Is the Productivity Commission neoliberal? Of course, many might say. Many on the Left, that is — “an advisory body that facilitates the development of neoliberal policy”; “part of a neoliberal agenda to push costs from society — by taxing the rich — onto individuals, which discriminates against women and the low-paid”; “providing advice that from a neoliberal mindset is rational, but may be politically inconvenient”; “the commission, in my view, is far too dominated by economists. Worse still, these economists are predominantly advocates of neoliberal economics.”
Not so, according to Peter Harris, outgoing chair of the commission, professing not to know what the term actually means, noting that there were a wide range of economic views within the commission and that, for an allegedly neoliberal body, it was odd that it had produced the crucial report that led to the establishment of the National Disability Insurance Scheme or the study being presented by Harris and his fellow commissioner Jonathan Coppel yesterday, on changing inequality in Australia (take-out: it has worsened, but not by much, and not by much lately).
All of which is correct, and relevant. Nonetheless I disagree somewhat with my former boss. Back in the 1990s, I worked under Harris in the Department of Transport implementing national competition policy in the rail sector, and received a solid imprinting of Hawke-Keating era policymaking of a kind that has long gone out of fashion in this reform-averse era. There remain plenty of policymakers from that era in the top levels of the APS — Daryl Quinlivan, now Secretary of Agriculture, was also there in rail; Mike Mrdak, for years Transport, and now Communications, Secretary was in Aviation at the time. But the politicians have changed. And the electorate more so.
Harris’ point about the ill-definition of neoliberalism is an important one, and not just because the Left defines neoliberalism as pretty much any policy they dislike. Even the most ardently neoliberal governments of the last 30 years have often been conspicuous failures against the kind of criteria universally agreed as the markers of contemporary market economics. Government spending has grown, not shrunk. Intervention has persisted, in subtler forms. Favourite industries — like agriculture here — continue to get handouts. Infrastructure investment is skewed by political priorities.
And while I’ve argued that neoliberalism proved to be an inherently unstable model, one that delivered too much power to corporations at the expense of workers and consumers and thus contained the seeds of the backlash that is now destroying it, that’s not to say that many of its characteristics don’t have both good and bad sides. The way in which neoliberalism strips away other forms of identity — racial, gender, sexual preference, tribal — in favour of imposing a purely economic identity, in which one’s value is solely as a producer or consumer, ends up instead reinforcing tribalism and nationalism, for example. But the meritocratic principle at the heart of it is good for public policymaking. Why should one sector get assistance and another miss out? Why should influence, rather than efficiency, provide the basis for government support? If someone is to be supported, why not use the most efficient method, rather than a mechanism that the evidence shows is less effective?
That is, within the neoliberal “agenda” is a willingness to call bullshit on policy, to demand that it stacks up in terms of efficiency and fairness, to compel an explanation of why government is helping some groups and not others and, if so, whether it’s doing it as efficiently as possible; whether, in short, government is maximising community welfare (and even, sometimes, animal welfare). That’s why Harris is right to note the NDIS report or yesterday’s inequality report. Both are fundamentally about maximising community welfare. Are we looking after people with disabilities as efficiently and effectively as possible? If not, how can we do so? Is inequality growing in Australia? And who is stuck at the bottom? How do we best target that small number of people left behind by decades of economic growth?
The PC is no more perfect than other institutions, and can fall into groupthink and unquestioned orthodoxy like the rest of us can. But it’s neoliberal in the best sense, the sense that demands better public policy to maximise outcomes for the community. The sense most often ignored by politicians.