Introduction

Since we emerged from the lockdown phase of the COVID-19 pandemic that began in 2020, it is clear that something important has changed. Old certitudes about work and life, government and politics, and the way the economy works were being questioned even before the pandemic. Now they appear to have collapsed altogether.

The contrast between our current situation and that at the turn of the 21st century is startling. As the sun rose on New Year’s Day 2000 and it became apparent that the much-predicted ‘Millennium Bug’ had failed to bite, the world seemed to have entered a new era of capitalist prosperity. That new era had been prophesied in numerous writings, ranging from academic works such as Francis Fukuyama’s The End of History (1992) to airport bestsellers like Thomas Friedman’s The Lexus and the Olive Tree (1999).

Many terms have been used to describe the set of ideas and policies that held sway at the beginning of the 21st century.

In most cases, these terms were initially positive or neutral, but they became primarily pejorative over time. This reflects the fact that critics of a ruling ideology need terms to describe it. By contrast, those who accept and implement such an ideology rarely see it as such.

Terms used to describe the newly dominant ideology included ‘economic rationalism’, the ‘Washington Consensus’ and ‘market liberalism’. Political and economic commentators finally settled on ‘neoliberalism’.

As is usual with any widely invoked political concept (for example, ‘democracy’ or ‘socialism’), the term neoliberalism has been used and misused in many different ways. The range of different uses of ‘neoliberalism’ has led some (primarily supporters of neoliberal ideas) to suggest that the term is nothing more than a slur, applicable to anything left-wingers dislike.

But it is still true, as US Supreme Court Justice Potter Stewart famously said of obscenity, that even if we can’t define neoliberalism precisely, we can recognise it when we see it. Properly understood, it is the ideological underpinning of the era of financialised capitalism that emerged from the economic crises of the early 1970s and remained dominant for the rest of the 20th century.

The central idea of neoliberalism was that markets, particularly financial markets, generally outperform governments in the allocation of resources and investments. Neoliberalism came in a variety of forms, reflecting the variety of liberalism itself, but was different from preceding forms of liberalism because of the need to respond to the successes and failures of social democracy in the second half of the 20th century. In one form or another, neoliberalism became the unquestioned basis for the thinking of both centre-right and centre-left parties around the world.

My own academic career has coincided almost exactly with the era of neoliberalism. My first journal article was published in 1979, the year Margaret Thatcher became prime minister of the United Kingdom (UK) and inaugurated the program of radical reform that became known as Thatcherism. I began work on this retrospective volume in late 2022, just after Liz Truss ended her brief and disastrous stint in the same position. Her sole accomplishment in that period was to demonstrate that a Thatcherite policy program was no longer acceptable, even to financial markets.

Between those endpoints, neoliberalism surged around the world, taking different forms in different countries and reaching a triumphal high point in the 1990s. Successive financial disasters, culminating in the Global Financial Crisis (GFC) of 2008, discredited the central ideas underlying neoliberalism. However, these ideas remained part of the mental equipment of the political and policymaking classes. As soon as the immediate crisis was over, neoliberalism re-emerged in zombie form,¹ driving disastrous policies of austerity that produced a decade of miserable economic performance throughout the capitalist world.

It is only in the last five years or so that new thinking has begun to fill the gap left by the failure of neoliberalism. Ideas like universal basic income, a four-day working week and autonomous remote work have moved from the margins to the centre of the policy debate. The movement towards gender equity has extended to encompass measures including parental leave and expanded provision of childcare. Privatisation has been replaced by an expansion of public enterprise in a variety of fields. Serious efforts are finally being made to bring global financial markets under control.

Over the 40 years of neoliberalism, I have written hundreds of journal articles, book chapters and opinion pieces presenting a critical view of the dominant ideology and, more recently, advocating alternatives. In this book, I have picked a representative selection of these, running from the 1990s to the last couple of years.

The book is organised as follows.

Chapter 1, originally published in 1987, was my first venture into the public debate over productivity and economic growth. It was published in the Current Affairs Bulletin, a peer-reviewed journal produced by the Workers Educational Association. The journal made valuable contributions to Australian public debate from its inception in 1947 until 1998. The gap created by its departure has been filled by online publications, most notably The Conversation.

