Lindsay's speech at the John Button Lecture on December 2, 2009

Today is an auspicious day in the Labor calendar. After twenty-three years in the wilderness, Labor won national office under Gough Whitlam on this day thirty-seven years ago.

When the 1972 election was announced, Whitlam famously compared the coming contest with Napoleon’s victory at Austerlitz, which also happened on December 2. Sadly, Whitlam met his Waterloo rather more rapidly than did Napoleon. Yet it is his brief era, more than any other, which underlines the core questions facing social democratic parties. What are we for? What are we to be? The Whitlam period sits at the crossroads in the long complicated process of transition from traditional to modern Labor.

The global financial crisis has cast these questions into intense focus. Before the crisis began, the Rudd Government faced somewhat similar circumstances to those that greeted the incoming Whitlam Government in December 1972. A strong global economy, a nation in an expansive mood, and opponents in disarray. Almost overnight, the national mood switched from sunny optimism to near panic. As the pillars of the global economy buckled, the Government was suddenly required to address the most serious global economic crisis in modern history.

The causes of the crisis are complex. One critical element was excessive adherence to the Efficient Markets Hypothesis in academic and regulatory circles. The notion that market outcomes efficiently reflect all known information seems a utopian concept that ignores human nature and human frailties. And regardless of its academic merit, it’s a very convenient excuse for regulators to get out of the way of slick operators making obscene amounts of money. Debate continues about the causes of the crisis, and the Australian Government’s response.

My focus tonight is the implications this crisis holds for Australia’s future and for the Australian Labor Party, the party I have belonged to since my teens, and the party that currently dominates Australian politics.

Kevin Rudd’s critique of the role of neo-liberal ideology in the global financial crisis is an important reminder of Labor’s enduring values. It opens up a range of questions about Labor, particularly its future approach to economic matters. It is these questions I want to address.

While most other nations are grappling with more serious economic problems, Australia still faces significant challenges. Our productivity performance has been poor in recent years. The great diversification of our export base in the 1990s has virtually stalled and is now threatened by a rising Australian dollar. We have years of catching up in skills and infrastructure investment in front of us. These are essentially economic management questions, but inevitably they connect with wider philosophical issues. The answers to these questions depend on how we wish to organise our society more broadly.

Labor began its life as a redistributional political force in a land still evolving into a nation. It sought a greater share of income and wealth for working people within the framework of an emerging nation-state. This philosophy reached its zenith under Ben Chifley in the immediate post-war era. Yet even at its height, it encompassed a good deal more than crude redistribution.

In 1951, Ben Chifley told the New South Wales ALP State conference:

I try to think of the Labour movement, not as putting an extra sixpence into somebody's pocket, or making somebody Prime Minister or Premier, but as a movement bringing something better to the people, better standards of living, greater happiness to the mass of the people. We have a great objective - the light on the hill - which we aim to reach by working for the betterment of mankind not only here but anywhere we may give a helping hand.

Over the next two decades, Australia’s outlook changed profoundly, but Labor’s didn’t. Then under Gough Whitlam the party caught up with the modern world in a rush. Labor embraced the new social politics of the 1960s, driven by pervasive social and economic changes arising from growing affluence and technological change. The result wasn’t entirely coherent, but the traditional Labor of solidarity and redistribution managed to coexist with the emerging Labor of environmentalism, feminism, and multiculturalism.

Then the 1960s social revolution was bookended by the 1980s economic revolution. Most of Australia’s institutional framework of economic solidarity and redistribution was torn down or drastically modified by the Hawke and Keating Governments. Adherents of traditional Labor looked on aghast as a Labor Government assailed the central pillars of their belief system and erected new and alien structures.

Since that time, Labor’s outlook has been a rather complex mix of philosophical themes from all three periods. This raises an important question. Is there now a central organising principle around which contemporary Labor is arrayed? Or are we simply an amalgam of these various phases of Labor history?

This question was asked fairly recently by John Button, who I am privileged and delighted to honour tonight. In reflecting on Chifley’s statement of Labor’s beliefs, Button asked:

There is no reason why these words cannot continue to express the heart and soul of the ALP. But they must do so in a way that is contemporary and relevant, not lost in the mists of Labor retrospect. Perhaps the fundamental question is this: can a political party organised for the early twentieth century, that has grown content with recycled ideas, compete for influence and power in the twenty-first century?

John Button lies at the heart of the evolution of modern Labor. He joined the party at the peak of the fratricidal split in the 1950s. He played a crucial role in the Whitlam modernisation program. He was a central figure in the great intellectual upheaval of the 1980s as Industry Minister in the Hawke Government. As someone who knew him fairly well, and occasionally conversed with him on these matters, I want to outline ton

ight where I think we are heading, as if I were still conversing with him.

