The Experience of Middle Australia: The Dark Side of Economic Reform

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Advance praise ‘Commentators talk about Middle Australia. In this humane and scholarly book, Michael Pusey talks with Middle Australians instead, to find out what they think is happening to their world. The result is fascinating. One of the most important contributions to Australian self-understanding of recent years.’ Robert Manne ‘Ten years ago Michael Pusey’s research told us how we were landed with ‘market rule’ without much chance to vote about it. Now in a fair sample of middle Australia he has found a landslide majority for a fairer, fully employed, less unequal and more sustainable economy than small government has ever given us.’ Hugh Stretton ‘We should applaud Michael Pusey for reminding us that our proper study is not the bottom line but the way we live and relate with each other, and that the quest for constant growth ignores the need for harmony and balance in the finite world that we inhabit.’ Elizabeth Evatt ‘Middle Australia is stretched, anxious, angry. Michael Pusey is its champion. This is moral sociology at its best.’ Peter Beilharz ‘Pusey’s provocative and important book is a challenge to contemporary orthodoxies. Society, he warns, will bite back if we choose to build our civilisation solely around the concern of business to operate with as little constraint as possible. He deserves to be read – and heeded.’ Will Hutton The State We’re In and The World We’re In ‘Middle Australia wants other riches than money. It has a lurking suspicion that economic reform involves highway robbery of human values. Michael Pusey and his team have unveiled a fascinating insight into the hidden Middle Earth of Australian thinking.’ Bob Brown ‘If the doctrine that “markets know best” is an empirical thesis, not merely fundamentalist dogma, then a variety of questions at once arise. The great value of this book is that it poses some of the most important of these: in particular, the crucial question of “how people experience the economy.” The answers are instructive, in some respects chilling, and should become a central component of public debate on the radical reconstruction of Australian society that has been imposed on the basis of principles that are far from self-justifying.’ Noam Chomsky

The Experience of Middle Australia The Dark Side of Economic Reform

This book puts middle Australia under the microscope, examining how quality of life is faring in the face of change and uncertainty. Four hundred Australians from around the country shared their experiences of work, family and community for this book, creating a striking picture of Australian society as it heads into a new century. This lived experience is set against hard data so that we can truly understand the impact – good and bad – of economic restructuring on the broad Australian middle class. Meticulously researched, it mounts a moral and intellectual counterargument to eonomic reform. Following on from the groundbreaking success of Economic Rationalism in Canberra, Michael Pusey’s new book will be equally important. Michael Pusey was educated in England, France, Australia and the United States, where he took his doctorate of Harvard. He is the author of the best-selling Economic Rationalism in Canberra and is presently Honorary Visiting Professor at the University of New South Wales.

The Experience of Middle Australia The Dark Side of Economic Reform

MICHAEL PUSEY University of New South Wales With the assistance of Shaun Wilson, Nick Turnbull and Toby Fattore

   Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo Cambridge University Press The Edinburgh Building, Cambridge  , United Kingdom Published in the United States by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521651219 © Michael Pusey 2003 This book is in copyright. Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published in print format 2003 ISBN-13 978-0-511-06847-8 eBook (EBL) ISBN-10 0-511-06847-6 eBook (EBL) ISBN-13 978-0-521-65121-9 hardback ISBN-10 0-521-65121-2 hardback ISBN-13 978-0-521-65844-7 paperback ISBN-10 0-521-65844-6 paperback Cambridge University Press has no responsibility for the persistence or accuracy of s for external or third-party internet websites referred to in this book, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.

You should write as if you were already dead. That is the only way to write with integrity. Nadine Gordimer

This book is dedicated to good citizens everywhere.

Contents

List of Illustrations Preface Abbreviations

xi xiii xvii

Chapter 1

The Experience of Economic Reform Middle Australia: Why does it matter? Economic reform: Where did it come from? Who are the reformers? Warnings? Approach and method

1 3 7 10 12 14

Chapter 2

Incomes and Their Meanings What’s happened to incomes of the broad middle? Feeling the pinch? Does middle Australia know what is happening to its income? Winners and losers? Is it fair? The latent politics of income distribution Pointers and conclusions

19 21 25

Chapter 3

Jobs, Work and Fairness in the Wake of Labour Market Reform What? More labour market reform? Two angry middle Australias? A double assault on the willing? Looking for the culprits Conclusion

29 32 36 44

47 49 53 62 67 74

ix

x

Contents

Chapter 4

Working Families: Struggling with the Costs of Reform It’s hurting … Families caught in the middle Women, work, rights and choices Lost restraints, lost disciplines and invidious choices Family experience across the generations Conclusions and pointers

76 76 80 84 92 101 107

Chapter 5

Civil Society and Communities The breakdown of community? Social capital and volunteering The structure of society: recognition, denial and egalitarian aspiration The media Trust Conclusions

111 113 119

Chapter 6

Politics, Power and Institutions The power of big business Institutional ‘reform’ Towards active government? Who is to blame? In conclusion and with hindsight …

138 141 147 154 159 162

Chapter 7

Judgements on Economic Reform Time Globalisation Practical moralities Legitimacy (and trust) Finally …

168 170 172 174 178 182

Appendix A: Chronology of Economic Reform Appendix B: Methods and Procedures: Middle Australia Project Appendix C: Supplementary Tables Appendix D: Income and Equivalent Household Income

186 194 197 204

Notes Index

208 240

121 126 132 135

Illustrations

Figures 2.1 Perceptions of winners and losers from fifteen years of economic change 4.1 The family over the life cycle: caught in the middle 5.1 Five possible models of the social structure of Australia 5.2 Winners and losers from economic change, by feelings about what is happening with middle Australia 6.1 Middle Australia’s perceptions of the capacities of government Tables 2.1 Attitudes towards household income by equivalent household income 2.2 Areas of rising and falling income by equivalent household income and perceptions of adequacy of income 2.3 Winners and losers from fifteen years of economic change by equivalent household income 2.4 Newspoll 2000 Survey, reduce the income gap or make the pie bigger? 2.5 Newspoll 2000 Survey, distribution of wealth across Australian society compared with ten years ago 2.6 Attitudes towards income redistribution, poverty and inequality by equivalent household income 2.7 Changing perceptions of the income gap in Australia 2.8 Differences in income by standard of living, and attitudes towards business, elites and economic reform 3.1 Labour market change, 1985–2000 3.2 Incomes and job prospects of middle Australia 3.3 Self-reported aspects of work by occupational ‘class’ 3.4 Attitudes to reform, by ‘class’

33 82 123 124 156

28 31 35 38 39 40 42 43 51 53 56 58

xi

xii

4.1 4.2 4.3 5.1 5.2 5.3 5.4 5.5 5.6 5.7 6.1 6.2 6.3 6.4 6.5 6.6

Illustrations

Attitudes towards work and family duties Women and work: family roles, rights and choices Household types and attitudes about the family Perception of incidence of crime Civic association: memberships of organisations What kind of society is Australia today? Which model of the social structure do you think best describes Australia? Influence on political and economical matters Trust by perception of social structure Trust in people by equivalent household income Attitudes to big business Attitudes to big business and control of multinational companies by selected variables Support for ‘old’ and ‘new’ economic institutions Pressures driving economic change and restructuring How to solve Australia’s economic problems by rating of economic reform Blame for declining income and job prospects of middle Australia

84 87 93 118 120 124 125 127 133 134 142 144 148 152 158 160

Preface

This book is written for people who want to understand the experience of their fellow Australians. Everyone agrees that Australia has been profoundly changed by a twenty-year program of economic ‘reform’, ‘structural adjustment’, or ‘globalisation’ – all these terms mean the same thing. Yet we do not really know how economic reform has redefined the lived experience of families, workplaces, and communities. Has it reshaped our dispositions and orientations towards others? We need to understand how it challenges our practical moralities, our trust in others, our time horizons, our coping strategies, and our sense of where we fit in the larger society. In the wake of twenty years of reform how do we now construe our mutual obligations to others? And how do we make sense of our engagements with intimates, strangers, citizens and leaders? It’s the resonances, the meanings and the social significance of the lived experience that matter here. And it’s from this viewpoint, and with the reports of 400 randomly selected middle Australians in five capital cities, that this book explores the impact of economic reform on the experience of middle Australia. A great scholar once said to me that all learning and all scholarship in every branch of the humanities and social sciences is always led by inner motives. We academics, teachers and writers feel driven without respite by questions that have no easy answers. In this quest my scholar friend was also reminding me that the experience of others only becomes intelligible through questions that have taken hold in our own intellectual imagination. My own driving questions first took shape in the national debate that exploded with the publication in 1991 of Economic Rationalism in Canberra. Suddenly the costs and benefits of economic reform became a burning public issue. Economic Rationalism was an empirical and sociological study based on some two hundred interviews with top Canberra public servants. Among other things it showed how economic rationalism (or, in different words, applied neo-classical economic doctrines, laissez-faire, and ‘free market’ economics) had colonised and narrowed the intelligence of Canberra’s xiii

xiv

Preface

central policy apparatus. Economic reform was already busy recasting society itself as a stubbornly resisting sludge through which we must drive the economy. In this upside-down view of the world, society had been redefined as a generic externality for the economy. As the debate over economic rationalism intensified, I found myself variously supported and attacked by parliamentarians from both sides of politics, public servants, public intellectuals, by some excellent journalists and by the hired guns of corporate Australia. At one point 200 economists wrote a petition to the then Treasurer John Kerin objecting to the reform agenda and supporting my criticisms. Over the best part of three years from the end of 1991, I unexpectedly found myself speaking to parliamentary committees, engaged in some 200 media commentaries and interviews, and talking to public interest groups and to church, trade union and community organisations. I was generously received as a guest speaker to a range of organisations across a political spectrum from the Evatt Foundation, the Australian Democrats and Federal ALP Caucus Committees to the Sydney Rotary Club, the Harvard Club, and the Committee for Economic Development of Australia. Everyone, it seemed, wanted to know about economic rationalism. Who was driving it? What impact would it have on contemporary Australia? In struggling for answers over the course of nearly a decade I often asked academic audiences of social scientists and economists, ‘Does anyone here think that economic reform is really going to benefit the broad mass of the Australian population?’ To this day I have not had a single positive answer. It was in this context that the ‘inner motives’ for this research took hold. I was locked in debate with opponents – most of them libertarian economists and proclaimed reformers – who argued with mineral certainty about other people’s life experience. Evidently they felt no need whatsoever to question people about how they live with money, order their priorities, make choices and experience the economy. External economic measurement of market behaviour would provide the only sufficient and valid answer. Of course I accept that social science has its own division of labour. It allows each of us to make our inevitably specialised contributions to a world that is infinitely larger than the tiny patch on which we concentrate our energies. But still, there is something perverse in the presumption that extremely artificial and disputed abstractions can be used to re-engineer, from the top down, a whole nation society without any felt need to ask how the lives of millions of people will be affected. For Economic Rationalism in Canberra I had done the empirical work. But now, increasingly, I found myself opposing libertarian and economic ideas not with appeals to sociological ideas but rather to a lived experience of ‘middle Australia’ that I had not studied for myself. At

Preface

xv

the same time the ground was moving under me in another even more unsettling way. How can you know anything about other people’s lives? Are you not projecting your own narratives and languages upon them? The footings of my own discipline were moving. It’s good for us of course, but very unnerving. Just as you reach out to engage with others in a splintering public sphere, you feel the ledges giving way under your feet. Either quit, or brace yourself for something new. How does middle Australia experience the new economy? You have to go and ask them for yourself – and you must do it with just the breadth and openness that you find wanting among your opponents. As the world has both shrunk and changed, we find our own theoretical uncertainties echoing back to us from a broad public that is puzzled and mistrustful. We are all pluralists now. Thoughtful people everywhere know that arguments about how best to live the Good Life can no longer be quickly settled with trump cards, expert findings and conventional answers. People know they have to choose, but in doing so they want to see how the choices are generated. And when positions are publicly contested, they look for sense and feeling about how the disputes are grounded. Who are the arbiters of choice? With what authority do they speak? In any and all these discussions people like to know something about our political positions. I have always been a middle-of-the-road social democrat. I might often even find myself to the right of centre in other nations like the Netherlands, Denmark and France that I much admire. What does middle Australia think about economic reform? Only a minority believe that they and the society as a whole, have benefited. But as the reader will discover, the answers are mixed. It’s what they say that forms the basis of this book. The data was gathered with two projects that were generously funded by the Australian Research Council: one on the experience of middle Australia, and a second on the impacts of economic reform on quality of life. In the book my own judgements on the dark side of economic reform are clearly marked so that the reader can make up her own mind about what is at issue and see how the judgements have been made.

