ALLAN PATIENCE. Where do we go from here?

“Why do we experience such difficulty even imagining a different sort of society? Why is it beyond us to conceive of a different set of arrangements to our common advantage? Are we doomed indefinitely to lurch between a dysfunctional ‘free market’ and the much advertised horrors of ‘socialism’?” – Tony Judt, Ill Fares the Land  

It is slowly dawning on Australia’s ideologically blinkered political class that the neoliberal project has passed its use-by date. Even Paul Keating, one of neoliberalism’s chief architects in Australia, now acknowledges that its public policy relevance has come to an end.

Nonetheless as neoliberal junkies, our current politicians persist in public policy making that conforms to its dictates about deregulating the private sector and selling off public enterprises. They are incapable of thinking outside the “iron cage” of economic rationalism. A while ago the excellent Jacqueline Maley described a certain politician as “an intellectually lazy pest.” That very apt description now applies to nearly all of our politicians, state and federal. They are nearly all intellectually lazy pests. Political discourse in Australia has come to a very dead end.

Consider the evidence. Wage levels have flat-lined for nearly two decades. Inequality is now among the worst levels ever in this country’s history. Manufacturing industries are collapsing or moving offshore. The costs of electricity and other basic services are skyrocketing. Education standards in public schools are in decline. The public health system is over-stretched. Full time employment is increasingly rare. Housing for most young adults is no longer affordable. Infrastructure across much of the country is falling apart. Our public transport services are outdated and neglected. (Compare, for example, our grubby and graffiti stained trains with those in Singapore, Beijing, or Tokyo.)

The social consequences of neoliberalism are equally appalling. The inequality it incubates is opening up rancorous social divisions along class, gender, age, ethnic, religious and regional divides. Our privately (and badly) run prisons are locking up people whose crimes are too frequently the consequence of poverty, mental illness, racial prejudice, loneliness, and sheer desperation. The rural/urban divide is widening even as our major cities are becoming over-crowded. Road rage and vicious outbursts on buses and trams are becoming “normal.” Alienation is clouding Australia’s great tradition of a fair go for everyone.

Who have been the beneficiaries of this era of public policy vandalism? Clearly the big four banks have profited handsomely from government indifference to their questionable business practices. A Royal Commission into their behaviour is way overdue. The obscene salary levels of CEOs of major companies point us to another category of overly entitled players in the economy. Certain politicians (probably more than we know of) are cynically rorting expense allowances. Big law firms and medical specialists have also joined the gravy train, as have leading real estate agents, financial planners, and a host of shonky “life style coaches” and equally dodgy “consultants” on just about everything except how to live happily and cooperatively in a civilized community.

The basis of neoliberalism’s claim to replace the vaguely welfarist public policy orientations of post-War western governments was that public institutions had become hopelessly bureaucratic and self-serving. Some government departments, for example, were spending more on salaries, travel, work entitlements, and offices and infrastructure than on the services they were meant to be delivering to the public. Their priorities were horribly wrong. Red tape and regulatory protocols were cumbersomely byzantine and increasingly irrelevant to the outcomes they were supposed to achieve. And much else besides. So a radical solution was needed.

Neoliberalism claimed to be the necessary radical solution. Its advocates promised that privatizing inefficient public agencies and deregulating the economy would deliver more efficient and cost-effective services than ever before. They were sure that freeing up the private sector would unleash untold innovativeness and energy for wealth production that, according to the hoary old myth of “trickle down” economics, would end up enriching just about everyone.

Subsequent neoliberal reforms have certainly been radical – extremely so – but they’ve provided no solutions. What they have created are larger and uglier problems for which they have absolutely no solutions.

What is to be done now that neoliberalism is collapsing around our ears? The German economist Wolfgang Streeck (How Will Capitalism End?) thinks that the coming post-neoliberal era is likely to be pretty nasty – a mixture of ruthless authoritarianism and massive social inequality.

But it doesn’t have to be like that. In the past Australians have been inventive public policy makers. We were among the very first in the world to establish effective representative government. The welfare state and the basic wage are still admirable achievements in the country’s political development. And despite Malcolm Turnbull’s empty hyperbole about it, this country should be very proud of its multiculturalism (although we need to be far more protective of it than we have been in recent years).

We can be inventive again, but this will require some fresh thinkers in politics. The ideological obsession of the mainstream political parties and their populist offshoots make them incapable of any creative policy thinking. At the core of the required inventiveness there must be a vibrant public sector that can compete with the private sector across a wide range of activities – banking, real estate, the law, education, health. By actively competing with the private sector, public agencies will be in a powerful position to “keep the bastards honest.”

