The Ends of Certainty: The Australian Settlement and Neoliberal Globalisation

*More from the PhD. This section comes after the introduction to the third of three chapters and seeks to present and critique Paul Kelly’s influential narrrativisation of the long Labor decade.
Kelly devises the heuristic of the Australian Settlement — a 90 year old political-economic ‘contract’ between Social Liberals and Labourists — which he argues is being irresistibly dismantled by economic globalisation. The corollary is that the political party best able to align its reform policies with the direction of globalisation is best able to govern and most deserving of government. Kelly’s story of the 1980s and early 1990s is, generically, one of a national coming-of-age. Unlike the UK and the USA it was a Labor party that governed through the emergence and dominance of Neoliberal policies in Australia. This coincidence of an ostensibly left-wing political party in league with a left-wing social movement (the Australian Council of Trade Unions – ACTU) implementing Neoliberal policy had a profoundly destabilizing and even confusing effect on Australian political culture and cultural politics. Kelly’s narrativising of this period through one of the key genres of modernisation is thereby both an understandable performance aimed at goving narrative shape to this destabilizing period, and a highly charged instance of a cultural form — the Bildungsroman — called on to naturalize Neoliberalism as a national inevitability and opportunity to mature and become independent.
Ironically Kelly is certain about the unstoppable force of what he conceives as globalisation.*

Two trends coalesced during the 1980s – the internationalisation of the world economy in which success became the survival of the fittest; and the gradual but inexorable weakening of Australia’s ‘imperial’ links with its two patrons, Britain and America. The message was manifest – Australia must stand on its own ability. Australians, in fact, had waited longer than most nations to address the true definitions of nationhood – the acceptance of responsibility for their own fate. (Kelly, 1994: 13)

In Kelly’s The End of Certainty the Australian nation is personified and emplotted through the narrative model, and using the narrative techniques of, the classical Bildungsroman. In this narrative of nation a youthful Australian economic self is presented as being pulled into an uncertain future by irresistible, modernising global forces. The combination of the twin forces of economic globalisation and post-colonial de-coupling from Great Britain and America present Australian political culture with an opportunity to come-of-age: to be independent. For Kelly this opportunity for independence is to be understood by acknowledging why the long Labor decade had been such a period of transformation, and indeed loss. The long Labor decade needed to be understood as the exhaustion of what he calls the ninety-year-old Australian Settlement:

The story of the 1980s is the attempt to remake the Australian political tradition. This decade saw the collapse of the ideas which Australia had embraced nearly a century before and which had shaped the condition of its people. The 1980s was a time of both exhilaration and pessimism, but the central message shining through its convulsions was the obsolescence of the old order and the promotion of new political idea as the basis for a new Australia.

The generation after Federation in 1901 turned an emerging national consensus into new laws and institutions. This was the Australian Settlement. (1)

Kelly’s Australian Settlement is comprised of five pillars or five institutional commitments which gained consent from a dominant bloc in the political class in the immediate post-Federation period, and which he groups “under five headings – White Australia, Industry Protection, Wage Arbitration, State Paternalism, and Imperial Benevolence” (1-2). More specifically Kelly characterises these foundations of Australia as:

faith in government authority; belief in egalitarianism; a method of judicial determination in centralised wage fixation; protection of its industry and its jobs; dependence upon a great power (first Britain, then America) for its security and its finance; and, above all, hostility to its geographical location, exhibited in fear of external domination and internal contamination from the peoples of the Asia/ Pacific. Its bedrock ideology was protection; its solution, a Fortress Australia, guaranteed as part of an impregnable Empire spanning the globe. This framework – introspective, defensive, dependent – is undergoing an irresistible demolition. (2)

Kelly’s essential argument here is that Australian political culture is both reacting to exogenous economic and post-imperial shocks and to an endogenous institutional and cultural agreement that is exhausted. For Kelly

the 1980s saw the Labor-Liberal paradigm being eroded as the major battleground of ideas [as t]he real division is between the internationalist rationalists and the sentimental traditionalists; it is between those who know the Australian Settlement is unsustainable and those who fight to retain it. (2)