I cannot think of any aspect of academic life more satisfying and stimulating than the experience of working with talented younger scholars. For their dedication to the Middle Australia Project I must thank at least four people without whom the study would never have seen the light of day. Nick Turnbull and Shaun Wilson saw me through the hard grind of marshalling and analysing the data over the last eighteen months. At the beginning it was George Matheson who got us started with the processing and mining

xvi

Preface

of the data before Toby Fattore took over about three years ago. Without the friendship, generosity, and abilities of George, Toby, Nick and Shaun the study would have broken my back. My thanks go also to Claudia Tazreiter and to Lydia Burns, who both helped me get the instruments working and who so patiently did all the early administration of the field work. In the last months Harry Blatterer, Aileen Woo and Ben Butcher have helped me with the seemingly endless job of getting the manuscript moving into the hands of my friends at Cambridge University Press and the good care of Peter Debus in particular. I would like to thank the former Comissioning Editor, Phillipa McGuinness, for her confidence in my work and most recently Janet Mackenzie, my copy editor, for her amazing skill in turning my manuscript into a book. In these difficult times for academics and universities, scholarly care and collegial friendship still spring forth as perennial as the grass. When I was in despair over my earlier drafts several people – Hugh Stretton, Judith Brett, Sue Richardson, Bill Martin, Kevin McDonald, Peter Saunders, Martin Krygier, and Boris Frankel – came to the rescue with patient reading and indispensable critical advice. Some months later John Buchanan, Michael Johnson and Barbara Pocock helped with still more. Often they do not agree with me. I take full responsibility for every word that I have committed to these pages. And then, as my kids used to say, there are people who are always ‘there for you’. First among them is Maria Markus, who has been an inspiration to me for the best part of twenty years, and with her, some especially generous colleagues in the School of Sociology at the University of New South Wales; Jocelyn Pixley, Clive Kessler, Mira Crouch, Paul Jones, Michael Bittman and Michael Humphrey. Beyond the school, special thanks go to John Milfull, Craig McGregor, Bruce Petty, Deborah Mitchell and Peter Beilharz, among many others. Institutions matter perhaps as never before. The Academy of the Social Sciences in Australia has given me much stimulating engagement with scholars across several disciplines. Other proteins have come from participation over several years in the Australian National University’s Reshaping Australian Institutions Project. Thanks go there especially to John Braithwaite, Geoff Brennan and Francis Castles, who have been the driving forces behind that very successful initiative. I would also like to thank Clive Hamilton and the Australia Institute, and my several friends in the International Society for Studies in Quality of Life. My closest friends know how much they matter to me. My partner Vivienne and my two daughters Cara and Lisa are my nearest dialogue partners in this passage of my life that is for me so thankfully intertwined with theirs.

Abbreviations

ACIRRT ACTU ALP BCA CD GST IMF MAP NSSS OECD WEF WTO

Australian Centre for Industrial Relations Research and Training Australian Council of Trade Unions Australian Labor Party Business Council of Australia Collection District goods and services tax International Monetary Fund Middle Australia Project National Social Science Survey Organisation for Economic Cooperation and Development World Economic Forum World Trade Organisation

xvii

1

The Experience of Economic Reform What matters is the expectations of the middle class. Disappointed middle class expectations cause revolutions, and the middle class is now being told that their old expectations are out of date. Fewer of them are going to be able to own their own homes. They are going to live in a very different world where inequality rises and where real wages fall for most of them. The era of annual wage increases is over; they cannot expect rising standards of living over their lifetimes or for their children. Lester Thurow1

Anyone who turned forty with the new millennium will have spent all their adulthood living through what we so blithely call ‘economic reform’. Everyone knows what it is. Deregulation, privatisation, labour market reform, user pays, tax reform, cutting government spending, more competition, tax reform (the GST), and – the latest instalment – welfare reform. Watch this space, we are assured there will be more! Yes, but have you benefited from it? Have I, but not you, benefited from it? How? In what way? Has it been good for the nation? Did we have to have it in the first place? Were there alternatives? Was reform an economic necessity or a political choice, or both? If both, then in what combination? Blind Freddie can guess that, once opened, these questions will be hotly contested. They are in the Academy. But what do middle Australians think? For good or ill the stability and permanence of all that has been done for us and with us, or to us, may well depend on how the people have received it, on how it has been woven into the fabric of their daily life. What impact – this is the central question to which this book is addressed – has it had on their experience? Some things are generally agreed. Economic reform came upon us from the top down, with the radical aim of transforming the whole society and its institutions. On every side of politics it is agreed too that we are living now under what Richard Sennett calls a ‘new capitalism’.2 The central purpose has been to make us less dependent on states and governments and more dependent on economies, markets, prices, money, and more directly upon ourselves. As uncertain individuals, we are forced, now as the risk managers of our own lives, to make new economic and social choices in a changed 1

2

The Experience of Middle Australia

structural environment. Everyone knows that economic reform has made the rich richer. Some say that it has made the poor poorer and hollowed out the middle. But these are contested judgements that depend greatly on definitions, timespans and yardsticks for measurement. This is one among several good reasons for studying the impact of economic reform in terms of how the people understand their own relation to the economy, to their own society, and to the political class that is supposed to regulate the relation between the two. Another is that they care and look for answers about what is happening to middle Australia. Almost two-thirds (64 per cent) of them say they are angry or unhappy about what is happening to middle Australia. We shall find them looking for answers in their own conversations with friends, family and workmates; in response to the media; in casting their votes; and in adjusting their own coping strategies to what they think is happening. In Chapter 2 we discover that our 400 randomly selected Middle Australia Project survey respondents seem to have a pretty good idea about what has happened to their own incomes over time. Moreover, we find them making remarkably accurate judgements about who have been the winners and losers from economic reform. They know that big business has been the only big winner. They have not dissociated economic reform and the supposedly neutral medium of money and exchange from the power of corporations. Already we find them making normative moral and social judgements about the widening gap between rich and poor. In the wake of ten years of economic boom, Australians seem to know intuitively, at least, that this has been the only boom in living memory where the broad mass of the population gets nothing or as little as possible. In looking more deeply into where the shoe pinches, we soon discover (Chapter 3) that middle Australia worries about jobs, jobs, jobs. For nearly everyone work is a social protein, a buttress for identity and not a tradeable commodity. As work presses ever more deeply into the fine grain of life itself, it is no surprise to find our middle Australians, the working women especially, worrying about the impacts of work on their families (Chapter 4). As relationships are shaped in the fluid mental spaces between jobs, beds, cots and the sink, we hear people talking much about stress. Economic reform has made intimacy and a whole range of needs and obligations to others contingent in an unexpected way. Stress and troubled practical moralities move to centre stage. As Camus once said, the entire human race suffers from the ‘division between the self and the rest of the world’.3 When people feel themselves forced to retreat into the private sphere, their bonds with strangers and with other citizens are put into question. As the focus of the book shifts to other institutions (Chapter 5), we see economic uncertainty

The Experience of Economic Reform

3

implicated in their concerns about the ‘breakdown of community’, crime, and the impact and truthfulness of the media. Together with disquiet and anger at what is happening to middle Australia, these concerns spill over into the murky waters of politics (Chapter 6) and into the politics of economic reform in particular. With the story of economic reform told through the experience of our respondents, the conclusion to the book puts my own judgements into open question so that the reader can decide for herself on a suitable framework for evaluation of what has happened to us. Could we have enjoyed the fruits of high modernity without radical economic reform? Does middle Australia – and should we? – think of economic reform as wind and rain, as a quasinatural consequence of ‘globalisation’? In the wake of nearly a quarter of a century of reform, what is to be said about trust and political agency? To what extent, if at all, has politics degenerated into the evil art of persuading others to accept states of affairs that are not in their best interest?

Middle Australia: Why Does It Matter? As we shall see in a moment, middle Australia means the broad urban middle class, and indeed just about all of us who live between the rich and the poor. Yes, ‘between’. Middle Australia matters because a broad flourishing, diverse and well-educated middle class is probably the best available predictor of long-term prosperity, stability and social peace. In describing Australia as one of the most ‘contentedly middle class societies in the world’, art critic Robert Hughes used the past tense.4 In the years following World War II, before reform took hold, the generally right-wing Economist magazine thought that Australia was ‘the sunniest democracy in the world’, as Donald Horne’s Lucky Country made an irony of our unthinking complacency. Middle Australia today matters because its expectations are built on the certainty that everyone would have ‘a fair go’, that upward social mobility for the poor was always possible – or even normal – and that a nation-building state would moderate the distribution of income, responsibly lead national economic development, and temper the demands of corporations.5 Likewise for the other primary goods of personal economic security, freedom, right and entitlement. Even in the United States we know that ‘historically it was not the market but the state that created the broad middle class’.6 Now in Australia and in the name of economic reform, we could be unmaking it. Middle Australia is as much an outlook as a demographic category. As such, it holds the background assumptions that people use to interpret

4


what has happened to them. It provides them with the referents they use to make sense of the obstacles and challenges, the joys and the disappointments that we must all face, together and individually, in our struggle to do the best we can for ourselves and others. In this field of thought and emotion, nothing stays the same for long. Economic reform is internalised as the pressure to keep up and adapt with the times. In the ongoing struggle for the hearts and minds of a nation, the experience of middle Australia matters because we cannot know when tolerances have been exceeded until after the elastic has snapped. The integrity of the nation, its cohesion, and its prospects in an uncertain future depend on the capacity of ordinary people to discriminate between opportunity and danger. Middle Australia itself is now the object of a radical experiment. In the past it was the vulnerable poor who were most exposed to the vagaries of the economy. Now, as the market is made to penetrate ever deeper into the lives of ordinary people, the deliberately expanded risks of a new capitalism take hold on the job security, savings, retirement incomes, and family stability of the broad middle class. As we shall see, middle Australians know that they are becoming ever more dependent on structures over which they have ever less effective control. As economic reform has come upon them from the top down, they understand that the biographies and coping strategies of ordinary people become increasingly contingent on a process of economic restructuring that has been driven by corporations. Society itself, along with its broad middle, is externalised for big business as nothing more or less than an environment that is treated, along with minerals and natural resources and the capital and labour markets, as one among many resources for production and profit-making in a competitive global economy. Economic reform was always designed as a radical re-engineering of a whole nation society, which would ‘give capital a chance’ by reshaping regulatory and other institutions to allow corporations both to harvest the benefits and to externalise the costs of risk-taking. Business, and big business in particular, takes risks and produces dangers that are ‘externalised by economics, individualised by the legal system, legitimated by the sciences’ – and by the media – and ‘made to appear harmless by politics’.7 Democracy matters. And under conditions of rapid change it depends more than ever on the tolerances of the broad middle. In a changing context most middle Australians are being asked, not just by their employers, to give more for less. Economic reform has some perverse effects. It may have raised the threshold of justification in the very process of trying to reduce it. As people find themselves on the receiving end of insistent demands that they must reduce their expectations of governments, employers and


5

corporations and, at the same time, work harder, more flexibly and more cleverly, they inevitably begin to ask, ‘What’s in it for me?’, ‘What’s in it for us?’ Without clear answers, legitimacy, and with it cooperation and trust, are put into question. These pressures exacerbate already latent conflicts of interest and agency. In this new situation the reformers lead ever more aggressively from the front foot, with a libertarian and minimalist idea of democracy that treats the law and democratic institutions only as formal constraints on economic exchanges and frustrations to business practice. On the other hand, for most middle Australians democracy still carries a stronger, substantive and promissory meaning: more than ever in uncertain times we expect our representative to represent our interests. In such conditions it is rational to trust what has worked well in the past. For Australia, this is a strong reliance on the modern, unromantic, utilitarian, pragmatic – but effective – institutions of (Benthamite)8 representative government and statutory authority. The gap between these two notions of democracy widens. All we know is that the elites at the top have decided to put their interests first, and that the people at the bottom have no voice. The outcome and the consequences will therefore depend on how the tensions are resolved in middle Australia. Happiness matters and, yes, middle Australia wants to be happy. If the markets are up, how come middle Australia is down?9 In Australia, economic reform has been imposed on the people in the face of international comparative evidence showing that economic engineering reduces happiness and causes depression. In advanced countries like Australia with already highly developed markets, economic development conceived and imposed as ‘more market’ erodes quality of life. It increases poverty and thus misery, and it forces people more deeply into an inherently frustrating scramble for what the economists call ‘positional goods’ (better cars, better houses, better holidays etc.).10 Increased personal dependence on markets undermines achievement and compromises personal equanimity and good judgement. Materialistic people are more unhappy than others with more socially effective personalities.11 Fighting off the false demands of intensified markets makes for a happier journey. Similar findings show that the commodification of everything, and the widening imposition of money as a common denominator of value, pollute and undermine other more fundamental social resources for personal happiness, such as tension-free leisure, autonomy, effective personal communication, domestic felicity, good health, inter-generational relationships, meaningful work and friendships.12 In responding to a forced requirement to define themselves more as self-seeking strategic economic actors with competing economic interests,

