Social democracy & consumer capitalism

Clive Hamilton

I appreciate the opportunity to speak to you today. As The Australia Institute has no political affiliations, our thinking is unconstrained by the ideas and ideologies of the past and we are able to challenge the shibboleths of both right and left. Most of our criticisms are aimed at neo-liberalism, but today I want to confront some of the most entrenched ideas of the left.

For the left must now admit its failure. Since the early 1980s, many of us have been searching for a coherent alternative to neo-liberalism, for a way of reinventing social democracy in an era of global consumer capitalism. We have failed miserably. While all around us social movements have been transforming the world, the left has been wandering in the wilderness, mouthing the old slogans to a world that is no longer interested, distraught at its irrelevance, but not knowing where to turn.

So bereft of ideas has the left been that the vacuum has been filled by the pallid apologetics of the so-called Third Way - Thatcherism with a human face. The Third Way that no-one can define, a program in search of a rationale, a social analysis in which conflict is conveniently replaced by complexity, and in which any talk of power is taboo. Around the world, we have seen the parties of the left transformed into their opposite, in which the spin doctor has elbowed out the policy advisor; parties for politicians who are not sure what they stand for but which employ advertising agencies to convince us that they stand for something.

The Third Way is essential to the new dispensation of political convergence in which the historic battle of ideologies has been superseded by product differentiation. It is a dispensation in which the conservative press can devote endless column inches to the ramblings of the Sage of Werriwa.

The left itself is responsible for this state of affairs. In a social structure that has been radically transformed by five post-war decades of consumer capitalism, it has failed utterly to develop the new ideas that will promote a more just and sustainable community. It remains wedded to a view of the social order defined by class, exploitation and inequality.

Difficult as it may be to admit, social democrats and democratic socialists have a psychological predisposition to believe that the mass of people are suffering from material deprivation. We thrive on the imagined wretchedness of others. When the economy goes bad we feel secretly vindicated, for our reason to condemn the system is renewed. We revel in a collective schadenfreude.

But we must face up to the facts of today's world. While rooted in historical fact, the left's 'deprivation model' is today the opposite of the truth. The dominant characteristic of contemporary Australia is not deprivation but abundance.

By any standard Australia is an enormously wealthy country. The great majority of its citizens want for nothing. In 1950, average real incomes were around $9000; today they are more than $30,000. The great bulk of Australians are prosperous beyond the dreams of their parents and grandparents. Average households today are filled with big-screen TVs and DVDs. When we overfly the suburban expanses of Sydney, we see backyards dotted with swimming pools. It is nothing for an average parent to spend $1000 on a present for a child or to buy them a personal mobile phone.

Ordinary families happily shell out $40,000 for a four-wheel drive play-thing and gamble away a few thousand dollars each year merely for entertainment. They avail themselves of sophisticated healthcare when it's needed. Almost everyone has access to good quality primary and secondary education. Despite the availability of free education, large numbers of households with no more than average incomes, and many with less, are choosing to outlay tens of thousands of dollars to send their children to private schools.

In real terms, Australians today are at least three times better off than their parents were after the war, and the fact is that the distribution of income is about the same. Unpalatable as it is to concede, inequality is not substantially greater than it was 40 years ago. Even if it had worsened somewhat, given the enormous wealth of the great majority, it would not matter.

Of course, there is a residual at the bottom who are struggling. We still have poverty (and, let's face it, we probably always will). As a society we have an obligation to attempt ceaselessly to eradicate it. Bodies such as ACOSS do sterling work, but their target is quite properly the poor and seriously disadvantaged, and their philosophy is rooted in the ethic of Christian charity.

But why does the left continue to base its entire social philosophy and political strategy on the circumstances of the bottom 10 or 20 per cent? The tail is wagging the dog. Concern for the underprivileged should not provide the driving force for a politics of social change in a society where the daily experience of the great majority is occupied not with how to pay the bills, but with how to enjoy their unprecedented wealth.

