The economy — or, more correctly, the economy as the lived experience of Australian households — has a way of re-inserting itself into political debate despite the best efforts of politicians.
The week began with an almost absurd emphasis on national security, with the Prime Minister parading in front of gas-masked soldiers and military gear to bolster his counter-terrorism credentials, then the following day expanded the Commonwealth’s most incompetent department into a new Home Affairs portfolio, to be led, of course, by Peter Dutton or, as some wag dubbed him in a stroke of pure genius, J. Edgar Tuber.
By yesterday, however, national security was being supplanted by matters economic, with Turnbull assailed on radio by 3AW’s Neil Mitchell about the possibility of interest rate rises, in an extraordinarily facile interview that seemed predicated on the idea that Turnbull was both controller of monetary policy and the nation’s chief financial adviser.
Today, Bill Shorten ratcheted up his language around inequality and interventionism, even flagging that Labor might look at possible cuts to hitherto politically unassailable tax concessions. For the party that bravely went after negative gearing, is the capital gains tax (CGT) exemption on the family home in its sights?
In days of yore — say, up until two years ago — a political leader flagging that changes to some of the most sacrosanct Australian tax dodges were on the agenda simply wouldn’t happen. Or, if they did happen, they’d become the basis for a ferocious scare campaign by the other party. Labor changed that with its proposed negative gearing and CGT reforms. But the electorate has changed it as well. Aspiring to be in a position to take advantage of major rorts has been replaced with a deep-seated loathing of how high-income earners benefit from the system while ordinary households get dudded.
All of this relates to the central challenge across the West currently, of addressing this growing electoral antipathy to economic systems seen as benefiting the few, not the many, to use Jeremy Corbyn’s language. Even national security: the open borders and anti-tribalism promoted by neoliberal policies, under which each of us only has an economic value regardless of our nationality, religion, or skin colour, has induced a backlash that plays to the strengths of the right as well as the left. Who, after all, does the electorate trust to secure borders but conservatives? Who is trusted to ensure — in the mythology peddled by the likes of News Corp — that immigrants and refugees don’t start murdering us on the street? Conservatives.
This is the first stage, if you like, of the death of neoliberalism: the left responds with redistribution policies and interventionism, the right with tribalism and hardened borders. What’s missing in that mix is the response from neoliberals themselves, the remaining supporters of the economic dogma that has dominated since the start of the 1980s but which is now under attack on all fronts, their defences — wage stagnation is temporary, it’s technology, not free trade, destroying jobs — crumbling under the onslaught.
When neoliberalism surged into policymaking in the 1970s, there was little intellectual response from the left. Keynesianism was seen as failed (and the hard left regarded that as a sick indulgence of capitalism anyway), the Soviet Union was nearing the final stages of economic collapse, and a lot of intellectual effort on the left went into explaining why the Soviet Union wasn’t really a socialist state anyway. Indeed, progressive parties like Labor in Australia and Labour in New Zealand became the vehicles for market liberalisation, rather than defending interventionism against free market zealotry, sometimes outpacing even their conservative opponents.
Neoliberals now face a similar historical moment. Already, notionally free market, small government parties like the Liberals in Australia and the Tories in the UK are embracing greater interventionism and larger government. As with Labor/Labour in the 1980s, there’s diehard resistance from the fringes, but electoral reality is proving too powerful. What’s the neoliberal response? Bland assertion of more of the same won’t work — indeed, is actually harmful. Do any neoliberal advocates have the intellectual substance to craft a creative response to this crisis?