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October 2003   
F E A T U R E S

Interview: No Ifs, No Butts
Rugby League Professionals Association president Tony Butterfield on his battle to deliver a collective agreement for NRL players.

Unions: National Focus
In this month’s national wrap: Noel Hester meets a heavy hitter talking up open source unionism, truckies front the suits at Boral’s AGM, tales of corporate bastardry and Medicare birthday revelry.

Industrial: Fools Gold
Unions have thrashed out a string of protocols with the NSW Labor Government. Some, now, are questioning whether they are worth the cheap, imported paper they are written on, reports Jim Marr.

Bad Boss: Bones of Contention
Byron Bay chicken boners have nominated thier boss for a Tony after seeing their entitlements plucked.

History: The Gong Show
In late September the South Coast Labour Council (SCLC) celebrated 75 unbroken years championing the rights of workers in the coastal Illawarra region 80 kilometres south of Sydney, writes Rowan Cahill.

Politics: The Hawke Legacy
The election of the Hawke Labor government twenty years ago holds some salient lessons for today’s Labor Party, writes Troy Bramston.

International: Sick Nation
As Australia celebrates 20 years of Medicare’s universal health coverage the crisis facing American workers in need of medical care is a useful reminder of what we’ve got – and what we stand, writes Andrew Casey.

Economics: Closed Minds
Philip Mendes looks at the political influence of right-wing think tanks, their financial backing and asks why the left hasn’t been able to get its ideas out there.

Review: Mixing Pop and Politics
He's had relations, with girls from many nations... but Billy Bragg seems to like us Aussies as much or even more than any of the others, writes Pádraig Collins.

Poetry: One Size Fits All
There once was a man from the Lodge - Who tried hard, our poems, to dodge... Resident bard David Peetz is back!

C O L U M N S

Postcard
North By Northwest
Phil Doyle returns from up north, where he survived on nothing but goodwill, good people and a great big orange bus.

The Soapbox
The $140 Million Patriot
It would be hard to imagine a steeper slide from hero to zero than the experience of Richard Grasso, the now-deposed head of the New York Stock Exchange. writes Jim Stanford.

Media
Bush's Bad News Blues
The Bush Administration is cooking up a new campaign 'to shine light on progress made in Iraq', writes Bill Berkowitz.

The Locker Room
A Tale Of One City
Phil Doyle gazes into the crystal ball for signs of life, and finds that somewhere the horses are running in the wrong direction.

Culture
With Banners Furled
There is no better account of the glory that was the annual Labour Day marches than that given by Kylie Tennant in Foveaux, her fictional account of life in inner Sydney in 1912, the year she was born.

Politics
The Westie Wing
Our favourite Macquarie Street MP, Ian West MLC, reports on the world of NSW politics.

Postcard
The Cancun Wash-Up
The dramatic collapse of the World Trade Organisation Ministerial Meeting in Cancun, Mexico, last month has been followed by a deafening quiet from Geneva, Brussels and Washington, writes Peter Murphy.

E D I T O R I A L

The Monk Off Our Back
It should come as no surprise that Tony Abbott has been dragged from his workplace relations portfolio just as his $60 million assault on the CFMEU finally unravels.

N E W S

 Concrete Boot for Democracy

 Picketers Get Blue Ribbon Result

 ICAC Call at Mudgee Abattoir

 Telstra on Charges

 Unis Walk Over Federal Bullying

 IRC Shoots Rooster that Quacked

 Ugly Australian Riles Timorese

 Medicare Gets Abbott For Birthday

 Business Council Opposes Salary Vote

 Rail Workers Call For Self Defence

 ACT Leads On Industrial Manslaughter

 Thumbs-Up for Awards Binding Subbies

 Entitlements Crash into Hangar

 Blackouts on NSW Horizon

 State Govt Told To Clean Up Contracts

 Would-be Presidents Face Union Probe

 Activists Notebook

L E T T E R S
 A Hard Act To Follow
 Which Boss?
WHAT YOU CAN DO
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Economics

Closed Minds


Philip Mendes looks at the political influence of right-wing think tanks, their financial backing and asks why the left hasn’t been able to get its ideas out there.

