In 1992, political scientist Francis Fukuyama famously declared that humanity had reached the “end of history”. Communism was dead, and modern liberal economics triumphant, with the Western model of democracy and economic freedom universally agreed upon as the future for mankind, or so, at least, the story goes.
In Australia, the ramifications of this period have led to a pervasive mantra about the state of politics and government – that there is no real policy difference between the nation’s two major political parties, and the glorious age of big ideas and ideological debates has been replaced by a rush to the centre.
It was Labor, once the defenders of socialism and builders of tariffs, that delivered the big liberalising reforms to our national economy in the ‘80s and ‘90s, while John Howard eschewed sweeping ideological agendas and broad political narratives, instead developing a “small target” strategy to return to Coalition to power. By 2007, Rudd was matching Howard on tax cuts and Howard matching Rudd on emissions trading, with both sides intentionally narrowing the field of debate to achieve the upper hand.
Indeed, in the year 2013 alone, the Labor Government cut university funding and recommenced offshore refugee processing, while the Liberal Opposition Leader declared he was on a “unity ticket” with Labor on education funding. At a glance, it was hard to see where one party’s platform ended and the other’s began.
One year into the Coalition’s term in Government and this is no longer the case.
Since September, the declarations and decisions of the Abbott Government have revealed a deep and thorough ideological bent: a reductive, unapologetic neoliberalism that brings to mind the Reagan and Thatcher eras with crystal clarity.
The first suggestions of this can be heard in the key themes of the Coalition’s election campaign – “cutting red tape” and “ending the waste”. Together, these ideas provide a rhetorical foundation for both deregulation and cuts to government spending on services the key steps towards achieving a neoliberal ideal of small government and all-encompassing market freedom.
Since the implementation of the policies, the pervasion of this ideology has become even clearer. The proposed co-payment for GP visits has been justified as a part of balancing the budget, but the bulk of the payment is to contribute to a new Medical Research Fund. Rather than just proposing a smaller co-payment, or raising the Medicare levy, the introduction of a price signal has been prioritised. The market, in all cases, must know best.
The same could be said of proposed changes to university fees, where government price control is seen to distort the market, and of the end to industry support for car manufacturers. If a business cannot make it on its own two feet, then neoliberal economic theory tells us, it must be allowed to die.
Other decisions have been even more blatant. The Government has announced its belief that the financial industry should do more “self-regulation”, and has cut funding for the Australian Securities and Investments Commission – a clear indication of the intent to move towards an economy more akin to the U.S. Indeed, the pursuit of greater personal freedom almost spilled into how racial vilification is “regulated” by the Racial Discrimination Act.
These are only the first among many examples – the fingerprints of ideology are everywhere in Coalition policy.
With that in mind, it’s worth taking a moment to reflect on the former Labor Government. Were the Rudd and Gillard years really so bereft of ideological distinction?
The answer, of course, is no. When the core policies of Labor’s time in office are collated – the Gonski education reforms, the National Broadband Network, carbon pricing, the National Disability Insurance Scheme and the stimulus responses to the Global Recession – a consistent ideology of collective action, government intervention and social improvement is clear to see.
They may not have satisfied Marx and Engels, but these policies show a belief in pooling the relative resources of the community (through tax) in order to deliver equitable and generous support where it is needed. As a whole, the policies listed above proposed to create a society of equal education, equal connectivity, protection for the environment and the vulnerable, and collective action in the face of a crisis.
That is a far cry indeed from the society of individualism, limited government and unencumbered success and failure for businesses and industries that neoliberalism would invite. To paraphrase Thatcher, that’s not much of a society at all.
So why is all of this important? Because it shows that the idea that both sides of politics in Australia are the same is utterly false.
It is an idea that springs from a failure to interrogate the policies and ideas presented in political debate, and an obsession with the machinations of Parliaments and caucus rooms instead of the policies that they deliver. Above all, it is an idea that is dangerous for the health of our democracy.
Recognising this ideological distinction is important for economics, too. Economic theory is infused with ideological preconceptions, and a great deal of economics is used to justify and amplify ideological positions. Simplified models of supply and demand can lend themselves to slogans of “all tax is bad” and “the market is always right” despite the restrictions and assumptions that underpin them, while a fear of impacts on industry can keep others from embracing economic reform.
Ultimately, all economics is ideological, and all ideologies are economic.
Economics students, and economists generally, must be alert to the interplay between their field and the ideological battles that occupy the public domain, and that means recognising these ideologies when they are at work.
It is not a problem to pursue economics with a value set, but rather dangerous to ignore the value sets that underpin economic study and debate, lest these ideological penchants be enacted under a different guise. Australia is case in point – for too long the economic ideology of politics has escaped critical analysis, and changing this will be a key part of improving the level of public debate in coming years.
The reality is, ideology isn’t dead – in fact, today it defines Australia’s political parties with startling clarity. That’s important for everyone, economists or otherwise – let’s not forget it again.