Thus Australian political culture in the long Labor decade is to be understood as being remade in the face of new realities. Throughout this thesis I have largely agreed with this line of argument. But Kelly’s story of the long Labor decade is one that uses this heuristic of the ninety-year-old Australian Settlement in order to bring a specific representation of what Tim Rowse calls a “characterology” into this narration of nation (1978: 94). In a close-reading of Keith Hancock’s influential “enquiry [into] the status of Australian nationhood or civilisation,” Australia (1930), Rowse detects a particular logic at work in Hancock’s text; a

generous use of characterological explanations for the flawed policies he is criticizing. Not a particular class or interest (such as a working class defending itself through reforming ideologies), but the idealism of a ‘people’, the optimistic, generous, reckless instincts of every Australian were evident in its ill-conceived economic and political arrangements. Hancock moves effortlessly from personality to national policy. I shall call the logic of this kind of argument the immanence of subjectivity: the national or social level is reducible to the personal. In Australia this logic is exploited enthusiastically. Hancock lifts characterology from the subordinate marginal place it occupies in previous sociological descriptions of Australia, and places it at the centre of his nationhood argument. The dilemmas of an ethical, interventionist [social] liberalism, its aspirations and pitfall, are evoked as the engaging but innocent quality of the emergent Australian personality. The metaphors of youth, age and maturation which run through the book have a logical as well as a literary felicity. (1978: 79, 93-94)

The “immanence of subjectivity” whereby the national or social level is reduced to the personal is a logic we have seen at work in the language of Keating. For Rowse, Hancock’s master-work presents an Australian character through which he makes his arguments about the direction that Australian political culture should proceed by casting Social-Liberal ideals as adolescent and thereby as able to come-of-age toward a “cultural maturity” which was defined by “its defence of British interests in particular and of Australian capitalist interests in general” (79, 81).

Kelly too deploys a characterology, an immanence of subjectivity, which shifts from the qualities he characterises as embedded in the Australian Settlement to those needed and to be affirmed in the time of the post-Settlement. Thus in the following section we can see how Kelly “moves effortlessly from personality to national policy” when he writes:

The obsolescence of the old order is documented. Since Federation Australia has failed to sustain its high standard of living compared with other nations. Australia’s economic problems are not new; they are certainly not the result of the 1980s, the 1970s, or the 1960s. The malaise stretches back much further to the post-Federation Settlement. Australia’s economic problem is a ninety-year-old problem. The legacy of the Settlement has been relative economic decline throughout the century. Australia is a paradox – a young nation with geriatric arteries. (13)

There are similarities here with Keating’s statement that

It was our view that finance is the lifeblood of the economy and that this country’s financial arteries were clogged by redundant and outdated regulation and the lack of effective competition. In a sluggish economy that needs investment and dynamic entrepreneurship it is essential that the financial system encourage and sponsor the initiative rather than stifle it (Keating, 1987: 184)

The similarities between Kelly’s and Keating’s body metaphors turn on the figure of financial arteries which suggests that the paradox Kelly is referring to is that of a young political culture which has not been mature enough to embrace, by encouraging to make flow, the vital lifeblood of international finance and which has been locked into the debilitating stasis of the Australian Settlement’s “introspective, defensive, dependent [. . .] Fortress” (2). The paradox is thus a political culture which has stuck to an immature Settlement and thereby overprotected and restricted the economy with “protectionist shackles which stifled its first century” (6). By casting the destruction of the Australian Settlement as inevitable and those who resist its demise as “sentimental traditionalists” Kelly presents a modernisation thesis which gains in power by the immanent subjectivities ascribed to both the old and new Australia; here represented as those in the Fortress and the masculine builders:

[t]he [long Labor] decade saw the collapse of the Australian Settlement, the old protected Fortress Australia. In the 1960s it was shaken; in the 1970s its edifice was falling; in the 1980s the builders were on site fighting about the framework for the new Australia. (13)

