More elder statesmen are calling for a return to the state. I’m not backing them.
It seems that neo-liberalism is on the nose.
It used to be all the rage in policy circles. In a nut shell, it was the idea that the market, not the government, was the best way of organising activity, and so as much as possible, the government should get out the way and let the market soar.
But now neo-liberalism is on the nose. And it’s not just unwashed arts majors in cafes any more. The elder statesmen of Australian policy are also taking their shot. Like former Treasury Secretary and Reserve Bank Governor, Bernie Fraser:
Neoliberalism has caused “misery and social polarisation” yet remains in vogue with the Coalition government, according to the economist Bernie Fraser.
In the background notes for Fraser’s speech, seen by Guardian Australia, he says that Australia’s 27 consecutive years of economic growth is a “standout”, “Winx-like” performance.
But the record deserves only “qualified applause” because “too many Australians remain unemployed, under-employed, underskilled, underpaid and lack job security”.
Fraser warns that society has become “less fair, less compassionate and more divided” and “more devoid of trust in almost every field of human activity” in the past 20 years.
…Fraser in large part blames neoliberalism and its influence on policymaking for the “disconnect between Australia’s impressive economic growth story and its failure on so many markers to show progress towards a better, fairer society”.
“Favouring the market system ahead of the state system, and individual interests ahead of community interests, can lead to profoundly unfair social outcomes.”
I think Dr Fraser has the symptoms about right, but I’m not sure I agree with the diagnosis. And I certainly don’t think a swing back to the state is the remedy.
Because we’re not just talking about whether the government should do something or whether private enterprise should do something. It’s just not as simple as that.
What we’re talking about is the concentration of power.
And where power concentrates, that power starts directing benefits into private hands.
So take the Australia experience. I’d probably agree that we’re becoming less fair, less compassionate and less generous as a society.
But is that because government got out the way and let the market do its thing?
Or is it because it got in the way, and started developing policies that gave certain groups and certain individuals massive free kicks?
Is it because major parties stopped believing in or standing for anything, and started seeing political power as purely an end in itself?
Is it because our politicians started playing industries off each other, creating largesse and consultancy gigs for whoever was donating the most to their campaigns?
Is it because politicians started tilting the rules in favour of big business, so that now we have one of the most concentrated economies on earth?
The way I look at it, the problem is that there is too much government in the economy, not the other way around.
The way I see it, the government can play a useful role as an umpire in the game. Once the rules of the market are agreed on, the government can be there to enforce those rules. That increases trust in the game and you get much better outcomes.
But the government should not be a player in the game.
And it should definitely not be a player in the game who is actually pretending to just be an umpire, giving random free kicks away to its mates.
And that’s what I think we have now.
So yeah, Bernie, I’m hearing you. I think on a lot of fronts we’re moving in the wrong direction.
But we have to make sure that our cures are not worse than the disease.