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middle Australians carry the costs of thinning social connections with others. In the establishment and maintenance of normal interactions, ever more time and energy must be given to watchful vigilance. As others are more normally assumed to have competing goals and conflicting interests, cooperation and collective action are undermined. Economic relationships become more costly before they even begin to turn a profit, because transaction costs increase.13 Time horizons shorten as memory of the past becomes irrelevant to the present. As prediction fails in the face of an opaque wall of unfathomable contingency, the future becomes too risky to sustain calm and confident action. As these same forces impact on the institutional structure, the costs are borne in the daily lives of middle Australians. These several pressures inhibit the most socially useful longterm economic investments (in complex high-tech manufacturing, for example), and they favour financial speculation, short-term economic expediency, buccaneers, exploitative work practices and early profit-taking. Adaptation, even forced adaptation, changes the thresholds of acceptance in what is, at least arguably, a downward spiral. In seeking to grasp the changing balance of social costs and benefits, we need to look more attentively to the experience of the people themselves, and to middle Australia in particular. This is the only way to tell whether new norms and standards are taking hold or failing. It is to the inflections of voiced experience that one must look for the social meaning of the massive structural changes that economic reform has unleashed on Australia. Economic engineering has mostly produced, or otherwise abetted, a seismic shift in the distribution of income, power and resources. There are seven notable dimensions to this redistribution. From the public sector the bottom 70 per cent of wage and salary earners wage and salary earners small business the ‘bush’ consumers households

To the private sector the top 10 per cent corporations big business the city producers the market

We see a clear shift in the distribution of income from wage and salary earners to corporations. It shows up in the national accounts as a fall in the wages and salaries share of national income and a rise in gross operating surplus or profit share (see Appendix C, Table C.4). For corporations, this


7

represents the benefits of greater labour productivity. But in the absence of effective redistribution (through taxes and other channels) for wage and salary earners and their dependants, it means more work for (relatively) less pay. Everyone is agreed that there has been a clear increase of national income going to those in the top decile of the income range. This partly explains why those in the top bracket tend to ask, ‘What’s all the fuss about?’ For them incomes have continued to grow smoothly over a period of nearly fifty years from the end of World War II. They do not see that for others, everything has changed. Even the government’s Productivity Commission agrees that there has been some hollowing out of the middle, but once again this depends on definitions and metrics.14 Despite high levels of unemployment, incomes of the bottom 20 per cent have probably been maintained, or even slightly enhanced, by targeted social security transfers. The massive reduction in the proportion of the population working for government clearly marks the huge shift in power and resources from the public to the private sector. The goods and services tax (GST) represents another shift of income from consumers and wage and salary earners to producers – their savings were cut in one stroke, as more of the tax burden was shifted from inputs on corporations to the rest of the population. There has been another shift, at least in relative operating cost and power, from small business to big business. And, as families and households buy more goods and services, there is a further transfer from the informal household economy to the market.

Economic Reform: Where Did It Come From? Economic reform is a child of the Cold War. It is no surprise that the national public policies of small to middle-sized nations like Australia should be shaped by the movements of world history. Dominant trends are normally mediated through international institutions, most recently by international economic organisations like the World Bank, the International Monetary Fund, the Organisation for Economic Cooperation and Development, World Economic Forum and the World Trade Organisation. In the mid-1970s Cold War stand-off between ‘the West and the rest’, elite opinion in the developed Western nations came to the judgement that these nations were drifting dangerously into ‘ungovernability’. Private enterprise capitalist democracy seemed to be in trouble. In the age-old tensions between accumulation and legitimation, both seemed to be failing together on two fronts. Corporate sector profits and the profit share of national income had been falling steadily from the end of World War II to the late

8


1970s (in the United States from just under 8 per cent to just under 5 per cent),15 and Keynesian economic policies were producing too many perverse effects. The view from the top was that the great postwar boom was threatening the very stability of democratic governance by generating too much contestation, and too many ‘irresponsible demands’ for higher wages and living standards and for more consumption and more publicly provided services. Australia too seemed to be reeling: first from the oil price shock of 1973–74; from worsening terms of trade in the mid-1970s; and then gradually into the 1980s from the double affliction of high unemployment and high inflation (as measured by the so-called ‘misery index’). In response to these problems came the New Right with its neo-liberal, or more accurately, libertarian free market policy. In 1975 libertarian and neo-conservative politics were first packaged as a political program for the reform of whole nation societies in The Crisis of Democracy: A Report on the Governability of Democracies to the Trilateral Commission.16 The diagnosis was clear: ‘an excess of democracy means a deficit in governability’.17 The ‘ungovernability of our societies is a cultural failure’. Democracy is failing because governments are weighed down with an ‘overload’ of contradictory and ‘irresponsible’ demands. These were ‘the disruptive effects of continuous growth’ and of the excessive and ‘incompatible’ claims of citizens. The cure? Less, and more austere, government. And much more stern discipline from the markets. The new policy dispensation had clear priorities. Strong political leaders must take charge of public policy and bring bureaucracy to heel. They must bring the critical media into line and under corporate control. The trade unions and organised labour would be exposed to market discipline. Public debate must be managed more effectively, from the top down. The restructuring of higher education would need to mortify the ‘disruptive value intellectuals’ and give more scope to ‘action’ education, promoted as a business and for business. Variously, by recommendation and implication, the new leaders must impose fiscal discipline, slash government spending, eliminate budget deficits and widen the reach of corporations in every area of society. Among the Anglophone countries this program was known as neoliberal reform, structural adjustment, free market economics, laissez-faire or supply-side economic reform (all the terms mean the same). It was first deployed in a soft form by Labor in 1975 and thereafter in the late 1970s by the Liberal governments of Malcolm Fraser (see Appendix A). Thereafter, economic rationalism, as we call it here, was taken up in a harder form by the governments of Margaret Thatcher, Ronald Reagan, New Zealand Labour; then by the successive Australian governments of Robert Hawke


9

and Paul Keating; and thereafter, to the turn of the century, by Howard Coalition governments. One measure of how far this process had gone in Australia comes with the assurance of a senior ex-Treasury official that ‘during the Hawke and Keating years Treasury got the whole of its agenda up; more of it than they did in the whole postwar period’.18 The reform prescription has now become a global orthodoxy for economic ‘development’ and an obligatory form of economic correctness. With twenty years of refinement, it is now an evolving and highly sophisticated program for the re-engineering of nation societies. But the degree and manner of its adoption vary enormously, and it is resisted and mediated differently with hugely varying political and economic effects in different nations. In Australia we copy others in pretending that economic reform offers a ‘one best way’ to which there is ‘no alternative’. Yet the Anglo-American libertarian model of free market capitalism is by no means the most successful among at least five different forms of ‘developed’ capitalism in the world today. An admittedly disputable classification would put, in first place, German and Dutch partnership capitalism – also known as corporatist capitalism but not to be confused with corporations! – as the most successful model. The Scandinavian model would come second. Then, variously and in no particular order of success, would follow: the Mediterranean model of Portugal, Spain, Greece and, arguably, Italy; the unique Japanese model; and the invidiously labelled crony capitalism of the Asian Tigers – so named until they fell into a pit with the Asian meltdown of 1997. There is a dark side to the Anglo-American model that has been applied in such an aggressive form here in Australia – and even more so in New Zealand.19 In every country, reform is faced with the same basic elements of markets, states, families and, arguably, civil society. What matters most are the limiting claims that each is allowed to set on the others. Our own economic rationalist prescription proceeds from the extreme assumption that economies, markets, money and prices can always, at least in principle, deliver better outcomes than states, governments, and the law. And, further, that the market provides the only practical means for setting values on anything.20 On the dark side, the danger is that the model and its strategies accept no inherent limits: nothing is off-limits to the strategy of securing the maximum possible penetration of the market mechanism.21 Civil society becomes a ‘stubbornly resisting sludge’ through which one must somehow drive the economy. Deliberative politics, participatory democracy and independent criticism are cast, a priori, as frustration to economic efficiency. And government itself is recast as the enemy of governance. The strategy stands honest reason on its head by remaking politics as the cunning art of

10


reducing expectations, of putting government beyond the reach of the governed, of undermining the trust of citizens and, in short, of destroying all forms of opposition to corporations at source and before they can ever be effectively mobilised into action. Internal balance is impossible. Both in its conception and implementation, economic reform of this kind is violence to open democratic society.

Who Are the Reformers? Who initiates and manages the new capitalism in Australia? The answers to these questions cannot be reduced to class any more than they can to simple notions of wealth and power. Moreover, most people know that there never was a unified ruling class. It is the architecture, control and management of the new capitalism that matters. From the early 1980s major public policy has been authored by cabinet ministers and top public servants working together as one. Early in his career as Treasurer, Paul Keating once proclaimed that he asked Treasury what needed to be done, because reform, he said, would only come about through a massive combined effort of both political leaders and top ‘econocrats’. The forerunner to this study demonstrated that the drivers of economic rationalism in Canberra have been top ministers and Senior Executive Service economists. In practice, this means the offices and departments of the Prime Minister, the Treasurer and the Minister of Finance – together with two or three other senior cabinet ministers – and a handful of elite and narrowly trained neo-classical economists, most of them steeped in American econometrics and with experience in Washington, the OECD, the WTO, the World Bank or the IMF. Together they have destroyed the capacity of a once excellent and highly professional public service, one of the best in the world, to deliver independent advice and policy in the public interest and without fear or favour. From the mid-1980s the substantive policy areas of education, health, trade, communications, industry and the like were all subjected to the same process of internal colonisation and restructuring. At the Senior Executive Service level a highly sophisticated form of ideological selection quickly led to the replacement of experienced officials having real policy know-how with a new elite of narrow neo-classical economists, business-oriented economists, accountants, and people with degrees or experience in business administration and corporate management. For the most part, the new breed are extremely bright model-makers and strategic analysts, with a trained incapacity to think intelligently about society or the common interest. They are united by a


11

common determination to give the markets primacy over the society, and hence to make the tail wag the dog.22 The wider interests of the nation and the people could never have been so thoroughly subordinated without a close partnership between the economic rationalists in Canberra and the peak organisations of big business. None has been more powerful than the Business Council of Australia, comprising the CEOs of about one hundred major corporations. In the 1980s those with an ear to the ground in Canberra already knew that, with senior Treasury and central agency officials, the secretariat of the BCA was writing national budgets sometimes almost line by line.23 To this day, the BCA produces reports that sound reasonable. In Canberra behind the scenes, and in the name of greater economic efficiency, it successfully pushes for the maximum possible reduction of input costs to big business – ever lower wages, ever more labour ‘flexibility’, and ever lower levels of corporate taxation – all within an always more permissive regulatory environment. Coordination between the commanding heights of both Canberra and the big business sector has all but drowned the interests of domestic manufacturing. Other groups representing small business, retailing, construction and the agricultural sector24 are variously coopted and manipulated as tokens and pawns in the main game of economic reform, which aims always to produce a maximum nation-wide dependency of both people and institutions on markets rather than upon particular sectional interests. Given that no single fraction of the elite can for long drive economic reform on its own, flexible but loose and effective coordination is everything. Interlocking directorships coordinate big business interests over a range of companies,25 but they still need the added leverage provided by the large international accounting houses like Arthur Andersen (the thought police for institutional and other large shareholdings) and the local representatives of the international credit rating agencies like Moody’s. Yet effective coordination has to legitimate itself with authoritative reference to a strategically contrived public discourse. As in the United States (and Britain), a number of New Right business-funded think-tanks with international links have simulated the methods of serious academic research to promote business interests.26 Freedom fighters (the libertarians) and other hired guns are brought in to do their thing with just enough independent scholarly participation to give a veneer of independence. Some commentators have detailed up to seventy such places.27 The think-tanks include the Committee for Economic Development of Australia, the Institute of Public Affairs, the Centre of Independent Studies, the Sydney Institute and the Australian Institute for Public Policy. To the best of my knowledge they

12


mostly refuse to disclose the specific sources of their funding. They manage public opinion and provide platforms for newspaper opinion writers and for public commentary on radio and television. For some of them, with means fair and foul, the aim is to further the interests of big business by attacking public intellectuals, the Australian Broadcasting Corporation, the churches, the unions, community advocacy organisations and, indeed, any institution or agency that resists the big end of town. Yet the entrenchment of the public discourse depends as much on differentiation and segregation as it does on open debate. I was once told by a senior official in the Reserve Bank that what I called ‘ideological purity’ was just my term for what he read as successful recruitment policies. Large corporations routinely use psychological testing to screen out people who are critical, reflective and ethically minded. Similar selection processes operate, together with huge conference attendance fees and other membership barriers that variously combine to pre-empt unwanted public debate, to strengthen the internal (recursive) self-reference of the paradigm, and to immunise it against effective criticism from social and public interest positions. Structurally abetted mutual incomprehension has its own somewhat tragic consequences. To the greater detriment of the national conversation, people of goodwill on both sides of the fence never talk to each other.