Kelly’s thesis of the inevitable dismantling of the Australian Settlement provides a structural organising power over the temporality of the text. At those moments in the detailed narration when interpretation and, indeed, evaluation are proffered, Kelly consistently reaches into the temporal and characterological binary opposition between, on the one hand, the traditionalists who valued the Australian Settlement and Fortress Australia, and on the other, the modernisers who reformed the economy in line with the expectation and judgements of the international markets. Emblematic of the structural power of Kelly’s modernisation thesis is the manner in which he frames and presents the micro-economic labour reforms of the late 1980s. Here Kelly presents the problem – a series of economic crises – the solution for which he advocates as being heedful of “the need for more efficient workers, firms and industries” (386). Next, he asserts that the solution to the problem was one of changing “work habits and company practice” (386). This solution is presented as a “new benchmark against which Australian institutions and practice would be measured – the benchmark of international competition. It was a repudiation of the values of Fortress Australia” (386). The evaluative weight clearly lies on the side seeking to avoid the illness, old-age and immobility of the traditional forms of governmentality. The characterology Kelly employs in this evaluation of micro-economic policy is redolent with this modernist temporality:

The new benchmark would affect ultimately every enterprise in the nation. It derived from the realisation that lack of international competitiveness had declined over the previous two decades, a legacy of cultural attitudes dating back to the post-Federation Settlement and more recent economic policy failures. Hawke’s initiative was an attack on the habits of protection, regulation and national introspection. It meant changes in how people worked, their motives, their outlook and their relations with fellow workers and managers. (386)

Similarly his final evaluation on this episode of the long Labor decade intensifies the violent undercurrent that this modernizing inevitability is presented through: “[m]icro-economic reform was about changing Australia’s work culture and destroying the mindset that produced the Australian Settlement” (398). Near the end of Kelly’s story of the long Labor decade he writes that with the passing of the Australian Settlement there is an optimism

rooted in an appreciation of the progress towards a new national compact. [. . .] The essence of [which] was national maturity, more emphasis on individual responsibility and less on state power, a more open and tolerant society, an economy geared to a new test of international competition, a greater reliance on markets to set prices, an emphasis on welfare as a need not a right, a growing stress on individual achievement, history and national destiny. (679-80)

Near the end of the long Labor decade, in Kelly’s estimation, Australia was coming-of-age.

*

As was mentioned above there have been a number of substantive critiques of Kelly’s text and the heuristic of the Australian Settlement in particular. For some, like Geoffrey Stokes, “to the extent that we can speak of a ‘Settlement’ in Australia, it was one reached on a wider range of key conflict or cleavages than those to which Kelly refers” (2004: 5-6). On other hand, there are those critics who dismiss its temporalization of Australian political culture. Stuart Macintyre writes: “Kelly has little interest in recent history. His Settlement is a cipher for the long-delayed and urgently needed deregulation of the Australian economy” (31-32). Paul Smyth argues that

[t]he relevant historical context to the rise of economic rationalism in the 1980s was not any crisis in federation-style developmentalism – let alone the tariff regime of Kelly’s Australian Settlement – but that central object of attack of the monetarists, supply-siders and other globalising neo-liberals: Australia’s Keynesian legacy. (2004: 40)

For Tim Rowse “Kelly’s story of the dissolution of the Australian Settlement is the closest thing we have to a widely respected account of the modernisation of Australian politics” but it is one that ignores the

Keynesian critique of two of the pillars of the Australian Settlement: compulsory arbitration and industry protection. The effect of pointing to this [. . .] critique [. . .] is to break open Kelly’s category of sentimental traditionalists, that is, to show that there is more than one way to be critical of the recent neo-liberal antidotes to the Australian Settlement. (2003: 220)

