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August 24th 2012 print

Peter Murphy

The End of the Age of Reform

Through 2011 and 2012 the Australian Labor Party has slouched its way towards electoral oblivion. The lack of legitimacy of its leader, Julia Gillard, is a factor in this lemming-like stagger to the abyss. She was elected on a lie, and the voters have never forgiven her. “There will be no carbon tax under the government I lead” were eleven of the most toxic words any Australian political leader has ever uttered. Gillard’s political judgment in office has proved to be just as suspect. Her original fib turned into a government of feint, sham and pretence. The downward spiral that began with her brazen reneging on the election promise not to introduce a tax on carbon dioxide reached its nadir with her indecorous embrace of various pungent members of parliament. Yet for all that, the two Labor leaders who preceded her were no less dysfunctional. For the ALP to have suffered one hopeless leader was bad luck; but three in a row was a pattern. It suggested something deeper at work.

Several observers have remarked that we are seeing the beginning of the end of the Labor Party. On the surface that sounds like a political fantasy. Parties collapse in electoral support and then recover. Parties of reform have existed since the mid-nineteenth century. The ALP has for more than a century. So arguably it is just going through a bad patch. Or is it? There is an equally powerful argument to say that parties of reform everywhere are in a state of dementia and that the age of reform is coming to an end. The major problem is not the parties so much as what they stand for. Whatever the historic merits of reform were, and they were varied, reform agendas today have become a mixture of platitudes on the one hand and absurdities on the other. What brought the Gillard government unstuck was the same thing that brought its predecessor, the Rudd government, unstuck: their policies were gimmicks. They relied on green gimmicks and Keynesian gimmicks that the electorate showed momentary interest in and then shunned.

Every few years the parties of reform go to the electorate with a new batch of policy confections. Each political cycle the shelf-life of these policies gets shorter and shorter. The media and the intelligentsia lap them up and proselytise for them. The policies prove attractive for a short time and then the scepticism of the electorate sets in. The sheer silliness of commercial wind farms or wave energy (or whatever fad) becomes apparent but not before they get five minutes of rapturous applause. That is all that is left of reform today: the rapture and the rhetoric. But the reformer still has a big bag of buzzwords to badger us with. We are relentlessly subject to pitches. We are assured that the coming reform is fair, just, efficient, rational, beneficial and necessary; it may even make us live longer or help us to save the planet.

The principal art of navigating today’s politics is to be able to set this army of oratorical platitudes aside and distinguish between what is harebrained and what is sensible. One way is to apply the rule of paradox. Whenever you are confronted with the relentless rhetoric of reform, stop and ask yourself whether what is proposed, when it is instituted, will create the opposite of what it promises. So that whenever a reformer says to you, “This is fair”, and on the surface it does sound fair, ask yourself: if this fairness comes into being, what unfairness will it create? It’s a good question because so much of reform backfires. When it does, we end up having to reform the reforms.

The policies of the Obama administration in the United States illustrate this to a tee. When Barack Obama was elected President in 2008, he came to power making all kinds of windy promises of change. To fulfil the expectation he created, he had to demonstrate leadership. His first attempt at leading was the economic stimulus package to reduce high unemployment. It failed. So to reassert his credentials as a transformative leader, he had passed into law in 2010 a health care reform act (the “Patient Protection and Affordable Care Act”) that pledged to provide health insurance to the 33 million Americans who have no health insurance. Presented in that way, how could any person say that such a health care law was not fair or reasonable? Such is the claim of the vulnerable upon our moral conscience that—surely—“Obamacare” had to be the incarnation of rightness and light. At least that was what the President bet his 2012 re-election campaign on. Yet the rule of paradox says: first check to see that fairness does not create greater unfairness.

One of the striking things about the President’s “affordable” health care act is its cost. It was offered to voters initially as an act that would reduce the cost of health care. Early in 2012 it was calculated by the Congressional Budget Office that the gross cost of Obamacare will be $1.7 trillion over a decade, or almost twice what the George W. Bush administration’s war in Iraq had cost.[i] For the 33 million imputed beneficiaries of the health care law (those without insurance), that works out to $51,500 each per decade, or $5150 per head per annum. As a point of comparison, in 2011 in the private health plan market in the USA, the average premium paid for single coverage was $2196 per year. The average family coverage was $4968.[ii] Obama’s health law costs—over $5000 per recipient per year—represents neither affordability nor a reduction of costs, quite the contrary.[iii]