The model of society where the dominant social evil is want has been rendered irrelevant by five decades of sustained economic growth. It might be argued that the left is concerned not with material wealth but with exploitation. But it is impossible today to argue that the mass of people in industrialised countries are exploited, at least not in the way the left has traditionally understood the term. Both the structure and nature of classes are fundamentally different. Liberation itself has not been denied but co-opted by consumer capitalism. Let me simply quote Germaine Greer on this. She argues that women sought liberation, but settled for equality.

T]he kind of feminism that sees getting membership of the MCC or the Garrick Club as a triumph is lifestyle feminism that gives tacit support to a system that oppresses women worldwide. A 'new feminism' that celebrates the right (i.e. duty) to be pretty in an array of floaty dresses and little suits put together for starvation wages by adolescent girls in Asian sweat-shops is no feminism at all.

Modern consumer capitalism is wracked by a great contradiction, a contradiction that must lie at the core of a new left politics. It is not the contradiction of class conflict, between wage labour and profit. It is a contradiction between the promise of consumer capitalism and the modern social condition. The great contradiction is this: Despite the fantastic promises of material progress, and the extraordinary success of capitalism in delivering undreamt of wealth for ordinary people, we have to make a horrible admission - the people are still not happy.

In the USA, where consistent surveys have been conducted since 1946, real incomes have increased by 400 per cent, yet there has been no increase in reported levels of well-being. Indeed, the proportion of Americans reporting themselves to be 'very happy' has declined from 35 per cent in 1957 to 30 per cent in 1988, while the percentage who said they agreed with the statement that they are 'pretty well satisfied with your financial situation' fell from 42 to 30 per cent. The story is the same in Australia.

The growth project has failed; but it is too threatening for people to admit it. In the USA, there is virtually no difference in reported levels of life satisfaction between people with incomes of $20,000 and $80,000. In her book The Overspent American, Juliet Schor reports that 27 per cent of households with incomes of more than US$100,000 a year say that they cannot afford to buy everything they really need.

Overall, over half of the population of the richest country in the world say they cannot afford everything that they really need. And it's not just the poorer half.

Moreover, more than a third of those with incomes of US$50,000-75,000 say that they spend nearly all of their income on the basic necessities of life. In a poll conducted in 1986, Americans were asked how much income they would need to fulfil all of their dreams. (Note the premise of the question.) The answer was $50,000 (that's US dollars). Eight years later the income required to fulfil the American dream had risen to $102,000. Something similar would apply in this country. If this is how people think, no amount of money can ever be enough.

The pursuit of wealth is not making us any happier.It is not simply that other trends in society, occurring in parallel with rising incomes, have offset the benefits of wealth; the process of economic growth itself has produced a seriously sick society. In a mass of evidence from the USA, mirrored by studies in Australia and other rich countries, the richest people in the world are saying that they are miserable, that it's not worth it, and, most disturbingly of all, that the process of getting rich is the cause of the problems.

So the issues for the left today are not those of exploitation, poverty and discrimination. The sicknesses of our society that affect people today are not those of brutal bosses, sweatshops and grinding poverty. At the dawn of the 21st century, the sicknesses we face are overwhelmingly the sicknesses of affluence.

  • We see epidemics of the diseases of boredom and alienation, especially gambling, television catatonia and recreational shopping.
  • We see an epidemic of drug use, both legal and illegal. Our response to unruly children is to drug them into submission with Ritalin.
  • For all of the hype, the information superhighway is principally a conduit for pornography, and there is an insatiable demand for soft-core titillation on television and video.

Moreover, at a time of unprecedented levels of personal wealth, citizens of rich countries are afflicted with an epidemic of psychological disorders. According to one study, depression has increased ten-fold among Americans born since World War Two. Young people, the principal beneficiaries of super-affluence, are most prone to clinical depression, manifested in record rates of teenage suicide and other social pathologies such as self-destructive drug taking. According to the the World Health Organisation (WHO), by 2020 major depression is expected to be the second most burdensome disease in the world. In rich countries, one out of every four disability adjusted life years is lost due to psychiatric disorders, an astonishing burden of mental ill-health that gets worse by the year.

Today, our greatest afflictions are associated not with deprivation but with over-consumption. We are gorging ourselves and literally growing fat. The volume of waste we generate is enormous. We discard and destroy vast quantities of useful goods. Driven to consume more and more, we are willing to pour our wastes into the atmosphere, oceans and landfills, causing severe damage to the natural world that sustains us.