But the most extensive and sustained critique of Kelly’s text comes from James Walter who is alive to the diachronic antecedents and synchronic bedfellow of Kelly’s central argument. Walter links Kelly’s construction of the Australian Settlement to Hancock’s Australia, a link that has been given further emphasis in this thesis through their shared use of ‘characterology’ (1996: 33). Moving sideways, Walter pairs his hermeneutics of Kelly’s text with a reading of Francis Fukuyama’s coterminous “The End of History?” arguing that both texts “express the wisdom of the moment with a comprehensiveness and historical sweep that gives [them] real force” but the problem with both is that they “re-read the past in anachronistic ways” (33, 36). Fukuyama’s triumphal declaration of the victory of the “free market” and “‘the liberal idea'” embedded in a “universal, directional history” collapses the distinction between Social-Liberalism and its market-based cousin, thereby effecting a depoliticization between the quite serious differences between forms of Liberalism (36-37). For Walter,

Kelly’s anachronism – and emptying of political history – is even clearer. His astute description of ‘the Australian Settlement’ shows the ameliorative tendency, and the expectation of a significant role by the state, to be leading characteristics in Australian politics. The difficulty emerges when he implies that, because such assumptions no longer seem appropriate, they were always mistaken. Thus, the tactics which generated a local politics and sustained an economy increasingly oriented to Australia’s interests can be shrugged off as simply ‘the protectionist shackles which stifled its (Australia’s) first century’. How such delusions could have survived, with (to some extent) bipartisan support and popular acceptance, is a mystery. That there might be some cause for pride in Australia’s political achievement is inconceivable. (37)

These critiques of Kelly’s text and its key heuristic, the Australian Settlement, go some way toward unsettling the inevitability that his claims generate. It is my contention, though, that the characterology, in both its crucial introductory pages and throughout Kelly’s history, where he narrates and explains his Australian Settlement thesis, rests on a set of Bildungsroman conventions. Primarily Kelly is characterising Australian political culture as being forced to face a realistic vision of its prospects and in having its former Fortress both dismantled and in torn down, opens itself to and integrates with the world. In arguing that the inevitable collapse of the pillars of the Australian Settlement produced such new foundations as a “deeper sense of national self-reliance, [. . .] an emphasis on individual responsibility [and] Australia’s economic orientation was more outward-looking and its aspiration was to become an efficient and confident nation” Kelly is presenting a Bildungsroman of nation: one through which key rationalities of Neoliberalism are embedded into Australian political culture (150). This form enables a narrativising of Neoliberal rationalities through the narrative technique of generating a forceful historical future. As Bakhtin argues, in the Bildungsroman the hero

emerges along with the world and he reflects the historical emergence of the world itself. He is no longer within an epoch, but on the border between two epochs, at the transition point from one to the other. This transition is accomplished in him and through him. He is forced to become a new, unprecedented type of human being. What is happening here is precisely the emergence of a new man. The organizing force held by the future is therefore extremely great here – and this is not, of course, the private biographical future, but the historical future. (1986: 23-4)

Thus the twinned emergence of the hero and history, which is in a transitional or interregnum period, generates a powerful forward momentum which when tied to the organic development of the hero’s transition from youth to maturity makes the Bildungsroman an ideal form for providing symbolic pathways through periods of modernisation. And indeed, as Moretti argues, the Bildungsroman is ready-made for eighteenth-century European modernity, which chooses youth as its central form into which this fusion of historical and biographical time will occur. For Moretti this choice is

[b]ecause, I think, at the turn of the eighteenth century much more than just a rethinking of youth was at stake. Virtually without notice, in the dreams and nightmares of the so called ‘double revolution’, Europe plunges into modernity, but without possessing a culture of modernity. If youth, therefore, achieves its symbolic centrality, and the ‘great narrative’ of the Bildungsroman comes into being, this is because Europe has to attach a meaning, not so much to youth, as to modernity. (5)