The article was a response to a string of jeremiads put out by supporters of what came to be known as ‘micro-economic reform’, predicting economic disaster if the policies they proposed were not implemented. The supposed poor performance of the Australian economy relative to that of Japan was of particular concern.

My central observation, repeated in different forms in much of my subsequent work, was that the supposed decline of Australia’s relative living standards was largely a statistical illusion, and that the apocalyptic scenarios in which Australians were doomed to become the ‘white trash of Asia’² were unlikely to eventuate.

Rereading the article after nearly 40 years, I would change almost nothing. I have deleted two figures that I could no longer reproduce from the available data and that added nothing to the analysis.

Chapter 2 is a retrospective, examining the rise and decline of neoliberalism from the 1970s to the COVID-19 pandemic. I present a ‘three-party’ model, in which the main movements driving contemporary politics are categorised as neoliberal (soft or hard), Trumpist³ and leftist. In conclusion, I discuss the requirements for a successful left response to the crisis and offer some suggestions for a way forward.

Chapter 3, drawn from my 1996 book, Great Expectations, turns the focus back to Australia. I describe the background of Australian neoliberalism (referred to at the time as ‘economic rationalism’ or ‘micro-economic reform’). The growth of the state from the Second World War to the Whitlam government is contrasted with the subsequent retreat under Fraser, Hawke and Keating. The chapter ends with a discussion of the National Competition Policy, which turned out to be the last major instalment of micro-economic reform.

Chapter 4, written for the Committee for Economic Development of Australia and published in their journal Growth, deals with what is arguably the most distinctively neoliberal policy project, that of privatisation. The Thatcher government, in particular, focussed heavily on reversing the growth of public enterprise that had taken place over the course of the 20th century. By 2002, when this chapter was written, the project was running out of steam. The promised benefits of privatisation had not been delivered, and new privatisation proposals were facing increased opposition. My article proposed a revival of the concept of the mixed economy, in which both privatisation and nationalisation were available as policies to achieve an appropriate balance between the public and private sectors. Twenty years later, with large-scale Australian government initiatives in telecommunications and energy infrastructure, including the National Broadband Network (NBN) and public investment in renewable energy, such a policy seems to be emerging.

Chapter 5, first published in The Economic and Labour Relations Review, was notable at the time for treating neoliberal micro-economic reform as a policy agenda with a fixed beginning and end. Most commentators agree that micro-economic reform in Australia began with the floating of the dollar by the Hawke government in 1983. When the chapter was originally published, the dominant assumption was that ‘reform’⁴ was essential and would continue indefinitely. By contrast, I argued that the process had already ended with the introduction of the goods and services tax (GST) in 2000 and that, for the most part, the reform agenda had been exhausted. Over time, this latter point has become conventional wisdom. Calls for a return to ‘reform’ are obligatory in various contexts but are no longer taken seriously by anyone.

The main point of the chapter was that the benefits of reform had been oversold in various respects. Most relevantly to contemporary debates, I stressed the role of unsustainable increases in working hours and work intensity as a driver of the brief and illusory ‘productivity miracle’ of the early 1990s. In the wake of the pandemic lockdowns, issues of this kind are coming to the fore, with the rise of remote work and calls for a four-day standard working week.

Chapter 6, first published in the Australian Economic Review, was written in the aftermath of the GFC and summarised the key arguments of my book, Zombie Economics: How Dead Ideas Still Walk Among Us. I argued that the crisis provided sufficient evidence to reject the dominant models in academic macro-economics and finance theory, as well as policy claims such as the ‘trickle-down’ hypothesis and the case for comprehensive privatisation. In reality, few of these lessons were learned, and much of the policy response to the crisis has been irrelevant or counterproductive. As a result, we have learned some unflattering lessons about the economics profession, including policymakers, commentators, central bankers and academic economists.

In Chapter 7, which is based on a paper presented to a Reserve Bank conference, I return to the topic of productivity growth. By the time the paper was presented in 2011, it was clear that the supposed ‘productivity miracle’ of the 1990s was, at best, a temporary blip, and that all the measured gains had subsequently been lost. By this time, Australians recognised that calls for ‘reform’ and ‘improved productivity’ were little more than code words for ‘work harder with fewer resources, and produce more’. As these calls were increasingly ignored, work intensity declined, and productivity slowed. In further writing, not included in this volume, I made the case that productivity growth in Australia is mainly driven by improvements in information and communications technology (Quiggin 2017; 2018). Since we import most of the associated equipment, technological progress is manifested in improved terms of trade rather than measured multifactor productivity. The main lesson from this analysis is that Australian workers increasingly value work–life balance over increasing material living standards.

