ALLAN PATIENCE. Where do we go from here?

Apr 5, 2017

“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 Our public transport services are outdated and neglected.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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