Kelly’s young nation with geriatric arteries, coming into maturity after the collapse of the Australian Settlement, is in a similar position to the symbolic youth that Moretti analyses as being a form with which the uncertainty and motility of European post-Revolution modernity can be represented. Kelly’s Australia, finally standing on its own and leaving the Fortress of tradition, is also in an interregnum: between the Labourist-Social-Liberal consensus and the ascendance of the Neoliberal forms of government. Indeed, in constructing such a distant and monolithic edifice as the five pillars of the Australian Settlement Kelly generates a level of modernising momentum which can barely be contained by the characterology through which this Bildungsroman of nation is presented. Yet as Joseph Slaughter argues “[t]he tautological-teleological complex of inherency in becoming articulates the impossibly anticipatory and retrospective (proleptic and analeptic) temporality of the story of the modern citizen-subjectivation shared by human rights and the Bildungsroman” (1415). What Slaughter is referring to here is the paradox, in the classic Bildungsroman structure, of a narrative in which the story of becoming is issued from a present in which the becoming has been achieved: the past that is presented as open is closed from the perspective of the narrator who can narrate the story of a becoming because they have seen its final shape.

A similar narrative technique exists in The End of Certainty where Kelly’s authorial persona disappears and is replaced by the evaluating voice of a historical future: that of the valuations of the international markets:

[t]he ‘banana republic’ was a dose of shock therapy for the nation which for a while left a legacy of crisis which Labor could have utilised to impose far tougher policies on the nation. The opposition gave labor plenty of room. Howard called for a freeze of wages and public spending; the New Right was mugging unions from Robe River to Mudginberri. Keating’s authority was as potent as Hawke’s popularity. The prime minister declared the crisis the equivalent of war. The historical judgement in terms of the public mood and the depth of the problem is that the Hawke-Keating team failed to seize the full magnitude of the moment. Labor could have gone further but lacked the courage and imagination.

Labor felt it was heroic enough – its decisions were draconian by orthodox standards and its advisers were pleased. Labor was also frightened by the demons of revolt from its base and a community backlash. Hawke and Keating depicted themselves as bold warriors. But history will record that the times demanded more and would have given more. (227).

Here we have a clear indication of the tautological-teleological complex. Kelly here slips away and it is the future historical that speaks. The ‘times’ are personified as making demands that weren’t met. What Kelly means here is that the dramatic fall in the Australian dollar that precipitated Keating’s “Banana Republic [. . .] shock therapy” treatment, history will show, should have been cause for a deep wage cut (208). The Bildungsroman form generates this tautological-teleology but on whose authority is this judgement made: who are the times? One clue is provided in the same chapter where Kelly writes: “In late 1985 the jury – the financial markets – voted against Keating by forcing another major depreciation of the $A” (208). Also, Kelly, weighing into a dispute over how to determine the rate of micro-economic reform, between ALP Industry Minister Senator John Button and Chicago economist David Hale, argues that while they are both correct,

the difference is the test of measurement: it is whether Australia is judged by its own historical standard or by an international standard. There is no dispute that Australia has made advances; but those advances are not sufficient unless they are advances in relation to Australia’s trading partners, all of whom have their own micro-economic reform programs. (389)

Later Kelly writes, “Labor’s failure at the ‘micro’ level was to use the historical standard of comparison, not an international standard of ‘first-best’ practice” (397). It can be argued then that the historical future in The End of Certainty is what the international financial and other markets decide: they are the times. This seems like common sense, but as a temporalization of time, achieved in part through the Bildungsroman form and supported by the anthropomorphism of “the times,” the positioning of the international markets as the judges of political decisions narrativises Neoliberal self-government as a technique of Australian political culture that effectively grants the international finance markets authorship of the history of our times. To be part of history a nation, a political culture, a self needs to anticipate what the markets will demand. More.

*

To come-of-age during the end of certainty is to enter the formative pressures of Neoliberal temporality. As Morris argues, the fusion of what were considered formerly discrete, because non-economic, spaces in Chicago School economic theory, results “in a generalized economic tabulation where human time would be the primary element'” (1998: 184). In Kelly’s Bildungsroman of nation we can see how the historical future too is subject to Neoliberalism.