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October 31, 2005

The culture war and moral politics

The following is an excerpt from Chapter 5 of "Beyond Right and Left: New Politics and the Culture War" (Allen & Unwin, Sydney, 2005).

In early 2004, the Prime Minister, John Howard, sparked a brief but intense national debate about the values taught in public and private schools. Parents were increasingly sending their children to private schools because, he said, ‘they feel that government schools have become too politically correct and too values-neutral’. The acting Education Minister, Peter McGauran joined in, adding that too many government schools were ‘hostile or apathetic to Australian heritage and values’. Treasurer Peter Costello backed his leader. Parents turned to private schools, he said, because they delivered hard work, achievement by effort, respect for other people and strong academic standards.

At first glance these comments seem oddly misplaced. The public-private divide in education was perceived as a weak point for John Howard’s coalition. In 2004 his government had given $4.7 billion to private schools, including some of the nation’s most elite, doubling the $1.9 billion it gave when first elected in 1996. Moreover, school education is largely a responsibility of the states, not the federal government.

Why then was he intervening? His remarks made sense on two levels and they give an insight into how a new dimension has entered Australian politics. In the short term, the values-in-education issue was good politics. Said one commentator: ‘[Howard] wanted Labor to respond by engaging him on that issue because by doing so he would turn the debate on education (on which he is weak) into a debate about political correctness (on which he is strong). The unions and others bit hard….[Mark Latham] refused to engage the debate on Howard’s terms. He knows that most people in his electorate agree with Howard.’

In the longer term, the values issue was part of a broader strategy. A perceptive editorial in The Age commented that it was difficult to discern any real difference between and state and private schools. It added, ‘This is all about Mr Howard’s view that there is an ongoing culture war. It is not that schools are values neutral but rather that he does not like the values taught in schools – public and private.’

In the short term, the culture war is about shaping and mobilising certain values in the community in order to win elections. In particular it is about dividing your opponents on the basis of issues about values. A revealing indication of this came after Labor’s defeat at the 2001 election, Paul Kelly of The Australian had predicted that Howard ‘is going to focus on social policy this term and set out to smash the post-Whitlam political alliance between the working class and the tertiary educated Left that defines modern Labor … [Howard] senses that the 30 year alliance of the Australian Left is collapsing because of its fundamental contradictions’. Kelly rejected the idea that this strategy was merely about ‘wedge politics’ to win elections. Instead it was about carving out a new policy direction on social issues which had been the preserve of the Left for many years. No doubt both statements are true.

But the culture war is also about giving the Liberal government a moral legitimacy. Just a couple of days after Howard’s comments about values and education one of the most ideological members in the government, Tony Abbott, attacked the ‘chattering classes’ and the ‘politically correct establishment’ at a conference of Young Liberals. To most of its critics ‘the Howard Government is not just mistaken but morally illegitimate,’ he said. This taint of moral illegitimacy worried Abbott, particularly in an election year. He responded that ‘moral courage is doing what’s right when people who should know better declare you’re wrong’. The Howard government had demonstrated such courage on tax reform, East Timor, work for the dole and stopping refugee boats and joining the war on Iraq. On Iraq he noted that the government ‘sent Australian forces into action in the teeth of public opinion’ because it was the right thing to do. Abbott conclude his moral defence of the Howard Government by arguing that ‘it’s the Government’s participation in the ‘culture wars’ which has most put out its habitual critics. Especially in an election year, the moral case for the Howard Government ought to be made … because the best government since Bob Menzies deserves a fair trial.’

It’s true that government sometimes get public respect when they are perceived to be doing what’s right, rather than what’s advantageous. There is a new hunger what is called ‘conviction politics’. But this situation marks a change in the way governments and oppositions conduct political discourse. It’s rare for politicians to openly debate their success in terms of morality. Most politicians conceive of government in terms of the material benefits, resources and policies it produces, rather than the shaping of culture and values.