Since John Button departed the Federal sphere, there have been a couple of important developments in Labor’s circumstances. The first is the emergence of the Third Way. Ostensibly a British Labour creation, the Third Way largely reflects the modernising agenda of the Hawke Government. Its core principles, a shift in emphasis from public ownership to regulation, modernising political and social frameworks, internationalising economic relationships, and mutual obligation, neatly encapsulate the new ideas framework of 1980s Australian Labor. The triumph of these principles has not been absolute. They have captured Labor heads, but not Labor hearts. The more recent difficulties of New Labour in Britain have underlined the lack of emotional commitment to the Third Way among grassroots supporters.

The second major development is the emergence of the Greens as a serious political force. As tertiary education has grown rapidly, the ranks of those with limited interest in the traditional Labor themes of solidarity and redistribution but a profound commitment to multiculturalism, gender equity, environmentalism and higher learning have grown rapidly.

As globalisation has comprehensively undermined Labor’s ability to pursue a traditional redistribution agenda, the competing ambitions of the two elements in the Whitlam coalition have come more and more into direct conflict. Political party affiliation is increasingly shaped more by identity and less by interest. Voting behaviour is increasingly defined as much by education level as by income level. The Greens are, first and last, a product of higher education. Green voters are overwhelmingly people with tertiary education pursuing careers where job satisfaction is as important as income.

Twenty years ago this group was modest in size and overwhelmingly Labor in adherence. Now their numbers are growing rapidly and many support the Greens. And while the Greens are an immediate political threat in electorates like mine, their more serious challenge is to the whole essence of the Labor Party. As Stuart Macintyre said in an address to an earlier ALP National Conference, true believers need beliefs. The Greens have appropriated elements of the belief system of Whitlam Labor and, free of the constraints of seeking to govern, intensified them to a point where they have no prospect of attracting majority support. Labor can only compete with Green grandstanding at the price of an indefinite period in opposition.

That then takes us to the fundamental question. If we are to have believers, what are our beliefs?

Labor cannot survive for long as a negative political force. Our rejection of the instinctive neo-liberalism and social obscurantism of the conservatives will win many votes. Our rejection of the one-dimensional zealotry of the Greens will win many more. But without a central positive theme that expresses our core political mission, we won’t survive in the longer term. This challenge is complicated by the fact that the world keeps changing. Too often progressive activists make the mistake of assuming that government action is the only variable in an otherwise static world. Of course, our world is constantly changing. And our ability to mandate and control change is limited.

Labor’s policies change not because we are rejecting the past but because the past is the past. We no longer run on Ben Chifley’s platform because it was relevant to 1949, not 2009 - not because we seek to repudiate or apologise for it. Pragmatic manipulation of the mechanisms of power plays a major role in political success, but it isn’t a philosophy and it isn’t a program. Australians expect their leaders to behave pragmatically, but they also expect them to aspire to something more than keeping themselves in power.

In the first half of my life, Labor was astonishingly unsuccessful. By the time I turned 26 and was no longer eligible for Young Labor, the ALP had achieved three years in power federally and zero years in power in Victoria. Since that time we’ve been a lot more successful. So something’s been going right. For this to continue, we have to keep evolving. The seeds of terminal decline are usually sewn at the moments of greatest success. So these questions about our beliefs and organising principles are matters we must address now, not in the wake of eventual electoral defeat. By then it will be too late.

If asked to describe what Labor stands for in only one or two words, what would we say? In years gone by, many would answer socialism, social democracy, democratic socialism or social justice. Some of these themes still carry strong resonance, but others have been largely drained of meaning. In an increasingly complex society, what does a vague term like social justice mean? I’m happy to sign up to it, but I’m not sure it effectively explains what we’re on about.

Therein lies the challenge. We need a central organising principle that is simple and succinct enough to be conveyed to most disengaged citizens but broad and supple enough to carry a great deal of meaning. And that meaning must be much more than feelgood platitudes that the nastiest conservative would happily sign up to.

The global financial crisis has challenged many modern intellectual assumptions. It’s highlighted the risks and uncertainties facing ordinary people in a globalised world. It’s exposed the downsides of a global, digital, atomised economy. However tempting it might be to some though, we can’t return to Chifley’s prescriptions. If we are to enhance the lives of working people in today’s world, we need organising principles and ideas that reflect today’s world.

I’ve spent many hours pondering this problem over the years. I know that John Button did likewise. Like me, he came to Labor as a young law student at Melbourne University deeply immersed in the controversies of an intensely febrile period. Like me, he was in politics to advance a wider perspective of human society. And like me, he abhorred the short-sighted approach of wheeling and dealing for votes without wider purpose. So in paying tribute to his memory tonight, I want to attempt to answer my own question.

I think there is a central theme around which modern Labor can build its program. It’s a theme that is central to the tribulations of the global financial crisis. It’s a theme that readily reflects the enduring elements in Labor’s belief system spanning the three eras I’ve identified. And it’s a theme that reflects the policy agenda of the Rudd Government. This theme can be expressed in a single word. Trust.

