There have been a couple of corker lines delivered over the last couple of weeks to underscore the fact that no politician with a yen to continue his or her career wants to be seen dead wearing last season’s economic consensus.
I especially liked the line from Nationals’ leader Matt Canavan at the National Press Club last week, criticising the economic sentiment of the past 15 years as “microwaved Milton Friedman” (the economist who promoted deregulation, small government, and free-market capitalism).
Liberal MP Andrew Hastie also got in a good one on the ABC’s Insiders when he declared that voters wouldn’t reward the Liberal Party for “a final stand for neoliberal politics”.
How fashions change. It feels like just yesterday that I was mocking the earnest libertarianism espoused on the Australian right, especially by young men. In the “noughties”, the unrealistically individualist philosophy had really caught on. I blame the lack of social media. Back then, boys were still reading the politically libertine Playboy for the articles. They even read books.
Like Ayn Rand’s novels. After being told dozens of times that it was necessary to read the Russian emigre to understand the world, I did. Hoooh boy. From then on, I understood what had captured those young men’s imaginations. Let’s just say that sections of The Fountainhead and Atlas Shrugged, which didn’t start off sealed, would have become fused by the sticky panting fingers of their impressionable pubescent readers. I could well imagine how young men could become captivated by the heroic self-sufficiency of The Fountainhead‘s Howard Roark and his transcendent and detailed physical unions with the uncompromising Dominique Francon. How they could be drawn through the erotically charged adventures of Atlas Shrugged’s Dagney Taggart into wishing she would ask if they were, in fact, John Galt.
What was a young woman of good education to do, but poke merciless fun at this cartoonish dream of hyper-individualism? A universe in which the gossamer threads of familial love and obligation were considered stifling enslavement? I was amused enough to spend countless hours debating the ideas of the extreme libertarians. One memorable night, as we sat at the pub contemplating the newish idea of seasteading – a utopian idea of a no-tax society built aboard a floating platform in lawless international waters – I pointed out the glaring obstacle in the way of these fancies. There were eight men around the table, and me. A philosophy of radical individualism can’t reproduce itself. It is predestined to die out for want of wombs.
Two decades later, the pendulum has swung to the other extreme. The young men of laissez-faire have been mugged by the reality of a complex world. But rather than replace it with a more sophisticated approach to policy, they have chosen another solution that is as appealingly clear and simple as it is wrong: neoprotectionism.
Obviously, no one objects to the notion of sovereign capability. But the interventionist instinct tends to become as extreme and, ultimately, ridiculous as the minarchism of yesteryear.
What it boils down to is the idea that governments, which are mostly made up of people who have never worked in business – let alone run one – are somehow going to do a good job at investing taxpayer money and rendering industries viable which private companies have abandoned. Along the way, trade-offs are going to magically disappear. In this government-directed economy, we will have high wages, secure jobs, as well as enough output to shore up our nation’s every need.
Forgive me if I hum The Internationale to myself. Unfortunately, government-laid five-year plans turned out to be pure fiction. History tells us that governments are 90 per cent powered by wishful thinking, which doesn’t transubstantiate into life’s necessities.
The left has been arguing its way into a post-productivity nirvana for a while now. Playwright and progressive fulminator Van Badham has been declaring neoliberalism dead and the Labor Party damned for failing to bury it for over a decade. The Australia Institute’s Richard Denniss discovered that neoliberalism was responsible for spreading COVID. Columnist at this masthead Sean Kelly recently authored a Quarterly Essay which argued that even the Albanese government, with its bent towards the institutionalisation of all things, is essentially a conservative government. To prove his point, the right has now come around.
While it’s a heart-warming moment of bipartisanship, both sides are wrong. These neat frameworks struggle to accommodate messy reality. Yes, in a shifting global environment, Australia must consider how it can best ensure that we will continue to have access to the resources, foodstuffs and technology that modern life requires. But signing up to neoprotectionism is following the left down a path to poverty.
Instead, we now need to acknowledge global dynamics and model scenarios in which the world becomes less integrated, without holding them up as a sure thing or an ideal. Rather than fixating on national sovereignty, Australia needs strategic sovereignty – the ability to act independently in key sectors, while continuing to benefit from the considerable dividends of cooperation and global trade. If that seems a rhetorical nicety, it’s not; the first proposes that we shield our industries from competition, the second that we create the conditions for them to become more competitive with those elsewhere in the world.
As always, Australia’s advantage always comes down to energy abundance – if we choose to exploit it, rather than throttling some sources in the hope of bolstering others. The neoprotectionists of the left and right will like that Australia has a good chance of becoming a manufacturing hub again if we take that path. It’s possible to stay a high-wage country and continuing to furnish plenty of jobs if Australia is an attractive place to make things – not just in the short term, dependent on industry subsidy, but structurally, because of the materials available here, and it’s profitable for business to use them.
And there we go – ping! Your Milton Friedman is ready. At the perfect temperature to serve up anew. Delicious neoliberalism for the modern palette.
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 McGuinnessis 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.
