How the economic rationalists tried to steal our hearts and minds

At the start of the year in my piece ‘Proud to be a bigot’ I mentioned that, before Abbott, Australian governments tended to look after those who were ‘down on their luck’. It was a phrase with which I grew up. People who were unemployed were not ‘dole bludgers’ then, nor even just bludgers (although there may have been a few, bludgers were usually identified when they were in work): they were ‘down on their luck’. I began to wonder why that approach has disappeared.

A key aspect of the phrase ‘down on their luck’ is that it is an egalitarian phrase. In an egalitarian society, success and failure are more usually attributed to luck rather than personal attributes because almost by definition personal achievement breaches the personal equality of egalitarianism. While there are always degrees of success, even in an egalitarian society, success is down-played or shared — either by emphasising the role of others or distributing the monetary rewards of success by throwing parties and ‘barbies’, or buying extra ‘rounds’ at the pub. Acknowledging personal achievement was usually limited to sports people and, to a lesser extent, performers and artists — although we were also good at cutting down the ‘tall poppies’.

We seem to have gone back to something closer to the ‘undeserving poor’ of Victorian times. That, in itself, provides a clue to the change. People are undeserving if they are perceived not to have made enough effort on their own behalf. It follows the logic that ‘if I am successful or moderately well-off then anyone can be’ if only they make the effort. It focuses on the individual and the effort made by the individual, not on initial conditions or community responsibility nor even the common good. And we all know who promotes such ideas: the neo-liberals, the economic rationalists, the free-marketers and, politically, the current Liberal party and the IPA behind it. Somehow they have managed to change us without many of us even noticing. Although loathe to say it, the Labor party has also contributed by accepting the free market philosophy.

Between the gold rushes and the 1890s, Australia was considered a ‘working man’s paradise’. The depression of the 1890s changed that somewhat but also fostered the growth of unionism and the birth of the Labor party to represent workers’ interests. That meant that by 1911 Australia was still considered a great country for the ‘working man’ with higher wages than in many other countries, shorter hours than the US and Canada and more holidays. Australia was also a world leader in social reforms, including universal suffrage, and was known for not having as large a gap between rich and poor as most industrial countries — it was effectively largely egalitarian.

For the purposes of this discussion, we can ignore 1914 to 1950, because it was dominated by two world wars and the great depression which obviously impacted working life and government approaches in ways specific to those events.

I think the first change came with the election of the Menzies’ government in 1949. Menzies’ new Liberal party focused on the small businessmen, the shopkeepers and small-scale entrepreneurs with the cry that these were the ‘forgotten people’ of Australia — which was partly true, as least as far as the pre-existing political parties were concerned. Of course, that emphasis also gave an emphasis to the ‘market’ but in Australia at the time it was still a market protected by government (through tariffs on imported goods) and was to remain so for the next three decades. Protection of the market also gave some protection to the workers: and there was also the Arbitration Commission and the ‘basic wage’ which helped maintain the standard of living of workers.

The major change came after the ‘stagflation’ and oil crises of the 1970s. Governments, led by the Thatcher and Reagan governments, began abandoning Keynesian economics, which had allowed for a degree of government management of the economy and the market, in favour of what is known in Australia as ‘economic rationalism’, or overseas as ‘market liberalism’. The latter name actually explains it better — market freedom. In articles last year I discussed the liberal view of individual self-interested freedom and that is the view that underlies market liberalism. It is the antithesis of egalitarianism and the ‘fair go’.

Also, following World War II, America had become the world’s dominant economy (and still is, although China threatens to surpass it in the coming years). The American ethos has always been focused on the individual and the idea that anyone can rise to the top by their own efforts, even from the humblest beginnings: Abraham Lincoln was often touted as an example. That meant that some looked to the American ethos, rather than an Australian ethos, as the exemplar for economic success. And, of course, modern market liberalism (as opposed to the old English version of the 1800s) also rose to prominence in America.

Reinforcing the changes was the appearance and growth of multi-national corporations and their creation of a global economy. The multi-national corporations loved market liberalism and they had the power to enforce it. They could threaten recalcitrant governments with the withdrawal of investment. Even a government trying to protect its workers knew that such withdrawal would reduce jobs, perhaps slow the national economy, even reduce wages, so that its efforts to protect workers would be in vain. Of course, it was rarely an open threat, more a reminder that the multi-national could do business elsewhere if the government was not favourably disposed towards it in such things as wages and working conditions or did not allow its other products to enter the country without high tariffs. Countries even vied to attract such companies, offering them incentives to invest, in contradiction of free market principles, but such incentives were never turned down on the basis that they breached principles — no, the other principle of self-interest won out.

Underlying all this is competition. Since the 1980s we have been continuously told that competition is the key to an efficient economy and that government regulation reduces competition and efficiency. And to make competition work, individuals need to be competitive in their approach.

