Many argue that economic reform is impossible in contemporary Australia. While this is an overstatement, there is no doubt that successive federal governments have struggled on this front. Why this record of failure? A variety of theories have been offered, but most overlook a fundamental point. We have witnessed, on a number of occasions, failures of political advocacy. Time after time, the public arguments for reforms did not resonate. The community, for whatever reason, did not buy the case put to them.
It is too easy to blame our politicians for this and rhapsodise about the rhetorical gifts of Keating, Howard and Costello. We are all complicit, however. The way we talk about policy constitutes a shared language. There is an irreducibly social element to the way we communicate ideas, make arguments and conduct debates.
I would suggest that in recent years, we have seen marked changes in the way policy arguments are made in Australia. This is not limited to particular issues, politicians or political parties. Academics, business people and journalists have also been affected.
I think three clear tendencies have come to the fore.
First, policy advocates increasingly appeal to expert authorities. Each side, in any debate, competes for expert endorsements. The more, the better. The public, in effect, must take on faith what they are told. This leaves them little scope to come to their own views: to consider arguments on their merits, weigh the evidence and draw their own conclusions. At its worst, we see a kind of credentialism, where only the (self-anointed) few are qualified to offer views.
Second, policy arguments are often reduced to narrowly technical questions. This has limited our scope, as a community, to debate fundamental political choices: competing values, different views on how the world works, and the (non-quantifiable) costs and trade-offs of proposed reforms.
Too often, policy debates come down to competing modelling claims: a kind of ‘he said, she said’ argument which goes nowhere. Modelling conclusions, of course, are utterly captive to assumptions, type of model used and data limitations. Intelligent members of the general public, I suspect, know this and so attach little weight to them.
Third, policy arguments too often betray a simplistic, social engineering mindset. The government, according to this view, sits at the centre of society. Policy-makers pull levers to bring about specific outcomes.
I want to discuss this last tendency in more detail. It is perhaps less obvious than the other two. It is a by-product of them, lying below the surface of policy advocacy.
To explain what I mean here, I have to say something about the limits of our understanding. There are two basic views on this question. The French enlightenment view, which maintains that human intelligence, applying scientific methods, is capable of comprehending all the mysteries of the world; and the Scottish Enlightenment view, associated with Adam Smith and David Hume, which is more sceptical. The latter respected science, but understood its limitations. Accordingly, our understanding of human nature, the physical world and economy will never be complete.
I would suggest that policy advocacy in Australia betrays a naïve French Enlightenment view of the world.
Advocates, on both sides of politics, boast of their plans. The more comprehensive and ambitious these are the better. They talk about pulling the levers of policy suggesting our economy, society or indeed the environment is a giant mechanism. This impression is reinforced by the way policy outcomes are described. Highly speculative results, potentially playing out over many years, are stated as certain and expressed with a spurious precision. So we have claims, for example, that a given funding injection (education, health, infrastructure, a tax change) will result in a range of specific outcomes (jobs, GDP, educational results). It is as if we were programming a giant computer.
This bias, I suspect, rests on a uniquely Australian view of the state: the belief that government lies at the centre of our economy, our society and indeed our nation. I am not talking about the footprint of the state, which in Australia is smaller than in many other OECD countries. My point is a more subtle one. It is the notion that government is a benign, paternalistic presence at the very heart of our national life: the fount of initiative, the guarantor of justice and fairness, the expression of our values. The great historian Keith Hancock wrote about this in the 1930s.
What role has the social engineering mindset played in the failure of reform arguments?
First, it does not ring true. By inflating the role of government in our national life, it necessarily shrinks other realms. It ignores, or downplays, the existence of an individual, family, community and economic world outside of government; realms which, at best, are only imperfectly amenable to government manipulation. Sophisticated social democrats, as well as conservatives, understand this.
Second, it results in excessive expectations of government. We hold the government to account for everything. Yet government action must always be constrained: by the resources available to it, by constitutional limits, by our federation, and by its limited scope to shape the world beyond it.
Third, pro-intervention rhetoric has fostered a false sense of certainty. It has tended to downplay, or ignore, risk, uncertainty and the possibility of unintended consequences.
Each of the advocacy tendencies I have discussed reinforces the other ones. We discuss policy questions in dry, technocratic and abstract terms. The public is told to accept the views of experts, rather than think for themselves. We do not paint a picture of a world that the public can recognise and relate to.
We find that we have a parallel universe, where politicians, media and experts speak a language which is virtually incomprehensible to everybody else.
It is not only the public that is short-changed by this development. It is the elites themselves. For them, the complexity, colour, variety and diversity of our world disappears from view. And as George Orwell observed, when our language is corrupted, we end up deceiving ourselves.
David Pearl is a Treasury economist on secondment in the private sector. Views are entirely his own
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