Warnings? This book is written from a middle-of-the-road social democratic position. One axiom is that a flourishing nation needs strong, well-functioning markets. Another is that the people must compel governments to hold and build whatever authority they need, to have those markets work for the benefit of all. Yet, sadly, moderate positions are most commonly treated by policy leaders as enemy attacks on the castle gate. That is why the warnings of senior international figures on the perils of winner-take-all economic reform deserve some attention. Decorum alone would require that the revered leading architect of postwar economic policy should be invited to respond to the international launch of economic reform at the plenary session of the Trilateral Commission’s conference in Kyoto on 31 May 1975. With masterful understatement and prescience, Ralf Dahrendorf, a former director of the London School of Economics, warned the delegates: they have to avoid the belief that a little more unemployment, a little less education, a little more deliberate discipline, and a little less freedom of


13

expression would make the world a better place, in which it is possible to govern effectively. Indeed, I think, this attempt to turn back the wheels of history to try to recreate the state which we have fortunately and deliberately left is in many ways as uncivilized, indeed primitive, as the belief that all we need is nationalized ownership, public planning, and worker control.28

Even Rupert Murdoch’s local battleship The Australian felt compelled to publish the warnings of another man whose successes were judged by the London Times to be ‘unparalleled in the history of finance’.29 After all, in 1992 he was credited with having single-handedly brought down the British pound. One half-teasing but sympathetic critic was not far wrong in representing George Soros’s view of the deregulated market as a ‘killer shark crunching up in its massive jaws values, morals, communities, families, family businesses, nation-states and the undeveloped world as it scours the world in search of nourishment’.30 One can be quite certain that no one at the Business Council, the Treasury, or in the cabinet room is listening as Soros considers the dangers of too much competition, too little cooperation, and too much profit-maximising – nor when he warns that ‘the incursions of market ideology into fields far outside business and economics are having destructive and demoralising social effects’.31 Soros has soberly explained in plain language what is wrong with equilibrium theory, neo-classical economics, rational expectations theory, and the mathematical formula-mongering that have governed national economic policy in the United States, Britain and Australia for the past twenty years. Today it is these ideologies, he warns, that present the most palpable threat to the shared values of an open society.32 A recent warning comes from an American in Paris, who is surely one of those more generous American plutocrats who seem so thin on the ground of late. In speaking frequently to a range of audiences throughout France about ‘Popular Capitalism in America’, one hears the voice of a man with forty years of experience as a mover and shaker on Wall Street. He says he has proudly defended ‘our economic model as one that could deliver more jobs, and more wealth, to a higher proportion of citizens than any other system so far invented’. In asking himself whether he could deliver the speech again, he questions aloud whether a popular American capitalism – that now has half of all American families owning listed stock – ‘was in fact providing both for the creation of wealth and for regulation that would protect the public and encourage high standards of corporate governance’. In pressing his thoughts further with the observation that a highly sophisticated system requires highly sophisticated regulation, he moves in his

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conclusion – to an essay titled the ‘Betrayal of Capitalism’33 – that there has been ‘a general failure to maintain ethical standards that are in my view fundamental to the American system’. And that, ‘without respect for those standards, popular capitalism cannot survive’. Felix Rohatyn is no longer the Ambassador of the United States of America to France. In this dialogue with the deaf, it is fitting that an Australian icon should have the last word. Late in his long career of public service, H. C. Coombs warned in 1992 that ‘the intellectual and moral basis of Australian society is being corrupted’ and that ‘the driving force behind this … is a view of the economy as a machine independent of social purposes’.34 In his excellent life,35 Nugget Coombs was, at different times, our most revered public servant, Governor of the Reserve Bank, the author of a buried Royal Commission report that sought to reform the public service (in part by reducing the power of central agency economists), and the head of the Department of Post-War Reconstruction that put ‘the light on the hill’ for what was once the most successful postwar capitalist democracy in the world.

Approach and Method A book needs to be concentrated about its purposes. This one is focused on how people experience the economy. The structural dimension of economic reform and its implementation are presented separately in a chronology (Appendix A). The Middle Australia Project draws together two research studies: one that deals broadly with economic experience, and another that has focused on the impact of economic reform on quality of life. With both, the aim has been to understand, and here represent for a broad readership, what my fellow sociologists would construe as the social construction(s) of economic reality. The theory too is presented elsewhere.36 In reaching for the meanings that people weave from their own experience as consumers and producers – but most of all as persons – we must attend especially to the point of tension at which action and behaviour meet. This is a perpetual tension; and it is the point where we most knowingly recognise ourselves and understand how we are striving to fashion our lives, and see what is happening to us as we do so. It is a two-way street, in which our thoughts, emotions and motives meet the dull compulsions of the market. Traffic flows in both directions – one might be tempted to say, more in one direction than the other. In another place I have more formally defined this as a tension between systematically


15

coordinated behaviour and communicatively coordinated action (the vertical axis) and between markets on the one side and normative (or social cultural) structures on the other (the horizontal axis). Economies are not made of carbon, water or salt and, so far as I am aware, there is not a single economist alive or dead who has ever seen, smelt, tasted, lifted or heard a market or a price (though many of them think they do). Economies, markets and money are symbolic social artefacts that we collectively construct ourselves as social beings. They are not natural phenomena. What we create ourselves we can and should recommit to will and critical awareness. In giving voice to the experience of 400 middle Australians, I have sought to obey what I take to be the mother of all methodological rules: that the method must fit the task. Any one-sided insistence on either its objective or subjective aspects destroys the very idea of experience from the outset: because experience is where these two dimensions of life are intertwined in thought, emotion, and language. It is recognition that matters: their recognition of themselves as (‘middle’) Australians, and thus as social and economic beings; and our own recognition as we listen for what this has to tell us about a contemporary Australia in the throes of radical change. The aim is to give voice to this moment with a minimum of censoring mediation and reduction, of either the methodological or the theoretical kind. Nor must disciplinary boundaries stand in our way. We are not looking per se for the attitudes of middle Australians, but rather for the meeting between internal and external orientations to the world in which they form and change. The same holds in the search for reliable intuitions about coping strategies, time horizons, economic and social expectations, and the various ways in which our respondents partition their own experience in what others often call the arenas37 or domains of family and friends, work, consumption and leisure. In a time where so much excellent social science research comes either sponsored or narrowed by the imposed (and implicitly political) requirements of contracting government bodies, no apology is made here for the breadth and openness of this study. To capture this experience, the Middle Australia Project combined three different research strategies. At the beginning, in 1996, focus groups were used to find the major recurring themes and preoccupations of middle Australia. We let them tell us what these were through conversations in their homes with each other. We started these conversations with a few prompts such as ‘What’s happening to middle Australia today?’, ‘What’s happening to families, to workplaces, in middle Australia today?’, What’s happening to quality of life in Australia?’ Our 400 respondents then completed an extensive questionnaire, and thereafter an interview in late 1996.38 Then a

16


sub-set of half of them (in effect a panel of 200) agreed to complete a second questionnaire at the end of the year 1999. In the light of our early results, in 2000 we conducted six ‘exit’ focus groups, again in home settings, to guide and fill out the interpretation of the survey and interview data. Meanings should lead and inform measurement rather than the other way about. The narratives that unfold from the focus group quotes are more than simply illustrative: they reveal embedded meanings that are often inaccessible to measurement. Further details about these instruments are provided separately in Appendix B. Our middle Australians comprise a stratified random sample of 400 respondents in five Australian capital cities: Sydney, Brisbane, Adelaide, Melbourne, and Canberra. They were randomly selected from Australian Bureau of Statistics data, a sub-set of the 9483 Census Collection Districts (CDs) used by R. Gregory and B. Hunter for their large study of changes in income distributions in urban Australia from 1976 to 1991.39 The sub-set consists of CDs with average household incomes below the 90th percentile and above the 20th percentile. Indexed to year 2000 prices, this represents an average cut-off in household income of $57,541 for the 90th percentile and $36,483 for the 20th. The rationale for this choice is relatively simple. The bottom 20 per cent of the (average household) income range were excluded from the initial selection once again because one must be concentrated even about broad purposes. From the time of the Henderson inquiry of 1975, Australia has produced an established body of excellent and ongoing research into poverty.40 Those in the top 10 per cent of the range were excluded for a quite different reason: people in this top bracket have enjoyed steadily increasing incomes more or less continuously for fifty years since the end of World War II. It is important to remember that the respondents were chosen from urban CDs that normally comprise between 250 and 350 households living in one or two contiguous urban streets. Given that the locus for the initial selection was the average household income profile for the CD taken as a whole, our randomly chosen respondents would often report incomes that were either above or below our CD cut-off figure. For example, in our sample we catch many people who were quite poor but living in an affluent neighbourhood, and conversely some affluent professionals living in lowermiddle income areas. Given again that we deliberately chose to make no further exclusions on the basis of individually self-reported incomes, we find, happily and fortunately, that the sample contains many individuals and households with incomes both above and below the CD profile. So our middle Australians ‘represent’ a very broad urban middle, with substantial


17

numbers (see Appendix C, Table C.3) from higher and lower income brackets. Table D.3 of Appendix D shows the sample to be remarkably similar to the reported income profile for the Australian sample population for the International Social Science Survey.41 Although Sydney is somewhat over-represented, our sample offers, in short, a good sweep of the broad urban population of the five capital cities chosen for study.42 It is more than adequate for modest inferential purposes that are ultimately more heuristic than scientific. Beyond this point, judgements about the representational adequacy of the sample depend on the standpoint and technical needs of the reader. Because the gathering and interpretation of data takes time and the publication of books more time still, questions always arise as to what answers to questions asked at one moment in time will mean several years later. Social science researchers conducting specialist surveys commonly remark that social attitudes are both remarkably hard to change and stable over long periods. For example, the British Social Attitudes Surveys of the early 1990s showed that popular evaluations of the structural changes brought on by Mrs Thatcher’s governments were set in a framework of perceptions and judgement that was remarkably independent of the reforms themselves. They tell us, in other words, that cultures do not obediently follow shifts in the structure of the economy and the social structure. As one of several means of asking our respondents to reflect on the big picture rather than on single, ‘hot’, media-driven issues of the moment, where appropriate we deliberately framed key questions with such predicates as ‘over the last fifteen years or so’. More importantly, one purpose in conducting the followup study in the last two months of the century was to anchor the study in a moving present and to orient it towards future readers. Key questions asked at the end of 1996 were repeated at the end of 1999. Indications are that, with a few important exceptions, the experience of economic reform has a steady, well-contoured shape and substance that will continue to inform middle Australia’s intuitions about economic reform for some years to come. In responding, finally, to readers who may have expected a line to be drawn between economic reform and economic change tout court, one must answer that for the best part of a quarter-century we have been told that economic reform is the overriding priority of governments and the defining characteristic of our times. So be it. It’s all economic reform unless and insofar as others can demonstrate that it is something else: functional inevitability, fate, normal change, business-as-usual, or whatever. Although this is a critical work that focuses on the dark side of economic reform I do not wish to imply that it is all bad and certainly not that the very

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provincial and protected Australia of the Menzies or Whitlam years prior to reform was a better or more liveable society. Nostalgia for the past is just as unhelpful to criticism as ideological frozen prescriptions for the future. There never was a golden age and we are, in any case, stuck with our present. The critical voice here appeals to normative standards that are ‘practical’, immanent, and latent as a potential in our present: one that comes to us always through a mediated social memory of the past and through our hopes and strivings for a better future.

