Look. I’m no Delphic Oracle, but if forced to lay my drachma down on naming the general character of Treasurer Scott Morrison’s budget tonight, I’d go with “neoliberal”. This era of economic policy — to avoid confusion, one characterised by the mobilisation of the state in the interest of firms — is on life-support. It is upheld not only by public assets, most evident in the US bailouts following the financial crisis of 2007-08, but by hot air.
Overwhelmingly, Western political leaders and commentators of all stripes refuse to identify the problems divulged by this era of policy. If poverty is on the rise, then this must be the result of bad parenting. If housing prices exceed the reach of young Australians, then this must be the result of them buying posh coffee. If wages are stagnating, this must be the result of unreasonable union demands. These last two claims were made not by overt right moralisers, but by Stephen Koukoulas, a putatively progressive economist, and a then-custodian of the labour movement, Paul Howes.
In his 2014 interview with Leigh Sales, Howes said that what was needed for wages reform was an end to “politicising” its debate. As if there ever has been a matter less political than one’s personal financial survival. This, however, is the public assertion made, even by the purported “left”, to justify 40 years of market-friendly techniques: wages are not political, silly. As David Cameron said, we are all Thatcherites now.
Neoliberalism is the horizon beyond which many are unable to see. It is not an avid reconstitution, as is powerfully argued by Mark Blyth in his marvellous book Austerity: The History of a Bad Idea, of classical models of economic thought, but something that is seen by elites as a natural end to world progress — a real End of History deal. Why fix what the god of Reason ordained?
Well, because it’s not working. The crises of housing, poverty and wage stagnation in Australia did not unfold due to a lack of personal virtue in those afflicted by them, but because capitalism produces regular crises. And you don’t have to be a material leftist to believe this. You just have to be Paul Keating.
In an interview this week with Troy Bramston, who is shortly to release a book on the former leader, Keating restates his newly emerged view that neoliberalism is a crock. Of course, being Keating, he doesn’t admit the part that his government played in creating present conditions — just ask him and he’ll tell you that all Australians benefited from the Hawke-Keating brand of neoliberalism-lite — but he does, unlike most others, actually concede that economic history has cycles.
Morrison will deliver a budget based on the belief that the “free-market” has a natural equilibrium. Notwithstanding all the hard work done by business-friendly administrations across the world to deliver this “freedom”, this is now the widespread view. Even if Keating dismisses the recent remarks by ACTU secretary Sally McManus that neoliberalism was always a bad idea destined to screw large numbers of people, he is, at least, urging for a dynamic view of history.
John Maynard Keynes, the economist whose thinking was adopted to address the crisis of 1929 and whose prescriptions were ended by Keating, almost certainly never said, “When the facts change, I change my mind. What do you do, sir?” But, you know, he meant it. And so does Keating. Things transform and so, in a reasonable nation, must economic policy.
The fix for the problems of neoliberalism is unlikely to be more neoliberalism. To be, as today’s many undeclared advocates for neoliberalism are, personally moralising about it: you don’t reward a toddler for crapping all over your rug. If you’re an economic parent, like Keating, who combines authority with liberalism, you attempt to resolve the matter by containing your child, or risk an unmanageable steam-cleaning bill.
You need have no particular political allegiance, other than that to the classical fiction of market equilibrium, to know that things change, sir, and so must minds. When things changed to produce the Great Depression, the new technique of full employment was tried. When full employment produced the stagflation of the 1970s, as predicted, the new technique of neoliberalism was tried.
When neoliberalism shat itself, we applied more neoliberalism.
Neoliberalism has produced mediocre ideologues and difficult conditions for many in the nation and the world. Despite claims made by many in the press — particularly following the election of Emmanuel Macron in France — that this aging neoliberalism is a fresh new resistance, it will continue to produce harsh political results.
Keating is, of course, an arrogant man. But he’s not one nth as arrogant as those many, from the labour movement to the IPA, who believe that neoliberalism is the natural and apolitical extension of human nature. And he’s not as deluded as a man like Howes who believes there to be no necessary connection between politics and individual survival.
It’s time to change your mind, sir, and acknowledge the intimate link between politics and economies that neoliberalism has cunningly obscured. If minds don’t change, facts will, in any case.