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Following the Great Depression and World War Two, there was a broad consensus in favour of increased public spending to address social inequities. Friedrich Hayek and other classical liberal philosophers who opposed any interference with the free market were effectively marginalised. However, over the last 25 years, classical liberal ideas have enjoyed a remarkable international revival to the point where they can reasonably be described as constituting a new political orthodoxy

Their revival has been greatly assisted by an international conglomerate of neoliberal think tanks generously funded by corporate resources. These think tanks trace their origins to the relatively obscure Mont Pelerin Society founded by Hayek in 1947 as an international forum for classical liberal ideas. As noted by Cockett the think tanks largely mirror the earlier successes and methods of the left-wing Fabian Society in their commitment to converting a generation of opinion formers and politicians to a new set of ideas.

Think tanks have arguably been able to not only shape the policies of individual governments, but have also succeeded in moving the whole policy debate to the Right. According to Beder, the free market ideas promoted by the think tanks have become hegemonic not only amongst conservative parties, but even within traditionally social democratic groupings. They have become publicly accepted as self-evident truths against which there is no other alternative.

Think tanks have helped to popularise and target neoliberal ideas that emphasise behavioural rather than structural explanations of poverty and disadvantage. These ideas assume that people are poor or unemployed due to incompetence or immorality, rather than due to inequalities in wealth and income, or inadequate public sector investment. They also suggest that the welfare system per se contributes to the entrenchment of poverty and dependent behaviour.

The think tanks claim to be politically independent, and to be offering impartial and disinterested expertise. They insist that their intellectual integrity and hence credibility is protected by their multiple sources of income. However, critics argue that they are generally partisan, motivated by political and ideological bias, practice the art of directed conclusions, and have more in common with corporate-funded vested interest groups or pressure groups concerned with political activism and propaganda than with genuinely academic or scholarly institutions.

Neoliberal think tanks have been particularly prominent and influential in the Anglo-Saxon countries. However, their impact seems to have involved mainly broad intellectual and ideological reinforcement, rather than direct and decisive links with particular pieces of legislation. Their role appears to have been significant in terms of offering accessible policy options which are publicised by the mass media, and consequently help to influence the climate of opinion - whether that of the general public or the leaders of political parties. It is more difficult, however, to precisely document or measure their input into specific policies.

In Australia, a number of academic-style think tanks were established and/or revived in the late 1970s/early 1980s. They included most prominently the Tasman Institute, the Australian Institute for Public Policy, the Institute of Public Affairs (IPA), and the Centre for Independent Studies (CIS). Some of these think tanks were directly modelled on similar institutions overseas, and consequently described by critics as mere derivatives or clones. Yet, the transposing of Anglo-American ideas onto the Australian policy

agenda proved highly successful. Australian think tanks have vigorously promoted neoliberal ideas concerning economic liberalisation, privatisation, competition reform, labour market deregulation, reduced government spending, and lower taxation. These ideas have been targeted at elite opinion, and have succeeded in achieving hegemony over the political agendas of both labor and conservative governments.

The think tanks have also adopted a common position of hostility to the welfare state, and a preference for greater charitable or private welfare. Their campaigns have suggested that, since free market principles were now dominant in the macro-economics sphere, they should also logically be applied to the welfare state. Attention is drawn here to the activities of the two most vigorous critics of the welfare state, the IPA and the CIS.

The Neoliberal Critique of the Welfare State

Both the IPA and the CIS broadly subscribe to what may be called the neoliberal critique of the welfare state that incorporates many of the older classical liberal doctrines of Adam Smith, Friedrich Hayek, and Milton Friedman. The overriding objective is the application of free market principles to welfare provision. In Australia, the term 'economic rationalism' is also popularly used to describe these ideas. The neoliberal critique comprises five related themes - the problem of interest group capture of the welfare state, the case for labour market deregulation, the attack on welfare dependency, the distinction between the deserving poor and the undeserving poor, and the promotion of voluntary or charitable welfare.