2

Incomes and Their Meanings Whereas market economics holds that money is a neutral medium of exchange whose influence is exhausted by its power over goods and services, my findings suggest that money is itself an emotionally charged symbol. Robert Lane1

In June of 2000, in the wake of twenty years of economic reform, Australia’s premier national newspaper, The Australian, ran a cover story, and then a week of special reports, under the headlines ‘Advance Australia Where? … Death of the Fair Go’.2 The caption announced that ‘two decades of reform have … generated feelings of loss and anger’. The cover story continued under the headline ‘Death of the nation’s great middle-class dream’.3 A few weeks later I showed these pages to an audience of American social scientists. They were bewildered. Someone asked whether this was a leftwing newspaper, and another whether such sentiments were overstated. I replied that this was generally a New Right newspaper that has promoted economic reform with ferocious zeal for the whole period; and that, no, the sentiments were everyday concerns in Australia that a prestigious national newspaper would have to address. With a shrug, one person in the audience said, ‘Well, it’s obviously not working then.’ But working for whom? For the corporations and elites who drive the reform process, success means reconciling the people to whatever reduced relative incomes are deemed necessary to insure increasing shareholder returns (profits), investment and growth. For the people, on the other hand, success means – in some combination that it will be our purpose to examine – an adequate income and a just compensation for their contributions to the larger economy. There is obviously a tension between these views. Everyone will strive to maintain, at the very least, a non-zero-sum distribution, in which an increased share to profits will leave room for some small but still significant increase in the share to other ‘stakeholders’ (which usually means labour and ‘the community’). But even in good times, and always in bad 19

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times, the unspoken priority is to hold down the share that goes to wage and salary incomes (whether directly or indirectly), within whatever limits the political system will allow without unacceptable risks to stability. That there should be a live national conversation about incomes, distribution, and fairness is no surprise, given that the earth has moved under our feet. In the 1960s certainly, and then into the 1970s, Australia was, comparatively, a very affluent nation enjoying a distribution of (wage) income that was generally judged to be one of the most equal, if not the most equal, in the developed world. Australia is still an affluent nation; but more than twenty years of economic reform have produced a changed distribution that stands out now, compared with the other developed nations, at the opposite end of the spectrum. With respect to the gap between the top and bottom deciles of household income our distribution of household income is, according to some measures, the most unequal after the United States and Britain4 – the two nations that Australia’s reformers have sought to emulate as models for our future (see Appendix C, Table C.1). The central aim of economic restructuring is to shift the burden of coordination from the political system to the market. It is assumed that a restructured economy will reassign gains and losses in a way that is more economically (but not socially) efficient, and without the need for ‘distorting’ government interventions. It may distribute some of the income and output imperfectly – government can take care of that later with social security payments, but not through the regulation of business. Indeed, the grand idea behind the libertarian economics of our times is that, in principle at least, all important goods can be neutrally coordinated through the medium of money, ‘free’ exchange and, in short, the market. This is the pivotal notion used everywhere as the official justification for economic restructuring, and economic ‘reform’. It assumes that, although reliance on markets and prices may be a flawed means of coordinating the affairs of nation societies, it is still the best available way; better than public deliberation or moral reflection and discourse of any kind. How smoothly and surely has middle Australia accepted the new order of increasing incomes at the top and an ever-increasing pressure for the smallest possible gains – or even, where possible, losses – to households in the broad middle? To what extent is dollar income working as a smoothly functioning, neutral medium of exchange? How realistic is it to expect the invisible hand of the market to dissolve the social world into purely private acts of production and consumption? Can this really happen without recourse to social memory and meaning? In this chapter we begin by reviewing the postwar rise and then the ‘hollowing out’ of the broad middle class over two decades of economic

Incomes and Their Meanings

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reform: what has happened to the incomes of middle Australia in the leadup to the economic restructuring of the 1980s and 1990s? In the second section, we use the middle Australia data to begin charting the economic experience: do middle Australians know what is happening to their incomes and job prospects over time? To what extent are money and income still connected in the minds of our respondents to the unpriced social costs of adaptation to what the reformers would call the ‘new economy’? We look at their reckoning of the winners and losers from economic change since the reforms began in the early 1980s. In the last section we dig into middle Australia’s experience about the distribution of income to see where the shoe pinches. We look at the economic experience of income to see what has happened to its normative dimension. If we may be forgiven this formulation, we want to see whether money has buried fairness. What is visible along the seam between income and experience?

What’s Happened to the Incomes of the Broad Middle? Before we look at this question I want to clear up a possible source of misunderstanding. In this section my purpose is certainly not to make authoritative pronouncements on the ‘objective facts’ of income distribution in Australia. This book focuses rather on middle Australia’s response to two factors: to what it sees, correctly, as the widening gap between the rich and the poor and, more importantly, to the new economic dispensation that has come with it. The purpose of this section is to present the reader with some authoritative accounts of changes in the distribution of income and on how the ‘hollowing out of the middle’ has been construed by others far better qualified than I to deliver expert judgements in this complicated technical field of study. Even a cursory reading of the larger literature shows that with different approaches the criteria and techniques of measurement vary greatly and are often quite incommensurate. At no point do I wish to imply that broader perceptions of what is happening to the ‘broad middle class’ can be read off simplistically as a function of small changes in the real incomes of people in different strata of the income distribution. For our purposes here it is always the larger symbolic social meanings that matter most. We now turn to our discussion of incomes. The broad middle class as it is remembered today is very much a product of the long boom that followed World War II. Anyone who is forty or more years old in the year 2000 has some formative experience of a much more egalitarian Australia. Whether it be through the memory of the baby boomer generation,5 or the inherited standards that parents bequeath to their young, this period, in Geoffrey

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Bolton’s succinct phrasing, was a time of ‘getting and spending’ that has shaped many of the economic, social and personal expectations that middle Australia uses today to judge its own contemporary experience.6 It is useful to recall the conditions that produced this overwhelmingly middle-class society, where rising affluence became the norm and where, by comparison with Britain and the United States,7 there were few very rich people and very small numbers of people living in poverty.8 Bolton observes: During each year of the Menzies prime-ministership the average weekly earnings of the Australian worker increased by about 4% [per annum] in real terms. This represented roughly five times the annual average rate of advance in living standards between 1901 and 1940 … Between 1952 and 1965 Australian GDP rose annually at a little less than 5 per cent.9

The cumulative effects were enormous. Tariffs and other arms of a conservative social welfare policy of those years were used to manage a distribution of income in which any decline in earnings was minimised, through the application of the working principle that the income of ‘no significant group shall fall if that of the others is rising’.10 Until the early 1960s, about 60 per cent of Australian secondary industry was protected by tariffs. During those postwar years to 1965, Australian gross domestic product increased by nearly 5 per cent per annum, faster than in the United States or Britain, and with lower levels of unemployment and poverty.11 Incomes were, disputably, more equally shared than in almost any other ‘developed’ nation in the world.12 Real average weekly earnings for employed males grew by 52 per cent from 1945 to 1965.13 With slower but still substantial real increases in the standard of living, the good times would continue to 1975. Indeed, in the last two years (1974–75) of this Golden Age, household incomes increased considerably faster than prices, and faster even than business profits14 – a circumstance that business leaders would see only as a catastrophe! The material basis for broad middle-class affluence seemed to be secure on all fronts. Australia’s not quite unique (New Zealand was the leader) centralised arbitration and wage-fixing system indexed basic wages to prices until 1953. Thereafter, to the beginning of the 1980s, it still succeeded in its ‘historic mission’ of redistributing primary wage incomes at source in a way that minimised wage inequalities and obviated the need for a large welfare state of European scale.15 From the end of World War II to the mid-1960s, legions of middle Australians moved out into their own homes in the swelling suburbs of the capital cities. Home ownership stood at about 70 per cent.16 The


23

five-day working week and three weeks of annual paid leave had become the accepted standard by the early 1960s. Free medical care would follow free university education in the early 1970s. Ownership of labour-saving appliances, colour television, a family sedan, along with a family holiday, and soon overseas travel, became normal. Despite the Cold War, the postwar boom was a time of great optimism and rising economic expectations. Middle Australians assumed that their living standards would go on rising. Their children could reasonably aspire to as much free education as they would need to land a secure white-collar or professional middle-class job. Home ownership and retirement incomes would pose no insurmountable problems, even for single-income families. The broad picture of what has happened to incomes since 1975 and, more pertinently, since the advent of economic reform, is clear. Incomes of Australians in the top quintile have risen, while middle incomes have, at best, stagnated or more probably hollowed out over the broad middle of the distribution. Certainly incomes from earnings hollowed out markedly in the period from 1985 to 1996 as inequality between the top and bottom deciles of the distribution has increased by some 17 per cent.17 Economic restructuring has produced what The Australian calls a U-shaped society.18 Income measurement is an extremely complicated and specialised statistical enterprise. In Australia the foremost centres for the study of income are led, respectively, by Professors Ann Harding, Bob Gregory and Peter Saunders. Despite differences in methodology and time reference points, all three tell essentially the same story about what has happened to Australian incomes in the course of twenty years of economic restructuring from 1980 to 2000. For our purpose Gregory’s figures (covering the period 1976 to 1991) are especially useful markers, not only because they are based on the incomes of Census Collection Districts (CDs) in those urban areas from which our respondents come, but also because they are already scaled into socioeconomic status deciles by the Australia Bureau of Statistics. Gregory summarises his findings as follows: ‘for the bottom 70 per cent of collection districts average household income has fallen in absolute terms and is lower in 1991 than in 1976’.19 To drive the point home, he explains that the income gap between the top and the bottom 5 per cent of CDs has, over that same period, widened by 92 per cent.20 It is no accident that the sharpest hollowing out of middle incomes should have coincided with the economic ‘reforms’ of the 1980s. It is true that in the 1980s there was a very small increase (for the whole decade in average real male earnings of some 6 per cent), ‘but the slow down in real

24


wage growth has been extraordinary. Since 1976 the total per capita increase over two decades has been the equivalent of an average three-year increase during earlier decades.’21 There may have been some improvement in the latter half of the 1990s. But over the 1980s, as Saunders points out in relation to different income types (private, gross and net incomes units), the story is clear: ‘Income inequality increased both within and between groups, however defined, and increased both before transfers, after transfers, and after transfers and taxes combined.’ 22 During this period women have certainly entered the workforce in ever greater numbers and are, probably, remaining in it over an increasingly longer span of years. This is one reason why changes in male and female earnings over the period of economic reform are not comparable. Women have entered as men have been pushed out and as their incomes have fallen. These shifts have masked the larger impacts that Gregory explains with still more startling figures.23 Under the title ‘Competing with Dad’, he invites us to consider what has happened to male incomes. If we compare the per capita labour market earnings of males aged between 25 and 34 years of age in 1976 and 1996,24 we find that in real terms, they are earning $75 per week less in 1996 than they were in 1976. This would represent an accumulated loss of labour market income over the whole period of about $91,000 per person! (see Table C.2). The only two male age cohorts to have made ground are those aged 35 to 44 and those aged 45 to 54, with trivial gains of $10 and $12 per week respectively. After that, as the men are pushed out of the workforce (through ‘reform’ and corporate ‘rationalisation’, rather than by the women per se), their incomes fall again steeply. As we shall see, as male incomes have declined, families have become ever more dependent on the second income of the woman to make good the real fall in household income with contributions of their own. This still leaves them disadvantaged in their own right with respect to retirement incomes, educational (HECS) repayments, access to higher-income jobs, and home ownership. The hollowing out of the middle becomes clearer still if we move the point of focus to the figures from Ann Harding’s National Centre for Social and Economic Modelling. These show real changes to equivalent family incomes covering our period of economic reform from 1982 to 1996–97. These are the figures used by The Australian in ‘Death of the nation’s great middle-class dream’.25 The figures refer to average changes, both in real dollars and percentages, in equivalent family income for this period. The incomes of the middle deciles have fallen, both in relation to those in the lowest quintile, where tightly targeted social security transfers may even


25

have slightly increased incomes, and in relation to those in the top decile. A closer look at the trends behind these numbers shows, among other things: that the poorest deciles now include increased numbers of working poor; that the burden of a slightly more progressive income tax regime has fallen on the middle; that governments on both sides of politics have provided large tax breaks to families; and that the informal household economy plays a huge role in making good for lost market income.26 Even when we allow for these and other factors by using equivalent real household incomes as our measure (see Appendix D), we see that two-income families have been winners, while single-income, two-parent families with children are the losers. Harding’s latest figures clear up some earlier doubts about the continuation of these trends during the much touted ten-year economic boom of the 1990s. She summarises her most recent findings thus: There is strong evidence that income inequality increased between the late 1980s and the mid-1990s and there is some evidence to suggest that it has continued increasing since then. The increase in inequality was driven by declines in the income shares of the bottom ten per cent and, to a lesser extent, the middle 20 per cent of Australians during the 1990s, and an increase in the income share of the top ten per cent.27

Looking back over these two decades of economic reform, one observes that something important has happened to the inclusive broad middle class of the Menzies era. Whatever the preferred technical metaphor, ‘hollowed out’, ‘dispersed’ or ‘thinned’, the reality is the same. Australia was a ‘lucky’ nation, commonly identified by the fullness of its broad middle class; it now has, in terms of its incomes, a middle stratum that is instead ‘hung and drawn’ between the rich and poor in the ever-widening gap between the haves and the have-nots – a constant theme that emerged in our focus groups. And still this picture only captures the tip of an iceberg that signals underlying shifts in power, resources, and capability from the bottom 70 per cent of wage and salary earners to, roughly, the top 10 per cent: from all wage and salary earners to corporations; from the public sector to the private sector; from the bush to the city; from consumers to producers; and from small business to big business.

