There are some interesting parallels between the Federal election of 2007 and that of 1983. In 1983 Labor swept to victory and pushed the country in a direction it was probably already heading in. There was plenty of teeth-gnashing within Labor, and it changed that party in ways it is still coming to terms with. It left the Liberals in a disarray that gave Labor a clear run for over a decade, a time in which the country changed course.
What are these parallels?
First, Labor is going into the election with a new and popular leader in Kevin Rudd, just as they did in 1983 under Bob Hawke. Furthermore, just as in 1983 the ALP has to deal with a previous Labor incumbency with an ambivalent legacy. Now it is Keating and interest rates, then it was Whitlam and inflation.
Second, the election was fought in a context few understood but which increasingly shaped the whole direction of subsequent Labor governments. In 1983 it was globalisation, although no one called it that then, whereas now it is the energy crisis, manifest mainly as global warming and peak oil.
By the 1980s sustained decreases in the cost of transport due to technological and organisational innovation and the rise of global finance markets due mostly to new information technologies was bringing about a fundamental shift to what was an increasingly global economy. Newly developing counties like the Five Tigers in Asia and a revitalised Japan were challenging American and European dominance in manufacturing. They were producing much cheaper and often better quality goods, including cars, electronics and white goods, and out-competing high-wage Western manufacturers.
Similarly, the huge amounts of money that were flowing across boundaries were putting ever greater pressure on the financial structures of places like Australia. Investment, interest rates and unemployment were more and more influenced by the massive global finance flows.
Globalisation would surge through the 1980s, and by the 1990s, with the Cold War over, it would be the most powerful force on earth. Not coincidentally, it would radically undermine the capacity of governments to control socio-economic conditions, including industrial relations and expenditure on welfare, health and education. Australia, as a nation that was heavily reliant on trade and wealth transfer systems like arbitration, was unusually exposed to this shift.
The big global force this time is the energy crisis. Profligate use of fossil fuels over the last two centuries has caused carbon to build up in the atmosphere, setting in motion forces that are resulting in climate shifts. If this process is not dealt with very soon, catastrophe will result. In addition, the most valuable energy source of recent times, oil, is becoming more difficult to find while demand only increases. The result will be a tailing off of reserves and dramatic price increases beginning in the near future.
Australia, as a major coal producer, heavily reliant on oil and with a highly vulnerable climate, is unusually exposed to this threat. Just as the new Hawke Government was rapidly fixated on the problem of globalisation, whoever wins government in 2007 will find themselves increasingly focused on the energy problem.
The third major parallel relates to changes in international relations. In 1983 the Cold War, which seemed to be thawing, got serious again. The US was pressuring the Soviet Union with new medium range nuclear missiles in Europe, which the Soviets saw as genuinely threatening. In fact, the Russians were so scared they placed their forces on red alert and the world came as close to nuclear war as it had since the Cuban Crisis of 1962.
The emerging situation in international relations is just as problematic as the Cold War. The first problem is the rise of China, which the US sees as a serious threat to its global position. The Americans are repositioning their forces to hem in China, while dealing with rising Chinese cyber-attacks. The second problem is Russia, which under President Putin is attempting to leverage its huge energy resources and its remaining power as a major nuclear force to reclaim global relevance. The Russians are making increasingly threatening noises over missile defence, Iran, NATO expansion and a number of other issues.
This situation is mightily complicated by the energy crunch. China is undertaking a world-wide effort to secure energy supplies, especially oil, to fuel its double digit growth. Russia, as we’ve noted, intends to use its energy to wield power, and has already done so. The US has already shown its intentions by invading one of the major remaining oil reserves, Iraq, and threatening another, Iran.