Privatisation, neoliberalism, and the new economic fairytale
A popular quote attributed to a long-dead economist, John Maynard Keynes, proposes that, when the facts change, a reasonable person might change his or her mind. It is, of course, rare. Hardly anyone changes their mind just because of evidence.
Instead, there is a concerted effort in Australia to change economic thought to suit a preferred set of facts. One hilariously explicit attempt that has just been launched by the new Green Institute, headed by former Greens MP Max Chandler-Mather, was sent to me this week. It’s created “a course on understanding the economy and how it dominates our lives”. I suppose any comparison to the political and ideological indoctrination programs of the Soviet era would be lost on the young targets of this program. So they won’t pick up that it’s what used to be known as “re-education”; they’ll just conceive of it as education.
It’s an attempt to persuade the next generation of something that a favourite fulminator of mine, Van Badham, has been trying to convive people of through her column for years. For a decade at least, Badham has been making the case to anyone who’ll listen – and the same people (plus me) listen avidly to everything she has to say – that neoliberalism is so over. In one 2018 column, in the wake of what was supposed to be Scott Morrison’s last budget, she foretold that “it’s possible to conclude from auguries like smoke rising from a garbage fire and patterns of political blood upon the floor that history may be hastening neoliberalism towards an end that its advocates did not forecast”.
It was a time in which the zeitgeist seemed to indicate a progressive landslide win to Bill Shorten, confirming neoliberalism’s demise. “People hate it,” Badham declared – linking as evidence to another Guardian columnist, who argued that “neoliberalism is not simply a name for pro-market policies, or for the compromises with finance capitalism made by failing social democratic parties” but “a name for a premise that, quietly, has come to regulate all we practise and believe: that competition is the only legitimate organising principle for human activity”.
The closest I’ve seen to it is the brief moment of libertarian effusion around the 2010s, when a few too many young men took the writings of Ayn Rand seriously – most of whom, at least those I know, are now by and large cured. Market economics has survived even their neck-bearded assault on its credibility. Mainly because people co-operating and transacting freely is just the most natural thing in the world, regardless what philosophers of any stripe proclaim.
Despite Badham’s prophesy, it turns out Australians didn’t hate “neoliberalism” enough to vote against it in 2019. Instead, they chose to vote in favour of aspiration, as the Labor review of that catastrophic miscalculation later noted.
Alison Pennington, a former staffer to Labor fixer Tony Burke, and now inaugural chief economist at the McKell Institute, expressed similar concerns in her column for this masthead earlier this month. The language has evolved a bit. Perhaps in recognition that only zealots get hot under the collar over an abstract idea, Pennington doesn’t use the term “neoliberalism” until her final paragraph. Instead of hating neoliberalism, Australians, Pennington says, hate privatisation “with a passion”. This is borne out in the 2015 poll she cites as evidence.
Plenty of polls around this time show Australians weren’t keen on the idea. But then-NSW premier Mike Baird was re-elected despite his explicit plan for privatising state assets. And, as Baird pointed out in 2023 – as the projects the state paid for with the proceeds began to come online – “voters hate the sell-offs, but they love the rewards”. The residents of NSW got schools, hospitals, roads and transport infrastructure which even the privatisation sceptics are enjoying without having to pay more tax.
We still don’t have to like privatisation. But then, which of us wouldn’t rather life without trade-offs? We’d all prefer to have the use of the money saved for a house deposit as well as the house it’s used to buy. The parents among us often feel we’d love to be free of responsibility, without wishing to be without the intense joy and worry our children occasion. Wouldn’t it be great to be an expert, without spending time mastering a skill? A hero of mine, Dorothy Parker, once said, “I hate writing, but I love having written”. So real for me as I work to a deadline. Amen, sister, amen.
But trade-offs are traded away in the neo-economic thought currently being peddled. Or rather, the trade-off is silent: it is access, or simply enough for all. Pennington is, of course, completely correct. When goods are publicly owned, they become much cheaper. So cheap, in fact, that they often don’t exist at all – or are available in such shortage that only those with power have access to them.
This was the lesson of the great experiment with public ownership we called the Soviet Union. But it can be observed in modern liberal democracies as well. The mostly public National Health Service in the United Kingdom is simply overwhelmed. In the German states in which childcare is a “right” and access free, there is a chronic shortage of places. India, a great growing nation with enormous entrepreneurial potential, is held back by bureaucracy (which also is a leading cause of corruption as people seek to circumvent the stifling state).
The evidence is that state centralisation and public ownership result in similar outcomes every time (don’t come at me with your tiny and homogenous Scandinavian nations – these nations are themselves starting to fear they’re hitting a wall).
Which is why the Green Institute’s course is so necessary and timely. The facts themselves must be re-educated – because they are laden with false consciousness, continually preferring to fall on the side of voluntary exchange in a free market. That, I suppose, is why Max Chandler-Mather, in his new incarnation, has found it necessary to bring together – for the course to be held next month – a group of “political economists” (the kind who focus on how they’d rather the world were, rather than how it is) as well as an anti-capitalist primary school teacher, an illustrator and some general activists to set reality straight.
Keynes at least was intellectually honest. This mob have a different approach: given the facts won’t change, they have to try to change their meaning.
Parnell Palme McGuinness is an insights and advocacy strategist. She has done work for the Liberal Party and the German Greens and is a senior fellow at the Centre for Independent Studies.
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Parnell Palme McGuinness is an insights and advocacy strategist. She has done work for the Liberal Party and the German Greens and is a senior fellow at the Centre for Independent Studies. She is also an advisory board member of Australians For Prosperity, which is part-funded by the coal industry.
