1 March 2004

Moving to a more just Australia

Andrew Scott, RMIT University

Marian Sawer The Ethical State? Social Liberalism in Australia, Melbourne University Press, 2003 (224 pp). ISBN 0-52285-082-0 (paperback) RRP $29.95.

John Wright The Ethics of Economic Rationalism, UNSW Press, 2003 (206 pp). ISBN 0-86840-661-9 (paperback) RRP $37.95.

These two books both have the word ‘ethic’ in their title and they are both about the philosophy of ‘liberalism’ in one or other of its forms. Both are very timely and in-depth analyses of the aims and moral assumptions of different liberal philosophies which have been influential in Australia’s past or present. What becomes very clear after reading them, however, is how wide the gap is between the branches of what can only be very shakily seen as a shared liberal philosophical trunk.

Marian Sawer’s The Ethical State? is motivated by concern about the recent erosion of social-liberal political traditions in Australia. She begins by observing that ‘there has been relatively little published on the shifts within the liberal tradition in Australia—and certainly nothing comparable to the flood of material on whether the Labor Party has “betrayed” the labour tradition’. Carefully, skilfully, and elegantly, she clarifies the strong influence in Australia’s political history of social liberalism, which she distinguishes clearly from the older classical liberalism (or laissez-faire) formulated at the time of Britain’s industrial revolution. The ideology of laissez-faire emphasised contracts between atomised individuals in opposition to the state. It is an ideology which has substantially re-emerged since the 1970s as ‘market liberalism’ or ‘neo-liberalism’ or ‘economic rationalism’. By contrast, ‘social liberalism’, Sawer argues, as articulated by the 19th century Oxford academic T.H. Green and as transferred by many of his pupils to Australia at a critical time in this nation’s building prior to the First World War, supported state intervention to promote positive liberty, equal opportunity, and fairness and to enable individuals to actually overcome barriers in the way of their reaching their full potential. ‘It was premised on the interdependence of individuals and the role of the community (with the state as its collective agency) in achieving equal opportunities for all its members’ (p. 23). Social liberalism imported liberal values of autonomy and equality into the family, and exported an ethic of care and fair distribution into the state. It has had, and continues to have, a vital affinity with feminism, Sawer contends.

Social liberal ideas were strongly represented in non-Labor parties until those ideas and their leading exponents (such as Ian McPhee) began to be purged from the Liberal Party from the mid to late 1980s as that party adopted increasingly illiberal policies including towards Aborigines and asylum seekers. However, Sawer regards ‘the Australian Labor Party (ALP) as the most important vehicle of social liberalism for much of the twentieth century’ (p. 7). Among the philosophy’s long-standing and distinctive institutional achievements in Australasia she includes: the creation of conciliation and arbitration, with its comparatively equitable wage outcomes; progressive taxation; the early State provision of education, maternity allowances, and old age pensions; and the policies for funded women’s services and childcare and gender budgeting of the 1970s and 1980s.

However Sawer regularly counterposes ‘social liberalism’ to ‘Laborism’ and to ‘class-based politics’. She writes, for example, that:

the blue-collar unions that had formed the [Labor] party and had a dominant role in its structure did not believe that women could adequately represent the interests of working men. It was their view that was to become most influential in the way that the ALP dealt with questions of equal opportunity over the next sixty years (pp. 124–5).

That is, until Whitlam whose ‘reformist … government … [she acknowledges had] an agenda shaped by social liberal discourse’ (p. 113). There may be, I think, more common ground between ‘Laborism’ and ‘social liberalism’ than Sawer suggests here. There have been very many migrant women working in blue-collar jobs as trade union members in Australia over recent decades. When the terms and concepts of ‘ethical socialism’ and ‘social democracy’ are included in the discussion of how to categorise particular philosophical and policy outlooks, the surface conflicts between ‘Laborism’ and ‘social liberalism’ become less clear.

Sawer makes an effective case for reviving Australia’s social liberal tradition.

Sawer is absolutely right, however, to express alarm at how some prominent figures in the ALP—including its new leader Mark Latham—have canvassed breaking up the post-Whitlam coalition between ‘social liberalism’ and ‘Laborism’ by ‘burning off’ the constituencies of feminists, Aborigines, and some ethnic groups which they portray, wrongly, as incompatible with Labor’s longer-term electoral base of blue-collar workers. Sawer’s book includes a fascinating and incisive chapter on ‘Gender, Metaphor and the State’, and her book as a whole makes a very effective case for reviving Australia’s social liberal tradition to arrest this nation’s further drift into dry ‘economic rationalism’.

