After the failed leadership spill of Julia Gillard last week, this article from Paola Totaro in the Guardian, Australians don’t know how lucky they are, made its rounds throughout the Internet.
Totaro’s argument was that the recent political events in Australian show a growing tendency of whinging in Australia despite a growing economy that should make us one of the happiest, and most stable democracies in the world. As she says:
“Last June, Australia celebrated its 21st. No, not a birthday or coming of age, but the completion of its 21st consecutive year of economic growth. Yup, you heard right, 21 years. Of growth. 21….
“Viewed from Europe, where national governments are planning to bail out their banks by raiding the savings accounts not just of Russian oligarchs but pensioners too, news of yet another political attack against Australia’s leader smacks of a particular strain of antipodean madness.”
There is a lot of Totaro’s thesis that I agree with. Compared with other countries, complaints about Australia’s economic growth, Government debt and ‘cost of living’ are often blown out. The Australian economy continues to be stronger than almost anywhere in the world, and we need to recognise that in the ongoing debate in the country. As she also states, debates like that around asylum seekers are completely overblown, with the perceived ‘threat’ of ‘boat arrivals’ well above any actual threat posed. Australians do have it relatively well-off.
Despite this however, I find the basis of Totaro’s argument to be extremely problematic. Her argument is based on a growing trend in modern democracies; an idea that economic strength, based on a few simple measures, is the only real measure of a successful Government. There are many issues I find with this thesis.
Totaro’s first argument is that ongoing economic growth in Australia, as well as other measures such as debt and deficit levels should signify a level of community happiness and satisfaction in the Government. As she says quite bluntly:
“A government budgetary surplus of up to 2% of GDP? Surely, that in itself should deliver government on its own. But not in Oz.”
This argument however, misses two key issues. Firstly, economic success in terms of GDP growth certainly does not mean economic success for everyone. For example, research from MP Andrew Leigh shows that after declining for about 50 years, economic inequality has grown significantly since the late 70s. In the 2009-10 financial year, Leigh found that the top 1 per cent of earners in Australia declared 8.9% of all taxable income, almost twice their share from 30 years ago. Other democracies are seeing much higher rates of inequality. In the United States, whilst GDP has rebounded since the economic collapse of 08, the median income level has dropped to its lowest point since 2005, pointing to the fact that GDP growth has gone exclusively to the wealthy.
More research shows that economic growth does not automatically mean happiness. Research from the UK for example, showed when asked what was important to them, most people placed immaterial things at the centre of their happiness. Research from China has showed, that whilst economic growth continues, as inequality grows, poorer community members are getting unhappier. This connects with broader research that shows a threshold level in the welfare effect of income (p.14-15); that is that the correlation between income and happiness is only strong when people are moving out of poverty (and therefore are moving to a place where they can afford the basics to live), but that the correlation dissipates once that threshold has been met.
Even on the other key economic measure that Totaro states, the argument can easily fail. Totaro constantly uses Australia’s unemployment rate of 5.4% as a key indicator of success. Obviously employment is a major issue, and high unemployment rates can bring significant turmoil, but it does not automatically equate to happiness. As I’ve pointed out before, research has shown that having a bad job is worse for people’s mental health than having no job. This suggests that issues such as industrial relations, and providing meaningful work is essential to community happiness.
Beyond all of this however, Totaro’s argument misses one other basic issue; Government is not all about a few economic measures. Whilst much of our democratic debate has been focused around a few economic measures, there are a lot of other issues that Governments have to deal with. In Australia we’ve seen big debates around how we deal with climate change, immigration, and how we spread the wealth of the commodity boom that is providing the GDP growth so much of the world envies. Going beyond this, the work of the current Government to try and achieve the economic positions that Totaro claims to be so great have caused great controversy; for example the cut to single parent welfare payments and international aid have been critical.
Whilst Totaro has an argument that there are many debates in Australia that are over-blown, the basis of her argument is flawed. Yes, compared to most of the world, Australia is extremely well off. That is one of the reasons why we haven’t the major movements and uprisings that the United States and many countries in Europe have seen. Despite this however, we cannot simply boil down modern democracy to a set of economic numbers. Our democracies, and the needs of our communities, are much more complex than that.