In the 2004 federal election, ‘culture war’ and values issues were present but not as sharply posed as in the 2001 election where security and border protection were vital after the September 11 attack and the ‘Tampa crisis’ over the arrival of asylum seekers. But values issues were present in the choice by the Howard Government to campaign on ‘trust’. The strength of this powerful word was that it was capable of meaning both trust in the economic management of the Howard Government (and lack of trust with the untested Labor leader, Mark Latham) but also capturing a less focussed pubic desire for this quality in daily life.

The culture war continued after the election. In January 2005 Tony Abbott talked about the fourth term of the government. He signalled that the Howard government would increasingly set an agenda on issues that were once the home territory of the Left. It would do this by changing the ‘pessimistic and narrow minded aspects of Australian conservatism.’

Fear of Asia, mistrust of difference, obsessive concern with whether people are getting more than their share are much less part of our national make-up than they were. Modern Australian conservatives seek allies among indigenous people and take pride in their achievements. They are no less committed to a sustainable environment than the green movement, just more practical and realistic about achieving it. They no longer feel threatened by diversity.

Critics often described the Right’s campaign on values as a ‘return the 1950s’, as a desire to return of women to traditional roles and to roll back the acceptance of cultural diversity and the gains of multiculturalism. While the Right does capitalise on such sentimental desires to return to a supposedly uncomplicated past, this ‘return-to-the-past’ analysis seriously underestimates what is going on.

Abbott’s statements reflect a flexible and confident conservatism which looks to the future as it adapts and reframes issues which were once solely part of the Left’s agenda. This can be seen especially in areas such as indigenous policy and social welfare. Genuine return-to-the-past issues such as abolishing abortion rights, are not likely to get anywhere given wide pro-choice sentiment in Australia and the Liberal Party itself.

Such an analysis is anotehr example of the way that the Left has consistently underestimated the Right’s intelligence and flexibility. Rather than mindlessly wanting to drag Australia back to the 1950s, the thinkers of the Right are addressing a series of very real and topical problems felt by many ordinary Australians which the Left either cannot see or in some cases refuses to recognise.

To explain. Over the last 30 years two upheavals occurred in Australia. One was that caused by liberal economics, the other was a libertarian cultural revolution. In the former, the working lives of people changed, respected institutions, both public and private were transformed and economic efficiency became the new measure of value. In the libertarian cultural revolution the role of men and women changed, the family loosened and a more culturally diverse national identity emerged.

These changes made Australia a more tolerant, diverse society and spurred economic dynamism so that Australians became richer. But with these changes came losses as well as gains. Family life changed and marriage became less secure. Stable identities and expectations of father, mother, husband, wife, and children changed. Assumptions based on an Anglo-Celtic population with shared values could no longer be made. The history of British colonisation in Australia was reassessed and a simple kind of pride in the past became less possible.

To many people Australia is a less secure place. Sociologist Michael Pusey who studied ‘middle Australia’ in the late 1990s found widespread ‘moral anxiety’. Security is unfamiliar territory to the Left. The Left of politics conceives of security as economic security. It means having a job or decent income. It means reliable government services in health, education and elsewhere. This captures one aspect of security but misses another dimension altogether. People worry about their job security but also about quite different, less tangible things. One is cultural identity. In the case of the ‘old Australians’, fears about loss of identity rate very highly and can be mobilised for political gain. In the 2001 election the Howard Government did precisely this by placing ‘border protection’ as a central issue on the political agenda. The desire for security also drives ‘law and order’ campaigns for tougher jail sentences. The Left regards these as phony issues and sees only a desire to punish rather than a desire for security. Yet in its time the Left has connected with and reconfigured a public desire for security and for law and order. One of the main victories of the women’s movement was to massively transform the operation of the criminal law on domestic violence, violence against children and sexual assault. This was possible because the women’s movement had won a ‘culture war’ and had changed social attitudes and values on these question. (This model of long term grass roots activism combined with legal and policy reform should be applied to other culture war issues.)