If the result of affordable health care is to push up costs, then the further consequence of this is to add to American government deficits and debt—at a time when there is already massive pressure to reduce those debts. The unavoidable conclusion is that the health care law adds to the competition for scarce public dollars. Public spending on public goods (other than health) for the poor will decline. The nominal beneficiaries of health law reform will suffer as state and federal governments in the United States will have to make savings elsewhere to pay for a health insurance scheme whose legislative enactment bill runs to thousands of pages, making it a bureaucratic leviathan and ensuring that the benefits of the scheme for the least advantaged will be whittled away by the costs of servicing its elaborate procedures and tax collection requirements. Will a poor person without insurance but access to a hospital emergency room be in a net better or worse situation after the scheme is implemented? The strong likelihood is that such a person will be in a net worse-off situation. The pursuit of fairness often creates unfairness.

The delinquency of state capitalism

Contemporary reform politics calls forth all manner of absurdity. A classic of the Gillard government’s slapstick public policy was the introduction of a mining tax. The Minerals Resource Rent Tax singled out the mining industry for a supererogatory levy. This was done at a time when the Australian mining sector was booming and the rest of the Australian economy was sluggish. The country’s foremost mining state, Western Australia, grew by 6 per cent in 2011, while the traditional manufacturing and services state, Victoria, grew by 1.5 per cent. The logic of the mining tax was perverse. It assumed that government should target the country’s most successful economic sector and impose on it a super tax, thereby penalising economic accomplishment and discouraging investment. It might as well have been called the “we don’t like the economic boom” tax. The aim of the policy was to increase government revenue to offset the negative effects of another Gillard government tax, its tax on carbon dioxide. The intent of the mining tax was to redistribute wealth. But to do that wealth must first be created, and invariably discriminatory super taxes discourage outlays, lessen wealth creation, reduce taxable revenue, and shrink the pool of money that can be redistributed through the tax system. As of June 2012, the mining tax was set to raise half of what was first forecast.[iv]

Take the case of the National Broadband Network (NBN) scheme that the Gillard administration inherited with alacrity from the Rudd government. Broadband is one of those talisman words beloved by the rent-seeking class of bureaucratic, media and corporate intellectuals. The $27 billion government investment in the fibre-optic NBN will cost Australia in real terms the same per head as the copper network deployed by the Post-Master General’s Department in the 1950s. The copper network lasted sixty years. NBN will last a maximum of twenty years before it is functionally superseded by wireless networks. It will deliver a third of the value, if that, of its predecessor. That also assumes the NBN’s projected $13 billion private sector debt-financing can be repaid before the network becomes valueless. The NBN lobby blithely claims that the “laws of physics” make it impossible for vast volumes of data to be carried by wireless. But already plausible models of high-volume wireless exist, such as Steve Perlman’s “distributed input distributed output” (DIDO) model.[v] If the recent history of technology makes anything clear, it is that anyone who proclaims the “laws of physics” to be a barrier to technology development is usually talking through their hat. Technologists routinely leverage one law of physics to get around another one.

When communism collapsed in 1989, everyone agreed that the days of Western socialism were finished as well. That seemed to imply the end of the age of reform and the start of a new age of common sense. It was not to be. Instead a plethora of sham capitalisms took off: state capitalism, crony capitalism, green capitalism, social capitalism and knowledge capitalism among them. The inverse of this was that the public sector became consumed by pseudo-market and faux-corporate language games. Left-wing capitalism, however, is about as economically viable as left-wing anti-capitalism. The National Broadband Network Company is a classic example. The NBN monopoly is neither a government infrastructure provider nor a market network builder but a self-defeating pastiche of both. Its fibre network is aimed at 90 per cent of Australian premises. Market vendors could viably roll out fibre networks for 60 per cent of premises. In a normal arrangement the government would service the rest. Market competition would drive down data prices in major population centres while the government would fix a subsidised price for remote places. Instead the government monopoly has set a single wholesale price for the whole country. The NBN Company can keep the single price high and impose a small customer base on re-sellers or else it can lower the single price and fail to meet its revenue targets. Either way, its pricing is political, which means it is arbitrary. It is not a market business but rather a pseudo-business that will see out its life effectively courtesy of taxpayer subsidies. It reduces both price competition and innovation.

