to where they stay during their shift roster, then they fly home to where the houses are cheaper.

I was not saying these were average salaries – I just said there were more people than you might think in this income range – it is not confined to the very rich business leaders etc.

My idea of VERY rich are CEOs etc of companies – $1M+ salaries plus share options etc.. And I’m certainly not defending Gina Rinehart!!!

Comment from ross
Time October 20, 2012 at 7:09 pm

Really high incomes have skewed the average income of$62,000 to the right.When doing stats you knock out the highest and lowest scores.I say medium incomes in this country would more likely be around the $50,000 mark.This means half the pop is below this income.

BTW John the RBA can save us.There is $700 trillion derivative market and they say only one in $10 represents real money.The QE 1+2+3 monies have mostly been absorbed by the financial system and the banks are using this as a hedge against each other’s preditory activities,so liquidity does not reach the real economy.

When the real panic sets in and our currencies collapse money will pour into precious metals which will further remove liquidity and we spiral down again.

There is a good article here Flawed Monetary Policy,’Why QE to infinity won’t work.’ They say that the US Fed is in uncharted waters with Clinton eliminating Glass Steagall in 1999 and a phoney economy worth 10 times the real productive one.

Our banks have $15 trillion of derivative exposure and only $2.66 trillion in assets or unpaid mortagages. It is a receipe for disaster is we too don’t initiate some sort of Glass Steagall Act.

Our RBA can save us by lender of first resort to our embattled banks and we get to keep the money here for infrstructure etc.

Comment from John
Time October 21, 2012 at 12:25 am

Average income from memory is now over $70,000. 70% earn below that.

Comment from John
Time October 21, 2012 at 12:32 am

Yes and casualisation sees many contract academics on pittances. As an Assistant Commissioner I earnt $150,000 in the ATOI was one of about 250 out of a workforce of 23000 who did. There are figures for income distribution which make this division – most under average wage, some over, and then from about 4150,00 the recipients being bosses or their lackeys. If we take class rather than income as the basis for our analsyis, workers are those who sell their labour power and have little control over their work. Bosses control capital or the work of others or both. Thus I was a boss in the ATO. However since income is mainly what we have to go on, my guess is somewhere around $120,000 is about the cut off line for workers and non-workers, depending on industry, with a gradation to bosses after that. Thus mine workers earning $120,000 are well paid workers, not bosses.

Comment from Kay
Time October 21, 2012 at 8:29 am

John: I guess that’s where we fundamentally differ – I see a ‘worker’ as anyone who is hired to do a task and takes directions from some boss re what he/she does. My definition naturally takes in a much bigger slice of the population that your definition does. Controlling the work of others is, in my view, a fatuous distinction as only those at the very junior/menial level would not be supervising at least one other worker – for example, lowly paid national park rangers often supervise other lower classified rangers and casual workers such as labourers employed after natural disasters. Such ‘supervising’ rangers could earn as little as $30K to $40K. Likewise, clerical workers in that salary range would probably also do some supervision. After all, most organisations have a ‘pyramid’ structure, with usually only the bottom row of the ‘pyramid’ not having any supervisory duties.

And yes, FIFO miners are very well paid workers who need to be compensated for their long shifts, long rosters and disruption of family life. And, I believe, they usually quit after a few years because of these stresses, despite the very tempting incomes.

On the other hand, someone I know well has earned between $150K and $200K for the past 20 years, and has never supervised anyone – he is an IT expert.

By extrapolation then, your calls for ‘workers’ to unite and fight the good fight for Socialism would have very few legitimate followers if we use your definition. Probably one of the reasons it doesn’t happen!

Comment from John
Time October 21, 2012 at 11:09 am

Actually my definition captures most people as workers, and excludes those who have control over others or their own work, such as your IT expert.

Comment from Lorikeet
Time October 21, 2012 at 11:58 am

Even the Prime Minister earns a bit less than $500,000. There’s certainly a big difference between $100,000 and $500,000.

John’s figure of $70,000 is probably more up to date, but I thought it was Median Household Income, taking into account all workers, pensioners etc.

Those on excellent incomes of $100,000+ would do well to compare their own living situation with those living in the streets, instead of the billionaires.

One of my relatives is a highly paid IT expert. He still has to supervise the experts below him.

I agree with John that his definition captures most people as workers.

A lot of clerical workers earn around $50,000 which is not a particularly great income.

