JOHN FALZON. Politics is concentrated economics

Stark displays of inequality, such as the concentration of homeless people in Martin Place, challenge us to unite in solidarity with those who are oppressed by injustice – an injustice that is a deliberate aspect of our neoliberal economic system.

When you see someone who is experiencing homelessness or when you are made sick and giddy by the spectre of First Nations children and children seeking refuge being incarcerated, do not think to yourself that these are signs the system is not working.

Homelessness, incarceration, systematic humiliation and dispossession are all signs that the system is actually working desperately but methodically to coerce and control the many so as to cement the liberty of the few.

The gathering of people experiencing homelessness in Martin Place in Sydney, for example, should be seen as revealing but not remarkable. This phenomenon, which was unsurprisingly extinguished rather than actually addressed, revealed a number of powerful truths:

  1. That this was a highly concentrated expression of inequality in a highly visible point in the city.
  2. That it was precisely this highly visible concentration that caused a sense of discomfort for those who generally are quite happy with the status quo.
  3. That this discomfort is less about the injustice of homelessness and the deprivation of access to appropriate housing and more about the heart of the prosperous city being the site of purported failure and dysfunctionality.

The story, in fact became all about the Premier’s and some others’ sense of discomfort, morphing into a tough-on-crime discourse about moving people on.

Whether you pathologise or criminalise the people experiencing homelessness as an extreme symptom of rising inequality, at the end of the day you are only entrenching the very causes of inequality that you are deliberately or unwittingly masking.

When we pathologise people who are bear the brunt of inequality we tend to focus on their constructed capacity deficits, their “typically” poor choices or their “tragic” bad luck. In this vein of thinking you are able to prosecute the argument that “throwing more money at the problem” will never solve it because the problem lies with the individual, not with social or economic structures or histories. This leads very nicely into the patronising and paternalistic arguments favoured by proponents of disempowering and costly distractions such as the cashless welfare card, compulsory income management and discriminatory drug testing on the stigmatising basis of class and postcode. In a fascinating, but deeply damaging, sleight of hand, income inadequacy and structural unemployment and underemployment are displaced by the alleged individual incapacity to manage an income or to manage their lives. This is the bread and butter of colonisation and it was no accident or surprise that these practices were, in the main, trialled first on First Nations Peoples before being extended, by the same logic of internal colonisation, to non-Indigenous populations on the basis of gender, class, disability and postcode.

In short, the practice of pathologisation leads us to believe that poverty, in that personal and moralising sense, is to blame for homelessness.

The criminalisation of those we pathologise is simply the next extreme step. Incarceration is sadly, but predictably, a mass means of punishing people for the systematically moralised crime of being poor.

But if you take a structural view, it is not poverty that is to blame for homelessness. It is wealth. Specifically, it is wealth in its highly concentrated and, especially, speculative, form, as opposed to shared wealth, wealth that is productively used for the good of society as a whole, common wealth. This is clear in the area of housing, which has become a speculative sport instead of a human right. But it is also clear when we look at broader distribution and resource allocation questions relating to taxation, wages, employment, economic development, infrastructure and social expenditure.

Which brings us to neoliberalism which, contrary to its own arguments against big government, does not mean government getting out of the way so as to allow the bullies to rule the yard.  Neoliberalism means arming the bullies with sticks and telling their victims to stand still for their tormentors.

In the meantime the dominant narrative chants its devastating doxa that the excluded are to blame for their own exclusion, which is why they should be treated even more harshly, demeaned with drug-testing and demerit systems and cashless welfare cards designed by those who mean explicitly to disempower and demonise and do so shamelessly.

If the political is concentrated economics and the personal is concentrated politics, then the obvious question that is begged by mass outbreaks of inequality, such as we saw in Martin Place, is how we should change the way we make economic decisions as a society so that people are not excluded from the essentials of life such as a place to live, a place to learn, a place to heal, a place to work.

But, as the poet and theorist Audre Lorde reminds us:

“The true focus of revolutionary change is never merely the oppressive situations we need to escape but that piece of the oppressor which is planted deep within each of us.”

We need to challenge our own hearts as to how we internalise these structures of inequality, naturalising the historical and blessing the unconscionable, justifying everything from the offshore brutalisation of people seeking refuge to the onshore torture of First Nations children. There is nothing quite as radical as reality. What we are prophetically called to do by the reality of rising inequality is to take a side. The social space can be shaped by the dominant discourse into the diffusion of the political, the personal and the economic. But it can also be the space for uniting in solidarity with the people who are oppressed by injustice. It can be the space for the collective movement for social justice and social change; the place in which we move to change society rather than the place from which the rejected are told to move on.