We live in an age of bureaucratic capitalism, driven by grants from government boondoggle money-pools like Australia’s $10 billion Clean Energy Finance Corporation. The charms of such state capitalism are irresistible for some but its business models are dismal. In this, as in so much else, the time of the Gillard government in office proved to be a kind of bad Hegelian comedy. The consequence of so many of its policies was the direct inverse of what the government intended. It couldn’t take a trick. As all children understand, that is the essence of clowning. One of the many ways the Gillard government managed to slip on its own banana peel was to promise to turn vast swathes of the seas that are under Australian jurisdiction into marine parks. This was a stunt designed to curry favour at the 2012 Rio talkfest, one of those innumerable, interminable ecological rent-seeking lobby events loved by the frequent-flying global bureaucratic activist class. The stunt presupposed that fishing is not allowed in marine parks. Strike one for marine conservation, then? No. Australia imports 70 per cent of its fish. That percentage will only rise when more fishing is outlawed in restricted zones. The perverse effect of this is that Australia will then simply import additional fish from countries that “strip mine” their own fishing jurisdictions. Strike one for green ideology; strike out for the fish.

As green ideologies have flourished in the past twenty years, self-defeating actions of this kind have multiplied. Green creeds fill the space that socialism and social liberalism once occupied. In their wake they have induced a global industry of professional moralism, pseudo-religion, cod-mysticism, political pandering, bureaucratic pocket-lining, and media pretentiousness. It is impossible to overstate the silliness of the whole show. If you took the dumbest things that management, science, and religion ever said, and spliced them together, you would end up with ecological social “thought”.

So rather than the collapse of communism leading to the end of ideology, instead we got the rise and rise of junk ideologies, especially preening green thinking. Green ideology was an effusive, fatuous kitsch mix of pseudo-science, New Age spirituality and officious morality that aligned perfectly with bureaucratic sloganeering and rent-seeking businesses. Green policy offers a vaguely plausible surround filled with piffle. So it is no surprise that the Gillard government’s carbon dioxide tax was a manifesto of silliness. It was not just wrong or questionable—it was harebrained. Even many of the ministers in Gillard’s government looked embarrassed by it.

In the long history of silly taxes, the tax on carbon dioxide was a world-beater. In 2012 when Australia made its unique contribution to the genial history of comic government lunacy and enacted this tax on a harmless gas, carbon dioxide, it culminated twenty years of the global green lobby insisting that the end of the world was nigh because the planet was warming. The problem with their argument was that the planet was not warming (it hadn’t since 1998) and even if it had been the net global effect of that warming would have been beneficial, and even if warming was a bad thing (which it is not) reducing carbon dioxide emissions by taxing Australia’s emitting industries would have zero effect or (at most) an infinitesimal effect on planetary temperatures. The tax on industries that emit carbon dioxide into the atmosphere will raise at least $24 billion over three years. The tax will drive up industry costs (energy costs in particular) in the order of billions of dollars. Yet it will have no beneficial effect whatsoever. The principal negative effect of the tax will be felt most by low-income groups, the traditional constituency of the Labor Party.

How it is that the least well-off are slugged by a Labor government is easy to explain. Today Labor policies are designed by high-income moralists. This group came to dominate all left-of-centre parties after the ideology of socialism collapsed. The moralising class of affluent tertiary-educated activists, bureaucrats and rent-seekers stitched together post-industrial “values” with welfare economics. Under their watchful eye, regulatory green tape expanded along with entitlement claims. In the global semi-boom years of the 1990s and 2000s, the fictitious wealth of the era made the wonky alliance of industrial and post-industrial statist policies vaguely serviceable. After 2008, the alliance was rendered kaput by economic reality. So then began a new comedy. The Gillard government enacted a mining tax in order to find the money to subsidise low-income families for cost-of-living rises driven by the functionally useless but ideologically imperative carbon dioxide tax.