But too often issues of security are left to the Right and are automatically discounted by the Left. Grappling with them means entering a territory in which both legitimate and fanciful fears lie in wait. But skirting this territory is no longer an option in a world where globalisation is disrupting established patterns at home, at work and in the national culture. Globalisation has been seen as primarily an economic event, but its cultural impact is arguably more dramatic.

In the face of cultural insecurity Labor and the Left has not found a way of articulating their values into a coherent and convincing popular stance. This is not a problem of ‘packaging’ but a much deeper problem, It is a problem of whether to recognise cultural fears as legitimate and as facts. It is also a philosophical confusion and incoherence about which values and which ideas constitute a progressive standpoint in Australia today. To win a culture war, a political force must exercise intellectual and moral leadership, but this is impossible without clarity on underlying issues.

The culture war – declared by the Right on the Left – is a central feature of modern politics in the US and Australia. While the clash between labour and capital was largely about material things – wages, jobs, and a positive role of the state, the culture war is about post-material concerns of values and identity. In fact both are about similar things (such as education and public schools) but expressed in different ways. And ‘post-material’ issues have actually have been part of human existence since the beginning of time: each clan had an identity and values as well as being engaged in a struggle for material survival. What is occurring now are the political consequences of the gradual dissolution of working class identity based around male breadwinners often doing hard physical labour and organised in trade unions.

Above all the culture war is about mobilising political support through articulating issues which strike a chord with many people. In a sense that is what all political rhetoric is crafted to do. But the Right’s method of fighting the culture war is about framing the issues of politics as moral politics and setting this agenda in such as way that you isolate and divide your opponents. Hence the companion phrase to ‘culture war’ is ‘wedge politics’. The immediate purpose of cultural politics is to drive a wedge which splits the supporters of your opponent and draws one section nearer to you.

But the culture war is more than a way of achieving short term advantage. It’s about deeply held but slippery concepts such as social cohesion in a multicultural society; it is about ‘family values’; it is about the national identity of Australia and who counts as ‘Australian’; it is about relations between the indigenous people of Australia and the non-indigenous settlers and it is about Western values. Above all, the culture war is about ideas of right and wrong, both in society at large and on the personal level.

In contrast to politics seen in rationalist terms, the culture war is about emotion and how people feel. And in case such matters are regarded as vague and insubstantial remember that ‘how people feel’ covers a range of emotions and includes both passionate love (eg. for children) and intense hatred (eg. against other ethnic groups). To this extent playing politics as a culture war means playing with some of the most powerful ingredients in human nature.

To a significant degree the culture war is the backlash of the Right to the rise of feminism, multiculturalism and libertarian social attitudes of the 1960s and 1970s. When these ideas emerged they recast the political and cultural landscape and helped create a better society. But everything has unintended consequences. Some ideas that still form the basis for a progressive outlook have turned out to be wrong or silly. For example, that moral wrongdoing should be discussed in terms of underlying social problems and not in terms of holding people morally responsible for their actions. But as time went on the inherent weaknesses of such a one-sided idea have emerged. The Left’s flat-footed refusal to recognise them has laid the ground for the Right’s largely successful roll-back on the cultural and values front. (I discuss what this means later in this chapter and in the next two.)

Posted by David at 10:25 AM | Comments (16)

October 11, 2005

The Death of the Old Right: when conservatives become radicals

The following is an excerpt from Chapter 4 of "Beyond Right and Left: New Politics and the Culture War" (Allen & Unwin, Sydney, 2005).

One night about 30 years ago I drove in a battered car with a comrade through the darkened streets of inner Sydney, spray cans at the ready. That night we endlessly painted a slogan on brick walls, fences and the side of factories. The slogan read ‘Stop Work to Stop Fraser’. It was just a few days after the notorious sacking of the Whitlam Labor Government by the Governor-General, Sir John Kerr, and the abrupt installation of the leader of the Liberal Party, Malcolm Fraser, as Prime Minister. The response of the Communist Party, of which I was a member, was to try our hardest to organize a general strike by trade unions to protest the assault on democracy represented by the sacking. Politically, lots of things have changed since then but I don’t regret for one minute trying to help organize that strike.

