Academic journal article Social Alternatives

The 'New Right' Were Wrong

Academic journal article Social Alternatives

The 'New Right' Were Wrong

Article excerpt

This article assesses the legacy of the 'new right'. It argues that an array of economic and social problems followed from the adoption of neoliberalism. These problems include increased speculation, growing debt and increased vulnerability to economic crisis, such as that which developed in 2008-9. Structural imbalances in Australia also result from the neglect of investment in the public sphere and the over-reliance on minerals extraction. The outcomes of the experiment with neoliberalism include growing environmental problems, workplace stresses and widening disparities in the distribution of income and wealth. This array of issues presents a major challenge to those who seek now, in the midst of the current economic crisis, to develop a more progressive political economic strategy for the future.

In 1982, this journal published an article called 'The New Right Are Wrong' (Stilwell, 1982). Twenty seven years later, it is pertinent to revisit the experience of the 'new right' and the neoliberal policies its supporters have promoted. It is particularly pertinent to do so at a time of global financial crisis. The causes of the crisis are complex but have been widely interpreted as a product of over-reliance on unregulated markets. So, has neoliberalism failed? Were the 'new right' wrong?

The term 'new right' warrants clarification. It came to be widely used in the 1970s and 1980s as the critics of Keynesian economic policies and the welfare state mobilised for a counter attack. Intellectuals of libertarian, free-market orientation joined forces with corporate business interests, forming an array of influential 'think tanks' and influencing politicians such as Margaret Thatcher in the UK and Ronald Reagan in the USA. In Australia the influence was a little more muted but came to be expressed in the embrace of 'economic rationalism' by all the major political parties and the economic policy bureaucracies (Stilwell, 1989). According to the dominant rhetoric, 'small government' was the goal and more free rein had to be given to market forces. Hence privatisation, deregulation, trade liberalisation and closer integration into global capitalism. This is the neoliberal policy thrust that Kevin Rudd has recently described as leading to 'extreme capitalism'.

One may readily concede the significant economic successes in the last quarter century, although the causal connections with neoliberal policies continue to be contested. After 'the recession we had to have' ended in 1992, a long boom lasted for sixteen years in Australia, as in many other capitalist nations. Volumes and values of goods produced and consumed rose relentlessly. Newspaper articles heralding 'the triumph of capitalism' regularly appeared, particularly following the demise of the former USSR.

The aggregate economic statistics for economic growth certainly looked impressive. However, what had developed was, and is, a distinctively consumerist capitalism, with a strong emphasis on the acquisition of economic assets and the transient pleasures of 'retail therapy'. It has not produced a more contented society. A growing volume of evidence, some of which was surveyed in an earlier article in this journal, shows that there is no positive correlation between rising incomes consumption and happiness (Hamilton and Denniss, 2005; Stilwell and Jordan, 2007b; Oliver 2008). Moreover, underpinning the impressive economic aggregates has been an array of growing structural problems.

It is pertinent to review these structural problems that have led us to the current impasse. A political economic perspective indicates some significant links between them and the neoliberal policy agenda pursued by successive governments. Important differences have existed between Labor and Liberal-National Coalition governments, of course, but there have been significant areas of commonality. The scorecard is deeply problematic - on at least eight counts, as follows. …

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