In short the Labor Party had to pretend to be a labour party. Yet even its core constituency and the beneficiaries of this chequebook politics did not believe in what it was doing. Political pretence is both expensive and difficult. $1.3 billion in payments to one-in-ten households and $2 billion per annum in tax cuts is nothing compared to the real cost of the tax to consumers. So what then followed in 2012, like day following night, was a hilarious moral charade. Cartoon caricatures and stick figures of wicked mining billionaires abounded. Faux class warfare was declared in fits of spurious pique by the country’s Treasurer, Wayne Swan, himself a walking, talking carnival compendium of all of the clichés of reform. His stunt of declaring twelve hours after the carbon dioxide tax had begun that no grocery prices had risen was only to be outdone by the Minister for Trade Craig Emerson’s interview-turned all-singing, all-dancing take on the 1970s Skyhooks pop song “Horror Movie” that left the whole nation agog. Emerson’s feral gimmick was meant to convince the voters that thirty-six hours after the start of the tax the town of Whyalla was still standing. No need to send in the clowns then? This circle of absurdity was entirely premised on the slight and wrong assumption that the world was heating up. A massive lobby of righteous self-confirmation had insisted, against all common sense and plain evidence, that a benign gas was diabolical. Because rent-seeking careers, companies and industries like the “Businesses for a Clean Economy” now lived off this peculiar presumption, the government was stuck with it until the day when the little boy would finally arrive to tell the courtiers that the emperor has no clothes.

The effrontery of the didactic class of activists, bureaucrats and rent-seeking corporate officers is remarkable. No one embodied that effrontery better than Julia Gillard. She was all impudent ambition and insolence. Nothing personified better the impertinence and bald-faced presumption of the rent-seeking finger-pointing class than Gillard’s rhetoric—a tedious, grating mix of harping insistence, puerile condescension and brazen arrogance. The didactic elite can effortlessly trip off its collective tongue words like fairness and justice to justify its rampant use of the tax system to distribute money away from the less affluent to itself to fund its air-conditioned offices, its cushy but pointless “values” jobs, and its government-subsidised businesses. When you first read a slogan like President Obama’s “audacity of hope” you think it means boldness and courage. But then it becomes clearer that it really signals the impudent nerve of post-industrial elites to fund their sanctimonious projects come what may—and even in opposition to their supposed beneficiaries. One of the few things that this self-aggrandising elite learnt at university was Nietzsche’s idea of the trans-valuation of values. If you think you know the meaning of a word, forget it. In the world of this insolent elite, all words are capable of being turned inside out. It is as if they all read Orwell’s Nineteen Eighty-Four at school and absorbed the opposite lesson from what Orwell intended.

Left-liberal fundamentalism

In the age of reform words like fairness have become very fuzzy. Fairness was once a synonym of consistency. In the medieval world, for instance, if the social norm required the annual crop of the villein to be taxed at 30 per cent by the local county sheriff on behalf of the king then human instinct demanded consistency in the application of the rule. The expectation was that one peasant farmer ought to be treated much like another. As human communication grew, the scope of such comparisons also grew. Persons in the same category naturally came to compare themselves with their counterparts in other counties and eventually in other countries. The world shrank. Modern societies began to remove a lot of class-categorisations and status-categorisations from the law. Thus for many purposes, though not for all, we became (all of us) equal before the law. Middling persons now compare themselves with rich persons and poor persons. In many instances that works well but not in all instances. While modernity did broaden the rule of consistency it also made that rule less effective. It meant that in many instances the rule of consistency has had to be replaced by the rule of paradox in the making of sensible decisions.

Modern legislative entitlements (such as sick leave and unemployment benefits) are usually now framed in universal terms, as applicable to all. But we can’t do that for an entitlement like maternity leave, can we? It is observable that the movement of the 1970s for gender equality very quickly turned into a set of lobbies for the differential treatment of the genders. Much the same happened in respect of racial equality. Anatole France’s quip from 1894 that “the law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread” set the tone for much of the thinking about consistency in the following century. Everyone from the highest political leader to the lowliest manager wants (in principle) to treat everyone the same—but many also become aware of the strange paradoxes such treatment brings. A very perverse instinct is aroused by this. One might call it the instinct of liberal fundamentalism, the feeling that we must elevate a rule of inconsistency in place of the rule of consistency. This became the signature of much postmodern reform. It identifies various presumptive entitlement groups. These are singled out not for equal but for favoured treatment. Thus the police are encouraged not to apply the law against begging, stealing or sleeping under the bridge to the poor. The consequences of this are paradoxical. The areas where beggars congregate are on the poor side of town. The toleration of anti-social behaviour simply triggers a downward spiral of already hard-pressed neighbourhoods. The bad behaviours drive out small businesses, raise the unemployment rate, and encourage gangs and drug-taking, until an urban hell starts to take shape. From the apparent good intention of the reformer comes ruinous consequence.

