On the morning of 2 December 2003 a colleague and I were setting up a room in Parliament House for Kim Beazley’s victory press conference, when a call came through to say that Mark Latham had instead won the caucus ballot to replace Simon Crean. We felt terrible for Beazley – a man I admire greatly and someone I went on to serve when he returned to the leadership – as we pulled down the logoed backdrop we had just constructed for him. He had fallen one heartbreaking vote short. On the thirty-first anniversary of Whitlam’s election, it seemed at the time that the party was waving goodbye to the leadership generation that had sprung from the Hawke and Keating cabinets: Crean and Beazley at once. We know now it was an interregnum – of a sort.

The passage of time and the historical focus on the “Howard handshake,” the resignation, the Diaries, the 60 Minutes stint in the 2010 campaign – all of these things have helped many forget the optimism in the party and the nation that Latham’s leadership brought about. It was a white-knuckle ride, but for one exciting year it seemed Labor had found a sense of genuine purpose and verve. We appeared capable of replicating the conviction and courage that my generation of activists had arrived too late to experience under Paul Keating. Many of us devoured Latham’s books and speeches, especially when they referred to busting up the old Tory establishment. We hung on his words, imagined that ladder of opportunity, and cheered him on as he frustrated our ageing nemesis, John Howard. To inelegantly adapt Milton Friedman and Richard Nixon, we were all Lathamites then.

He rose fast and high, then fell fast and hard, a victim of Prime Minister Howard’s skilful fear campaign over higher interest rates, which proved in 2004 as effective as his asylum seekers scare in 2001. Latham retired to a property on the distant south-western fringe of Sydney to raise his kids. In the party (and in his diaries) there was disappointment and hate, recriminations and get-squares. And now, after a decade-long winter, there are signs of a thaw in the animosity between Labor and its fallen leader. Not just Paul Howes’s welcoming words at the National Press Club, nor even the recent stirring topics of his regular column (one of a dwindling number of must-reads each week in Australian journalism): searing critiques of Tony Abbott and the Tea Party-inspired right, and defences of Julia Gillard against the Slater & Gordon allegations. As well, a punchy and heartfelt response to Nick Cater’s book The Lucky Culture for the Chifley Research Centre, Labor’s think-tank.

But the most heartening sign yet is the title, tone and much of the content of another recent contribution, Not Dead Yet. It is hard to agree with every word (more on that later), and yet easy to see it as a well-written reminder that Latham remains an ideas machine on the centre left. That whatever the missteps of his political career – and he concedes they were many and substantial – he has something important to say about the ALP’s future. Reading it gives you a sense that Latham, for so long accustomed to the accelerator, has found the steering wheel. Too late for his leadership, but just in time for the party he once led.

A useful way to understand Latham’s essay, his new relevance to the conversation and the force of some of his ideas is by way of a former Venezuelan industry and trade minister and a former German deputy chancellor and foreign minister. This is not the beginning of a joke from the well-worn three-men-walk-into-a-bar genre, but a way to understand some of what Latham writes in his essay about the breaking down of the old structures of the left. Because, strangely, the Venezuelan, Moisés Naim, and the German, Joschka Fischer, help to tell Latham’s story about Australian Labor’s big challenges in the twenty-first century. 

Naim is the author of a well-received recent book, The End of Power, which argues that “Being in charge isn’t what it used to be.” In the Washington Post essay which summarises his book, Naim relates a conversation in which Fischer said that when he was elected to government, “one of my biggest shocks was the discovery that all the imposing government palaces and other trappings of government were in fact empty places,” and that “the imperial architecture of governmental palaces masks how limited the power of those who work there really is.” In Naim’s detailed and compelling assessment, strong forces around the world – such as the explosion of the middle class, global mobility and a cognitive transformation that values individual freedoms – are working to fragment power. As Naim describes it, “The More Revolution helps the challengers overwhelm the barriers, the Mobility Revolution helps them circumvent them, and the Mentality Revolution helps them undermine them,” so that decision-makers in and out of politics have far less influence.

How is this relevant to Australian Labor? The fragmentation of the old structures of working-class life upon which its organisational and electoral hopes rested has thrown up the representational challenges Latham identifies in Not Dead Yet. He has the dichotomies right, between aspirationalists and the underclass, and between inner-city progressive elites and outer-suburban cultural conservatives. There is hardly a threat to Labor’s future which isn’t related in some way to these dilemmas, which Latham and others describe as serving two masters. Solving this constituent dilemma – aspirational/underclass and blue/green – is the ALP’s philosophical and electoral Rubik’s Cube. Getting all the colours to match up is proving its most daunting task.

