Have the economic reforms pursued in Australia since the early 1980s produced positive social outcomes?
To give this question proper consideration, we shall need to do a number of things, beginning of course with an explanation of what economic reforms are in question. To do this, I will focus on one particular policy area — higher education policy. This is an area of policy to which the sort of economic reforms we will be discussing have been applied visibly and purposively; it is also a policy area in which we can comfortably discuss social outcomes. We will also need to tackle the more difficult issue of evaluating what constitutes a positive social outcome and how we might recognise one.
Let us turn first to the discussion of the economic reform itself. ‘Since the 1980s’ is code for a number of related and complementary notions and assumptions about economics, society and human behaviour that became widely influential and accepted around this time — the sort of constellation of ideas that we might best describe as a movement. The movement in question has been variously described as ‘neoliberalism’, ‘economic rationalism’, ‘free-market’, ‘Friedmanite’, ‘lassez-faire’, ‘small government’ and even ‘Reaganomics’. These labels all emphasise different aspects of the movement and are largely interchangeable, though my preferred term is neoliberalism, which I will use hereafter.
Attempting a precise definition of such a fuzzy category as neoliberalism is a futile exercise, so let me instead lay out some of the core principles that underwrite it. At heart, neoliberalism combines a libertarian political philosophy with an economic world-view. That is to say, it invokes an image of humanity as a collection of rational individuals each acting in their own self-interest — the role of public policy on this view is to ensure each individual has freedom to exercise his or her rational choices as efficiently as possible. Efficiency here means with as much information (price signals) and as little interference (government) as possible. Neoliberals believe that in this state of affairs, the sum of each individual’s rational, self-interested choices in a perfect market will secure the best possible outcome for all. Free markets, free people. (In that order.)
When former US President Ronald Reagan famously said, ‘government is not the solution to our problem, government is the problem’, we can see what he was getting at. Similarly, when former UK Prime Minister Margaret Thatcher more ominously said ‘there is no such thing as society’, we see she was appealing to a vision of homo economicus — Economic Man. Continue Reading →