The demands for consistency in modern societies continue to grow. Yet so does disenchantment with the rule of consistency. But when consistency is dispensed with, the result is worse still. The human world is not consistent and excessive effort to make it so leads to unpalatable consequences. Rationalism readily descends into authoritarianism. Conversely though, aggravated and wilful inconsistency is the root of tyranny. What it leads to is despotism. This may be the despotism of the traditional tyrant, or the modern totalitarian ruler and his apparatuses, or it may be the soft despotism of modern liberal societies. The latter was first noted by Alexis de Tocqueville. He observed that modern universalism had a curious side effect. It made bureaucracy universal. Tocqueville objected that pervasive petty rule-making followed in its wake. A subsequent effect of the spread of modern universal liberal bureaucracy was the burgeoning of liberal fundamentalism.[vi]

Reform movements have repeatedly used universal bureaucratic legal categories to generate new favoured statuses such as the closed shop employee, the tenured academic or the preferential hire (the mandated quota employee). Legal categories have been used to define benefits or rewards or allocations that were specific to a particular race or gender, in the name of eradicating gender and racial inequality. Discrimination has been created to eliminate discrimination. Conversely liberal fundamentalism has sought to introduce a swathe of new pseudo-universalistic categories into law. For example, in hospitals, fathers and mothers have been presumptively renamed “carers” when visiting their sick children in hospital. The rationale for this is that not everyone has a father or a mother but that the label carer fits everyone who looks after a sick child. This kind of manipulation of language occurs with increasing frequency and authoritarian dictate. Marriage, a legal relationship between a man and woman, is a status that has been now claimed by activists for homosexual couples. And so it goes.

The category of consistency has been turned inside out. In the age of reform, what began as claims for equal treatment either ended up as demands for unequal treatment or else as the persistent insistence on a banal kind of sameness. So we have seen either the proliferation of entitlement groups claiming special rights precluded to others or else the rise of a hyperventilating universalism in which the oldest of human distinctions, many of which go to the core of human identity, are rewritten with only the slightest consideration of consequence. The kinds of insipid categories that are whipped up to replace the tried-and-true ones should give pause to thought. The aura given off by the language of identity reform is always slightly creepy. Does anyone, including those who are parentless, want to live a world of “carers”? Do homosexual couples recognised by law and living with equal financial, beneficiary, and employment rights really want live under auspices of an anodyne and caricatured form of universal marriage? Does such a colourless arrangement do full justice to the distinctive well-established dynamics of homosexual relationships that simply are not the same as the relationship between a man and a woman?[vii]

How do we know which bit of the world properly is governed by difference and which bit of the world properly is governed by consistency? How do we know when to treat persons the same and when to treat them differently? This question affects all decision-making from the highest to the lowest. It defines what judgment and justice is in the modern world. In the traditional world justice required that the members of different social groups were treated the same as other members of their own group and differently from members of other groups. In the classical Greek world, for example, the citizens were treated differently from the rich, who were treated differently from the artisans, who were treated differently from the labourers. Conversely it was expected that citizens were treated alike, the wealthy were treated alike, the artisans were treated alike and the labourers were treated alike. Justice (dike) and wisdom (phronesis) required that the members of each group were treated consistently according to the norms of their class, but that different norms applied to different groups. As well there were some common norms. These applied to the state as a whole. A general—and largely aesthetic—sense of balance was understood to prevail between all groups. Thus one group might be larger than another in some aspect (power, wealth, status) but not so large as to crush the smaller one. Aesthetic abstractions like balance, proportionality, ratio and fit entered the law and became a subtle way of treating the unlike alike. In the modern world, groups and classes became bureaucratically rather than socially defined. Because of the contingent nature of modern life, such definitions have come to constitute shifting sands. Difference competes with universality which competes with hyper-difference which competes with hyper-universality. In between there is no shortage of hype. The member of a trade union may one day have the same legal rights and duties as any other member of society, the next day lesser rights and greater duties, the third day greater rights and lesser duties. How do we know which arrangement is the right one?

