Latham graduated in Economics from Sydney University in 1982 and became a political adviser for Gough Whitlam, then the New South Wales branch of the Australian Labor Party and NSW Premier Bob Carr. He was a councillor on the Liverpool Council between 1987 and 1994 and mayor from 1991 to 1994. Elected to Federal Parliament for Werriwa in January 1994, he has served in Parliament ever since.As the work of a member of what Hegel called the “political class”, born and raised to serve in the state machine, altruistically looking after the affairs of the rest of society, this book appears to express the writer’s discovery of a world outside the bureaucracy.
“Social democracy needs to give closer consideration to the relations between citizens rather than simply working from an assumption that all social issues can be resolved in the state-to-citizen relationship.” [p. xl-xli] “Other strands of political thought [as well as social democracy] have taken a strong interest in the social relations between citizens”. [p. 263]
As such, it should be welcomed. Latham has read widely and has plenty of ideas for the political class to reflect upon and we should wish him well. But there are some profound misunderstandings in his work which need to be addressed.
Latham believes that the creation of the Welfare State in the wake of the Wall Street Crash, the Great Depression, Fascism and World War Two was based on a series of “old” assumptions about stability, security and conformity. [see p. 199] In passing, it should be noted that Latham’s principal method of argument is to append adjectives like “old”, “crude”, “binary”, “simple”, “raw”, “traditional”, “mechanistic”, “dogmatic”, “linear”, “rigid”, “narrow” or “conventional” to the view he opposes and “new”, “complex”, “profound”, “radical”, “fresh” to the view he advocates. But it remains to be seen whether he is able to distinguish in the new and in the old what should be supported and what should be opposed.
His principal thesis is that the Welfare State was a product of a culture in which Fordist methods of production predominated in the economy, and the Welfare State and the associated methods of macroeconomic economic management, essentially emulated the methods of Fordist hierarchically organised, one-size-fits-all mass production.
Observing the decline of Fordist methods of production in the economy, it is hardly surprising that Fordist methods of government administration are called into question.
“Some commentators have suggested ... that the organisation of government will increasingly reflect these methods of post-Fordist production and service delivery”. [p. 211]
The economy of mass production and its workforce have been replaced by the globalised, information-age economy and its very different workforce. Latham is fully cognisant to the malaise affecting the modern world, its shallowness and individualism, the anomie, widespread insecurity, loss of community, the spread of “downwards envy”, the widening of the gap between rich and poor, the growth of an under-class, etc., etc.
Also to be observed everywhere is the decline in what Latham calls “vertical” “patron/client” relations, alongside the growth of symmetrical, “horizontal” relations. Under these modern conditions, Fordist organisations, such as the Welfare State, are altogether dysfunctional.
“organisations tending towards the vertical have declined most notably in their participation and relevance in recent decades. ... Conversely, some organisations displaying horizontal social capital and the virtues of mutual trust seem to have moved against the tide of social capital depletion.” [p. 278]
Let us agree with Latham the welfarism and Keynesianism were indeed part and parcel of the period of Fordist production and that with the decline of mass production manufacture, these methods of governance must also decline. No rational person could wish to restore them.
But when trying to account for the malaise of modern society, is it rational to ascribe the rampant and burgeoning social problems of our times to the inadequacy of the system of government and welfare distribution? Can a member of the political class be so deceived as to their own importance to believe that the vast social changes witnessed over the past several decades are the result of a failure of government to move with the times?
To put it another way, if modernism has had the effect of replacing “vertical” (hierarchical patron/client) relationships with mutual, “horizontal” relations, why is there a crisis at all? What reason do we have to believe that if the public sector emulates the private sector, the problem will not get far worse, rather than better?
To make sense of this confusion we have to look a little critically at what we could call, to borrow some of Latham’s own adjectives, the old, rigid, binary categorisation of relationships as “vertical” or “horizontal”.
What has been the transformation of person-to-person relations wrought by modernism which has transformed work and society? It has been the replacement of all forms of hierarchical relations (bureaucratic, managerial or traditional) by the commodity relation.
Now the commodity relation, the relation of buyer and seller, of customer to service provider, is a mutual, symmetrical relation based on fair exchange. It is a relation in which each party enters as a free agent with equal rights. This relation is nevertheless the very relation upon which the modern form of exploitation is based, for if two parties enter a fair exchange under conditions where there is a gross imbalance in social power, the outcome though fair is also exploitative. Furthermore, it is a relation in which, rather than collaborating, each manipulates the other for their own ends; it is a relation which isolates people and reduces them to appendages of an object.
This is a horizontal relation to be sure. But not of the same kind as that which, for example, binds together the participants in a neighbourhood project, a football team, a cooperative, a volunteer firefighting group, and so on. I call these relations “collaboration”. There is a third party in all these relationships, which I could call “we”. In the exchange of commodities there is no third, there is no “we”, only them and us.
So when Latham proposes to abolish the “old” patron/client relation in favour of the modern, mutual relation of customer/service provider, he sounds the death knell on the last surviving points of support against capital, and must thereby place enormous pressure on those relations of collaboration which are struggling to develop in opposition to both bureaucratic patronage and commercial anomie.