One of the things that has changed is Malcolm Fraser’s political outlook and therein lies a significant key to understanding the new politics of social change. One of the trade unions which supported the strike was the metalworkers’ union. Recently the same union invited their former foe to address their national conference about the issue of asylum seekers and their detention in detention camps. Trade union delegates interrupted Fraser’s speech with applause several times and after the speech, the metalworkers’ leader, Doug Cameron, commented that Fraser ‘had grown in stature since his period as Prime Minister. He is a true statesman for this country and a great spokesperson for the issue of humanity for all people around this globe.’

The wheel has turned for the former Prime Minister who, for seven years had headed one of the most disliked governments in Australian history. Today Fraser is a changed man. Gone is the bluster and bullying of yesteryear. His government is seen to have failed according to the new orthodoxy of the Liberals and their economic rationalist philosophy. Fraser is in a philosophical no man’s land. He is no longer a reactionary conservative nor is he an economic rationalist. He laments, ‘our generation is without a political philosophy relevant to our time and circumstances. We have a theory of globalization but, baldly stated, it is cold and technical …. We need an idea of how our society will develop and how, in a more global society, people will relate to each other. We need a philosophical framework.’ As we shall see, Fraser’s pin pointing of a crisis of political philosophy is accurate.

The journey that he made beyond the Right is not unique. From 1990 to 1997, another conservative, Robert Manne, edited Australia’s premier right wing intellectual journal, Quadrant. In his time Manne penned many attacks on left wing causes. In 1990 he celebrated the collapse of communism but warned about the ‘fashionable new orthodoxies’ of ‘radical environmentalism, feminism, gay liberationism, multiculturalism and animal liberationism’. But soon after this he began to genuinely re-think his position and that of the magazine in the new post-Cold War world. This lead to deepening disagreement with most of his editorial board and to his highly public resignation from Quadrant. Today Manne supports many causes usually described as left wing. He supports a republic and feminism and he has championed issues concerned with indigenous people. He mounted the most effective attack on the Right’s denial of the ‘stolen generation’ of indigenous children. He has become an outspoken advocate for a more humane policy toward refugees. He now describes himself as someone on the Left and is regularly (and bitterly) attacked by conservative commentators.

Fraser and Manne are two examples of what one writer on the journal Lingua Franca called the diaspora of the ‘ex-cons’ --- conservatives who have cut themselves adrift from the Right. Lingua Franca also focussed on John Gray, professor of European Thought at the London School of Economics. Gray was once a house intellectual for Margaret Thatcher and a darling of the New Right. He wrote a book on John Stuart Mill and another on the theoretical godfather of the New Right, Friedrich Hayek. Of the latter, Hayek himself was effusive in his praise. It was ‘the first survey of my work which not only fully understands but is able to carry on my ideas beyond the point at which I left off’. Today Gray is a savage critic of Hayek and of market-driven globalization which he regards as a form of fundamentalist utopia. Gray’s ideas, which were touched on in the last chapter, will be examined in more detail and represent a new kind of conservatism which has a place in the reconfiguring a new politics beyond Right and Left in the 21st century.

Neo-liberalism is more radical than conservative. Its trajectory is corroding much of the social fabric. Genuine conservatives like Gray therefore become its natural and effective critics.

Another critical voice was that of Charles Kemp, the founder of the oldest think-tank, the Institute of Public Affairs. By 1991 he had had enough of the simplistic nostrums of the economic rationalists. In Quadrant, he warned that the ‘great danger of extreme market philosophies is that they enthrone profit, greed and self-interest. After the horrors of the eighties it is not surprising that the restoration of decent ethical standards is figuring high on the agenda of the nineties.’ His ironically titled article ‘Those Terrible 80 Years?’ points out that the era before market economics had enjoyed full employment, low inflation and a booming economy. By that time both of Kemp’s sons, David and Rod, had rejected their father’s position and become militant economic rationalists. Both became ministers in the Howard Government and the latter spent the 1980s at the head of the institute which his father founded unravelling his father’s work and rebuilding right wing philosophy.