Dr John Falzon is the CEO of the St. Vincent de Paul Society National Council of Australia.


John Laurence Menadue is the publisher of Pearls & Irritations. He has had a distinguished career both in the private sector and in the Public Service.

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12 Responses to JOHN FALZON. Politics is concentrated economics

  1. Thanks for coming in on this Paul. I am aware of all the above points in a general sort of way, especially the eighth. One of my favourite stories at the time of the collapse of the Soviet Union came from one of the former Iron Curtain countries. Might have been Poland or Hungary.

    The Senior lecturer in Marxist Leninist studies at the Polytechnic became the under-secretary in charge of privatisations. We will know the neoliberal order is dead when Rupert Murdoch’s papers back Jeremy Corbyn and Bernie Sanders.

    Stalin governed with insane brutality but he knew he had to have ideological credentials and he worked hard to produce a Marxist-Leninist text that passed muster with the intellectual vanguard of the Party faithful, most of whom he executed.

    I wish we could see this sort of debate in our Parliaments but they have become irrelevant because of the military discipline exercised by the major parties, especially the Australian Labor Party, of which I am a member.

    So I’m grateful to John Menadue for opening up this space to which I am able to contribute from outback Western Australia, that region known as the East Pilbara. It is a long way from academic conferences but I would love to catch up some time. I can’t beat you blokes on equations but I like to think I can hold my own on the history of thought.

    The question is where do we go from here?

  2. Despite his youthful, blunt, Dutch arrogance and the condescension we have come to expect from economists, Paul Fritjers is one of the more interesting thinkers around the place and I enjoy reading his comments but he has gone over the top in his reply to John Falzon (and to me, since I am the only bloke on this blog mentioning Hayek and Mont Pelerin). Paul is telling John to go back to his church, light a few candles, swing some incense, mount the pulpit and harangue our wicked politicians for worshiping the golden calf. Leave the hard stuff to experts like me, says Paul to John.

    I detect the outline of a narrative from the economists who write in this space — Paul, Michael Keating and Nicholas Gruen. They are seeking to absolve their profession from blame for the global financial crisis and the galloping inequality of our times and to lay the blame at the feet of those naughty politicians doing deals with vested interests. Their situation reminds me of the 16th Century church tracking down William Tyndale and killing him for translating the Bible into English. Our economists are happier if the public does not know how to spell dynamic stochastic equilibrium. They are hanging on to their theories on which they base their models. They want to retain their status as the high priests of modern society.

    Paul has a point …. up to a point. Much of an economist’s work is the collection and interpretation of data. The quantity and quality of data are improving so it is reasonable to expect the work of economists to improve. Who would disagree with Paul’s assessment of modern political leadership? Tony Judt made the mistake of visiting the House of Commons in his later years and said we were living in the age of pygmies. Going back to the terrible trio of Thatcher, Pinochet and Reagan our politicians have shovelled so much money into Wall Street, Colin Street and the City of London that the long lunches must have tested the most durable of stomachs.

    In Australia we can’t blame the economists for the greatest disaster of the 21st Century Parliament — the failure to put in place a proper mining tax in 2010. The Australian Labor Party, of which I am a member, was not solid on this key policy, to put it politely, and the Liberals were opportunistic. They should have supported the tax which was based on the thinking of their favourite philosopher, John Stuart Mill, the patron saint of liberalism and one of the founding fathers of economics.

    The tax was designed by a Professor of Economics in Melbourne who has been working on this sort of thing all his life. I hate to think what he does for fun but he seemed a decent chap in the Australian Financial Review interview. The Financial Times of London recommended the Australian proposal as a model for all mineral-producing nations so the miners were bound to fight. They didn’t have to. The Australian Parliament collapsed in a heap of pseudo-psychological character assassination and John Stuart Mill did not get a word in, which was a pity because among all the writers on economics his is the best pen.

    It gets worse. Last year my local member of parliament, Brendon Grylls, had a crack at raising more revenue for the State from the big miners. Brendon, the bright young leader of the Nationals in WA, argued the case persuasively throughout the campaign for the State election held in March this year. I could not fault his reasoning but the Labor Party lined up with the multinational miners against him and Brendon lost the seat because National and Liberal Party supporters voted for Pauline Hanson’s One Nation and the Shooters, Hunters and Farmers Party, who directed preferences to Labor. That surprised me until a gun-owner told me the shooters never forgave John Howard for taking away their semi-automatic rifles.

