Plenty of business figures are yet to fully work out the significance of the dramatic shift going on across the West in relation to economic policy — that the neoliberal agenda of pandering to corporations, shackling government and suppressing wages is so badly on the nose that policymakers have been forced to abandon much of the economic dogma of the last 30 years.
As significant economic reform ground to a halt in Australia, or was reversed by cynical governments, the standard narrative — and Crikey promoted it as much as anyone — was that if only we had better political leaders, ones capable of explaining nuanced policy and of providing genuine leadership, then everything would be fine. In short, we just needed the second coming of Paul Keating.
Over the last 18 months, it’s become clear that the problems run much much deeper than that, as politicians promising business as usual have been turfed out or pushed to the brink by populists. The business community, particularly large companies, might save themselves a lot of bother if they worked this out instead of continuing to reflexively demand neoliberal dogma — company tax cuts, deregulation, wage cuts.
Outgoing BHP chairman Jac Nasser knows something is up, but he’s still stuck in the old mindset. He understands some serious shift has occurred, but he can’t work out the implications of it, partly because those implications are deeply problematic for businesses used to dominating policy.
In a speech yesterday to what is one of the few ways in which newspapers make money any more, a branded event, Nasser made the usual noises about community disaffection:
“In many Western countries people have lost confidence in institutions and the establishment. They believe government and business aren’t listening, don’t understand how difficult life has become or how concerned they are about the future for their families. We see that here, where Australians are also losing their brand loyalty, whether to the major political parties or to businesses. Businesses and industry groups must listen and respond.”
It’s fascinating that Nasser can’t understand this except as an act of consumerism by the community, the kind of problem better marketing and product placement in the great supermarket of policy can address. Naturally, his solution is along marketing lines. What we need is … leadership. “Who will take that leadership role?” Nasser implores. “Without that we will let opportunity slip and eventually will fall behind.” What kind of leadership? Step forward, Hawke and Keating. “Bob Hawke and Paul Keating won the intellectual case for new economic and social ideas as part of a national vision. They had a view of the future and Australia’s role, and a sense of purpose that guided consistency in sometimes tough decision-making.”
Most of us over 40 have a nostalgia for the Hawke-Keating years, when public policy debate was complex and nuanced, when political courage was in ample supply, when effective communication was the order of the day. But it was a different world. For a start, there was a single media space through which everyone got their news and current affairs; now it is hopelessly fragmented, making it impossible for even the most effective political communicator to reach voters. And we’d had repeated exposures to the problems of the old economic model through recessions and high inflation, so the community understood the need for reform. And we had a degree of bipartisan consensus on reform that meant when Labor, for example, took the risk of cutting manufacturing protectionism during a recession, their opponents didn’t cynically exploit it.
The fetishism of the Hawke-Keating years has to end. It was a glorious period of policymaking that delivered a big increase in Australians’ real wealth, but it offers little in the way of help now. Yes, we could do with policy champions like them, and like John Hewson, but they wouldn’t make much difference if a time machine delivered them, fresh-faced and energetic, into 2017. It’s not lack of leadership, or lack of good communication, that’s the problem — it’s that the massive inequality delivered by neoliberalism, the debauching of policymaking in the interests of corporations delivered by neoliberalism, the permanent war against workers’ incomes delivered by neoliberalism, that needs to be addressed. It’s the belief that the economy is no longer working for citizens, but instead for corporations and the wealthy, that’s the problem. Nasser and his mates in Chairman’s Lounges across the country won’t get anywhere until they work that out.
John Hewson. Yeah right. we all know what happened to him. Thanks largely to a media campaign based less on facts than on scare and lie . Sounds familiar. Businesses today aren’t interested in whether neo liberal or neo anything is the dominant force. The reality is the basic stuff of life for the majority of businesses, especially the ubiquitous small and medium businesses , has become a millstone around their neck. The miasmic creep of far left authoritarian regulations , steeply rising costs on the back of religiously flavoured decisions on power supply , restrictive as opposed to flexible staff hiring laws and regulations and corrupt behaviour between unions and the big end of town are just some of the developing challenges facing our largest employer group.
Yeah, it’s OneHand but infected by a bad strain of Blot McCrankism.
Are you for real AR . Like my Mum and thousands of others used to say” If you can’t say something nice, say nothing at all.” From my son in law, “Never miss an opportunity to say nothing” Good advice for you I think.
Are you one of the “forgotten people”?
Is this your business Damien or others that you know? Four good friends of mine have successful “small” $million businesses from different sectors who will tell you that absolutely nothing that you’ve written applies to them to the extent that you’re suggesting. Perhaps you’re talking about Retail whose biggest enemy is the Landlord and/or Franchise, and not the Staff who are actually the most flexible element of any small business.
Are you for real AR . Like my Mum and thousands of others used to say” If you can’t say something nice, say nothing at all.” From my son in law, “Never miss an opportunity to say nothing” Good advice for you I think.
Our staff are magnificent. Their efforts are reason enough for the success of our business. You have chosen to take meaning from something unintended by me and succeed in avoiding the main points of my post.
‘miasmic creep of far left authoritarian regulations’ is among the most amusingly absurd string of words I’ve recently seen. Thanks Damien.
Same!
Yeah, damn those regulations that try to stop business burning people to death or poisoning their water for more profits!! Let’s just have open slather on substandard building products! Cos, y’know ‘small’ business….
Cripes will business whining never end?
Linda, don’t forget those damned journalists who find out when you are underpaying your staff.
Will business whining ever end? Well certainly not during periods of record profits and low taxes, based on Damien’s absurd contribution.
I like your thinking BK, thanks.
“The fetishism of the Hawke-Keating years has to end. It was a glorious period of policymaking that delivered a big increase in Australians’ real wealth.”
A glorious period, Bernard? Real wealth for whom?
The pair reduced reduced corporate taxes by 16 per cent from 49 to 33 per cent. They cut the top personal tax rate from 60 cents to 47 cents in the dollar. Union membership fell from over 48 per cent to below 31 per cent. As a result, wages share of GDP fell from around 61.5 per cent of GDP to less than 55 per cent, amounting to a transfer of $50 billion from workers to the rich.
Hawke and Keating began the neoliberal experiment, you correctly describe as a failure.
Bill Mitchell provides a useful sketch:
The 1970s crash gave neoliberal economists, who had “been discredited in the 1930s depression”, a dominant political voice. The neoliberal prescription was for massive cuts to government spending, for monetary policy (interest rates) to be the main way to stimulate or contract the economy and for fiscal policy (government spending and taxation) to remain “passive”.
“Progressively, over the next three decades, that position was refined, to the point that in the ’80s, we had the massive privatisations and outsourcing and the politicisation of the bureaucracy”, Mitchell said. “The bureaucracy started to resemble a contract brokerage and management agency rather than a body providing unconditional services for citizens.”
Nasser is right to suggest that we need leaders who can articulate “a sense of purpose that can guide consistency in sometimes tough decision-making”. The big question, however, is whether people like him would follow. Clearly, the tough decisions are about how to reintroduce a measure of social control over the economy – to buttress wages, distribute work equitably, and translate clear needs, such as in housing, into effective demand. On the latter alone, SBS last night highlighted the fact that Australia has 105,000 homeless and 80,000 dwellings whose owners, responding rationally to the dictates of the market, can think of nothing better to do with their properties than to leave them vacant.
“When things go wrong it’s always someone else’s fault” just like “It’s up to someone else to pay the wages so that the plebs can afford our shit.”
Selling out for a seat at the corporate table didn’t help.
…… Now for those clowns who advocate government should be run like a business.