Do as I say not as I do
I recently read a fascinating Substack explaining why “Champagne Socialism” is now the ultimate luxury belief.
The post implies the ultimate status symbol for today’s elite isn’t a yacht or a luxury watch; it is a loud, performative nod to radical left-leaning politics.
While the term isn’t new, today’s manifestation of the Champagne Socialist is deeply insidious because it’s a dynamic familiar to the Australian Labor Party (ALP) and its socialist/Labor Left factions, yet one that alienates and financially ruins the working class that Labor claims to champion.
- The mechanics: status signaling and “luxury beliefs”
“To understand the mechanics of the modern Champagne Socialist, one must look through the lens of status signalling… A luxury belief is an opinion or conviction that confers status on the wealthy, while the actual costs of holding that belief are externalised and borne entirely by the lower classes.”
When affluent urbanites push for aggressive, top-down policies without considering the real-world friction, they are completely insulated from the fallout.
“When a multi-millionaire media executive or a Kensington-dwelling academic advocates for aggressive eco-taxes, open borders, or the dismantling of traditional civic institutions, they suffer zero material consequences… The radical ideology is, in essence, a luxury product. The elite get the moral high ground and the social adulation, while the proletariat receives the bill.”
In Australia, this plays out in the growing divide between inner-city “Teal” or “Green-Left” electorates (like Melbourne, Sydney, or Grayndler-Sydney’s inner west) and the outer-suburban and regional heartlands (like western Sydney, Hunter, or central Queensland).
If the ALP Left focuses primarily on abstract globalist policies or hyper-progressive cultural discourse at the expense of energy affordability and local manufacturing jobs, they effectively ask the outer-suburban tradie or regional worker to pay the bill for the inner-city elite’s moral satisfaction.
- The psychological shield: cloaking class guilt
The modern aristocrat or CEO doesn’t want to feel like a robber baron. Instead, they use radical rhetoric to cleanse their conscience.
“The psychological utility of Champagne Socialism cannot be overstated… Adopting radical leftist positions serves as an effective cloaking mechanism. By loudly demanding to tax the rich or declaring capitalism inherently evil from a lecture podium or a tech conference stage, the wealthy individual psychologically divorces themselves from their own privilege. They are no longer part of the oppressor class; they are part of the resistance.”
This creates a defensive strategy where legacy institutions and billionaires align with progressive rhetoric to immunise themselves against deep structural critiques.
Think, billionaires travelling in private jets or mining iron ore telling everyone the environment needs to be saved.
“By co-opting the language of revolution, the establishment immunises itself against actual systemic critique. If the corporate board is sufficiently progressive, the underlying exploitation remains conveniently unexamined.”
We see this heavily in Australia’s corporate landscape – from the Big Four banks to major mining conglomerates – where HR departments enthusiastically adopt progressive language and superficial “virtue signalling.”
For ALP socialists, the trap is celebrating this corporate pivot as a victory. In reality, letting corporations off the hook just because they adopt progressive vocabulary allows them to distract from stagnant wage growth, the casualisation of the workforce, and predatory banking practices.
- Structural damage to Labor
The most damaging pitfall of this phenomenon is how it fundamentally rewrites what it means to be “Left.”
“Historically, the British Labour movement was rooted in material realities, focusing on wages, working conditions, housing, and tangible community stability. When the Champagne Socialist faction takes the reins of a left-leaning movement, the priorities inevitably shift from the material to the abstract.”
Table 1. Contrasting the traditional working-class left with the modern “salon left”
|
Traditional working-class left |
Modern champagne / salon left |
|
Focuses on material conditions, jobs, & public services |
Fixates on identity politics, cultural discourse, & globalist policy |
|
Seeks protection of local industry & domestic labour |
Focuses on theoretical wealth redistribution via heavy bureaucracy |
|
Uses plain, accessible, community-focused speech |
Uses academic jargon & exclusionary syntax |
Because the affluent leftist doesn’t worry about rent or job security, the language of the movement becomes highly exclusionary:
“The working class finds itself politically disenfranchised. They look to the left and see a movement dominated by affluent urbanites who view them not as a constituency to be served, but as an uneducated mass to be enlightened. This alienation explains the massive realignment witnessed across the Western political landscape, where the traditional working class has abandoned left-wing parties in droves.”
While many will celebrate its demise, this remains the single greatest electoral threat to the Australian Labor Party. Australia has witnessed over the last decade working-class voters in regional Queensland or Western Sydney shifting away from Labor, and feeling judged or condescended to by university-educated urban elites.
When Labor branch meetings are dominated by identity politics, envy, jealousy and academic jargon rather than discussions on the cost of rent or the price of groceries, the party loses its soul – and eventually its voters.
- Ignorance of economic reality
Finally, Champagne Socialism relies on an unsustainable economic worldview, driven by people who don’t actually work in the productive sectors of the economy.
“The policy prescriptions advanced by the salon left almost universally involve the expansion of state power, increased regulatory burdens, and aggressive taxation. The irony is that these policies systematically crush small businesses and independent enterprises… Conversely, multinational corporations absorb the regulations with ease…”
Furthermore, they view wealth as a static, pre-existing pool:
“The Champagne Socialist, comfortably ensconced in non-productive sectors like media, NGOs, or academia, views the economy as a fixed pie to be divided by benevolent bureaucrats. They disregard the fragile ecosystem of risk, capital investment, and innovation required to sustain economic growth.”
Labor’s traditional strength lies in an alliance between organised labour and industry to build a strong, productive nation. If ALP socialists treat the economy as a “fixed pie” administered by an expanding Canberra bureaucracy, they risk stifling the very blue-collar industries – construction, manufacturing, mining, agriculture – that employed their core base.
Subsidising NGOs and expanding regulatory compliance might satisfy the professional class, but it does very little to build a resilient domestic economy.
The post concludes with a stark warning that the ALP would do well to heed:
“Champagne Socialism is fundamentally a parasitic relationship. It feeds on the genuine grievances of the economically disadvantaged to generate moral capital for the affluent… Until political movements reject the performative virtue of the salon radicals and return to the grounded, material realities of the working populations they claim to represent, the socio-economic divide will only widen.”
If the ALP Left wishes to remain relevant and genuinely progressive, it must reject the temptation of “luxury beliefs” and performative culture wars. True democratic socialism in Australia cannot be dictated from an inner-city wine bar; it must be built on the factory floor, the construction site, and the suburban kitchen table.
You can read the full post here: The Salon Radicals
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
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