    So John Howard won the seat of Pilbara in the WA Parliament for Labor, yet another remarkable achievement for this legendary politician. Having won office, the newly-elected Labor Premier blessed a delegation representing the miners, bankers, real estate agents and stockbrokers who crossed the Nullarbor to Canberra to bellyache about the division of spoils from the goods and services tax.

    Paul obviously is right about politics in Australia. It is over. I hope he is right about this young generation of economists and he and his mates are as clever as he thinks they are but I remain persuaded by Hayek and Keynes. I have previously quoted Hayek on the influence of intellectuals on government. Keynes said the same thing more famously and more stylishly.

    “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else.”

    By the way, I doubt if John Falzon is interested in “marketing.” He gives me the impression he is well past that stage. He is looking for the truth, that being the nature of his vocation. His comment about “arming the bullies with sticks and telling their victims to stand still for their tormentors” is so good it will go into the text books along with Jean Curthoys and her description of neoliberalism as “the flipside of communism.”

    If the church is to survive in 21st century Australia it needs to get involved in the great issues of our time, which are social justice and world peace, and gets its nose out of minor issues such as gender and who marries whom.

    • paul frijters says:

      Hi Jerry,

      thanks, I guess. The end of a long blog is not the place to have an in-depth discussion about economics (we should do that somewhere more in the limelight. A public discussion at a conference some time?). So let me summarise my position quickly:
      1. Economics is a very broad church in which there are many competing and internally inconsistent viewpoints, even within ‘the mainstream’.
      2. Economics is changing fast, with behavioural and wellbeing economists (like myself) trying to change the course of the ship.
      3. Economics is winning as the statemanship story of choice in the up and coming centres of power (India, China, etc.). Lots of new econ departments there, the newer ones more mainstream than the older ones.
      4. You should have a look at my views on economics (my 2013 book in particular). I am more sympathetic to the views of Hayek on price discovery than mainstream economics textbooks are (which tells you something about the mainstream!!), but also in favour of heavy state involvement.
      5. In reality, the debate of state versus market is completely stale. All major economies are now mixed economies, with states controlling around 40% of GDP, and lots of non-profits controlling a sizeable amount of the rest (churches, hospitals, universities, etc.).
      6. In a crude sense, regulatory capture and bureaucracy is winning in the West, not markets at all. Those who rile against markets are not looking where the real action is. There simply is not much real market at all. Lobbying and corruption of government is a much bigger game.
      7. John Falzon is engaging in marketing when he picks on an ideology. As a member of a particular church, he is of course entitled to push his brand of ‘ism’ and rile against others. I would prefer him not to waste his energies on straw men.
      8. The corrupt will always clothe themselves with whatever ideology is useful to hide behind. So of course economic ideas will be used for political gain. It would be a mistake to fall into the trap that it is truly about the economic label people hide behind. Watch the grabbing hand, not the mouth! Otherwise you will find those mouths change their tune, but with the hands exactly where they were before.

      • Jennifer Meyer-Smith says:

        Hi again Paul,

        with reference to #5,

        how can we turn around our socio-economic system from the growing dominance of the alleged NFP’s?

        NFP’s operate on the backs of slave labour ie unpaid labour provided by a broken Newstart system which purports to deliver social security while enslaving vulnerable people on below poverty line income AND draconian mutual job obligations.

        Why do self-righteous people wonder why many vulnerable succumb to suicide and/or crude substance abuse?

        Alternative economic arguments MUST always provide a humane socio-economic take on how those principles can operate in real world with equitable standards automatically built in.

  3. michael lacey says:

    Good article!
    “Which brings us to neoliberalism which, contrary to its own arguments against big government, does not mean government getting out of the way so as to allow the bullies to rule the yard.”
    There is only one economic debate in this country that is neoliberalism. , this means there is no debate at all. The country lives under the Thatcher quote TINA ( There is no alternative). There is a choice and the debate needs to be heard, it is long over due!

  4. Florence Howarth says:

    Those who follow neoliberal ideology seem to see it a divine right, established by their god.

  5. Paul Frijters says:


    I mostly agree with you, but it really is a big marketing mistake to buy into the whole ‘neoliberalism’ ideology stuff. It puts you in a corner which will always lose. The Hayek/Pelerin stuff is the stuff of grand conspiracies and arch villains.

