Wayne Swan and the vested interests of the 0.01%

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The Treasurer, Wayne Swan, penned an essay for The Monthly in early March which set off a national debate about wealth inequality. The essay was followed by a speech to the National Press Club where he took aim at the super-rich mining bosses. He labelled these people the 0.01%.

This debate is welcomed by socialists. We have been campaigning against the widening gap between rich and poor for many years. However, while engaging in this debate we are obliged to also highlight the real motives behind Swan’s remarks.

By Socialist Party reporters

In his essay Swan makes the point that “A handful of vested interests that have pocketed a disproportionate share of the nation’s economic success now feel they have a right to shape Australia’s future to satisfy their own self-interest.” In particular he was referring to three of Australia’s richest people – mining moguls: Andrew Forrest, Gina Rinehart and Clive Palmer.

He went on to highlight the big business campaigns against the mining tax and the carbon tax as examples of “hyper-rich activists” using their wealth to push an agenda which is at odds with the ‘rest of the nation’. He made the point that they “pour their considerable personal fortunes into advertising, armies of lobbyists, dodgy modelling and corporate and commercial manoeuvring designed to influence editorial decisions.”

In many ways this is no revelation. Most people understand that the super-rich use their wealth to buy influence in the media and with the major political parties. The thing that surprised many people was the fact that these words were coming from the Treasurer of the most right-wing, pro big business ALP Government that Australia has ever seen!

Attacking the 0.01% is clearly a change in tact for the ALP but unfortunately we have to say that their intentions are not at all honourable. Rather, Swan’s words are a reflection of the pressures that the ALP finds itself under due to the impacts of the economic crisis.

Between the coup that removed Kevin Rudd as PM and recently, the ALP has been a staunch representative of the mining industry. Gillard’s first task as PM was to modify the mining tax thereby saving the 0.01% billions of dollars. This was at the expense of other sections of big business, like manufacturing, which missed out on tax cuts as a result.

Since then the global economic downturn has further impacted on Australia. While mining continues to power along, the rest of the economy is effectively in recession. This has seen other sections of the big business elite cry out for government support. They, along with the more far sighted strategists of capitalism, are demanding reforms that can provide a buffer for the non-mining sectors.

It seems that the ALP is now starting to accept that putting all of your eggs in the mining basket is a dangerous plan. This is especially the case as China’s economy is slowing down and the debt crisis centred on Europe is getting worse. While Australia has missed out on the worst so far, Swan knows that this can not last.

At the same time the ALP have their sights set on the next federal election. At the moment Julia Gillard is extremely unpopular and has lost ground to Tony Abbott, particularly on issues like the carbon tax. While most working class voters want to see action on climate change they see no reason why they should be forced to pay for it when it is big business that does all the polluting.

Policies like the carbon tax along with regular corporate handouts have helped develop an ‘anti-rich’ mood in society. As Swan acknowledges, this mood was typified by the rise of the Occupy movement on a global scale.

ALP sources have said that Swan’s comments are part of a broader populist strategy which is aimed at trying to win back votes amongst working class and middle class people by taking advantage of the ‘anti-rich’ mood. The ALP plan is to tap into the anger that exists, diverting it away from the system and towards a minority of the ruling class.

Swan is at pains to explain that, despite its faults, capitalism (in his view) is the only viable economic system. In the vein of Cameron and Obama he has tried to present himself as the defender of a ‘fair go’ or ‘fair’ capitalism. He, like his counterparts in Britain and the US, knows that since the onset of the crisis capitalism has suffered a major ideological blow. The aim is to give it a coat of fresh paint and sell it back to the population as if it were brand new.

In an attempt to distance himself from both ‘extreme’ capitalism and the alternative (i.e. socialism), Swan says “This is neither the fierce pro-market capitalism that got us into a global financial fix, nor is it anti-market socialist ideology.” He claims that ‘fair’ capitalism is “…simply the best way to keep growing Australia’s economic pie so ultimately we all end up better off. Ensuring the social contract does not erode is vital if we want to avoid a hollowed-out capitalism assured of its own collapse.”

Here Swan is warning the rich that unless something is done to redeem the capitalist system people will inevitably look for a genuinely fairer alternative – namely democratic socialism. Mass struggle and revolutions in other parts of the world are early indications of this process.

The truth is that capitalism can never be fair. It is a system which is based on a tiny minority owning and controlling society’s wealth at the expense of the majority. The majority is exploited in the sense that it is not paid the full amount of the wealth that it creates.

Instead, the massive amount of wealth produced by the work of people is privately concentrated in the hands of a tiny few. The only real way to address this contradiction is to restructure society along totally different lines. We don’t need a different model of capitalism we need a different model of society.

The solution is not abstract notions of a ‘fair go’ but real measures that would address wealth inequality. Bringing the giant mining companies, the banks and the other big businesses that dominate the economy into public ownership would be the first step. On the basis of public ownership, and democratic control, a sustainable plan could be developed to produce things for society’s needs rather than profits. This would take power out of the hands of the 0.01% and open the way for genuine ‘fair go’ for all.