Afterword

In the papers collected here, I have described and critically assessed various stages of the rise and decline of neoliberalism, beginning in the 1980s. In this afterword, I offer some brief updates.

On Chapter 1 White trash of Asia?: The dire warnings of the disaster that awaited us if we continued on our old path were a major driver of reform. Forty years after the ‘White trash of Asia’ scare, our regional neighbours have become much richer and Australia’s share of regional income much smaller. We have also become a lot less white (on average) than we were then. Yet, none of the dire consequences predicted for us have come to pass.

On Chapter 2 The evolution of neoliberalism: For anyone who was not there at the time, it is hard to recapture the urgency and enthusiasm with which the neoliberal challenge to the economic institutions of mid-20th century Australia were greeted, at least by the majority of the political class. Looking back from the perspective of the present, the sense of disappointed hopes is palpable.

On Chapter 3 Neoliberalism in Australia: Those hopes were reflected in the title of my 1996 work Great Expectations. The focus on tariff protection in that book is a reminder that some of the issues that animated debate in the 20th century have become largely irrelevant with changes in economic structures. The industrial economy of the 20th century, with manufacturing at its core, has been replaced by an economy in which information services are central. With or without tariff reform, the decline of manufacturing in Australia was inevitable.

On Chapter 4 Privatisation and nationalisation in the 21st century: Among the failures of neoliberalism, privatisation has been the most striking. As I write this afterword, the New South Wales parliament has just passed legislation constitutionally enshrining the public ownership of Sydney Water. This is, admittedly, a piece of political theatre, since any prospect of privatisation has disappeared from the agenda. Nevertheless, it is indicative of the deep disrepute into which this policy has fallen. More substantively, we have seen the re-entry of public ownership in telecommunications with the National Broadband Network (NBN), and in electricity generation with the re-establishment of the State Electricity Commission of Victoria and similar moves in other states. Ideas like ‘asset recycling’ and BOOT (Build, Own, Operate and Transfer) have been thoroughly discredited.

On Chapter 5 Looking back on micro-economic reform: It is hard to recall now, but the term micro-economic reform was, when it was coined, an allusion to the then popular idea of supply-side economics. The point was to shift the focus of the economic debate away from macro-economic concerns about unemployment and inflation (demand-side economics) and towards enhancing the productivity of the economy by winding back government intervention. My restating of the view that macro-economic success (or failure) yielded larger and more sustained benefits (or costs) than micro-economic reform was largely ignored at the time. However, since the GFC, and even more since the advent of COVID-19, macro-economic issues have returned to centre stage. It seems unlikely that this will change any time soon.

On Chapter 6 What have we learned from the Global Financial Crisis?: As I argued in Zombie Economics, successful political ideologies have a life cycle of their own. They are born as fresh and exciting challenges to a failed status quo, then rise to dominate the debate before becoming ‘common sense’ conventional wisdom, just like the older ideas they displaced. Eventually, changes in conditions and weaknesses that have been overlooked prove fatal. But, even after death, they shamble on in zombie form. The lessons of the GFC are still sinking in. However, complete acceptance of those lessons may have to wait until policymakers whose ideas were fully formed before the crisis have departed from the scene.

On Chapter 7 The lost golden age of productivity growth?: The idea of a ‘1990s productivity miracle’ has been forgotten by most. Nevertheless, debates over productivity continue to be plagued by measurement problems. The shift to remote work provides an important example. Reductions in commuting time represent an important increase in productivity, considered in economic terms. Yet, statistical measures of working hours do not include commuting times, so these gains are not measured.

On Chapter 8 Financial markets: masters or servants?: The most striking development is the way in which we think about the financial sector. In the 1980s and 1990s, financial sector operators were routinely described as the ‘Masters of the Universe’, bringing their power to bear to force irresponsible governments into fiscal probity. Now they are at best a necessary evil, too enmeshed in the system to be dispensed with but continuously creating crises of one kind or another.

On Chapter 9 Basic or universal? Pathways for a universal basic income and Chapter 10 The case for a four-day standard working week: The experience of the pandemic has made it clear that the ways we have done things during the 40 years of neoliberalism are not the inevitable result of objective needs and can be changed radically if we so choose. We have made some marginal steps towards a livable income guarantee with the first increases in the real value of unemployment benefits since the 1990s. Nevertheless, the idea remains on the margins of the policy debate. By contrast, interest in a four-day working week is growing all the time. It seems likely that a shorter standard working week will become common over the next few years. It could become a legal norm in the next decade or so.

***

The era of neoliberalism is over, but it is too early to say what will replace it. Both utopian and apocalyptic futures seem possible. My hope is that the work presented here will make a small difference in favour of utopia.