    There are economists, like myself, who are keenly aware of how all this works and are trying to oppose the inequality and the corruption of our politicians that has lead to it. If you look, you will find many economists on your side.

    Just stick to simple labels: corruption, inhumanity, dehumanizing, class, moral crisis, etc. And put the blame where it belongs: the top politicians of the last 30 years. They could have prevented it, not aided it.

    • Jennifer Meyer-Smith says:

      Paul Frijters,

      my take was that Dr Falzon was not buying into the neoliberalism stuff.

      He was arguing against it and why it should never have been allowed to set root in Australia nor the world, if everything was played on a level playing field, which it obviously is not.

      Now that we know the harmful, regressive affects of neoliberalism, it is important to promote every advice, solution, provision to move us all away from the neoliberalist stranglehold.

      Your simple labels are the aims to support and/or destroy, as the case may be, for example, I don’t want the label of class associated with Australia.

      Nonetheless, I humbly agree that the blame lies at the cynical, ugly, nasty, cheating feet of every top politician, who has sold out any of us Australian People, who have been adversely affected by their misfeasance.

      Now they might be saved from such political office bearers’ misfeasance.

      • Paul Frijters says:

        Hi Jenifer,

        we are on the same side. I should have been more clear and say that John should not declare himself anti-neoliberalism, but anti-corruption. To pick a fight with a vague ideology that sounds like ‘pro freedom’ and ‘pro the economy’ is a fight he is not going to win.


    • Avatar John Menadue says:

      PAUL – I would like to email you, but your emails are ‘bouncing’. Could you reply with your correct email address. Many thanks, John

  6. John Falzon in this heroic post draws attention to a fundamental question in political analysis. Which or who is more important, the ideology of an era or the passing parade of individuals on whom the spotlight briefly shines — Turnbull, Shorten, Howard, Hawke and co? It is evident from his attack on neo-liberalism that John casts his vote in favour of ideology. So do I. There was only one important individual in the politics of the last 30 years and that was the Austrian philosopher, Friedrich Hayek.

    When the government of Margaret Thatcher in Britain introduced radical privatisation policies there had to be someone behind the scenes, apart from the usual suspects in the City of London, and it did not need Sherlock Holmes to detect the influence of F.A. Hayek. Milton Friedman made more noise and remains more famous to this day but Hayek was the brain behind the neo-liberal revolution. That is not in dispute. It would not have happened without him. The paper trail is not hard to follow. Students of neo-liberalism often start the story with the pre-war attempt to kick off the project at the Colloque Walter Lippman held in Paris in 1938 when Alexander Rustow coined the word “neo-liberalism.”

    Hayek’s wartime publication of “The Road to Serfdom” was assisted by Ludwig Von Mises and the pace hotted up in 1947 with the commencement of The Free Market Study in Chicago and the formation of the Mont Pelerin Society at the ski resort of that name in Switzerland. I never met Hayek, which is a pity, because I wanted to ask him if he based his network of Mont Pelerin think tanks on the Communist Party’s cells. I am sure he did. If you are getting into the propaganda business it makes sense to copy the experts. Like the communists, the neo-liberals sought to change not just the relationship between capital and labour, between commerce and government. They set out to change the nature of man.

    What we are trying to do now is dig ourselves out of the hole excavated for us by Hayek and his followers in the universities, the think tanks, parliaments and bureaucracies. We would have a better chance of reaching clean air if we had a more studious understanding of Hayek’s teachings. It is a long time since I read Hayek’s best-seller but two impressions remain fresh. The politics of the last 30 years revolve around Hayek’s interpretation of Hitler’s rise to power and secondly, many of Hayek’s insights make sense. He got a lot of it right. George Orwell thought so and gave The Road to Serfdom a favourable review at the time of publication.

    Writing to media commentators a couple of decades ago in one of several futile attempts to slow down the wheels of economic rationalism before our politicians flogged off everything not nailed to the floor, I estimated that Hayek got it 25 per cent right and that meant 75 per cent of our policies on privatisation and de-regulation were wrong. Sure, it is rough arithmetic and wild generalisation but does anybody disagree with me now?

    It is difficult to quarrel with the essential, technical criticism of socialism made by Von Mises, namely the absence of the price indicator, although Schumpeter devised an elaborate way around the problem, by way of academic exercise. However the manufacture of “quasi” or pseudo markets by a more recent generation of economists is an abomination that has opened the doors for financiers to enter such areas of massive government funding as health and education.

