Dear Passy,

It is common knowledge that there was wage restraint - and a corresponding fall in real wages - under Hawke and Keating...

According to The Gaurdian "labour's share of national income dropped... from 61% (in 1982) whereas in December 2000.. (it stood at) little more than 54%.

While many Marxist theories no longer hold up to scrutiny, his idea of a 'falling rate of profit' makes sense...

As productivity increases, and economic activity becomes less labour intensive, profits stand to fall unless the rate of exploitation increases...

Thus the wage share of the economy falls - and many would see this as an injustice... But many people do not notice or care - because new technology means increasing material living standards regardless...

Nevertheless, promoting a fairer share of the economy for labour is still a question of social justice... The best way of responding is to continue pursuing productivity - but to compensate labour through collective capital share... (ie: through wage earner or pension funds etc)

I am disappointed that so few posters seem to realise that we are moving into an entirely new economic period, in which few of the old certainties apply. There is, for example, not going to be enough oil to enable people to carry on as before, irrespective of income. One of the hardest hit groups will be those in gated communities in Sydney's south-west, who currently have about five cars per household, and consume 150 litres or more of fuel per week. It doesn't matter what money they receive, there won't be any fuel. They will have to commute to work using public transport, and spend many hours each day doing so. The value of their houses will collapse, because they are situated so far from shops and transport. Interest rates will have to rise substantially, otherwise people won't lend in an inflationary climate.

In other words, there will have to be a substantial cut in the standard of living, particularly in those who are unable or unwilling to reduce their consumption of energy resources. There can be no corresponding rise in wages, as this would just push the price of energy up still further.

Electricity is due for a massive increase. In addition, smart meters will charge at the price applying at the time the electricity is consumed, and that means that if you turn on your air conditioner in the afternoon when it is stinking hot, it will cost you a fortune. Those who cannot adapt by modifying their usage will pay the price. There can be no alternative, as otherwise there will be no electricity.

Over the next five years we can expect the price of food to treble, the price of electricity to treble, and the price of fuel to at least treble. People need to get used to the fact that there is nothing the government or anyone else can do to alter this.

How long will it be before the period from 1996 to 2007 is looked back on as the Howard Golden Age?

We are lucky in this country that we have a lot of COAL to burn thus staving off at least some of the costs of electricity.

It is not going to be the people who have massive houses with a fleet of cars who will hurt the most for they already have the money to buy hydrogen or electric vehicles which for the purposes of driving to work will be a treat as there will not be to many vehicles on the road.

The ones who will suffer will be the rest of us without the resources to survive in a lawless society of large groups of largely uneducated immigrants and our own nere do wells. Think South Africa.

Labour Govt is a slightly lite version of capitalism/economic rationalism. Lib Govt were sort of socialism lite, with their raft of middle class welfare.

So-called 'working class' is overstated. Most of this group are upwardly mobile middle-class, frequenting big box stores. Unwilling to delay material gratification, borrowing their way into 'our' mess.

Given that the masses in the middle have driven this whole buy now pay later lifestyle, its only fitting that they start paying. Later has arrived.

5-10% of rich/wealthy, poor/vulnerable at the margins are not the cause. They never are. They're a convenient scapegoat. Stirs up emotion, by exaggerating their impact/experience. Red herring.

Agreed, social justice could mean taking responsibility for your actions and not expecting others to foot the bill of your largesse.

Flog the 'rich' mantra wont be swallowed by the general voter, being plugged into the upwadly mobile pursuit of materialism inspired status, unlikely to flog what they're hoping to become. The 'socially minded' concerned about 'social justice' have embraced the middle class welfare doled out by Howard.

Ideological distinctions have been dead for at least 15-20yrs. Thankyou Keating. Very old fashioned. People have embraced a progressively upwardly mobile lifestyle. Genie's outta the bottle. Until everyone accepts that the oil is running out and population growth is outta control, few will even be willing to talk about how to get it back in.

Simplistic/naive idealism is not what got Labour in. Rudd is an eloquent speaker and master of platitudenous gestures (Kruddy Ruddish). He isnt a fool. Especially not regarding money. His marriage is worth $20 mil, no doubt his govt connections helped fill his coffers.

He's far too pragmatic in his self interest (power) to step into a time machine tuned to 1974.

ps. Hawke tried abolishing neg gearing... disasterous. Given current housing constraints, non-existent vacancy rates and spiralling rents, scarring off new construction of rental property would be disatrous. This cure is worse than the cough. Could advocate for rent controls... then expand pricing controls. But thats already been tried in the world.

A couple of points. Labor did announce the abolition of negative gearing and rents went up in Sydney. This was probably due to a housing shortage rather than the abolition of negative gearing.

On how to deal with a housing shortage, most hotels and motels achieve an average occupancy rate of around 70% from memory. That's an awful lot of spare rooms that we as a society could mandate the owners to make available to the homeless without cost. There are also a lot of Eastern Suburbs and North Shore houses with empty bedrooms. Same deal.

Tristan, you say that many of Marx's ideas are now dead. Stalinism is dead, thank god, but which ideas are you talking about? The revolutionary side of his ideas actually flows naturally from his analysis of the tendency of the rate of profit to fall, something you agree with.

I don't think increased productivity is going to save our bacon because it only increases the tendency of the rate of profit to decline. And it doesn't address the cyclical booms and busts inherent in the way capitalism is organised.

Finally thanks for the figures from 82 on. Not all of us deal with these issues on a day to day basis.

If you have ever worked with poor people,those struggling to make ends meet on low wages or pensions it is transparent that something needs to be done drastically. I cannot see how anyone can argue that this would fuel inflation. For most pensioners an increase will mean that the bills will be paid on time, adequate healthy food and they won't have to juggle their expenses from one pension to the next. I too would glady go without tax cuts to free up money for social infrastructure.

This country sadly needs a voice from the left - too much emphasis is placed on conservative and free trade economics and for a country which has one of the highest tax rates in the world (including hidden taxes at all levels of government) we are becoming more and more a 'user pays' society for services we once assumed were paid via general revenue.

People are brainwashed into equating left ideas with the "nanny state", Communist regimes and the like - but as a social democracy we accept that many services are free such as roads (most), bridges, schools, emergency services et al. These are socialised services and there are some things that should not be assigned to the whims of the private sector and a pure profit motive. The lack of funding to the mental health sector, disabled services, the homeless and other community services has steadily declined and with dire consequences. This is unacceptable in a civilised democracy.

This is not to argue that governments should control everything as most certainly there are some things best left to the private sector and away from the clutches of bureacracy.

We have to take a horses for courses approach and be pragmatic in how we tackle individual issues without having to conform to some ideal of left or right. What works, what is fair and how will it be paid for?

The health system in the US and the associated health insurers provide a blatant reminder of what happens when health providers are beholden first to shareholders and then to the sick.