In the age of global consumer capitalism then, the defining predicament is not a lack of money, but a lack of meaning. From a mass of psychological studies, confirmed by folk wisdom, there is one factor that stands out as differentiating more happy from less happy people. The factor that distinguishes contented people is a sense of meaning and purpose in life.

Yet a lack of purpose is the hollow centre of life in modern consumer capitalism. It is the hole we try to fill with consumption. Persuaded by the marketeers that more consumption is what people really want, Third Way politicians have discarded the pursuit of a better society for a "lifestyle politics" based on superficiality and greed.

As long as we cleave to the deprivation model we validate the belief in the general populace that the foremost means to social and personal betterment is continuously to raise incomes. The left reinforces the belief by those in government, of whatever party, that everything must be sacrificed on the altar of economic growth. In the interests of more growth we must have privatisation, free trade, small government, lower taxes, corporate welfare, competition policy and reduced welfare payments. We cannot adopt policies of sustainability because they might affect growth. The left is as much the slave of growth fetishism as the right.

The deprivation model draws the power from progressive people, not only because it means they share the fundamental goal of neo-liberalism but, crucially, because it prevents the left from joining with the most serious political and intellectual challenge to consumer capitalism - environmentalism. It explains the uneasy dissonance between the left's preoccupation with deprivation and environmentalists' emphasis on the perils of abundance. Put crudely, one wants more growth and one wants less.

Continued adherence to the deprivation model explains why the modern Labor Party has not been able to separate itself in any fundamental way from the conservatives, for if one accepts that growth is the ultimate goal and that, with some fiddling at the edges, free markets are the best way to get it, then one must cede enormous power to capital and pursue a politics that panders to the cupidity and self-centred individualism of the massed victims of the marketing society, of people who attempt to give meaning to otherwise empty lives by way of endless consumption.

The political implications of all of this are profound. The left must discard its old understanding of the world. We must accept that capitalism has moved to a phase of abundance broadly spread. We must focus on the things that really do affect the well-being of ordinary people and the processes that condition society. For despite its extraordinary successes, and at a time of complete political hegemony, capitalism is more fragile than it has ever been. Why? With more wealth at their disposal than ever before, most people could simply choose not to participate - to no longer notice the advertisements, to step off the materialist treadmill, to discard the DVD player, the second house, the luxury car, the holidays abroad, the meaningless acquisitions. To do so would not mean taking to the barricades, or putting themselves on the breadline. All it takes is a recognition that personal contentment is more important than money, and that it is possible to find a purpose in life that is fulfilling and self-expressive.

Today, the compulsion to participate in the consumer society is not driven by material need, or by political coercion, but by the belief of the great mass of ordinary people that to find happiness they must be richer, irrespective of how wealthy they already are. A vast advertising industry, staffed by some of our most creative people, devotes billions of dollars each year to reinforcing this belief. If ordinary people today are exploited, then it is by common consent. They choose the gilded cage.

We need a politics that will point out that the door of the gilded cage is open, so that ordinary people can achieve liberation and authentic lives in which community and relationships are valued above wealth and status. We need a politics for a society in which the citizens are committed to a rich life than a life of riches.

Such a politics would rob the market of its most powerful weapon, its ideological hold on people. A post-growth politics would deprive capital of much of its political power, because people would everywhere reject the assumption that everything - including our communities, the natural world and our dignity - should be sacrificed on the altar of growth.

We need a new beginning.


Clive Hamilton is the Executive Director of The Australia Institute, an independent public policy research centre located in Canberra. This is the text of his speech to the National Left ALP-Trade Unions Conference at the Humanities Research Centre, Australian National University (ANU), Canberra, on 11 May 2002. Clive is also a Visiting Fellow in the Graduate Program in Public Policy at the ANU and an Adjunct Professor at the University of Technology, Sydney. He has published widely, including six books, and is a contributor to the Evatt Foundation's new book Globalisation: Australian Impacts (UNSW Press). Image courtesy Asia Pacific School of Economics and Management.