Look. I’m no Delphic Oracle, but if forced to lay my drachma down on naming the general character of Treasurer Scott Morrison’s budget tonight, I’d go with “neoliberal”. This era of economic policy — to avoid confusion, one characterised by the mobilisation of the state in the interest of firms — is on life-support. It is upheld not only by public assets, most evident in the US bailouts following the financial crisis of 2007-08, but by hot air.
Overwhelmingly, Western political leaders and commentators of all stripes refuse to identify the problems divulged by this era of policy. If poverty is on the rise, then this must be the result of bad parenting. If housing prices exceed the reach of young Australians, then this must be the result of them buying posh coffee. If wages are stagnating, this must be the result of unreasonable union demands. These last two claims were made not by overt right moralisers, but by Stephen Koukoulas, a putatively progressive economist, and a then-custodian of the labour movement, Paul Howes.
In his 2014 interview with Leigh Sales, Howes said that what was needed for wages reform was an end to “politicising” its debate. As if there ever has been a matter less political than one’s personal financial survival. This, however, is the public assertion made, even by the purported “left”, to justify 40 years of market-friendly techniques: wages are not political, silly. As David Cameron said, we are all Thatcherites now.
Neoliberalism is the horizon beyond which many are unable to see. It is not an avid reconstitution, as is powerfully argued by Mark Blyth in his marvellous book Austerity: The History of a Bad Idea, of classical models of economic thought, but something that is seen by elites as a natural end to world progress — a real End of History deal. Why fix what the god of Reason ordained?
Well, because it’s not working. The crises of housing, poverty and wage stagnation in Australia did not unfold due to a lack of personal virtue in those afflicted by them, but because capitalism produces regular crises. And you don’t have to be a material leftist to believe this. You just have to be Paul Keating.
In an interview this week with Troy Bramston, who is shortly to release a book on the former leader, Keating restates his newly emerged view that neoliberalism is a crock. Of course, being Keating, he doesn’t admit the part that his government played in creating present conditions — just ask him and he’ll tell you that all Australians benefited from the Hawke-Keating brand of neoliberalism-lite — but he does, unlike most others, actually concede that economic history has cycles.
Morrison will deliver a budget based on the belief that the “free-market” has a natural equilibrium. Notwithstanding all the hard work done by business-friendly administrations across the world to deliver this “freedom”, this is now the widespread view. Even if Keating dismisses the recent remarks by ACTU secretary Sally McManus that neoliberalism was always a bad idea destined to screw large numbers of people, he is, at least, urging for a dynamic view of history.
John Maynard Keynes, the economist whose thinking was adopted to address the crisis of 1929 and whose prescriptions were ended by Keating, almost certainly never said, “When the facts change, I change my mind. What do you do, sir?” But, you know, he meant it. And so does Keating. Things transform and so, in a reasonable nation, must economic policy.
The fix for the problems of neoliberalism is unlikely to be more neoliberalism. To be, as today’s many undeclared advocates for neoliberalism are, personally moralising about it: you don’t reward a toddler for crapping all over your rug. If you’re an economic parent, like Keating, who combines authority with liberalism, you attempt to resolve the matter by containing your child, or risk an unmanageable steam-cleaning bill.
You need have no particular political allegiance, other than that to the classical fiction of market equilibrium, to know that things change, sir, and so must minds. When things changed to produce the Great Depression, the new technique of full employment was tried. When full employment produced the stagflation of the 1970s, as predicted, the new technique of neoliberalism was tried.
When neoliberalism shat itself, we applied more neoliberalism.
Neoliberalism has produced mediocre ideologues and difficult conditions for many in the nation and the world. Despite claims made by many in the press — particularly following the election of Emmanuel Macron in France — that this aging neoliberalism is a fresh new resistance, it will continue to produce harsh political results.
Keating is, of course, an arrogant man. But he’s not one nth as arrogant as those many, from the labour movement to the IPA, who believe that neoliberalism is the natural and apolitical extension of human nature. And he’s not as deluded as a man like Howes who believes there to be no necessary connection between politics and individual survival.
It’s time to change your mind, sir, and acknowledge the intimate link between politics and economies that neoliberalism has cunningly obscured. If minds don’t change, facts will, in any case.
This govt seems to still be a believer, note the ‘necessity’ of company tax cuts to stimulate the economy, trickling down to jobs growth.
Jane – Unfortunately, the “trickle down effect” is a result of being pissed on from above.
“clocks”.. anyone?
Yes Helen but what do we replace neoliberalism with? My bid is to mix Marx and Libertarianism, the most unlikely possible strategy. Imagine a Australia with an equal distribution of wealth and income but under current property law. No Age pension, no public education, no public health, no unemployment. How to get there? Simple invest the 10% of gdp which is the welfare budget, but invest it for the poor. The Libs can have their libertarian paradise, they just have to stand aside.
You might call the Hawke-Keating approach neoliberalism-lite when viewed from a socialist perspective, but there was an important difference between post-Keating neoliberalism (particularly as embodied in the Howard Work Choices regime) and the Hawke-Keating approach, at least in the field of industrial relations.
The Hawke-Keating approach was “enterprise” bargaining. It moved the industrial relations system away from industry-wide agreements to allow agreements to be made at the business, or enterprise level. This ensured that the agreement suited the individual business’ needs, while giving the employees of that business a stake in its success – if the business did better than its direct competitors then there was an opportunity to share in that success through higher wages in future EBAs. It was a model that promoted business competition but maintained a collective bargaining approach at the enterprise level.
Neoliberalism, on the other hand, dictates that every employee is a competitor of his or her fellow employees. It’s dog-eat-dog. This was the failing of Work Choices. It promoted competition at the individual level within enterprises, without regard to the impact that individual competition, and the resultant inequalities, would have on the performance of the enterprise as a whole. It drives down morale and collective productivity, and leads to employee-churn as individuals look for either sideways promotion or escape – both of which harm overall business productivity through loss of continuity, experience and corporate knowledge.
I thoroughly agree that neoliberalism should be consigned to the history books, but I think that it is a bit unfair to cast the Hawke-Keating model of collective bargaining at the enterprise level aside in the process. It had some significant benefits over neoliberalism. Looked at it from the far right end of the political spectrum it could equally be called socialism-lite.
Excellent comment about collective bargaining. As a side point, of all the utterances from our greatest Prime Minister, the one that made me squirm was that people made redundant from previously protected industries got ‘better jobs tomorrow’. Show us the evidence Paul.
Sneer all you like. Have you counted how many human beings are on the factory floor of a modern car factory? The higher value jobs that don’t need 80-90% taxpayer subsidies are in engineering and design and have an international impact
Let me know when you see a person Mr Wilkins
https://m.youtube.com/watch?v=VpwkT2zV9H0
who’s going to break it to Bernard?
I tell him ALL THE TIME.
Good on you, Helen…keep at it!!
Linda+Helen, you succeeded in having me spit my morning tea all over my monitor.
We are in a global economy. Without the Keating changes we would be even closer to being the poor relations of our region.