For an economist, Ross Gittins doesn’t like markets, which might be what happens when you lead a cloistered life. Gittins has been at the Herald since 1978.
It might be an economist thing.
The same thing happened to Paul Krugman when he joined the NYT. He left his economics training in the foyer – chasing hollow applause was more attractive than rigour. But that’s a topic for the next column Krugman writes. Which will be awful.
Back to Gittins.
For many years, Gittins has turned his anger towards ‘neoliberalism’. Neoliberalism is more a slur than a label – like calling someone racist. It ends the debate before the discussion.
Gittins had another crack at one of his favourite chestnuts this morning. In search of a hook to hang his argument on, Gittins has tied neoliberalism to the royal commission into aged care, but the song is the same as it always is.
How will the era of “neoliberalism” end – with a bang or a whimper? With a royal commission – or three. But don’t worry. Royal commissions always make a lot of noise.
With the memory of the government’s embarrassing delay in yielding to public pressure for a royal commission into banking still fresh, Scott Morrison got in before the Four Corners expose to announce a royal commission into aged care.
Here’s a basic definition from Wikipedia which has cobbled together several sources to arrive at this:
Neoliberalism or neo-liberalism refers primarily to the 20th-century resurgence of 19th-century ideas associated with laissez-faire economic liberalism. Those ideas include economic liberalisation policies such as privatisation, austerity, deregulation, free trade and reductions in government spending in order to increase the role of the private sector in the economy and society. These market-based ideas and the policies they inspired constitute a paradigm shift away from the post-war Keynesian consensus which lasted from 1945 to 1980.
For more on what it is, The Conversation provides a good primer until it mentions Trump which, we you should know by now, is the first step on the road to hell. From there on, all logic goes out the window and Trump Derangement Syndrome takes over.
Neoliberalism is regularly used in popular debate around the world to define the last 40 years. It’s used to refer to an economic system in which the “free” market is extended to every part of our public and personal worlds. The transformation of the state from a provider of public welfare to a promoter of markets and competition helps to enable this shift.
Neoliberalism is generally associated with policies like cutting trade tariffs and barriers. Its influence has liberalised the international movement of capital, and limited the power of trade unions. It’s broken up state-owned enterprises, sold off public assets and generally opened up our lives to dominance by market thinking.
The common line is that neoliberalism has “gone too far”, which is the general theme of Gittins’ article.
There are two problems with that idea.
- Has it gone too far because everything has been privatised and market are allowed to “let her rip” as Kevin Rudd used to say? If that’s the argument, the answer has to be “no”. It took longer than Gittins has been at the Herald for tariffs to finally stop propping the Australian car sector and only because the industry ceased before the tariffs had expired. Every single time government tries to implement reform the response is to ask whether people will be worse off. The truth is ‘yes’. The response is always ‘no’ – we compensate people to the point that the reform is no longer effective. It could be argued that the reforms do not go far enough. Instead of neoliberalism we have a bastardised hybrid. A mongrel. The worst of both worlds: a freer system with government interventions to quieten the loudest voices. This doesn’t seem to have worked all that well. Electricity is a good example. Yes we have a privatised system in most of Australia. But the biggest shock to the established system is renewables and they are subsidised so they can compete. Which isn’t the point of competition. A better response from government would be to fund the research but not tilt the outcome in their favour. One thing is sure in the realm of renewables – when they are cheaper and reliable they will rule the market. Until then, they shouldn’t unless you choose to pay more. Which few do. Instead, we are all made to pay more through renewable energy targets which compel AGL and the like to buy their high-cost product.
- Have neoliberal policies been applied to industries not suited to neoliberalism, such as education? No. But maybe. Private education has been a hallmark of school-age education in the West for centuries, yet it appears to have failed at the tertiary level (as Gittins observes). Is this a problem then of the theory, its application or, as I suspect, what happens when a sector is flooded with money from government without oversight? Is the private college training system a larger example of pink batts? Has too much government intervention created an irresistible honey pot without the proper oversight? It is right to blame the system if it hasn’t been implemented properly … and dear God … isn’t that the argument about socialism?
Ultimately, the blame for the system ‘failing’ lies with us.
Reform is never easy. If it was, it would been done by now. If you get the drift. But if we fight and whinge – and if the media is easily able to pick up on these disagreements to fight reform – then we will go nowhere fast. Social media makes this harder. An interest group of the disaffected can be brought together at a moment’s notice no matter whether the complaint is relevant or not.
The outcome is that nothing much happens and we go nowhere. Maybe even for 40 years.