‘Divisive’: Former RBA governor Bernie Fraser turns on neoliberalism (the New Daily, 17.10.18)

Former Reserve Bank governor Bernie Fraser has called for a radical rethink to policy-making, saying the way to a fairer, more equal society is with a pragmatic approach.

Mr Fraser, the RBA governor from 1989 to 1996, said Australian society had become “less fair, less compassionate and more divided” and “more devoid of trust in almost every field of human activity” in recent decades, despite 27 years of solid economic growth.

The problem was an adherence to ideologies such as neoliberalism, which made for bad government policy-making, the economist told the Australia Institute’s revenue summit in Canberra on Wednesday.

“The problem in my mind is that all ideologies are inevitably divisive, very damaging to both economies and societies,” he said.

They frustrate the development of good policies that are necessary to develop good societies.”

Neoliberalism has been the backbone of government policy in much of the Western world for decades.

Among other things, it backs increasing the economic control of private interests, and decreasing the power of the public sector. Proponents favour limiting subsidies, expanding tax bases, open markets, deregulation and privatisation of previously state-run businesses.

But Mr Fraser said the low-tax, high-individuality approach of neoliberalism failed many.

“Favouring the market system ahead of the state system, and individual interests ahead of community interests, can lead to profoundly unfair social outcomes,” The Guardian reported him as saying.

“Those unable to afford access to decent standards of housing, healthcare and other essential services have to settle for inferior arrangements, or go without.”

He said the best way to achieve what most governments aim for – a society where everyone winds up better off – is through a more pragmatic approach.

“An approach that picks the best out of the market system, lets the market work where it does work,” he said.

“It’s also necessary to be prepared to have the government step in with spending and other activities that get compensated for where the market is failing.”

To make such an approach work, Australia needed to have open and honest debate about policy and the implications of ideologies, Mr Fraser said.

That had not occurred for at least 20 years. But the current quality of public and parliamentary debate was the worst he’d seen in 50 years, he said.

“Instead of focusing on facts and research information and honest debate and presentation of those things, all that’s been replaced by assertions,” he said.

Pressure from lobbyists to back up those assertions, and budget modelling done by people eager to support one conclusion, were also part of the mix.

The state of the public service did not help, Mr Fraser said.

“Public service, unfortunately in my observation, is only a shadow of what it used to be in terms of providing expert, independent, forthright advice on all aspects of fiscal policy.”

-with AAP

Bernie Fraser background notes (2)


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1 Response to ‘Divisive’: Former RBA governor Bernie Fraser turns on neoliberalism (the New Daily, 17.10.18)

  1. Vincent Cheok says:

    What a statement of the ultimate truth by Bernie Fraser – “The problem in my mind is that all ideologies are inevitably divisive, very damaging to both economies and societies,” It shows that to be a true economist you must first be an anthropologist.
    Society is about humanity. The State to survive as a State, as a stable society, must have its governance predicated firstly on a humane policy – which means postulated not on a specific political ideology or economic theory, wagered on a ‘Two -Up’ toss at every general election like musical chairs.
    For in a relative subjective transient evolving phantasmagoric mortal world no ‘absolute’ of a permanent attribute, condition or state or entity can be found. Let alone any maxim, tenet, theory or ideology. ‘Beauty is in the eyes of the beholder’ and ‘One man’s food is another man’s poison’. In a diverse cosmopolitan mercurial society ‘where what goes round comes around’ and ‘a friend today is an enemy tomorrow’ and ‘horses for courses’, governance is not about a two horse race.
    Bernie expounds a pragmatic approach like Deng-Hsiao-Peng’s ‘It does not matter whether it is a black or white cat as long as it catches the rat.’
    And so freedom of the right of an individual as expressed by the market and free-will is secondary to the societal human dignity of freedom from thirst and hunger, homelessness, joblessness and of entitlement to public health, education, law and order and public infrastructure etc.The two must marry and dance in tandem, hand in hand, complementary to each other.
    The individual right to better yourself and for free enterprise and initiative and self-help (short term interest) should not be confused with the nonsense of using privatisation (via corporations and oligarchs and abstract entities and notions) of the State to immobilise it or make it impotent from discharging its inherent sole inalienable heavenly mandate to maintain societal human dignity (perpetual or long term interest).

    Vincent Cheok @ https://whirlwindrambler.com/

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