It’s time to acknowledge that neoliberalism’s time is up. It’s time to imagine a different sort of society. It’s time to conceive of a different set of arrangements to advance our common advantage.

Dr Allan Patience is a Principal Fellow in the School of Social and Political Sciences in the University of Melbourne.

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7 Responses to ALLAN PATIENCE. Where do we go from here?

  1. michael lacey says:

    Alan it does not have to be like that but I fear we will lurch into another disaster of the financial kind!

  2. Bruce says:

    We don’t need to be terribly inventive Allan, the solutions have been tried before and worked. It is not the first time that liberal capitalism has run into trouble. When it did in the past the medicine was either governments taking over the mess, as in nationalisation of railways, establishing government banks, establishing housing schemes or increasing government spending to kick start the economy. A third way has been on the agenda for a very long time but only recently being implemented, the abolition of “welfare” and replacing it with a citizen wage or universal basic income.
    Since the ruinous effects of the Industrial Revolution on the average person and the rise of the Eight Hour Day Movement we have seen a gradual decline in the number of hours worked. This is gaining such momentum now, driven by technology, that the idea of the old 40 hour working week is an anachronism, the average working week is now around 30 hours and declining. As Henry Ford rightly observed way back in the 1920’s, if the average worker cannot afford to buy things there is no use making them. Capitalism needs ordinary people to have money to spend!! We produce more food, raw materials and manufactured good than ever before.

  3. Mael Colium says:

    Nothing will change the direction of neoliberalism which is just a rinse and repeat of the historical events preceding the Great Depression, which took two world wars to wrest control from the elites. The same trajectory of inequality and right wing so called popularism can be traced in the mud map of the events which saw communism and fascism rise, caused by the utter ignorance of the political classes. There is no other solution the elites will support as they are too greedy to realise they have consumed the host and destroyed the social compact. The Hansons of this world as a result of will gain power and deliver us into the abyss. Society was recreated out of the last world wars, but I suspect this time it will be much more destructive and perhaps even result in our complete destruction.

  4. Stuart Magee says:

    Regarding “Intellectually lazy pests”, this morning Fran Kelly on ABC Breakfast called together representatives of the insurance industry, local government and, I believe it was, the SES. She put to them the proposition that rather than reacting to such recurring calamities as the current floods we should be endeavouring to prevent or mitigate against them. There was no shortage of good ideas that could be fleshed out into a policy position.
    By comparison, we saw on the news the Prime Minister fiddling about helping survivors of the floods clean a couple of stained wall tiles, and wheeling out a piece of rubbish to put on a heap. Is there any chance that he, accompanied by the affected State Premiers, might put together a similar group of movers and shakers and proceed towards a set of positive initiatives? Not bloody likely!
    Have we ever been so bereft of political leadership? Were there a Federal election tomorrow, who could one vote for?

  5. Wayne McMillan says:

    Allan The world is in foment and in the birth pangs of an entirely new socio-econo political system. What it will look like is too early to tell. We certainly live in interesting times and there are going to be experiments in new ways of communicating and solving personal, social and political problems.

  6. Greg Bailey says:

    The great strength of Wolfgang Streek’s book is that it clearly demonstrates the social effects of the neoliberal shift, which has really been functioning since about the beginning of the 20th century, with a brief period of neo-Keynesianism between 1946-70. He develops the idea of the “individualised individual” which beautifully encapsulates the sense in which society has collapsed back into a form of individualism defined substantially by short-term thinking, intense competitiveness, a high degree of narcissism and institutionalised bullying. Allan mentions some outcomes of this in his paragraph three.

    In my opinion this has all been exacerbated by the pervasive influence of digital technology–which, of course, has many benefits–enabling communication and networking without direct personal interaction, breaking down trust through hacking and suspicious emails, and stressing a short time span by the speed with which digital technologies operate. This will only get worse with the development and widespread use of robotics.

    Given that neoliberalism has been institutionalised in the union movement, government and big business, as well as in the fourth estate, and that its social implications now pervade every act of society it is going to be extremely difficult to turn this around. Nor is it so much that the Left has failed, but that the institutionalising effect of neoliberalism has been so successful. Change to a new socio-economic system or reform to an existing one takes time, and our only medium term temporal limit is now the ongoing spectre of anthropogenic climate change. Neoliberalism is incapable of confronting this kind of climate change with the necessary changes to the organisation of society required, and when it really hits us hard it may be too late to change in any case.

    What is needed is a grass roots shift that may seem non-political, but which will eventually effect our political class. However, given we are a society of “individualised individuals” it is difficult to see this happening.

  7. Julian says:

    A big thank you Alan for your splendid summary and to all posters.
    I am pleased and grateful there are some who will not remain quiet.

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