Finally there was the populism of Pauline Hanson and her One Nation Party, not so much a remnant of the Old Right as a new force prompted by its dissolution. Part of her appeal to many country people was her attack on economic rationalism which had closed banks, government offices and railway lines in country towns. One Nation’s rural policy argued that Australia’s competitors ‘have continued to protect their industries and national sovereignties while Australia has exposed itself to deregulation, free trade, globalisation and economic rationalism.’ To One Nation’s constituency (8.4% of voters in 1998), a seamless connection existed between their fear of cultural globalisation and loss of national identity and their fear of economic globalisation and the loss of national sovereignty.

Social liberalism in Australia

The Old Right in Australia was often seen as a single force, labeled ‘conservatism’ but it was actually an amalgam of different political ideas and trends, some of which now oppose the current neo-liberal and neo-conservative hegemony. The great icon of Australian Right, Sir Robert Menzies, for example, supported social justice and the welfare state. The Liberal MP who now holds Menzies’ old parliamentary seat, Petro Georgiou, points out that ‘pro-market purists’ in the modern Liberal Party damn any notion of social justice as a ’Labor plot’ when it was in fact a foundation stone for the Liberal Party. Georgiou cites Menzies’ colleague, Paul Hasluck, who said, ’Although a traditionalist, Menzies was not a conservative in any doctrinal sense … His political thinking was in accord with the liberalism of Alfred Deakin and the liberalism of late nineteenth century England.’

In a similar vein, the former Liberal Party minister Peter Baume, argues that ‘liberals welcomed measures, and continue to welcome measures, which empower people. Free public education empowered young people. Extension of the franchise empowered adults. Home ownership and income support empowered families. Anti-discrimination legislation empowered people otherwise powerless…’ Retired Liberal Party president, John Valder, actively campaigned against the war in Iraq on quintessentially liberal ‘human rights’ grounds while former Liberal cabinet ministers, Fred Chaney and Ian McPhee together with former leader of the coalition, John Hewson, deplore the Howard Government’s xenophobic attitude to race.

People like Petro Georgiou, Peter Baume, Ian McPhee and others were the first victims of the neo-liberal takeover of the Liberal Party in the 1980s. But they are more than this. The liberal tradition which they inherited had been deeply affected by ‘social liberalism’, a radical variant of liberal thought at the turn of the last century. Deeply influential in Australia, especially at the time of the federation of colonies, social liberalism became part of the conservative amalgam and its values and achievements are being studied anew by researchers such as Marian Sawer. Her work and that of others emphasises the gulf between social liberalism and modern neo-liberalism. Advocates of the latter, like Hayek, claim to be the inheritors of the true tradition of liberalism but this can be strongly contested. In my view acknowledging a vital social liberal tradition is important in trying to establish new philosophies beyond Right and Left and I deal with this in the final chapter of this book.

What is social liberalism? It is the name given to an important development of liberal thinking in Britain and in Europe which placed great emphasis on what is called ‘positive liberty’. In the latter half of the nineteenth century social liberals argued that the era of liberalism as a philosophy opposed to the privilege of the aristocratic state had passed. These ‘New Liberals’, as they were then called, believed that there was an important distinction between private and public spheres. In the latter it was possible to speak of a public good and a common interest. They argued that the abstract liberal notion of rights-bearing individuals and freedom of contract could become oppressive. ‘Freedom of contract’ for example, meant one-sided and unequal bargains between employers and workers. ‘The social liberals,’ notes Sawer, ‘did not seek the abolition of the market economy but believed that it must be subordinated to the democratic state which put the welfare of its citizens before the sanctity of contract and the rights of property.’ The ‘New Liberalism’ was influential in Britain and elsewhere well into the twentieth century. Discrediting it and seizing the mantle of liberalism was one of Hayek’s main motivations (discussed in Chapter 3).

