Naomi Klein, the ‘shock doctrine’ & Whitlam’s dismissal

In the latest post at her personal blog, An Integral State, Left Flank’s ELIZABETH HUMPHRYS challenges Naomi Klein’s celebrated “shock doctrine” thesis of neoliberal transformation by looking at the Whitlam dismissal and the Fraser government’s failure to drive through neoliberal reform.

But despite these concurrent ‘shocks’ — the deepest economic crisis since the Great Depression and an administrative coup against a democratically elected government — the newly elected Fraser Government did not (or could not) implement neoliberalism. The conservatives did not come to power with a coherent agenda of economic transformation, and nor did they have the support in society to drive through such a program. In the end Fraser signally failed to achieve significant reform, despite the Prime Minister, Treasurer and other leading party members being influenced by such neoliberal luminaries as Margaret Thatcher, Ayn Rand, Milton Friedman and Friedrich Hayek (the latter two visited Australia in 1975 and 1976 respectively). Contra Naomi Klein’s thesis, the presence of both a crisis and politicians committed to neoliberal ideas was not propitious for the introduction of the neoliberal project. Indeed, I would argue these factors were in fact part of the reason such a project could not be driven through in Australia at that time. …

Unlike when Thatcher came to power, Fraser in this period faced a more powerful and confident labour movement. The unions had not yet been softened up by the experience of a social contract — as had been the case with the weakening of the British labour movement during the Wilson-Callaghan era. Rather, Fraser faced a labour movement that was able to break his attempts at wage fixation with relative ease, having maintained much of its organised social power despite the political setback represented by the 1975 removal of Whitlam. Conversely when Hawke came to power at the head of a Labor government in 1983 he was able to drive through a broad suite of neoliberal reforms in the context of a consensual social contract with the unions, and on a platform of national reconciliation rather than confrontation.

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