Most people on paltry wages in the $30,000 to $40,000 range are at the slavery end of the scale, and the very few in supervisory roles might attract as little as an extra 50 cents per hour.

Workers in aged care are an excellent example of corporates ripping off the elderly and paying slave wages to both Australian and migrant staff, while superannuants scream for a greater pound of their flesh.

We have Kevin Rudd to thank for this parlous state of affairs.

Once again, excellent comments from Ross.

Comment from Kay
Time October 21, 2012 at 3:20 pm

You said you were a ‘boss’ when you were working in the ATO because you were controlling “capital or the work of others or both”.

So a ‘boss’ controls the work of others or capital (budget?) or both?

All supervisors and managers have control over the work of others, and they direct them day by day as to what work to do. Also, as they work to a budget, I guess they have control over capital. So are all managers and supervisors ‘bosses’ like you were? What about a Ranger-in-Charge? Ditto re controlling the work of others and having a budget to manage. In fact almost everyone in an organisation has these duties to a greater or lesser extent. In general, it is mostly only those on the bottom row of the hierarchical pyramid of a large or small organisation that do not have those ‘boss’ functions.

Those who do not have “control over others or their own work” are therefore workers. Is this correct? Well by my reckoning, ‘workers’ would constitute a smallish proportion of many organisations.

Re the IT expert – he has no control over the work of others, has no budget, and resolves telecommunication/IT problems as requested by his manager. Sounds like a ‘worker’ to me, albeit a well paid one!

Personally, I think the whole ‘class’ distinction is completely antiquated in today’s Australia. There are the ‘haves’ and ‘have nots’. But trying to distinguish between ‘boss’ and ‘worker’ has no relevance. A large percentage of the population is involved in investing for the future – shares, superannuation, investment properties. Money is what really creates the divide, and most people work very hard at accumulating wealth in one way or another, at some point in their lives. That is the capitalist way, I guess. The freedom to better yourself financially.

Comment from John
Time October 21, 2012 at 3:23 pm

Sorry Kay, I agree with you when you say ‘John: I guess that’s where we fundamentally differ – I see a ‘worker’ as anyone who is hired to do a task and takes directions from some boss re what he/she does.’ We don’t differ. Workers are forced to sell their labour power to survive and are in essence under the direction of someone else, and don’t have that control in a major way over others.

Comment from Kay
Time October 21, 2012 at 5:31 pm

Well – we all (apart from those who own a company) are “forced to sell their (our) labour power to survive and are in essence under the direction of someone else”. But these/we are often the very same people who ALSO have “control in a major way over others.”

Just before I retired, I was a senior PS manager who certainly felt I was “forced to sell their (my) labour power to survive and are (was) in essence under the direction of someone else”!!!! But I had a budget of tens of millions and managed about 70 people – so I also had “control in a major way over others.” Ditto my Director, and so on up the line. And ditto my staff down the line who were responsible for their own units. And I’m certain that not one of us would have continued to work had we won Lotto or for some reason or another could afford to stop working!!!

I think you are just using the same words again and again but dodging the dilemma of dual roles – ‘boss’ AND ‘worker’.

And my point is – in today’s world we are almost all workers, even if we manage the work of others. And hence I disagree with your description of yourself as a ‘boss’ at the ATO. Unless of course you are telling me that you could do whatever you wanted in your role and were not directed in any way by the head of the ATO as to what outcomes you should be delivering. Were you in that delightful situation?

Comment from John
Time October 21, 2012 at 7:03 pm

Yes, I was a boss and a worker. There is this whole managerial level for capital which is with capital, unless there is a massive working class explosion on the streets and in the workplaces. This managerial class is part of the middle class and can go either way in times of upsurge of working class activity.

Of course I followed what the Commissioner directed. But I also had between 10 and 60 people working for me and under my direction. I was their boss.

Comment from Lorikeet
Time October 21, 2012 at 8:16 pm

I don’t think Kay has much of an idea of what goes on out in the big wide less than wonderful world of the lower paid worker.

I have certainly never worked in a job where I was allowed to make financial decisions, and very few of the people on the bottom rungs of the ladder had very much say about anything.

In general, those who get to call the shots and direct other workers get better money.

In the corporate world (e.g. Woolworths, Aged Care Centres, McDonalds etc) most employees scurry about like ants in an ant colony and are almost completely powerless.

Write a comment