In Australia the popularization of these ideas influenced Alfred Deakin, who was Prime Minister of Australia in the decade after federation and instituted a number of reforms with the support of the young Labor Party. This early Left-Right alliance between labourism and liberalism was vital in defining Australia as one of the most progressive democracies in the first half of the twentieth century.

The reforms included the establishment of a system of industrial arbitration, age pensions and, eventually, the vote for (white) women. In this context social liberalism was expressed specifically in Justice Higgins’ 1906 famous ‘Harvester’ judgement. This legislated a minimum wage based, not on market forces, but on a conception of workers as ‘human beings living in civilised communities’. (Overturning the Harvester judgement was one of the early goals enunciated by John Howard who said in 1983: ‘The time has come when we have to turn Mr Justice Higgins on his head’. ) A similar commitment to fairness and of the obligations of a state to its citizens was behind the introduction of old age pensions and what grew into the welfare state, said Sawer. As well, she points out, social liberalism provided an obvious framework for early feminist ideas and activism. Because it helped set a intellectual and practical agenda in Australia’s formative years, social liberalism was a major element in the ideological make up of both the non- Labor and Labor parties. As Sawer said, it was translated into the Australian notion of the ‘fair go’ .

Posted by David at 11:22 PM | Comments (6)

October 03, 2005

The triumph of an idea: how neo-liberalism succeeded

The following is an excerpt from Chapter 3 of "Beyond Right and Left: New Politics and the Culture War" (Allen & Unwin, Sydney, 2005).

The power of ideas to shape societies is profound although we are largely unaware of their effect in our day to day lives. Underneath the common sense of an epoch and the slogans of its political parties are buried sets of philosophical ideas and values. These new ideas often begin as the property of a small group which then filter out into the surrounding society. If they find fertile ground they can spread and transform societies in a relatively rapid time. This has occurred with many new religious ideas, such as Christianity and it also occurred with the ideas of the socialists in the nineteenth century. The ideas of democracy, equality and reason fermented in French society before they burst out in 1789 in a revolution which not only transformed France but Europe and beyond.

A more modest revolution has occurred in the last 20 years. Like similar changes it was preceded by a ferment of ideas that were originally the property of a small group but then struck a chord and changed society.

Today our world is not just made by markets but by ‘free markets’ a phrase which operates as a code word for the triumph of a politico-philosophical trend known by various names but increasingly by the phrase neo-liberalism. In popular Australian parlance it’s ‘economic rationalism’. Other critics, like George Soros, prefer the term ‘market fundamentalism’. I prefer the term neo-liberalism because it conveys the profoundly important philosophical ideas which underlie what are often seen as merely economic policies. Conversely, to oppose the logic of neo-liberalism requires a different set of philosophical ideas and values, not just different policies or a set of slogans.

Neo-liberalism stands for a range of ideas but the most popular expression of its best known stances are:

* individual choice expressed in markets is better in principle and gives better outcomes than any other;
* government regulation of private business should be abolished in favour of self-regulation and greater competition;
* the public sector should be commercialised and state owned enterprises sold to shareholders;
* tax should be as low as possible, with a user-pays principle for many government services;
* barriers to trade between nations should eliminated;
* the market principle should be applied far beyond the economy to all public goods – education, health, the environment etc.

There is more to this than meets the eye, including certain deeper assumptions about human nature. But 25 years ago the small group of economists and philosophers who held these views were regarded as rather eccentric even by the mainstream Right. They met in small discussion groups and debated each other in obscure magazines and economic journals. They dreamt of a world reshaped by these ideas. We now live in this world.

Looked at coolly, this transformation is an inspiring testament to the power of ideas to shape society. It can give us hope that other ideas might also reshape the world and fashion it to more human ends. But first, the ideas of neo-liberalism need to be understood. In fact the success of neo-liberalism contains many lessons for those who oppose its relentless commercial logic. The fact that its critics have understood neither its ideas (including their strengths) nor why they have taken root, means that the emergence of new political philosophies beyond Right and Left continue to be delayed.

