The problem with this analysis is that it assumes that the partial retreat from Keynesianism was motivated entirely by ideology – people abandoned their attachment to social democracy and embraced so-called “economic rationalism”. While I don’t deny there was an ideological element involved, the main reason mainstream policymakers moved away from heavy reliance on Keynesian interventionism was the perception that the theory did not explain how the economy actually worked, and the policies were responsible for the economic train wrecks of the 1970s in Australia and the UK.

It is worth Reading Ian Macfarlane’s Boyer Lecture on the breakdown of the Keynesian consensus in the 1970s.

http://www.abc.net.au/radionational/programs/boyerlectures/lecture-2-from-golden-age-to-stagflation/3353140#transcript

Aiden’s conclusion gets to the crux of the matter:

“Whether or not Corbyn can win the BLP leadership ballot remains to be seen. Whether he can then go on to win an election is an even bigger question”

It is taking a huge gamble to say “there is an appetite among contemporary voters for progressive ideas.” That’s not what the recent British elections suggest. Labour should also look to its history. The much-maligned Tony Blair is the only Labour leader to have won an election since 1974. Michael Foot took Labour into a socialist wilderness, and it took many years to find its way back to electoral respectability. Corbyn could well do the same.

Tristan
Last time I looked, we still had a progressive tax system and a mixed economy. Can you quote a single influential Australian conservative who labels these "extreme"?

The mainstream debate on these issues is about matters of degree, not absolutes

Rhian ; The Conservatives label any attempt to enhance progressive redistribution via the tax system as 'class warfare'. That's pretty similar to labelling those kind of policies 'extreme'. The Conservatives - and indeed some in the ALP - signal their intention to 'broaden the base'. And even some in the ALP buy into the whole 'class warfare' angle. The Conservatives' actions - diluting the progressive nature of the tax mix - and showing an ideological preference for regressive taxes like the GST - suggests their perspective and their agenda pretty clearly. They've also made it clear they are impatient with any meaningful mixed economy. They just privatised Medibank Private ; and already their screws are being turned on consumers.

As for the 1970s - its the Oil Shocks that changed everything. And the perceived Ideological need to have a radically different (and hostile) narrative from the Soviet and Eastern bloc. Neo-liberalism was an Ideological assault on the rights of labour, the welfare state and the mixed economy. We still live with the consequences - and not even Labor will step up to the plate and question any of this.

Hi Tristan

Again you are confusing relatives with absolutes. Opposing a MORE progressive tax system is not the same as opposing A progressive tax system. Perhaps they think it’s already progressive enough.

Base broadening is usually pursued because it’s economically efficient. It’s not necessarily regressive – broadening the base of the land tax, for example, would arguable make it more progressive. Broadening the income tax base could very well be progressive. Broadening the GST base would, in isolation, be regressive, but this could be offset by compensating changes in benefits and lower-level tax thresholds (my preferred policy).

And “class war” is much more commonly the language of the left than the right.

Read MacFarlane’s piece. The acceleration in inflation and rise in unemployment in Australia preceded the oil price shocks. The oil price exacerbated stagflation, but didn’t cause it.

hi Rhian. I think the opposite is true re: 'Class warfare'. The Conservatives use the term to stigmatise redistribution and class struggle. And the 'relative Left' - ie: Labor mainstream - speaks constantly of 'reconciliation'. ie: they are on the run and are too scared to argue that sometimes workers and the vulnerable have to fight for their rights.

re: Tax - I think its quite clear the Libs want to cut income and corporate tax and replace them with more GST. They say they will compensate. But the reality is people lose track of how much GST they're paying. While they're more acutely aware of paying income tax. That means because of 'downwards envy' the compensation will be neutralised over time. AND the Conservatives know this. They don't like redistribution. Like Hayek they're willing to leave it to the marketplace as if labour market relations are 'essentially just and natural'. That's their Ideology.

re: a broader tax base. We cannot get away with ONLY taxing the richest of the rich. That won't get us the resources we need for Aged Care Insurance, Medicare Dental etc. Insofar as we need to hit the upper middle class - yes we need a tax mix as broad as that. And the middle class needs to pay its fair share too. What they get through collective consumption (via tax) is social insurance, social goods, infrastructure, services - at a much better rate than if they'd have to provide for themselves via 'the market'.

Hi Tristan

The Coalition has sometimes used the phrase “class war” as you describe, and Tony Abbott used it to describe one of Labor’s budgets, but a quick google shows it’s far more often used by the left.

Re tax – I agree that the middle classes need to pay their fair share of tax. I’d also argue that some of the middle class welfare introduced by Howard should be unwound. But even if the Coalition would prefer lower company and income tax, it doesn’t mean they oppose redistribution. So far as I know, they have never proposed a flat tax or poll tax. Again, it’s a matter of degree.

I doubt many Liberals are full-on Hayek supporters. It’s a bit like people who attack Labor for being “really” motivated by a hidden Marxist agenda. They are not, and trying to paint the mainstream as the extreme just misrepresents them and makes sensible debate difficult, because it does not engage with what people actually think, or the reasons why.

Hi Rhian,

Yes, yes. But Tristan really IS a full-on Marxist.