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November 5, 2007
One narrative---say the standard economist's view--- is that economic changes drive political changes. Thus, the Depression led to the welfare state of social democracy. Today, it is impersonal economic forces---eg., global competition, the IT revolution, and the demand for high skills--- that has led to higher inequality; which in turn has meant a shrinking constituency for a populist politics and a larger constituency, among the winners, for the kind of top-down, class-warfare politics that the Howard Government currently engages in.
Nicholson
Another narrative is that political changes drive economic changes---political change in the form of rising polarization has been a major cause of rising inequality. On this account the neo-liberal movement aimed to roll back the centralized welfare state and to give the deregulated market a greater role as an instrument of government.
This led to big business launching an all-out attack on the union movement, drastically reducing workers' bargaining power; freeing business executives from the political and social constraints that had previously placed limits on runaway executive paychecks; reducing tax rates on high incomes; using Work Choices to reduced work conditions and pay. This has resulted in rising inequality.
I used to hold to the first narrative, when a academic. I've swung over to the second, as a blogger who worked in the Senate. Politics rules. Like Paul Krugman I now see the world in political terms. So it was the political choices made by the Labor Party, and not impersonal economic forces, that lifted Australia out of depression and poverty in the 1930s.
Does Rudd signify the beginnings of a new politics of equality?
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Gary,Please check out this radically different assessment as to how and why we got to here both politically and culturally.
1. http://www.ispeace723.org/youthepeople2.html