    Nugget Coombs in his memoirs regretted the division of micro and macro economics and wrote that the inflation associated with the Vietnam War could have been contained within a Keynesian framework. However the well-oiled and well-funded Chicago and Mont Pelerin machines swung into action and most political leaders and major parties in the English-speaking world following Thatcher have accepted neo-liberal precepts, right up until the recent efforts of Bernie Sanders and Jeremy Corbyn to revive interest in Roosevelt, Keynes and Beveridge.

    A short-cut to understanding where we are now as fine leaders like John Falzon try to rescue society from economics may be gleaned from two famous comments — Adam Smith’s quip about “man’s propensity to barter, truck and exchange” and Karl Polanyi’s response to Smith. “In retrospect it can be said that no misreading of the past ever proved more prophetic of the future.”

    Another round of letters I sent to media commentators in decades past asked them to drop the “reform” word from government press releases and substitute a less coloured word such as “change.” The way the neo-liberals hijacked the “reform” word to claim the moral high ground for the fiddle-faddle that has passed for public policy these last 30 years was such a blatant confidence trick that I’m sure the newspaper editors of my day, like Dan O’Sullivan at the Daily News in Perth, would not have let them get away with it.

    The neo-liberals stole the reform word because they knew generations of high-school students in the English-speaking world studied the reform Bills of the 19th century British Parliament legislating to abolish slavery, extend the franchise and improve working conditions and public health. If the politicians of the era now ending were so conceited as to compare themselves to my Lords Wilberforce, Grey and Shaftsbury and if professional economists such as Nicholas Gruen and Michael Keating consider Australia Post to be a success story for neo-liberalism then we are in even more trouble than I thought.

    Australia Post is indeed a good example of the black hole at the heart of neo-liberalism. Whether it is corporatisation, privatisation or acquisition and merger the game is the same. The property and the jobs belonging to the people are swept upwards from the periphery in a gigantic, centralised vortex and redistributed to the coupon-cutters mocked by Keynes and a loathsome, nouveau nomenklatura of arrogant, grotesquely-overpaid executives.

    John Falzon digs deep into Christian values in his magnificent attack on our smug society and I am lost in admiration for his work. I think it helps to understand the philosophies, ideologies and economic theories that brought us to this uneasy point in our history.

  7. Jennifer Meyer-Smith says:

    A beautifully explained article of how the institionalisation of neoliberalism has allowed the bullies to persecute everyday people, so that many have had their best years depleted by ever shrinking circles into boxes.

    By understanding that insidious pathological process of blaming the vulnerable for their disadvantage and recognising the harmful logical affects of that convenient and dishonest blame shifting, Dr Falzon has beautifully identified how this neoliberalist system treats us as though we should be confined or constrained: especially those who need us most.

    I have continuously advocated for pro-active government backed programs designed to provide Micro Finance Grants and Micro Credit Loans, which can be fully accessed by unemployed and under-employed people on Newstart or other forms of welfare, so to incrementally escape the poverty of welfare.
    This would mean people can return to full economic autonomy again by deriving their own self-employment opportunities through their own micro-businesses based on their ingenuity, skills, experience and qualifications. (These MFGs and/or MCLs must be over and above the current welfare payment for the time it takes to achieve these aims.)

    This is a brave idea that needs brave social democratic and/or democratic socialist governments to adopt unilaterally (not with any restrictive bank involvement).

    Another brave idea for the different tiers of government to adopt and promote, is government purchasing public places for the operation of micro businesses for people on low or no incomes. Those public places would be large, under-cover marketplaces where each micro-business operator would have reasonable rental tenures on lockable market stalls where they can operate their micro-businesses and store their equipment and stock.

    Once their micro-businesses have been able to become established by sustainable Micro Finance Grants, Micro Credit Loans and affordable, accessible rental tenures in marketplaces, disadvantaged people can move off welfare and poverty and into their own economic independence. This in turn provides more employment opportunities as the micro businesses grow; more choice for Australian consumers to buy diverse homegrown services and products; more economic vibrancy with more homegrown industries.

    Such brave ideas can provide opportunities for disadvantaged people to retain or regain their independence, self-determination and dignity with fair and livable income access and this in turn allows them socio-economic access to life’s other essentials like healthy foods, secure and sustainable shelter, essential health care and life-affirming education and social inclusion.

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