It is obvious that neither consistency nor difference constitute by themselves sure guides in the modern world. Both have a role to play but also both at times do not work. In order to determine whether they work or not, it is necessary to apply the rule of paradox. The rule of paradox asks of any proposed institutional, organisational, legal or social arrangement: does it generate a paradox? Is its claim to fairness, truth or validity undermined by the paradox that it generates? The simplest way of applying the rule of paradox is to ask whether we can make a joke of the proposed arrangement. This is because humour in general and the joke in particular closely observe the unseen contradictions in any state of affairs. That which we do not see in normal discourse is highlighted in the joke. In an everyday way the joke does the same thing and serves the same function as the philosophical antinomy. It shows us that what we think of as good contains bad. That was the great power of Anatole France’s witty quip. It pointed out what was unseen and yet (once stated) obvious: namely, that the burden of the law that forbade the rich as well as the poor to beg in the streets fell principally upon the poor. Equality paradoxically created inequality.

Learning nothing at great cost     

No reform proposal, whether in modern politics or in a modern organisation, should be taken at face value. Consider education reform. Throughout the age of reform there have been relentless pressures to expand all levels of education, not least higher education. These pressures have succeeded because very few have asked the question: Is this good for society? That is like asking: Is milk good for you? Most of us would just assume yes, without realising how many people are lactose-intolerant. As it turns out, the denizens of modern society, despite their vast appetite for higher education, are actually tertiary-intolerant. Most particularly since 1970, but in reality for the last 150 years, legislators, university presidents, college academics, journalists, opinion-makers of all shades, education departments, education unions, and a whole host of other lobby groups in society have pressed for more and more and more higher education. The proportion of nineteen-year-olds at university has risen from less than 1 per cent to over 30 per cent, and in the last decade a cacophony of voices have demanded that the number rise to 40 or 50 per cent or more.

Is that sensible? Consider what education reform has actually achieved. In spite of the massive expansion of education in America in the twentieth century, there was no accompanying increase in the verbal abilities and skills of Americans.[viii] The level of educational attainment in America rose from an average of ten years in 1910 to fourteen years in 1974. When researchers compared this with the scores for verbal abilities of people born between 1910 and 1974, they found that, in spite of rising levels of formal education, verbal ability and skill had remained constant. In short, all of the additional spending on education had produced no better communicative competencies in the population across six decades. It gets worse. In 1967 one out of 120 applicants sitting the American Scholastic Aptitude Test (SAT) scored 700 or higher in the SAT-Verbal Test, a score needed to get into highly selective tertiary institutions. In 1994 the ratio of those getting the same score was one in 313.[ix]

It gets even worse. America’s Collegiate Learning Assessment exercise in 2005–2007 provided the researchers Arum and Roksa with a sample of 2000-plus tertiary students who were asked in their first semester and again at the end of second year to read a set of documents about a fictional business or political problem and then write a memorandum to a notional official advising how to tackle the problem. What the data from the assessment exercise indicated was that 45 per cent of students had made no progress whatsoever in critical thinking, complex reasoning or writing between first and second year.[x] So why are these students at university? Essentially because reformers at all levels have insisted on it. As of 2012, American graduates owe one trillion dollars in student loans, which is the same dollar cost as America’s Iraq War. What have students got for this investment? At least half of them have got nothing cognitively whatsoever. Another 20 or 25 per cent have got very little cognitively. The college-educated have an edge in job markets compared to the high-school-educated but only because reformers made the college degree a prerequisite of so many jobs. That is about sorting people into occupations. It is not about what a person has learnt or can do as a consequence of their learning. Higher education has become a multi-trillion-dollar job-sorting mechanism.

Twenty-four per cent of Australians aged twenty-five to sixty-four have a university degree. In the foreseeable future, at the most, 20 per cent of the workforce will need a degree, according to a study by the US Bureau of Labor Statistics.[xi] Already in 2007, 31 per cent of Australians aged twenty-five to thirty-four had completed a university qualification. But that did not stop political fantasists wanting 40 or 50 per cent of the population to attend university. This was the design behind the Bradley Review of Australian Higher Education in 2008. Following the review, between 2010 and 2012 Australian universities offered 16 per cent more places. In sharp relief, though, the official estimate is that 28 per cent of Australian undergraduate students permanently drop out of university study.[xii] Another 23 per cent, who graduate, end up in jobs that do not require a degree.[xiii] In other words, for 50 per cent of enrolling students, university is effectively a waste of time. Could anyone design a scheme that promised more to young people and delivered less?