Neo-liberal ideas trace their origins to the Scottish economist Adam Smith. Smith’s weighty book The Wealth of Nations is still a reference point and in Britain his name is commemorated by the Adam Smith Institute, a think tank founded in 1977. The glory days of economic liberalism were mid-nineteenth century Britain, still an idealized reference point for modern neo-liberals. But perhaps the key date for us is 1947 when the Austrian economist Friedrich Hayek founded the Mont Pelerin Society. The Society was no secret cabal of conspirators, but a regular forum for discussion by the tiny minority of post-war economic liberals who swam against the tide of opinion which favoured the welfare state and government intervention.

But the tide changed, as it always does. By the late 1960s the ideas of Hayek, and of other economic liberals, such as the US economist, Milton Friedman, had won important ground among academic and professional economists in universities, government and corporations. Global institutions such as the IMF and World Bank had been increasingly staffed by people who described themselves as ’neo-classical economists’. The tide of opinion was slowly but inexorably turning among elite economists, but this was not enough. Their target, the welfare state and government regulation of the economy, was the product of both conservative and social-democratic governments. Both had been pragmatic in their economic theory, adjusting their policy sails to the winds of key constituencies such as farmers, manufacturers, trade unions and exporters. When it finally succeeded the neo-liberal revolution was as much a trampling of an older conservatism as it was the beliefs of socialism. (See Chapter 4).

Two processes opened the door to the storm that was to come in the 1980s and 90s. The first was a series of events in 1971-74 which crystallized problems in managed capitalism. In 1971 after a series of trade deficits attributable to the costly war in Vietnam, US President Nixon removed the US dollar from a system of fixed exchange rates – the dollar floated. In 1973, the largely Arab organization of oil exporters (OPEC) dramatically raised the price of oil to the industrialized countries. As well, for some time, the unusual combination of both inflation and lack of growth (‘stagflation’) had become apparent in industrialized economies. This meant that the Keynsian approaches to managing the economy, supported by both conservatives and non-conservatives, simply did not work. The Keynesian approach to inflation recommended higher interest rates and tightening government spending but these measures would further deepen stagnation and worsen unemployment.

The second process was a quite different phenomenon. It was not an economic crisis but a slow building, deeper social and cultural change. The long boom of the 1950s and 60s in advanced industrial countries had increased material wealth for nearly all their citizens. The expansion and cheapening of the number of consumer goods led to a growing expectation of greater individual choice in satisfying material wants and more importantly, elsewhere. For example, the motor car came within reach of far more people with the consequent decline of state-supported public transport. Personal choice for women was widened by the widespread availability of the contraceptive pill. All of this generated a climate in which individuals chafed at the restraints of a narrow minded moral uniformity favoured by church and state. The result was the cultural and political revolt of the 1960s which saw a blossoming of libertarianism.

This revolt has been largely claimed by the Left but its effects were far deeper and complex. While the conservative moral order enforced by government and churches was flouted it was only a matter of time before all sorts of other regulatory, restrictive policies, including those on businesses small and large, came under fire. When the 20 year olds who asked ‘why should a government censor films’ turned 30, they were open to neo-liberalism’s questions: ‘Why should a government run a national bank, an airline or a phone company?’ As one commentator on Thatcherism notes, on moral issues the British New Right worked against the grain of the 1960s but they worked with the grain on economy-state issues. ‘Many of the Thatcherites viewed their politics as a crusade against the pettiness, restrictiveness, traditionalism and inertia that characterised the post-war settlement’, argues Richard Cockett. Such were also the terms of Left libertarianism of the 1960s.