A great deal of current thinking about modern human society is pointing us in this direction. Trust is the underpinning of our existence. At the heart of a decent society lies strong social and economic trust. For human beings to truly function as social animals, trust is essential. The absence of trust cripples any relationship, personal or communal. In the nineteenth and twentieth centuries, apocalyptic political movements sought to control and perfect human behaviour by emphasising one aspect of our natures. Communism idealised our instinct for equality. Fascism idealised our instinct for order. Both sought to prevail over free market capitalism which idealised our instinct for competition.

In recent times, philosophical and ideological inquiry has retreated from the extremes. We are at last beginning to focus on our own inherent characteristics and seeking to construct social models that reflect or accommodate them. Relational thinking pioneered by British visionary Michael Schluter shows how much better our society could be if it were organised more explicitly around the relational dynamics that govern our lives. The happiness and wellbeing discourse developed by academics like Richard Layard demonstrates the limitations of the collective pursuit of material gain. The landmark analysis from Richard Wilkinson and Kate Pickett in The Spirit Level shows how undue inequality corrodes social and economic growth. Cass Sunstein and Richard Thaler’s “nudge” principle and work by the school of behavioural economics shows how better market design and smart regulation can harness the innate characteristics of human nature to achieve better social outcomes.

Human beings are wired to compete and to collaborate. We feel empathy. And we feel fear. We are tempted by greed. And we are capable of self-sacrifice. We need physical sustenance, but also seek emotional and spiritual enrichment. We are complex creatures. The one thing that determines just how far we advance from the brutal world of cave-dwellers fighting the war of all against all is trust. The stronger and deeper our social and economic trust, the better our society.

Francis Fukuyama explored the pivotal role of trust in human societies in his insightful book Trust. For parties like the ALP, his insight is fundamental. All of the aspects of the good society to which we aspire boil down to questions of trust. We use many terms that ultimately reflect these themes, such as social capital, civil society and social solidarity. Trust is therefore underneath almost all contemporary issues.

How can I trust anonymous people I’ve never met to invest my money prudently? How can I trust food manufacturers or airlines to ensure my physical safety? How can I trust people receiving the benefit of my taxes to use my money well? How can I trust people from other countries and cultures to live harmoniously next to me? How can I trust other nations to collaborate with Australia to genuinely tackle the world’s problems? How can I trust my community to look after me when I’m old and frail? How can I trust our society to deliver job opportunities if I lose my current job? How can I trust governments, regulators and business to deliver a stable economic environment so I can take intelligent risks to improve my circumstances? How can I trust public servants to make honest decisions without seeking bribes? How can I trust law enforcement authorities to protect me against the threats of violence and theft? How can I trust my parents and grandparents to bequeath an environmentally sustainable world to my generation?

We cannot mandate trust. Nor can we simply assume it. The role of collective social action in fostering trust will always be a complex one. Hence the arrogant simplicities of all-encompassing theories like communism will always be doomed to fail. For Labor, the primary objective of our efforts must be to foster social and economic trust. If we examine our efforts in the modern era, that objective is almost invariably there, though more often than not implicitly rather than explicitly.

Regulating excessive executive salaries. Strengthening unfair contract laws. Increasing anti-terrorism protections. Enforcing anti-discrimination laws. Reducing carbon emissions. Extending mutual obligation in welfare benefits. Protecting the rights of vulnerable workers. Reforming electoral laws. Ultimately all these initiatives are about strengthening the web of social and economic trust that allows our society to function harmoniously and efficiently. Strengthening trust means reducing fear, unfairness and insecurity. Governments’ possess some of the tools for building trust, but other social institutions possess tools that governments do not, such as sporting clubs, schools, unions, churches and volunteer community organisations.

Workplaces are one of the most powerful social networks with a capacity to build trust, as demonstrated by widespread efforts to assist tsunami and bushfire victims. And of course, we are only beginning to understand how online social networking is changing how people think, relate to each other, and make choices about their lives. In a world where governments are less powerful than in times past, we need to innovate and experiment with new ways of strengthening trust in order to continue the pursuit of Chifley’s goal of a better society.

In a society steeped in political cynicism, dedicating ourselves to enhancing trust might seem like an odd thing to do. I don’t think it is. I think trust is at the heart of Labor’s value system. If we seriously aspire to a better society, the core of that aspiration must be a simple reflection of our core beliefs. I think trust is that aspiration.

Tonight we honour a great Australian, John Button. And we ponder Australia’s future, as we emerge from the biggest global crisis in many years. How are we to finance our future? What are the philosophical underpinnings of our efforts to better regulate financial services, rebuild our infrastructure, upgrade our skills and revive our productivity? What are the beliefs of Labor believers to be? What is the central organising principle for the better society we hope to build?

For me, the answer to these questions is trust. As we survey the wreckage of the global economy, it is clear that the evaporation of trust is at the heart of the devastation. To me, therefore, building trust as the central element in the social and economic mechanisms around which our society functions is our primary task.

I’d rather like to think that John Button would agree.