Feeling the Pinch? Yes, Australia is an affluent country. Nonetheless people still rank money and bills as one of their principal concerns, along with ‘things around the

26


world’, and ahead of other worries such as family problems, health, and crime.28 In order to get some of the following snapshots into perspective, let’s be clear that the median self-reported household income of our middle Australia sample in 1996 was $45,000, while that of the panel 29 was $50,000 (see Appendix D).30 The median income unit for the whole Australian population in that year of 1996/97 was $24,800.31 National studies of income distribution are not based on interviews. Australia does not yet have a large panel of unit record data that can explain what has happened to actual cases, and thus to samples of real households and individuals, over time. In the meantime these income statistics based on complex computer modelling or, as with the Gregory figures, on average income movements for CDs of some 250 to 350 dwellings, provide useful objective indicators of income. This is one inherent limitation. Anyone who has filled out a taxation return is aware of another: income is itself an abstraction that tells us surprisingly little or nothing about subjective well-being, about wealth and real resources, enjoyment and satisfaction. Indeed, Amartya Sen reminds us that differences in income do not even tell us much about standards of living and coping strategies, unless other factors are equal.32 It is precisely for this reason that we must dig into the experience of real people and ask how they think they are doing. This is one of several questions that we put to them after fifteen years and more of economic reform, in the middle of a ten-year boom, and in a period when politicians, economic commentators and reformers were telling the people that at last the economic reforms were delivering their promised benefits to the mass of middle Australians. Household income is one thing and equivalent household income is another. The problem with household income is that it takes no account of how many people are living off it. So, for example, a single person earning $50,000 is treated as though they enjoyed the same standard of living as a family with, say, two adults and a couple of dependent children. So, for the discussions that follow, we have used the much more sensitive measure of equivalent household income, which is derived by dividing the gross household income by the number of people who depend on it,33 in order to arrive at a more realistic approximation of the real resources that individuals sharing a household have at their disposal. It is important to note that the values thus derived are not the real household incomes of our middle Australians: they are an approximation of the amount of consumption resources available, on average, to each member of these households. These measures only enable us to compare households – they do not describe reality in


27

dollar terms.34 On that measure, we see that the median equivalent household income of our middle Australians is $24,352 for the original sample in 1996, and $27,500 for the sub-panel in the year 2000. We then cut the sample in approximately four vertical groups (see Appendix D for more detail; the slightly uneven allocation of respondents into these categories reflects the skew of the income distribution). The poorest quartile consists of households with equivalent household incomes of below $15,000: some 31 per cent of our respondents fall into this category. Those in the next quartile have equivalent household incomes of $15,001 to $30,000 – they comprise a further 31 per cent of our respondents. The third quartile of people, with incomes between $30,001 and $45,000, comprise 21 per cent; and the top bracket, with equivalent household incomes of over $45,001, amount to 18 per cent. When we use these measures, we soon discover that the reported equivalent household incomes of our middle Australians are systematically related to a number of key judgements about the adequacy of their own income (Table 2.1).35 We can already get a rough fix on what matters to us here: namely, the outlines and meanings assigned to their own experience of economic adjustment. Well over one-third (38 per cent) of middle Australians reported difficulties in meeting rental or mortgage payments. More than half of our 30 per cent of middle Australians on low equivalent household incomes are telling us that they are having such difficulties. Even among those in the next-highest income quartile of our sample, with equivalent household incomes of between $15,001 and $30,000 per year, a majority make this same judgement with respect to housing costs. Over the whole sample, some 13 per cent of our middle Australians said they felt poor ‘often’ or ‘almost all of the time’.36 Again the experience of having a low income is manifest in the data that tell us that almost one-third of our middle Australians in the lowest quartile say that they feel poor. About 70 per cent of them say that they have less than a family of four would need to live satisfactorily in the area, typically a street, in which they live. Clearly, we see that judgements about the adequacy of one’s income are systematically related to differences in reported (equivalent household) incomes. Middle Australians in our top quintile are doing well, and they know their incomes are higher than what they designate as the amount needed to live comfortably in their neighbourhood. Only 17 per cent of these respondents have difficulty meeting housing payments, and only one in twenty of them ever feel poor. They may wish for more income, but they seem to know that they do not need it.

28


Table 2.1: Attitudes towards household income by equivalent household income, per cent Agree with the statement:

Equivalent household income $0–15,000 $15,001– $30,001– $45,001+ 30,000 45,000

1. Finding it difficult or very difficult n on present income a

34 108

18 114

3 73

10 62

2. Having difficulty or great difficulty n meeting mortgage or rent b

57 68

52 67

29 45

17 47

n

29 111

12 114

3 75

5 63

n

45 87

36 100

37 68

27 60

5. Household income lower than the satisfactory amount e n

71 96

33 103

17 72

10 62

3. Household feels poor often or almost all the time c 4. Pay is low or low!! d

a

P < 0.001, Gamma = –0.55; b P < 0.001, Gamma = –0.42; c P < 0.01, Gamma = –0.62; P < 0.001, Gamma = 0.26; e P < 0.001, Gamma = 0.63. ‘Don’t know’ responses excluded. Notes The table presents the results of a number of cross-tabulations with the main variable, equivalent household income. Therefore there is only room for the respondents agreeing with the view in column one. The proportion of people holding the opposite or equivocal view can be calculated by subtracting the percentage value in each cell from 100. All the cross-tabulations in this book should be read with this factor in mind. The ‘n’ values in the table are the total number of cases in each column of the bivariate cross-tabulation, not each cell of this table. The data is presented this way because a number of variables are presented in the one table, and so the values are column percentages. The number of cases corresponding to the percentage values given in the table can be calculated by taking the percentage value of ‘n’ cases. For example, in column one cell one of this table, 108 respondents with an equivalent household income between $0 and $15,000 per annum responded to the inquiry about their feelings about their income. Thirty-four per cent of these 108 cases (n = 37) indicated that they found it difficult living on their income at that time. Because the percentages are column percentages for each cross-tabulation, and the full range of responses is not given here, the values do not add to 100 either across the rows or down the columns of this table. Questions 1. ‘Which of the following phrases on this card would you say comes closest to your feelings about your household’s income these days? Living comfortably on present income, coping on present income, finding it difficult on present income, finding it very difficult on present income, other.’ 2. ‘How easily are you able to meet your mortgage or rent payments at present? Very easily, easily, just managing, having difficulty, having great difficulty.’ 3. ‘How often do you and your household feel poor nowadays? Never, every now and then, often, or almost all the time, don’t know.’ 4. ‘All in all, how fair is your pay? Low!!, Low, Fair, High, High!!’ 5. ‘Taking into account the number of persons in your household, is the total income of your household higher, lower, or about the same as this amount [the amount estimated to enable a family of four persons, consisting of a man, a woman and two children of 10 to 15 years, to live satisfactorily in your neighbourhood]?’ d


29

As we move up the income ladder, we see that the gap between needed and (self-reported) actual income narrows. This in itself pulls against a view commonly held among economists, that wants are insatiable and cannot be distinguished from needs. In the other direction it points, more importantly, to the living conditions of the broad middle who are feeling the pinch. The real social meaning of the economic experience is showing through the medium that is supposed to neutralise it: money and income. What we see beneath the surface of these data is the lived experience of increasing dependence on a market that leaves our middle Australians with ever less capacity to save, buy houses, provide for their own, and their children’s, education and medical expenses, and secure their retirement incomes. In some cases these are absolute losses; in most cases they are relative losses in relation to the inherited experience and expectations of the preceding generation. In the following two chapters we delve further into what I take these observations to suggest: that middle Australians are losing the capacity to buffer and smooth incomes over the course of their lives and thus to meet unexpected needs or periods of high expenditure that could exceed their means in the shorter term. If that is so, economic change is producing the structural conditions that put great social stress on coping strategies. One consequence could be that people have incurred dangerous levels of household debt that the Reserve Bank deems unsustainable. But incomes and money provide only pointers to other wider demographic changes (such as family size and mobility) that are nonetheless consciously experienced by people as the social consequences of economic change.

Does Middle Australia Know What Is Happening to Its Income? Economic restructuring is aimed at expanding the role of the market in everyday life. The reformers want to increase the power – for them, the liberating power – of money as a medium for the coordination of everyday life. They want us to become ever more dependent on the market. They want the market to take charge of the future. Prospective and purely personal economic calculation is supposed to replace backward-looking social thinking about obsolete (social) expectations. We are meant to stop thinking so much about the past, to dump outdated expectations, and get serious about reinventing ourselves as private economic entrepreneurs of our own lives in a more urgent present.

30


A usual corollary of this view is that the relative or absolute losses to those who have not fared so well will pass unnoticed if they are small, gradual and broadly spread. Put more baldly, it is assumed that the losers don’t know, or don’t notice, what happens to their incomes if the changes are spread incrementally over a long enough period – a gradual downward adjustment takes care of the ‘experience problem’. It is hoped that people will lose the inclination to make comparative and normative social judgements about the distribution of income, both with respect to their own past, in terms of where they fit in the distribution in relation to others, and with respect to normative social judgements about fairness. This is at least part of what my American colleague meant when he took mass disquiet in the Australian heartland over economic restructuring as evidence for his judgement that ‘it’s not working’. This prompts us to ask the following questions: Do middle Australians know what is happening to their incomes and their economic prospects? What echoes do these movements in income have in the lived experience of our middle Australians? First we shall look for indications of how well middle Australians read what is happening to their incomes. In the 1996–97 survey our respondents were asked a number of questions about changes in their (real) income over time. Requesting them to reflect on the last ten years, we asked them: ‘How has your income fared in relation to prices: has it increased faster than prices, just kept pace with prices, or fallen behind prices?’ They were asked the same question in relation to ‘your spouse’s income’ and again in relation to ‘people living in this street’. Of those giving valid answers to these items,37 we find a consistent result across all three questions. The number of people reporting falls in relation to prices exceeds those reporting increases by a ratio of two to one – closer to three to one when the judgement is made in relation to ‘people living in this street’ (Table 2.2). Because our data are collected in Census Collection Districts, we are able to relate these subjective perceptions about income movements with objective census data on average income movements of the urban neighbourhoods (CDs) in which our respondents live. Specifically, our data enable us to compare the view of respondents who come from urban neighbourhoods in which household incomes have on average been rising steeply, falling steeply, or held steady over a fifteen-year period from 1976 to 199138 – the period of most intense structural adjustment or economic ‘reform’. These several results suggest that, for the most part, our middle Australians have a fairly accurate perception of what is happening to their incomes. Their judgements are grounded here in the objectively given


31

Table 2.2: Areas of rising and falling income by equivalent household income and perceptions of adequacy of income, per cent Income and perceptions

Equivalent household income a $0–15,000 $15,001–30,000 $30,001–45,000 $45,001+ n Over the last ten years how do you think your income has fared in relation to prices? b Has it: Increased faster than prices Just kept pace with prices Fallen behind prices n And what about most of the people who live in this street? c Increased faster than prices Just kept pace with prices Fallen behind prices n a

c

Steeply rising incomes

Steady incomes

Steeply falling incomes

22 27 27 24 102

28 35 23 14 95

40 29 17 14 124

26 40 34 100

19 43 38 96

8 40 52 124

19 62 19 70

8 52 40 63

5 48 47 89

P < 0.05, Gamma = –0.24, n = 321; b P < 0.01, Gamma = 0.28, n = 320; P < 0.001, Gamma = 0.40, n = 222.

characteristics of the very neighbourhoods, usually just a street or two, in which they have lived on average for only five years. It is important to note that these figures do not measure individual incomes over time. The point is rather that the experience of living in an area of falling income is reflected in judgements made about what has happened to one’s own income over time. We see too that their judgement is related to their equivalent household income. As one would expect, a steeply falling income is felt most keenly of all – going down hurts! Yet, as we shall see more clearly later on, it may be that, in an increasingly competitive economy, the experience of living on the up escalator exerts its own pressures, and even produces a defensive pessimism – one blink and I might fall off my ladder. Moreover it could be, the figures in Table 2.2 suggest, that being left alone, in economic peace and quiet in a relatively undisturbed and protected steady state gives the most reassurance. For the moment, though, we note only that these judgements about one’s own income movements seem to be intelligently inferred, as we have seen,

32


from the objective profiles of average income movement of the neighbourhoods in which our respondents live. They have rather remarkably survived dilution on three fronts: firstly, from the fact that we can measure them only against the average incomes of respondents in their own CD (confidentiality restrictions on census data prevent us from ever measuring the actual changes in incomes of real individuals over time); secondly, they have survived the effects of geographical mobility that has our respondents moving on average at least once in every five years;39 and thirdly, the Gregory data set, from which our CDs are selected, does not measure movements after 1991. Despite these obstacles, the subjective judgements find some confirmation in the objective data. They gently suggest that people do have pretty good hunches about what has happened to the distribution of income; that the restructuring has not yet covered its own tracks; and that the changing order breaks into the awareness of ordinary people who might not have any special curiosity or interest in such things.