For Lathamites, the frustration is that the fragmentation of constituencies and the dispersal of power was not supposed to play out like this. A decade ago, breaking up the influence of blocs was a Howard-era aspiration of Latham and his young charges. It was all about insiders and outsiders. The power of this image is demonstrated now by Tony Abbott’s enthusiastic embrace of Cater’s book about anti-intellectualism in Australia. A decade ago, Latham’s goal was the fragmentation of the right-wing establishment, the devolution of power and influence to ordinary communities, out of the wood-panelled rooms of the Melbourne Club, and the prospect of policies to benefit the many over the few. A victory for the outsiders over the insiders, all of it serving Labor’s historic mission: to enlarge the economy in a way that sees the benefits flow into a greater, not fewer, number of hands, as Wayne Swan would say today. 

Instead, the fragmentation of power has disproportionately damaged the institutions of the left, while catalysing a rearguard action from the old institutional right, in the form of the Murdoch press, talkback radio and well-funded conservative think-tanks. Despite challenges to this institutional right from Clive Palmer, Bob Katter and their ilk, this Liberal–Murdoch–talkback triple whammy remains the dominant force on that side of politics. At the same time, Latham believes, the sensible centre has disappeared from the public conversation, as social media and other influences pushes contributions to the extremes. He is right to point to old power hubs which are decentralising, or else being bypassed by choosier, smarter people, leaving our democracy to what he describes elsewhere as a “wacky, whingeing wall of complaint.” You see this in the decline of traditional media sources and the corresponding rise of new media. This creates the paradox of power dispersal in the new world – of expanding choice combined with a concentration of power in the fewer hands of those willing to participate in old-style representative politics in a meaningful, committed way. While Naim’s “more, mobility, mentality” sends the mainstream elsewhere for its news and social participation, the old political battleground is dominated by two extremes: the Greens and Tea Party wannabes.

It is for this generation of Labor people and the ones that follow to deliver on Latham’s welcome optimism that the ALP can fill the vacuum created in the centre of Australian politics by the changing nature of the media – at once fragmenting in the digital world as it consolidates into a few big outlets – and by the extremism of the right and the left. And there’s enough that is good about his emphasis on environmental sustainability, educational reform, aspirational economics and concern for the underclass to make the essay essential reading, and to more than balance the points where I would take issue with Latham. 

An example of where we differ is his charge that the ALP is confused on economics when, on the contrary, the past five years under Rudd, Gillard and Swan showed Labor at its decisive best, intelligently deploying the tools of Keynesian economic management to save Australia from recession. Those three contemporary politicians deserve the credit bestowed on them by one of the world’s finest economists, Joseph Stiglitz, who described Labor’s economic policies during the global financial crisis as among the best designed, best deployed, best timed stimulus programs in the world. But Latham shouldn’t just take Stiglitz’s word for it; consider what Latham’s hero Paul Keating might have called a beautiful set of numbers, which show an Australian economy with low inflation, low interest rates, low unemployment, and growth that astounds many countries still waist-deep in the quagmire caused by the GFC. Latham’s other writings point to these successes – especially rising living standards – without attributing them to the current crop of ministers. His beef is with the 1990s Crean–Beazley years that preceded his leadership rather than the Rudd–Gillard ones that followed him, but this is not teased out. Doing that would make his good essay even better, as would the recognition that implementing big policies on climate change and schools – Latham’s stated priorities – over determined opposition are among the current prime minister’s finest achievements.

But, to be clear, and to adopt Howes’ and Latham’s Christmas analogy, these are arguments in the family, to be settled over a beer. And they are ultimately healthy for the intellectual life of the party. Because Labor’s recent achievements demonstrate that it isn’t purpose that the ALP has been devoid of during the Rudd–Gillard years, but unity of purpose. Or perhaps there has been too much falling into the honey trap of personality-based, poll-obsessed politics that does not fuel the necessary generation of ideas. This needs to change if Labor is properly to address the dilemmas so thoughtfully sketched out in Not Dead Yet, weaving together the aspirationalists and the underclass, the blues and greens, and including new demographic groups into a coalition of the centre left capable of filling that sensible terrain of politics that Abbott, the whinging wall and sections of the media have now abandoned. 

That means a Labor Party that is as good at hooking people up to the benefits of a vibrant, dynamic, aspirational economy in Asia as it was at protecting their jobs and communities when both were threatened by global economic madness. It means helping people take two steps from poverty – from welfare-dependent underclass to working class to aspirational class – rather than just one, and representing each group without relying solely on the old institutional left. It means understanding that the collectivism of the labour movement was not just defensive, but aspirational, created to give working people access to the lives and labour conditions that the better-off got by right. It means harnessing the tools of the new media and new economy to shape breakneck demographic and technological change to Labor’s advantage. In short, it means delivering the powerful egalitarianism that Latham hankers for, in his old and new incarnations, making the dispersal of power that Naim describes work for Labor and middle Australia, not against it.

Jim Chalmers is executive director of the Chifley Research Centre, following long stints as chief of staff to the deputy prime minister and treasurer, senior adviser to state and federal Labor leaders, and national research manager for the Australian Labor Party. He has a PhD in political science and an honours degree in public policy. His first book, Glory Daze, will be published in 2013.