Hayek: Prophet of the free market

Any understanding of neo-liberalism must grapple with the complex ideas of the Friedrich Hayek, because they are foundational to the revival of neo-liberal ideas which have swept the world. It is Hayek’s vast intellectual output and theoretical system which gave the revival its resilience and depth. His vision and ideas helped give the sustaining confidence needed by the small radical liberal movement in its years before triumph. What follows in this chapter is a description and discussion of Hayek’s key ideas.

Hayek was born in Vienna in 1899 and took degrees in law and politics. But economic theory dominated his early work and in the 1930s, while he taught at the London School of Economics, he clashed with John Maynard Keynes, at that stage making little impact. The disagreement was over the correct analysis of the Great Depression and prescriptions for avoiding such calamities in future. In 1950 he moved to the University of Chicago, the intellectual centre for the development of neo-liberal economic and social theories and where a colleague was Milton Friedman.

Hayek was not just an economist but an evangelist who was prepared to swim against the tide. To most people World War Two had demonstrated the enormous advantages of the state in co-ordinating workers and industrialists in a single victorious focus. By 1944 planning for post-war reconstruction assumed large state sponsored projects of education, health, national development. At precisely this most unlikely of times Hayek wrote his best known polemic in favour of liberty and against the state and all its works. The Road to Serfdom compared state socialism, economic planning, Nazism, communism, social liberalism and concluded that they were all very similar under the skin because they shared an opposition to the free market order. It was dedicated ‘To the socialists of all parties’.

A remarkable quality of The Road to Serfdom is its absolutism. Not only is central control and planning an absolute evil but there is a rapid and slippery slope between government planning of any form and total central control. He was also blithely unaware of (or dismissive of) the realities faced by many ordinary people.

In a competitive society it is no slight to a person, no offence to his dignity, to be told by any particular firm that it has no need for his services, or that it cannot offer him a better job. It is true that in a period of prolonged mass unemployment the effect on many may be similar. But there are other and better methods to prevent that scourge than central direction.

At first glance Hayek’s book was a polemic against socialism and fitted the rapidly growing anti-communism that dominated the Cold War. But as his dedication made clear, Hayek was highly critical of anti-Communists who believed in a strong state. He was far from an ivory-tower dwelling academic. As an intellectual engaged in combat, he not only helped found the Mont Pelerin Society in 1947, but also the Institute for Economic Affairs in Britain in 1957 which helped fashion what the world came to know as Thatcherism.

As the years went by it became clearer that he represented a strand within the Right which was quite different from simple anti-communism and mainstream conservatism (which had merged with social liberalism). His aim was to revive a minority strand within liberalism which he believed had been largely taken over by a rationalistic, Continental liberalism which aimed to guarantee a liberal society more through governments than markets. Hayek’s liberalism, which drew on Adam Smith and philosopher David Hume, was grounded in a view which argued that liberal institutions (such as the market) evolved slowly and spontaneously and were justified by their success, not by government. In Hayek’s version of liberalism there was little room for government modification of market forces in the name of social cohesion. In his speech accepting the Nobel prize for economics in 1974, Hayek congratulated the selection committee for their willingness to award the prize to someone ‘whose views are as unfashionable as mine are’.

Hayek believed fashions changed through the central role of ideas and intellectuals and this had long been part of his crusade. In 1960, which many thought was the high noon of triumphant and prosperous capitalism, Hayek worried that ‘the propertied class, now almost exclusively a business group, lacks intellectual leadership and even a coherent and defensible philosophy of life’.

Hayek’s self-appointed task was to provide this intellectual leadership and a coherent and defensible philosophy of life. He did this by conceiving an intellectual system covering economics, law, politics, social evolution and morality. This system was developed from first principles, in this case Hayek’s particular concept of liberty. This gives his ideas the attractive element of coherence but like so many ideological thinkers, including many Marxists, a foundation of simple first principles also opened the way to fundamentalism. Hayek, however, had a number of genuine insights which it would be unwise to ignore. In any case, those repelled by the market fundamentalism of his followers need to understand the intellectual challenge he threw down to his fellow liberals, to conservatives and to socialists.

Posted by David at 10:39 PM | Comments (1)