It should be emphasised that neoliberal think tanks do not promote these ideas in isolation. Other important sources of neoliberal influence in Australia include sections of the media such as the Australian Financial Review and influential journalists such as Alan Wood, Christopher Pearson and Piers Akerman, academics such as Judith Sloan and Peter Dawkins, senior econocrats in Canberra such as Ted Evans and Ian Macfarlane, business economists and financial analysts, overt corporate lobby groups such as the Business Council of Australia, and significant groupings within the mainstream political parties. The think tanks constitute one specific component of this larger 'economic rationalist' coalition

However, the Institute of Public Affairs (IPA) and Centre for Independent Studies (CIS) are particularly significant for four reasons.

Firstly, they are absolutely dedicated to promoting the dismantling of the welfare state, and are rarely side-tracked by short-term pragmatic political concerns or alliances. Consequently, they are free (unlike political parties) to promote radical ideas that go beyond the conventional wisdom (Cahill, 2002:24). They actively seek, rather than fear, public controversy in order to give prominence to their ideas.

Secondly, unlike formal corporate lobby groups such as the Business Council of Australia, they are not bound by any obligation to promote the specific interests of local corporations. Both the CIS and IPA seem particularly wedded to idealistic notions of free trade that are most likely to benefit larger companies and financial interests that are integrated into the global economy. For example, they have vigorously condemned instances of economic nationalism, and supported ratification of the proposed Multilateral Agreement on Investment on the grounds that foreign investors should be entitled to the same rights as local producers.

Thirdly, their criticism of state welfare is based on a popular synthesis of social conservative and economic liberal concerns. This synthesis serves to break down the traditional tension between free market ideas and conservative social values such as family, authority and self-help, although it is arguable that a deregulated labour market will inevitably undermine traditional social institutions such as the nuclear family.

Finally, they persistently claim to be independent and objective purveyors of truth, uninfluenced by vested or sectional interests. Consequently, their pronouncements, however extreme or bound by ideology, are often granted greater legitimacy and receive less critical public attention than the views of organisations holding more obvious political links and interests. For example, the 2000 CIS publication Behavioural Poverty attracted significant praise in the mass media despite evidence that it was "littered with basic errors of fact, logical anomalies, and breaches of the accepted standards of academic research" (Australia Institute, 2000).

Political Influence of Neoliberal Think Tanks on Labor and Liberal Governments

To date, there has been no authoritative study of think tank input into specific Australian social policies. Nevertheless, it would appear that the neoliberal ideas promoted by the CIS and IPA have exerted a substantial impact on the Australian social policy agenda of the last two decades.

The specific policy influence of the think tanks has probably been more indirect rather than direct in terms of driving public and political debate in a free market direction.

For example, during the period of Labor Governments from 1983 to 1996, the IPA and CIS succeeded in popularising neoliberal ideas regarding the causes of poverty (behavioural and linked to failures of welfare system), and possible solutions (greater private or charitable welfare). These views had limited philosophical impact on the Hawke and Keating governments, although the ALP did incorporate suggestions for greater targeting of welfare. However, they did have significant influence on the ideological direction of the opposition Liberal Party.

Since the election of the Howard Coalition Government in 1996, neoliberal ideas have gained greater philosophical acceptance from the political mainstream. However, the specific introduction of neoliberal proposals has been modified by broader political and electoral considerations.

Explaining the Success of the Think Tanks

A number of key factors would appear to explain the political success of the neoliberal think tanks.

Firstly, there is the absence of a viable alternative or progressive model or strategy for managing the economy and distributing social benefits. The collapse of communism and the decline of social democracy has reduced any external or internal political challenge to the domination of 'free market' ideas. It seems that the managers of capitalist systems no longer fear potential revolutionary threats from labour movements or the disadvantaged. Consequently, governments have far less political incentive to address questions of social injustice.