The university roller-coaster is a charade. The overwhelming mass of university academic staff (almost to the last person standing) publicly endorses the unsustainable principle that everyone should go to university. At the same time almost every working academic privately despairs every single day that a third or a half of the students in undergraduate classes learn little or nothing whatsoever. A mass of useless bureaucratic money churns around the university system claiming to remedy academic failure. Thirty or more years of government reports have spirited these funds into being. Yet over this long period this money has had zero effect on student academic performance, though it has created a preposterous legion of rent-seeking “values” jobs in the university sector. In the meantime, university grades have inflated while the undergraduate curriculum has become vacuous. A C-minus grade in 1972 is a B-plus grade today.

Could there be a greater waste of private and public money? And yet, careers are made of this. Australia’s least able prime minister in memory made her way to the top via the Education Ministry. She had a schtick. This was to drive yet more unhappy souls into the universities where they would drop out in large numbers or exit with vocationally useless degrees having chalked up a lot of student debt for the privilege of ending privilege. Julia Gillard engineered the Bradley inquiry that produced a report filled with the usual clichés about the much-needed, the overdue and the indispensable that provided the self-fulfilling justification for government to lift its cap on enrolments in universities. Here was yet one more bogus state capitalist market that generated yet more bureaucratic incentives to have yet more students in higher education learning absolutely nothing. The chorus of experts endorsed it. And so the minister was on her way to higher things. Such is life.

The coming age of the grounded conservative  

Julia Gillard may be the last of her kind. There are signs that the age of reform is winding down. In America, Barack Obama may also be the last of his kind. Obama could well turn out to be the Herbert Hoover of the Democratic Party—the end of a political epoch. In the United States, the Republican Party dominated the ideas of the age from the Civil War to the onset of the Great Depression. The Democratic Party has done so ever since—even though Republicans have spent exactly the same time in the White House as Democrats have.[xiv] There is a good chance that a grounded conservative ethos will dominate the next long cycle of politics in the Anglosphere. I do not mean this in a political party or partisan sense. Rather what I mean is that a new set of dominant ideas is gradually percolating to the surface of Anglo-American politics. Australia had a taste of this in the Howard years. It is now difficult to argue with the proposition that those ideas provided the ballast that kept Australia in reasonable shape when the post-2008 global downturn hit. Even the Rudd–Gillard imbroglio could not negate the good works of the Howard–Costello era. In the end the Labor Party will either adapt to this or disappear.

When I was a young man, the Left squarely dominated the ideas of the times. Even the governments of Margaret Thatcher and Ronald Reagan only mildly punctuated this. But today things are different. The Left still commands the institutions and the media of ideas. It still dominates the press and the universities. But it no longer commands the ideas of the age. Its idea-set is exhausted. Compare the polemics of Paul Krugman with the polemics of John Maynard Keynes. Krugman is an over-wrought caricature of Keynes. He can only repeat a failing mantra: spend, spend, spend. There is no shortage of left-wing Australian media commentators but none can match the intelligence, sharpness or audience size of Andrew Bolt. Likewise in America the likes of Mark Steyn, Charles Krauthammer, George Will and Peggy Noonan intellectually tower above their left-of-centre peers. The last best left-wing commentator was Christopher Hitchens, who in the final decades of his life had made a partial shift to the intellectual Right. It is true that in the universities the intellectual Right remains marginalised, but the Left commands only the institution. The wellspring of leftist ideas has dried up. Most of the great left-wing intellectuals of the last century, some of whom were truly great, are dead. Their younger intellectual successors are almost entirely third-rate. They speak in clichés. The last half-century has seen a visible decline in both the intellectual productivity per capita of the universities and the amount of high-level creation by them. In Australia, Canada, the United States and the United Kingdom there is no longer any left-wing intellectual who can match the acumen of a Niall Ferguson, a Roger Scruton, or a John Carroll.    

What the end of the age of reform means is simply and finally the onset of a new age of common sense. In place of the unsustainable entitlement state and the fantasies of green bureaucracies, common sense demands low or no sovereign debt, government budgets that do not exceed a third of GDP, the end of the creation of pointless media-clerisy “values” jobs, a limiting of the size of the university sector, a cessation of the feather-bedding of green and legacy industries, and a sizable reduction of the 10-plus per cent of GDP that is spent on regulation compliance. This does not mean “no government”; rather it means good government that focuses on basics. Equally it means no more cappuccino capitalism and no more half-baked fictional wealth creation reliant on government subsidies or interest-rate-fuelled speculation. Commonsense capitalism rests on hard work, personal responsibility and high levels of innovation. It is not for the lazy, and that includes directors who sit on the boards of companies without investing in those companies. The colour of the future is not the pastel green of the environmental pseudo-church. Nor is it the creamy brown of the inner-city cappuccino capitalist. Rather it is the dirt-brown of dedicated hard-working souls and intelligent risk-takers who go to far-flung places and discover things that no one else has. Welcome to their future, it is nearer than you might think.


