THE RECENT political upheaval in Australia because of a proposed “super profits tax” on mining companies highlights the tensions between the socialist and capitalist ideals which do not coexist comfortably with one another. In fact, they are inimical.
Some of the most celebrated champions of socialism have coined terms like “greedy capitalist” or “capitalist pig”. By implication, a socialist is neither greedy nor a pig. But economic history suggests that socialists are just as porcine as their capitalist counterparts; maybe even more so.
One need only look to recent events in Australia for a glimpse into the real world outcomes of this ideological struggle. Former prime minister Kevin Rudd was recently ousted from office after a botched attempt to impose a “super profits” tax on the most productive sector of the Australian economy: the mining sector.
Rudd’s sudden resignation, following a revolt within his own party, capped a stunning fall from grace for a politician who until recently had been one of Australia’s most popular prime ministers ever, with over 70 per cent approval rating. His success in navigating Australia through an economic crisis was not enough to save him from voters’ wrath, angered over his policy reversals on issues such as taxes and climate change. His Labour Party dumped him, selecting Ms Julia Gillard to improve its political fortunes in the next election.
There may be lessons here. Politics can sometimes be cruel and be fraught with intrigue. After taking command of the party in 2006, Rudd led it to election victory in November 2007, ending 11 years in the political wilderness.
A former diplomat, he promised to reinvigorate Australia after more than a decade of conservative rule.
On assuming office, Rudd pledged to (and withdrew) all Australian troops from Iraq by July 2009, offered a historic apology to the indigenous Aborigines for past injustices, and then reversed his predecessor’s policy on climate change, putting it at the centre of his legislative agenda. He further ratified the Kyoto Protocol and played a major role in the final compromise at the Copenhagen Climate Conference this year.
Finally, Rudd steered the Australian economy through the worst of the recession and kept it growing in every quarter but one during his term in office. By all accounts Rudd’s performance was very favourable; until April when it all began to unravel. He reversed course on climate policy, shelving legislation that would introduce a carbon trading system and make the country’s worst polluters pay for their carbon emissions.
Coming from someone who called climate change “the greatest moral challenge of our time”, that switch alone risked his term in office. Then in May Rudd proposed a “super tax” on mineral producers which was more popular with the voters than his party. This move sealed his fate. Such are the vagaries of political life in mature democracies where winning elections is more important than winning party leadership.
