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Of murderers, bastards and inequality: neo-liberalism's failure

  • 16 August 2017
  Cometh the hour, cometh the third murderer. So now inequality is in the spotlight and is being booed off the stage. It is blamed for the rise of populist politics, and more fundamentally for economic stagnation. The economic neo-liberal orthodoxy that so implausibly claimed that economic competition, unfettered by government regulation, would benefit all of the citizens has produced the gross inequality that hinders economic growth.

The bastard child is strangling its father. Denial of inequality of wealth and the defence of the economic framework that spawned it—once conventional wisdom—now seems as desperate as the denial of global warming. Addressing inequality is also becoming a political necessity.           This is to be welcomed, as are political proposals to address it. But they need to be harnessed to a vision of society that the economy will serve. Otherwise, they will simply serve the competitive individual economic ideology that has bred inequality.

This failure is patent in the Labor Party’s presentation of the commendable proposal to reform the use of family trusts as a means of addressing inequality. Trusts have been used as an engine for the concentration of wealth.

The move to reform their use, however, has been portrayed by its proponents, as well as its opponents, as part of a competition between rich and poor, in which the protagonists see each other as inspired by greed and envy. This reinforces the view of economics as based on competition between individuals. This lies at the root of inequality

The goal of the exercise, too, is defined in purely economic terms: to repay the heavy levels of debt that Australia has incurred. That may be no bad thing, but it leaves out of the account the broader social goals that repaying debt will serve. They are subordinated to the management of the economy, instead of controlling it.

The same dynamic was evident in the conflict between Cricket Australia and the cricketers’ union. The dispute was about two interlocking matters: the distribution of money and the part of the cricketers in the government of the game.

In the treatment of the dispute, the larger issue of common responsibility for a common goal receded from view and it was viewed as the competitive economic struggle between greedy players and a self-interested Board. The final settlement was seen simply as the victory of the players. That cricket is primarily a cooperative, in which players and Board are partners