Peter Murphy is Professor of Creative Arts and Social Aesthetics at James Cook University. His latest book The Collective Imagination: The Creative Spirit of Free Societies was recently published by Ashgate.

[i]               Congressional Budget Office, CBO Releases Updated Estimates for the Insurance Coverage Provisions of the Affordable Care Act, March 13, 2012. 

[ii]               eHealth, The Cost and Benefits of Individual & Family Health Insurance Plans, November 2011. The eHealth figures for private health insurance are based on a survey of 384,000 policies. They are paralleled by the America’s Health Insurance Plans 2009 survey of 2.6 million policies. This survey recorded annual premiums averaging $2,985 for single coverage and $6,328 for family plans. Nine percent of insured Americans are in private plans. The majority of insured Americans (60 percent of them) are in employer-sponsored group health insurance plans. The rest are in military schemes, in Medicare and Medicaid, or are uninsured.

[iii]              The group employer-sponsored schemes are no more efficient than the government scheme. Corporate socialism doesn’t work either. Employers pay most of any group plan premium, while employees co-pay a minor portion (Kaiser Family Foundation, Employer Health Benefits 2011 Annual Survey, Menlo Park, CA: Health Research and Education Trust, 2011). On average employees with single coverage pay $921 annually (18 percent of the premium); while family coverage costs employees on average $4,129 per year (28 percent of the premium). Corporate schemes have been no more cost effective than the ‘Patient Protection and Affordable Care Act’. What then makes the private health plans work? More than anything they have cost-sharing provisions such deductibles, coinsurance provisions and co-payments. These help control both general health costs and insurer costs, in turn driving affordability. As long as a perverse paradox operates, and both government and employers define the cost of health care as not-a-cost but a benefit, then there is no incentive in the system for cost control or cost moderation, bringing America to spend twice per capita on health care than other OECD countries, and with poorer results on key indicators.

[iv]              With tax receipts down to $3.2 billion across the fiscal years 2013 and 2014.

[v]               A Silicon Valley stalwart, Perlman invented Apple’s Quicktime video technology.

[vi]              I use ‘liberal’ here in the sense of the American left-liberal or the English Liberal Party social-liberal, not in the older sense of the classic market liberal or in the sense of a contemporary centre-Right liberal-conservative.

[vii]             The Catholic Archbishop of Westminster, the Most Reverend Vincent Nichols, put it well. Asked what he would say to a gay Catholic couple who approached him for marriage within the Church, the Archbishop said: ‘I would want to say to them that I understand their desires, that I understand their experience of love is vitally important in their lives, but I would want to say to them that they are called in my view, in the Church’s view, to a very profound friendship in life. I would want them to be respected, but I would want them to have a vision in themselves that what they are called to is not marriage but a very profound and lifelong friendship. Marriage is about bringing difference together. Different sexes, sometimes different families, different tribes. It’s been used to bring kingdoms together. It’s about bringing difference together, out of which comes a new start and a new life. The gender difference is essential for its creativity and its complementarity.’ (M. Holehouse, ‘Gay couples are just lifelong friends, says Catholic leader’, The Daily Telegraph, 16 March, 2012.)

[viii]             Norman H. Nie, Saar Golde and Daniel M. Butler, Education and Verbal Ability over Time: Evidence from Three Multi-Time Sources, Stanford University, 2009.

[ix]              Charles Murray, Real Education, New York: Three Rivers Press, 2008, pp. 113-114.

[x]               Richard Arum and Josipa Roksa, Academically Adrift: Limited Learning on College, Chicago: University of Chicago Press, 2011, p. 36.

[xi]              The U.S. Bureau of Labor Statistics projects through to 2020 that 20 per cent of U.S. jobs require a degree and 10 per cent require a post-high school certificate. BLS, ‘Employment by summary education and training assignment, 2010 and projected 2020’.

[xii]             Denise Bradley (Chair), Review of Australian Higher Education Report, 2008, p. 10.

[xiii]          OECD, Education at a Glance. Paris: OECD, 2009, p. 43.

[xiv]             Between 1929 and 2008, Republicans and Democrats occupied the White House for 40 years each.