Winners and Losers? Do our middle Australians know who have been the winners and losers from Australia’s economic reforms over the fifteen years from 1981 to 1996 and thereafter to the year 2000? In the interview, they were presented with a list of fourteen different categories of people and asked to say whether they thought that people represented in each of these categories had been winners or losers from economic change over the last fifteen years to 1996. The word ‘change’ rather than ‘reform’ was used so as to put the question in a suitably neutral way. The question was repeated in the year 2000 follow-up survey. The interviewers introduced the question by saying, ‘In periods of rapid economic change there are usually winners and losers’, and then asked, ‘In your opinion who have been winners and losers from the economic change that Australia has experienced over the last fifteen years or so?’ (with ‘no idea’ as a third option). As one would expect, about nine in ten of our respondents seem to know that people on high incomes, rich people with assets, big business, and big companies have been the breakaway winners from economic reform (even though the promise of those driving the process was always that this would be ‘good for all Australians’). In this respect, they are in perfect agreement with virtually all the reputable national surveys of distribution. The imputation that politicians and people close to government have been winners must be correct if the appropriate referents are taken to be the salaries

Figure 2.1 Perceptions of winners and losers from fifteen years of economic change

0%

20%

40%

60%

80%

100%

Pe op l e Ric on hp hig e h o ple i nc om w Po ith es liti lot cia s n o sa fa n sse dp ts eo Big pl e b clo us s ine e to ss go v e r nm en ts Pe op l e Pr lik iv em a t es e ect o r Pu wo b rke l i cs rs ect o r Pe wo Pe o o p rke ple le rs on in so th c e ial mi s dd ecu le rit yo W a r ge we a lfa nd re sal ar y Se ea lf rne e mp rs Or loy d e i d n ar pe y op pe le op le g en era lly Sm all P e b op us ine l e on ss low inc om es

Winners

Losers

No idea

34


and other emoluments of parliamentarians, top public servants, industry lobbyists and – to stretch the point – corporate high-fliers. Conversely, we find about nine in every ten of our respondents saying that people on low incomes have been losers. This too is correct, given that their employability, job prospects, and real economic life chances have nosedived: even though social security and other transfers have maintained their incomes. More interestingly, we see that our middle Australians have accurately seen through the political rhetoric that would have them believe that the self-employed were doing well in some new era of ‘enterprise and opportunity’. In Australia, as in Thatcher’s Britain, the new self-employed, who have typically been laid off from salaried jobs, are very likely to fail and to take their savings with them. The same clear insight prevails once again with the generally accurate perception that wage and salary earners in the private sector, and especially in the public sector have fared badly from reforms that have slashed public sector jobs,40 held down public sector incomes, and moved a substantial slice of national income from wages and salaries to profits (see Appendix C, Table C.4). A majority of our respondents agree with the now robust finding that ‘people in the middle’ (however construed) have been losers, as have, by extension, ‘ordinary people generally’. In deciding who have been the winners and losers from economic reform our middle Australians are speaking from their own experience and real economic position; they are not simply replicating common beliefs. In Table 2.3 we remove the nearly tautological questions about high and low income earners and focus instead on judgements about categories of people – private sector workers, self-employed people and the like – who are more likely to be part of middle Australia, or at least not so easily read through stereotypes. The results are extremely consistent. We find that middle Australians, right across the equivalent household income range, are very clear that the losers from economic reform outnumber the winners, for the most part by large margins, except in the perception of their own fortunes. A majority of people on low equivalent household incomes perceive themselves as losers from economic reform, while the majority of upper income earners identify as winners. Significantly, it is people in the lower income quartiles who are most likely to deliver the highest ratios of losers to winners. We may surmise that they are speaking, as we shall see in later chapters, from their own experience of reforms that have had especially adverse impacts on the incomes and job prospects of three groups: those in sub-professional occupations; people living in the outer suburbs of the cities; and people affected by ‘downsizing’ in older manufacturing and other industries, who have most suffered from reform.


35

Table 2.3: Winners and losers from fifteen years of economic change by equivalent household income, per cent Winners and losers

Equivalent household income $0–15,000 $15,001– $30,001– $45,001+ 30,000 45,000

People like me a Winners Losers n Private sector workers Winners Losers n People on social security and welfare Winners Losers n Ordinary people Winners Losers n Small business b Winners Losers n Wage and salary earners c Winners Losers n Self-employed Winners Losers n Public sector workers Winners Losers n People in the middle Winners Losers n

27 53 103

39 37 109

58 24 71

58 22 59

22 48 108

30 35 111

36 47 73

34 44 59

23 62 111

21 63 112

24 63 75

33 52 60

15 67 111

17 59 111

22 62 73

22 50 60

9 83 111

5 81 112

16 77 74

18 65 63

15 69 108

23 57 111

25 62 73

34 42 59

15 58 108

16 54 111

19 48 73

32 43 609

27 59 111

30 43 112

36 53 72

26 57 61

27 53 109

39 37 112

58 24 72

58 22 61

a P < 0.001, V = 0.21; b P < 0.05, V = 0.14; c P < 0.05, V = 0.14. Relationships not statistically significant unless indicated. ‘No idea’ responses not presented. Question: ‘In periods of rapid economic change there are usually winners and losers. In your opinion who have been the winners and losers from the economic change that Australia has experienced over the last fifteen years or so? Winners, losers, no idea.’

36


The judgements are unambiguous with respect to ‘people in the middle’ and ‘ordinary people generally’. The only exception appears when the evaluation is made in respect to ‘people like me’. Here the most likely explanation comes from a robust phenomenon that social psychologists call the selffavouring bias,41 according to which individuals answering questions of this kind routinely judge themselves to have longer life expectancy than the average, to be luckier, to be above-average achievers, and to be happier and more fortunate than other people.42 Another notable finding here is that, as we move up the income scale, and for just about every category, people with higher incomes are more likely to take a more sanguine view and prefer to see a few more winners than do those with incomes in lower quartiles. People generalise from their own experience. In this case, the winners tend to generalise their own good fortune to others.43 As we shall see later (especially in Chapter 6), this makes them more likely to blame the losers for what is seen as a failure to grasp opportunities that they were assumed, often wrongly to have available to them. The only exceptions to this trend were when the judgement is applied to public sector workers and people in the middle. Our respondents have a good reading of how the new snakes-andladders game of income distribution is working. Their perceptions are systematically and consistently related to incomes. In other words, they know that the middle class is hollowing out. The closer they get to incomes that might edge them out of our sample into the top decile of national income, the closer they get to the only income stratum for which the postwar boom never stopped. As they move towards it, they want to minimise, or even ignore, the real experience of others less fortunate than they. How do these movements show up in the moral reasoning of middle Australia?

Is It Fair? The Latent Politics of Income Distribution In every society income distributions are skewed towards those at the top. As we have seen, economic reform has produced a large upward redistribution of income that has, in 1997–98, seen nearly half (48 per cent) of all gross weekly income going to the top 20 per cent of Australians. The middle 20 per cent gets only 15 per cent of the pie.44 But does middle Australia think this is fair? In all the focus groups, middle Australians told us, with much indignation and anxiety for themselves and others, that ‘the rich are getting richer


37

while the poor are get poorer’. Constantly voiced indignation over differences in incomes and life chances point not just to apprehension about one’s own situation but, equally, to a violated moral expectation about what ought to happen, and what would be a ‘fair thing’. In other words, attitudes to income distribution turn on what national populations and, crucially, different strata, classes, and occupational groups take to be legitimate differentials. As we shall see in later chapters, this points to the political issue that is at stake not just in settling acceptable degrees of income inequality but, more fundamentally, in deciding why, on what criteria, and in what measure, inequality is acceptable, repugnant, or even necessary and useful. There is division here both within and between policy elites and the larger population. The social justice argument stresses needs, social rights, the entitlements of citizenship, and equality of opportunity. A contrary argument, generally favoured by business elites and libertarian economic reformers, insists that larger rather than smaller inequalities are desirable and functionally necessary, because there must be an appropriate structure of incentives to reward individuals for striving and achievement. Increased ‘wage dispersion’ (the preferred euphemism for induced inequality) was an explicit aim of economic restructuring and, from the point of view of the reformers, certainly one of its great successes. What matters here is where our middle Australians stand on widening inequalities of income. Despite myths about the Australian love for cutting down tall poppies, comparative studies have shown Australia to be a very market-oriented liberal society, and thus strongly geared to incentives. In a comparative international social science survey of 1987, before the economic reforms of the mid-1980s began to bite, Australians, even more than Americans, strongly endorsed arguments for income inequality. They based this on a carrots and sticks theory of (extrinsic) rewards and incentives, phrased with statements such as the following: • People would not want to take extra responsibility at work unless they were paid extra for it. • No one would study for years to become a lawyer or a doctor unless they expected to earn a lot more than ordinary workers. • Workers would not bother to get extra skills and qualifications unless they were paid extra for having them.45 A recent comparative study demonstrates, in a somewhat different way, the same Australian acceptance of what are taken to be functionally necessary incentives. Here the assessment is made with cross-national comparisons of answers given, in several countries, to questions on what people would accept as legitimate differentials in pay between such occupations

38


as an unskilled factory worker, a farm worker, the owner of a small shop, a doctor (GP), a cabinet minister, and the chairman of a large corporation.46 On these comparisons, Australians are halfway between Americans and Swedes; they believe, for example, that a doctor should earn about 325 per cent more than an unskilled factory worker (Americans think that twice this difference is appropriate).47 However, as we shall see in Chapter 6, these may be misleading findings because they tell us nothing about the differing institutional framework within which these comparisons are made. In the Australian tradition, the gap between low and high wages has been strongly compressed; this may account for some of the tolerance for what may now be seen as the need for higher rewards for people at the top. Have twenty years of economic reform over-strained the limits of what Australians accept as legitimate income differentials? Do middle Australians support the rather dubious economic theory that the income pie will get bigger if, as the reformers would have it, ‘we’ go for maximum growth without regard for widening inequalities? A Newspoll survey gives a decisive answer to this question (Table 2.4). The message is clear. Only one-third, or less, of Australians want growth at any price, and huge majorities want the gap between the rich and the poor to get smaller. They want some kind of income redistribution to take place. These preferences are incipiently political and, as we shall see in Chapter 5, predicated on clear images of what economic reform has done to the social structure of the nation. Moreover, when presented with the normative question about the legitimacy and fairness of the distribution of

Table 2.4: Newspoll 2000 Survey, reduce the income gap or make the pie bigger?, per cent If you had to choose, which one of the following would you yourself most prefer?

Household income Less than $30,000– $60,000+ $30,000 60,000

Total

Gap between rich and poor to get smaller

71

72

65

70

Overall wealth of Australia to grow as fast as possible

25

26

33

28

5

3

3

4

Uncommitted

Source: Newspoll survey, The Australian, ‘Advance Australia Where’, n = 1200. http://www.theaustralian.com.au/extras/where/opindex.html Note: Data weighted to reflect population distribution. Totals don’t add to 100 due to rounding.