I think all those circumstances created a ‘perfect storm’ to undermine the Australian ethos of egalitarianism and the ‘fair go’.

Hawke and Keating succumbed to the international pressure and the advice of the economic ‘experts’, including those at Treasury. While the changes they made did improve our economic situation, it was still threatening our ethos. The trick was to try to maintain both and to some extent they achieved that with the ‘Accord’ but it was a delicate balancing act that also left the ‘fair go’ in the balance.

Even small businesses were influenced by the new approaches. Previously, many small businesses were happy to co-exist with other similar businesses. An example was the old ‘corner stores’ which were dotted throughout the suburbs on every second or third corner. Everyone could walk to a local store. There are other factors that led to the demise of such stores, including changes in transport and food storage, but the people who ran those stores knew they were providing a local service, not just a business. They made a living but were basically little or no wealthier than the neighbours they served. As the world changed some hung on, still providing a local service, but they could no longer ‘compete’ and people eventually sought the cheaper prices at the supermarkets (even though they had to travel further to access them).

Small businesses that survived became more competitive. Some managed to grow by taking over or forcing out their competition or they banded together (and gave up their independence) in order to ‘compete’. For the most part, the idea of providing a service was relegated to second place. (Although I see that it is making a come-back, now as a means of gaining an advantage in the market.)

Companies began running seminars for their workers extolling the virtues of competition, of the need to out-perform and out-do their rivals. You have only to walk past some real estate offices early in the morning and hear them chanting and cheering and psyching themselves to sell, sell, sell in the coming day. In the case of the real estate office, the emphasis is not just on out-performing its rivals but fostering competition between its own sales-people, promoting success by out-selling one’s colleagues.

That whole approach has encroached at the personal level and is readily displayed in job interviews. Even in the public service, I was once told that I ‘did not sell myself’ at interviews: my reply was ‘if I wanted to “sell” myself, I would have been a salesman, not a public servant’. Being able to ‘sell’ oneself in an interview is often not a valid indication of a person’s worth as a worker but it has become the competition in the interview, not the value or quality of a person’s work, that often determines who ‘wins’ the job. Even the fact that it is now more common to refer to a person ‘winning’ a job is an indication of a fundamental shift in values. Previously we would simply ‘go’ for a job and would be asked whether we ‘got’ it.

Some people now appear captured by the philosophy of the new economic world. In their personal undertakings they are competitive; they brag of their successes and claim the credit for themselves; they are concerned for themselves, not for their neighbours and may no longer care about fitting in with their neighbours. The economic rationalists have indeed stolen their hearts and minds.

I have my own theory that even if an ethos is ignored for long periods, people return to it in times of struggle or when they feel threatened because it remains in the collective consciousness. Howard abandoned the balance between the new world and the old ethos, that Hawke and Keating had tried to achieve with the ‘Accord’, when he introduced Workchoices. Abbott is taking the approach to the next level by imposing the underlying philosophy of market liberalism across society and not just to the economy. And, at last, people are seeing that as a step too far. It seems that, while many in the population may see individual self-interest as important for economic pursuits, they have not been convinced that it applies to society and are drawing a line in the sand. When it comes to social issues the ‘fair go’ still lingers or, as I suggest, is being resurrected as a threat is perceived to the way our society functions.

Labor needs to keep returning to the ‘fair go’. Not only does it resonate with a significant proportion of voters, it forces the Liberals to respond because, here in Australia, it would be political suicide to leave only one major party apparently defending the ‘fair go’. The Liberals, however, have trouble defending it because it is their approach threatening it and because their approach is, as I suggested earlier, the antithesis of the ‘fair go’. It leads to such bizarre statements as Hockey asking if it’s fair that the rich pay more tax (in dollar terms); or is it fair that three months’ worth of our taxes is required for those on welfare; or that poor people don’t drive as much as rich people, so a petrol tax is actually ‘progressive’. When reference to the ‘fair go’ can create such contortions by the Liberals, it is an idea worth pursuing.

And as for the economic rationalists stealing our hearts and minds, they almost succeeded — but not quite.

What do you think?

About Ken

As you are here reading TPS, we presume you are not one of those who were conned by the economic rationalists into abandoning our values in the name of economic success. But perhaps you know of some who were. Or perhaps you disagree with Ken’s view. Please let us know and leave a comment.

Come back next week for 2353’s ‘Instant experts’ which raises some pertinent questions about the expertise required of our politicians when they are expected to run our economy, our defence, our health system and so on. Are they qualified for such specific tasks? Should they be?

