What is the progressive alternative to neo-liberalism?

A talk at a conference of Australian progressive think-tanks.


If we look back in a year's time to our meeting today, I suspect we will say that we were (or are) living in a kind of phoney war period, a lull before a storm. We are on the brink of a profound economic crisis which will be historic in its implications. A large degree of unemployment at best, or at worst, global tensions leading to local wars. But even more profound than this crisis is the growing climate emergency, with events moving far faster than expected while the leadership of advanced industrial countries continues to avoid decisive action.

Whatever happens over the next few years, it is important to drive home our advantage. Free market fundamentalism has been discredited. The market for global finance proved not to be a self regulating and self-correcting mechanism, with frightening consequences. Nor are the strictures of the free market fundamentalists a reliable way of delivering the goods in terms of secure jobs and incomes.

So is this the death of neo-liberalism, the end of economic rationalism?

I don't think so.

Neo liberalism arose for reasons that still operate. First, it suits particular corporate interests and has delivered extraordinary growth in wealth to them. Second, it is deeply naturalised in Australian society. It is internalised, partly because ideas of freedom, competition, choice and self interest have an over-riding appeal to a significant number of people.

But another important reason is that there is no immediately apparent alternative philosophy. Without a robust alterative, we may be here is ten years railing against some future hybrid of neo liberalism which will have failed even more spectacularly.

Today I want to make some comments on what such an alternative might be and how we might strive for it. But before I do so I want to describe what a successful set of ideas is not. It is not is long shopping list of nice things you'd like to achieve. It is not the sum total of the various causes of progressive groups. In the real world there are conflicts and choices to be made. The most difficult centre around the contradiction between material delights of seemingly endless growth and the unsustainability of this. More tangibly, this means a genuine commitment to renewable energy will conflict with those who refuse to change in the coal mining and coal fired electricity generation industries.

But let's talk about possible alternative philosophies to neo-liberalism. In fact we can actually learn a lot from the rise of neo-liberalism. After all, it has been remarkably successful. From a set of idea which were universally regarded as absurd and marginal, they developed into a kind of new 'common sense'. I am not suggesting we need an ideological world view similar to neo-liberalism -- a Theory of Everything -- rather we need a set of values, a political outlook and a degree of coherence which the progressive movement so far lacks.

The most obvious thing is to learn from its success is the power of ideas, the ability of a set of ideas embedded in an intellectual framework, to inspire people and to change society. This has been the case with both neo-liberalism and with the earlier powerful paradigm of ideas grouped around socialism. Without inspiration and the strength that comes from a set of ideas, few will develop the determination which is necessary to actually change anything.

Such ideas operate on many levels. They have values by which to analyse society, they set longer term goals, they make assumptions about human nature, they contain moral principles, they suggest a range of political strategies for change, and ultimately they suggest practical principles to create policies.

In the case of neo liberalism, a key assumption about human nature is that narrowly defined self-interest is the key driving force of humans and that the main yard stick of value is the growing output of material goods. A related assumption is the claim that outcomes of free markets are somehow ethically 'good'. The latter is a principle about morality, in this case a deeply flawed morality.

These deeply embedded assumptions explain the hysterical attacks on those who argue that endlessly rising living standards are unsustainable and who disagree that human well being must be based on a growing supply of consumer goods.

Finally on neo-liberalism, we need note that the problem is not the use of markets per se, it is the fundamentalist and utopian philosophy that markets must be used wherever possible and that market outcomes can substitute for ethical decisions.

So what would a new philosophy look like?

In my book Beyond Right and Left I attempt to sketch this out. I argue that we need a synthesis of principles drawn from some of the world's major philosophies. I believe we can forge a new kind of common sense, a new hegemony on this basis.

At the heart of an alterative is the recognition of the inter-connectedness between what we used to call the economy and the environment. Sustainability is a fundamental concept and measure. This is a concept that breaks not only with neo liberalism but also with the economic assumptions of traditional socialist ideas. It involves rejecting assumptions of endless material progress. It involves supporting the concept of 'enough' and 'sufficient', not 'more and more'.