A further key factor is the influence of global economic pressures, including particularly the enhanced power of financial markets, which appear to have increased the policy constraints on national governments. Whilst there are varied views about the relationship between globalisation and national autonomy, neoliberal think tanks have promoted and in turn benefited from the deterministic thesis that globalisation forces nation states towards a consistent and uniform decline of social standards. This stands in opposition to alternative views that see globalisation as being modified by disparate national structures and policy and political agendas.

In addition, the think tanks enjoy the generous support of corporate financial power. Hundreds of millions of dollars have been spent in order to shape public debates, and further influence the intellectual and political climate which is already amenable to neoliberal ideas. Even the comparatively tiny Australian think tanks were already attracting an annual combined income of approximately five million dollars by the mid-1990s.

In contrast, the political Left has generally failed to create or adequately fund similar structures. Most Australian left-of-centre research centres, such as the Evatt Foundation or Australia Institute, for example, are relatively small, and operate on shoestring budgets. The prominent Australian sociologist Michael Pusey speaks of a "structured inequality in interest group representation in Canberra and hence a ready-made mobilisation of bias in the context in which any particular scheme or initiative is raised".

Nevertheless, the Australia Institute has enjoyed some success in promoting progressive alternatives to the neoliberal agenda. For example, two Institute publications by Pamela Kinnear on mutual obligation and aged care funding have gained considerable exposure in the mainstream media, and provoked significant public debate. The success of these publications suggests that a social democratic think tank committed to relevant and accessible research does have the potential to influence welfare policy debates.

An associated problem is that much of the Left continues to be caught between defending the welfare state, and/or developing new ideas and paradigms. Many authors debate whether the social care (humanitarian) or social control (oppressive) functions of the welfare state are more significant, and whether the welfare state is worth preserving at all. Others focus on making the structures of the welfare state more democratic and accountable to consumers through the introduction of community development and/or associationalist principles to welfare service provision.

However, in general, the Left has failed to match the neoliberals in offering tangible and creative alternatives to existing policies. Another factor is arguably the effective engagement by Australian neoliberals with global influences and trends. The IPA and the CIS have regularly utilised their international connections - via speaking tours, membership of their Advisory Board, and reprinting of overseas publications - in order to promote particular neoliberal versions of globalisation in Australia. The think tanks have succeeded in promoting the USA and the United Kingdom as policy models for Australia despite their horrendous records on poverty and inequality.

In contrast, the Australian Left has generally failed to offer alternative interpretations of global policy trends and agendas. For example, few if any prominent guests have been invited from Holland or Scandinavia to extol the virtues of social democratic welfare regimes. This is despite evidence from international comparative studies that they equal or exceed the performance of corporate and neoliberal regimes across all social and economic objectives.

A final factor is that the particular organisational and promotional strategies employed by the neoliberals maximise their impact in the mainstream media and culture. As noted by Mark Davis, the think tanks typically publish in non-refereed pseudo-academic journals, the contents of which are then either republished as opinion pieces in daily newspapers, or repeated by sympathetic newspaper columnists or talkback radio hosts.

Think tank access is also assisted by the concentrated ownership of the Australian mass media by News Limited and Consolidated Press, companies which are sympathetic to the neoliberal agenda. Consequently, in spite of their small and sometimes minuscule membership, the think tanks are able to influence a broad cross-section of public and popular opinion.

Conclusion

Australian neoliberal think tanks have acted as vigorous advocates for those corporate interests that most favour economic and social policy deregulation. Their political influence over both ALP and Liberal Party governments has been significant. They have played an important role in shaping a harsher Australian social policy agenda that is less sympathetic to the welfare state, welfare producers, and welfare beneficiaries.

Although the think tanks claim to be politically independent, they are wedded to neoliberal ideology, and the economic interests served by these ideas. Their policies and solutions are derivative in that they mirror the perspectives of neoliberals elsewhere. They are accountable only to the corporate groups that fund them.

This is an edited extract from an article by Philip Mendes in the Journal of Australian Political Economy no 51

Philip Mendes is Lecturer in the Department of Social Work, Monash University.


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