What ethical basis could underpin any claim by ‘economic rationalism’ to maintain the policy ascendancy it has had in Australia since the mid 1970s? This is the question philosopher John Wright addresses in a thorough, lucid, and detached discussion. With an open mind and by constructing many illustrative and challenging hypothetical examples, Wright examines in detail, from first principles, both the economic and ethical cases made for ‘economic rationalism’. He notes that ‘one reason for rejecting economic rationalism is scepticism about the idea that real economies do, or can be made to, approximate ideal markets’ (p. 39). He notes also that ‘some human beings who we might see as exemplifying at least aspects of human perfection, such as saints, might perform rather poorly in a free market’ (p. 134). Wright analyses nuances of meaning with great precision. For instance, he describes how both ‘economic rationalists’ and ‘neo-liberals’ argue that governments should reduce their own activities and leave as much as possible up to the free market, but points out that:

when they come to explain why they think governments ought to do this, economic rationalists and neo-liberals might give rather different answers. The economic rationalist will emphasise the role that the free market has in increasing efficiency and creating wealth. But a neo-liberal might instead emphasise the ways in which, by cutting back on their own activities, governments can thereby maximise the liberty of their citizens. The economic rationalist will emphasise efficiency, the neo-liberal freedom (p. 18).

Wright identifies ‘economic rationalist’ policies in particular as deregulation, privatisation, outsourcing, elimination (or minimisation) of public goods, corporatisation, and the abolition of minimum wages and compulsory trade unionism. As well as highlighting the negative specific effects of some of these policies on activities such as essential scientific research and the availability of banking services in rural areas, after judicious consideration Wright finds that the more general arguments for such policies are not strong.

For example, Wright identifies flaws in the argument that economic rationalist policies produce outcomes in line with what people deserve—demonstrating that the policies in reality fail to fairly reward equally meritorious activities and efforts. In the course of his largely conceptual discussion, Wright also presents hard evidence that people in the social democratic societies of northern Europe are happier than those in ‘economic rationalist’ nations. Further, these social democratic nations have promoted the greatest degree of political freedoms—contrary to Milton Friedman’s assertion that the most free market economies are those most likely to maximise political liberty.

Wright argues that all moral justifications for ‘economic rationalism’ fail.

According to Wright, attempts to give ‘economic rationalism’ a moral justification from a wide variety of frameworks all fail for similar reasons. Even if ‘economic rationalism’ maximises total wealth, it tends to increase the gap between rich and poor, and it fails to ensure that those at the lowest economic levels of society enjoy a satisfactory standard of living. It makes it harder to ensure that we can obtain other aspects of life that are also of value, such as security and freedom from stress, and a balanced life that includes enough time for leisure, hobbies, and relationships. Wright particularly emphasises the fact that a person’s status is often closely tied to the amount of money they have and that in a society in which there is a big divide between rich and poor, it is as though the rich are paid twice: they receive a lot of money and the high status that goes with it, while the poor not only receive little wealth but also suffer the negative effects of low status. Drawing on Richard Wilkinson’s book Unhealthy Societies, Wright points out that the negative health effects of low status can be so serious that life expectancy itself is affected. Further, following Wilkinson, he argues that:

once the wealth of a country rises to a certain level, then increasing the equality of distribution of its wealth is a more effective way of increasing the health of its citizens than further increasing the absolute amount of wealth (p. 117).

Overall, concludes Wright, even if ‘economic rationalism’ does add to overall wealth, it takes away from justice, from fairness, and from many aspects of the quality of life. Therefore, ‘from an ethical standpoint, it is hard to see that it is justified’ (p. 186). Wright points out how Australia has gone from being one of the most equal, to one of the least equal, nations in the industrialised world since ‘economic rationalist’ policies began to be introduced from the mid 1970s. He notes how progressive systems of taxation, death duties, and social security are all policy means by which the extent of inequality in a country can be reduced, even if it cannot be eliminated altogether.

Adoption of such policies will require a revival of the strong social liberal tradition in Australia which Sawer has so clearly charted, as well as attention to the continuing success and resilience of the social democratic nations of northern Europe to which Wright correctly points. There are not clear signs yet that the current Australian Labor Party leadership will adopt more socially liberal or social democratic policies, but the content of these two books confirms that they would be well advised to do so. These works constitute a valuable resource for people making efforts to seek a more ethical state in Australia; and a more ethical state must by definition break out from the morally stultifying limits of neo-liberal ‘economic rationalism’.

REFERENCES

Wilkinson, R. 1996, Unhealthy Societies: The Afflictions of Inequality, London, Routledge.

Dr Andrew Scott is Senior Lecturer in the School of Social Science and Planning at RMIT University, Melbourne. He has written several books on Labor politics.

Read Sean Scalmer’s review of Andrew Scott’s Running on Empty: ‘Modernising’ the British and Australian Labour Parties.

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