So my first point is about the deprivation model versus the sustainability model. Recently the Australian Bureau of Statistics reported that, over a 12 month period, due to a money shortage, 13% of Australians said that they had gone without meals or had been unable to heat their home.

As against that, on a longer time frame, real incomes in Australia have trebled in the last 50 years. Many, many working Australians enjoy a lifestyle undreamt of by their parents. Four wheel drives, home entertainment systems, overseas holidays. My point is not to brush poverty under the carpet but to ask: if our vision assumes that deprivation is central, then problems arise. The first is that the emphasis seems to be misplaced and does not accord with central facts. Second, in political terms, by emphasizing material deprivation, we are addressing the needs of a minority and risk say little to a much bigger group whose support is vital for social change.

This relates to my second main point which is about the need to assert the common good. For too long progressives have had a love affair with diversity. We valued the differences between people. We formed movements based on particular constituencies. Diversity is not bad principle at all, but taken on its own its application in practice has been negative. It fed the celebration of individualism. It meant that we didn't search for the commonalities, the common interests. In many ways it meant that progressive were simply a patchwork of special interest groups each pushing their own barrow and saying little about common interests.

Both the economic collapse and the climate crisis emphasise our actual common interests. There is hardly an individual solution to either. Neo liberalism assumes that choices and competition can be constructed -- but in the case of the environmental crisis, we have only one planet, we cannot choose another. We have only one atmosphere in which to breathe and one climate to sustain us. Given that growth will be constrained by the planet's limits we should talk about a more equal sharing of limited wealth, not endless expansion. In practice, a more equal sharing of wealth means vast improvements to the shared infrastructure of society, its common assets such as a health care, system, transport, education, energy and so on.

This relates to my third point, that we need to assert the goals of social equality. The economic crisis has spotlighted the grotesque wealth inequalities which exist in this society. Whether corporate bonuses of tens of millions of dollars are paid to competent or incompetent managers, the sums are immoral. But this is not the central point. The real reason we must have equality at the centre of our vision is that business will try to impose its own solutions to the economic crisis. It obviously wants to get back on track and its solutions will take little heed of social inequalities. In fact they will be predicated on them., More than this, in the years to come, as the climate emergency grows, corporate Australia will begin to act aggressively to solve it, because ultimately it wants to survive too. The solutions which it will promote, as so often in the past, will entrench inequality. The key social consequence of the climate crisis is that energy will cost far, far more than it ever has in the past. This means the costs of all goods and services will rise, in some cases radically. Ordinary people will bear a disproportionate cost unless social equality is at the heart of a climate response.

Finally, we need a new kind of movement based on this set of progressive values.

In terms of a movement, we need more coherence and co-operation across NGOs, trade unions, environment, welfare and church groups. But we need more than simple organisational efficiency. We need to work towards the inspiration of a new grass roots movement of people that goes beyond these lobby groups and their interests. In my lifetime, many activist causes have been transformed into institutionalised groups whose faces are turned to the government, not to the public at large. This development was largely inevitable but now the circumstances and the possibilities are changing. Rather than seeing mass action and public pressure as a small part of a wider lobbying effort, the progressive movements need a new orientation which sees building a mass movement as a real priority. In recent times the closest we have come to this is Your Rights at Work campaign. Unions had no chance of winning through lobbying so they began to organise both in an old familiar way and in new ways. Among the climate groups, a similar thing will hopefully occur. I may be old fashioned but a key thing for any movement to make an impact is its ability to mobilise in the community, and come into the streets in large numbers.

The key to this movement is a new set of shared values which are already present in embryo, are based on:

-- sustainability and conservation

- social equality;

- a common good;

These values sound easy to adopt but in practice, differences and disagreements will surface within and between the progressive movements themselves. The phrase one hears more frequently these days is about the fault line between greens and browns. Developing a vision that can inspire both activists and a wider circle of supporters will not be easy but it will help to resolve the fault line issues. The sooner we begin this process the better.