Chapter 8, based on an article in a special issue of Politics & Society, deals with the rise of financial markets to dominate the global economy in the era of neoliberalism. I contrast the adulation accorded to the ‘Masters of the Universe’ in the 1990s with the disastrous reality of the Global Financial Crisis and offer a number of suggestions for constraining the size and activity of the financial sector.

Chapters 9 and 10, written as the era of neoliberalism was drawing to a close, look forward rather than backward to possibilities for radical, even utopian change.

Chapter 9 deals with the idea of a universal basic income (UBI) and advocates what has been called a Livable Income Guarantee (Quiggin, Klein, and Henderson 2020). The central idea is to approach a UBI by focussing initially on extending a livable income to larger groups of people. This would be done by raising inadequate benefits like JobSeeker to a livable level and expanding eligibility to support activities such as volunteering. This ‘Basic first’ approach may be contrasted with a ‘Universal first’ approach of making a payment to everyone in the population but setting it at a level insufficient to support a living standard above the poverty line.

Chapter 10 presents arguments for a four-day standard working week. Working arrangements of many kinds were upended by the COVID pandemic. This experience showed that different ways of working were possible, notably including remote work. More broadly, the experience of the pandemic has restarted debates about reducing standard working hours that have been frozen under neoliberalism. Standard working hours fell steadily from 1850 to the 1980s but have been virtually unchanged since then. A four-day week is long overdue.

Bibliography

Dobell, Graeme. 2015. ‘Lee Kuan Yew, Australia and “white trash”’. Australian Journal of International Affairs 69: 363–72.

Friedman, Thomas. 1999. The Lexus and the Olive Tree: Understanding Globalization. New York: Farrar, Strauss and Giroux.

Fukuyama, Francis. 1992. The End of History and the Last Man. New York: The Free Press.

Quiggin, John. 2010. Zombie Economics: How Dead Ideas Still Walk Among Us. Paperback Edition. Princeton: Princeton University Press. doi.org/10.1515/9781400842087.

Quiggin, John. 2017. ‘The Productivity Commission’s Multi-factor Problem’. Inside Story. 31 October 2017. insidestory.org.au/the-productivity-commissions-multi-factor-problem/.

Quiggin, John. 2018. ‘The Not-So-Strange Death of Multifactor Productivity Growth’. Australian Economic Review 51, no. 2: 269–75. doi.org/10.1111/1467-8462.12275.

Quiggin, John, Elise Klein, and Troy Henderson. 2020. ‘Meet the Liveable Income Guarantee: A Budget-ready Proposal That Would Prevent Unemployment Benefits Falling off a Cliff’. The Conversation. 1 October 2020. theconversation.com/meet-the-liveable-income-guarantee-a-budget-ready-proposal-that-would-prevent-unemployment-benefits-falling-off-a-cliff-146990.

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1. 1 My book Zombie Economics: How Dead Ideas Still Walk Among Us (Quiggin 2010) developed this trope, describing the life cycle of zombie ideas, from birth through life and death to reanimation in undead form.

2. 2 As Dobell (2015) observes in relation to the ‘white trash of Asia’ catchphrase, ‘Pinning down great quotes can be an experience as ephemeral and exasperating as hunting the snark.’ Nevertheless, Dobell ultimately attributes the phrase to Lee Kuan Yew, former prime minister of Singapore.

3. 3 I formerly used the term ‘tribalist’, which is unsatisfactory in various ways, as is Piketty’s ‘nativism’. Donald Trump leads and exemplifies the political tendency I am talking about, so ‘Trumpist populism’ seems the best term to describe it.

4. 4 The word ‘reform’ is frequently used with a positive connotation, implicitly assuming that change is beneficial. However, this usage requires some level of agreement on the desirable direction of change. I use it to mean simply ‘a change in form’, without any implication as to the desirability of that change.