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12/04/2015Ken Once again you have given us a well-argued piece to contemplate. You put your finger on what I believe is the core difference between the neoconservatives, neoliberals, economic rationalists, free marketeers, call them what you like, who seem to follow the law of the jungle – the survival of the strongest – and the progressives who foster an egalitarian society, a fair go for all, and a helping hand for those ‘down on their luck’. Frankly, if we can’t have a society that values the ‘fair go’, what is there on offer other than what the economic rationalists propose? We have Hockey’s ‘lifters’ demeaning his ‘leaners’. We have a society torn apart as the ‘deserving’ complain about the ‘undeserving’, the ‘bludgers’. We have a society where the fortunate and the successful are admired, while at the same time the less fortunate, the less successful, are scorned – they have simply not tried hard enough. No allowance is made for lack of opportunity, upbringing in an impoverished environment, ethnic disadvantage, and disability. It is assumed that lack of success is the individual’s fault, that if only he had made a bit more effort he could have succeeded like those who had ‘made the grade’. We need to resist the repressive lurch to unfairness that Hockey, Abbott and many of his ministers foster; we need to rebut Hockey’s leaners/lifters dissection; most of all we need Bill Shorten and Labor to shout from the treetops that this is a society that values the ‘fair go’ almost above all else, and for Labor to paint for all to see a vision of the egalitarian society most Aussies want.


13/04/2015And Ken, they are still doing it. The 'conventional' wisdom to address budget problems is apparently to reduce spending even further - which takes more money out of the system and in reality multiplies the effects of a lack of confidence and cashflow in the system.


14/04/2015Yes, they haven't yet given up. 2353, it also goes back to your piece last week about 'trickle-down' economics. As Ad said, and as I tried to capture to some extent in the piece, the whole economic approach has created the situation where people 'down on their luck' are scorned by the successful, even the moderately successful. What is lost in the economic argument is that Australia was the world's leading economy in the 1880s (before the recession of the 1890s) and we managed to achieve that with an egalitarian ethos and as a 'working man's paradise'. As George Megalogenis pointed out in his recent television series we were also a relatively 'open' economy at that time. So despite what the current economists and Liberal Party insist, it is possible for an egalitarian ethos and an open, successful economy to go together. That certainly raises the question, why do they think they need to change us? If it is not just for economic reasons, there is a darker agenda, reinforcing the acceptance and power of those at the top - because they got there supposedly by their own effort, so they have to make sure that everyone else believes that is the key value. They are threatened by any alternative ethos.

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15/04/2015Folks I wonder have you witnessed [i]The Peter Principle[/i] in action at your workplace? Have you seen a competent colleague promoted to a position for which he or she was not suited, and end up a failure, an incompetent? This is what has happened with our federal government, where the Coalition has seen its elected leader rated as a dud, not just by its opponents, but also by the electorate and many previously supportive commentators. If you are interested to read more about how senior ministers, indeed the Prime Minister himself have risen to the level of their incompetence, get over to [i]TPS Extra[/i] and read [i]The Peter Principle[/i]: Your comments about [i]The Peter Principle[/i] will be welcome.


16/04/2015Ken What a lucid and insightful piece! It deserves a bigger readership but Oh well. The Fair Go principle, Yes, that's what Labor should focus on. A potential win-win, because in attempting to avoid being perceived as [i]anti[/i]-Fair Go, the Rich Right must make at least some concessions to the less fortunate. "Less fortunate", that term supports your contention that we have a collective consciousness that in many ways one's circumstances depend on the luck of the draw.


16/04/2015TT Thank you for your kind comment. "Less fortunate" is another phrase but I think it is more associated with the old concept of 'noblesse oblige'. While that was mentioned among the upper classes in England, it can be seen in the philanthropy of the rich in America: but it is something that has never really taken off in Australia. The idea of 'noblesse oblige' was never appropriate in Australia (probably because we were largely egalitarian). And for some reason philanthropy among the rich to help those who are 'less fortunate' never seemed to take off either. Perhaps that is another piece.:-)

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16/04/2015TT I thank you too for your comment on Ken's piece. You have highlighted another aspect of where we end up - fortune. Some have good fortune, others are less fortunate. There are many factors that lead to those outcomes. By the way, don't assume that a paucity of comments means few readers. The stats of some sites indicate that as few as one in a hundred visitors leave a comment. Traffic through both [i]TPS[/i] and [i]TPS Extra[/i] remains strong. The topic now current on [i]TPS Extra: The Peter Principle[/i] is close to your heart. Why not boost traffic there with one of your incisive comments?


17/04/2015A must watch from 'The Project' via Waleed Aly on climate change and political disinterest.


17/04/2015Ad I hadn't read your exhortation to me to comment on TPS Extra when I did! Even though you posted yours at April 16 2015 12:37 PM And I posted mine at April 16 2015 10:10 PM Doesn't sound right eh, 12:37 PM is EARLIER than 10:10 PM ?!

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17/04/2015TT Sometimes these computer conundrums are beyond understanding. I've given up trying to comprehend them. Anyway, thanks for spontaneously posting on [i]TPS Extra[/i]. Please come again.
I have two politicians and add 17 clowns and 14 chimpanzees; how many clowns are there?