39

wealth, they give a forthright judgement on what they see as the trend over the last ten years (Table 2.5). These opinion poll findings demonstrate again that the widening gap between rich and poor is most resented by those on lower incomes. With our own data on equivalent household incomes, we find the same story elaborated in several dimensions (Table 2.6). We see that the same feelings of injustice appear with respect to both income and wealth; that 60 per cent or more of those in our equivalent household income range $15,001–30,000 say the differences are too great; and that three quarters of those in our lowest group, those who have been most hurt by economic reform, condemn the widening inequities. Our middle Australians recognise that poverty has been increasing, and that on present trends it is likely to increase still further. Moreover, as we shall see later, only a small fraction (12 per cent) of our respondents say that poverty is the result of laziness or lack of willpower. Their instincts do not agree with the cruel or cynical functionalist arguments of many economic ‘reformers’ who believe that the answer is to give the poor less so as to make them try harder. It is clear, too, that views about poverty are consistently spread across the whole of middle Australia. Between 70 and 80 per cent of our middle Australians hold this same view. However, only between 30 and 40 per cent of them want to remedy the poverty problem with direct welfare state transfers. As we shall see in Chapter 6, they have preferred, and may

Table 2.5: Newspoll 2000 Survey, distribution of wealth across Australian society compared with ten years ago, per cent Distribution of wealth

Household income Less than $30,000– $60,000+ $30,000 60,000

Total

Total more fair

8

11

14

10

No difference

23

31

30

28

Total less fair Little less fair Lot less fair

61 19 42

54 24 30

51 22 29

55 21 34

8

4

5

7

Uncommitted

Source: Newspoll survey, The Australian, ‘Advance Australia Where’. http://www.theaustralian.com.au/extras/where/opindex.html Question: ‘Compared with ten years ago, do you personally think the distribution of wealth in Australia currently is more fair or less fair, or is there no difference? If more fair, is that a lot more fair or a little more fair? If less fair, is that a lot less fair or a little less fair?’

40


Table 2.6: Attitudes towards income redistribution, poverty and inequality by equivalent household income, per cent Agree with the statement:

1. Differences in incomes in Australia are too large a

Equivalent household income $0–15,000 $15,001– $30,001– $45,001+ 30,000 45,000 n

75 109

64 113

58 76

59 64

2. A few rich people get too big a share of the nation’s wealth n

80 112

74 114

75 76

66 65

63

49

51

45

n

112

112

75

64

4. Government should redistribute income from the better-off to n those who are less well-off c

43

33

38

39

111

113

76

65

36

37

27

34

110

113

74

64

81

77

72

73

n

106

112

68

59

7. Poverty in Australia will increase over the next ten years n

71 103

60 112

70 73

73 59

8. The incomes and job prospects of middle Australians are falling d n

83 97

73 92

67 64

54 56

3. Ordinary working people do not get their fair share of the nation’s wealthb

5. The government should spend more money on welfare benefits for the poor even if it leads to higher taxes n 6. Poverty in Australia has been increasing over the last ten years

a P < 0.05, V = 0.14. b P < 0.01, V = 0.16. c P < 0.05, V = 0.14. d P 0.5 are included; ‘don’t know’s’ and ‘not sure’s’ have been excluded from frequencies. All statements offer responses from ‘strongly agree’ to ‘strongly disagree’ and ‘can’t choose’.

This seems to provide some evidence for what we might call a structural transformation of the private sphere, as the market colonises this domain of family relations ever more deeply.20 It is a transformation that seems to rebound into the public sphere, with an expectation that a pregnant woman should have the right to a legal abortion on demand, and our respondents want to have this choice secured as a legal right. Moreover, we see from the factor analysis that they may be agreeing to something even more farreaching; namely fertility. Here decisions about the termination of pregnancy can – and perhaps even should, where people so choose – be made in the light of economic considerations.

On the other, cultural, side of the picture, the affirmation of women’s rights pulls in quite another direction, one that has more to do with modern values

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about public (state) support for equality and sharing than with economic adaptation. Here the cultural dynamic moves against the economic functionalists who want to see all the externalities of economic reform absorbed into a re-engineered set of family values (no doubt with some salutary bracing of the work ethic). For our middle Australians, the emerging dualincome model seems bound up with the affirmation of new social rights and a social contract, or at least the expectation of one, that exerts greater demands on governments (in this case for child care and paid maternity leave: see Factor 3 in Table 4.2). These emerging rights involve real money and, by implication, some vigorous government intervention in the labour market. Our respondents seem to know that strong remedies will be needed to correct a situation in which only about 7 per cent of workplace agreements make provision for maternity leave and where paid maternity leave only amounts on average to some seven weeks. As one respondent puts it, ‘When you’re both working, it all falls apart without child care.’ This is part of a larger picture which points not to the reduction of government provision, but rather in the opposite direction: to the expectation that governments can do ‘quite a bit’ to support families. This proposition brings agreement from about 80 per cent of our respondents.21 As we shall see, it could be that families, and especially those of the Battlers and the Survivors, are reaching the limit of their capacity to absorb the externalities of reform without further positive government intervention. Similarly, we find that assessments about the needs of children are changing in much the same direction. Almost 70 per cent of our middle Australians tell us that ‘a working mother can establish just as warm and secure a relationship with her children as a mother who does not work’; and around half of them reject the idea that ‘a pre-school age child is likely to suffer if his or her mother works’ (Table 4.1). As we have seen, only a tiny fraction of our respondents (about 12 per cent) are diehard defenders of the old norm that a woman with children should stay at home, for the sake of the children, and not work at all. With respect to the well-being and fulfilment of women themselves, we see the data running in something close to agreement with the pointed view of Brenda, one of our focus group participants, who told us that ‘If you are a woman and not working, everyone treats you like a second-class citizen.’ Over 50 per cent of our respondents agree with the proposition that ‘having a job is the best way for a woman to be an independent person’. And only just under 30 per cent of them agree with what is, in this context, the reactive value judgement that ‘being a housewife at home is just as fulfilling as working for pay’ (Table 4.1).

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* Our middle Australians know that the family is caught in the middle between economic wants and social needs. On the one side, as we have seen, economic reform has made them fretful and anxious about their jobs and their incomes. But a very small proportion of them (about 12 per cent) agree that both the man and the woman should contribute to household income (Table 4.1). On the other side, they reject the traditional moral standard that the woman should stay at home and look after the children. The conclusion to be drawn here is that they want the freedom to choose proactively, for themselves, in their own changing circumstances. What they reject, on both sides so to speak, are prescriptive models, be they economic or cultural, that limit this effective freedom to affirm their own solutions as a family. This is most certainly not a moral vacuum of dissolved family values into which the market can move unhindered to set prices on choices. We are looking, more probably, at an emerging norm that the man and the woman should be able to decide on all questions concerning work and the family on equal terms and that the necessary institutional support, directly from the state, from employers – or indirectly through a more firmly regulated market? – should provide them with the legal and economic resources to do so. Instead, the reformers and economic functionalists will assume from the outset that the market has functional primacy and that attitudes always obediently adapt in its wake. Our evidence points in a different direction. It suggests, as we shall see below, that the family may be running out of coping strategies and that adaptation has run into some relatively hard social structural thresholds (see Figure 4.1). Three considerations come to the fore. Firstly, the family seems to be running out of the capacity to absorb the externalities of economic reform. It cannot produce ever more economically useful, but unpriced social capital – for example, by supporting children until their delayed entry into the labour market, or providing the support needed to get two parents and the children into jobs with ever more unsocial hours.22 The invisible but huge contribution that families make to an increasingly demanding market would seem to run into limits on two other fronts. As one of our focus group respondents put it, ‘If we didn’t have kids we would be laughing.’ What she means is explained by Peter Saunders and Marilyn McHugh in their meticulously researched Budget Standards study for the Social Policy Research Centre, commissioned by the Department of Social Security. The real economic cost of having a child for a family, on about the median income and paying off a house, was about $172

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per week in 1997.23 This represents about one-fifth of the median income for households of this type. As the costs become more tangible, mobility, and perhaps also divorce, block off other compensatory coping strategies by reducing the capacity of families to draw in the unpaid child care of relatives and long-time friends and neighbours.24 Secondly, as we have seen economic reform has given Australia the second-highest casual employment rates in the OECD after Spain. ‘Reforms’ have caused demand for government-provided childcare places to outstrip supply.25 The effect is to further impair an informal household economy that is ‘forgotten in all senses of the word’.26 As we know, the household economy supports children till they are ready to enter the labour market, supports adults when they leave the workforce, and provides a host of other unpriced goods such as shared leisure, shared food preparation, care for the sick, and so on. If priced at market rates, these several contributions to the larger economy would, conservatively, account for something between 75 and 120 per cent of gross domestic product.27 As economic restructuring deliberately and successfully weakens the capacity of the labour market to secure full employment, the dependency ratio (of those not in the labour force upon those who are) increases these same demographic and economic pressures on the family.28 Australia already has some 37 per cent of its adult population not in the workforce, and a dependency ratio that is about in the middle of the OECD range.29 Increasing longevity does the same. So does the increase in unpaid overtime and longer working hours for those with jobs. The pressures are augmented, again, by delayed entry to the full-time labour market (as young people are obliged to stay longer in the education system and to tread water in part-time jobs) – and again, by forced earlier exit from the labour market as people are retired at an ever earlier age (even though they live some ten years longer than their grandparents). Understandably, as we shall see below, the combined impact of all these ‘successes’ of economic reform rebounds into the cultural and normative core of the private sphere. It leads women to question a formally, but not substantively, equal gender contract which has about 95 per cent of both women and men agreeing that household duties ought to be shared equally,30 but in which the women in fact do up to three-quarters of all the unpaid domestic work.31 As our focus group respondents tell us, it is the women who bear the brunt of what Bittman explains as the pressures of juggling time.32 Although men are gradually learning to share more of the household labour, they do so only slowly because fathers in couple families with dependent children are typically employed full-time and are now more likely to be working longer days than a quarter of a century ago.33 Small

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wonder, then, that women resent the expectation that the quest for more family-friendly workplace policies and more flexible hours should be designed, in practice, as special provisions to help women, rather than families. They feel obliged to shoulder the costs of adapting the family to the demands of the labour market – often at the expense of their chances to secure their own future in full-time jobs with decent retirement benefits.34 Even more, they may resent that the meagre supply of genuinely familyfriendly provisions in most workplaces has lagged so far behind the rhetoric. Thirdly, as we have seen, ‘class’ differences come to the foreground as male real wages have fallen (see Chapter 2) over the last quarter-century. Women want to work, but they have also entered the labour force to shore up eroding male lifetime earnings. For some families, these epochal structural changes can be accepted, or even welcomed, as opportunities and choices. Those on higher incomes have greater leeway in which to take on new social values in a proactive way. We guess that our North Shore People are more likely to have resources to help them break free from the traditional patriarchal norms of the single male breadwinner family. Whether wittingly or unwittingly, they are likely to internalise modern, abstract norms of mutually negotiated and equal choice for both men and women from another perspective, namely, with an eye to maximising the larger strategic advantage of the household. For example, they can own their own homes much more quickly if the women join the workforce, and they may decide strategically that both partners should work full-time to achieve that end. Our focus groups also suggest, in a rather different way (see Chapter 3), that the Improvers, especially those in dual-income families, have more consciously internalised these norms of choice and mutually negotiated equal rights because they see them as socially beneficial for themselves and others. However, the Battlers and the Survivors have much less leeway. As the deregulated labour market has eroded bedrock institutional support for the single male breadwinner family, the coping strategies of the Battlers and the Survivors are put in double jeopardy. Without the economic resources to keep up on the one side, and without the cultural resources, on the other, they are more likely to find themselves struggling on the back foot, dealing with a burden of adjustment that can put huge strains on family relations.

In short, economic reform has made families more dependent on the market in a situation of rising consumption, rising debt, falling savings and eroding labour market lifetime incomes. In response, the family internalises

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the ‘externalities’ of reform by sending off two breadwinners instead of one into the labour market. In joining the workforce and seeking to affirm their equal rights to fulfilling paid work and a wage, women are moving with the pull of the markets. To a jaundiced eye, they may seem to be following the price signals, and obliging the reformers, by increasing the competition for scarce work and so driving down the price of labour. But something else is going on. They are indeed caught in the middle between the market and inherited norms about the proper role of women. As they struggle with these conflicts, we see in the experience of economic reform that the attitudes of both men and women seem to be grounded, at another level, in increasingly modern notions of choice and social need.35 This brings on much indignation towards an economic system that is likely to be seen as hostile, rather than friendly, to both women and the family.

Lost Restraints, Lost Disciplines and Invidious Choices Our middle Australians know that economic reform has put families on the back foot, but they do not quite know whom to blame. They seem to know that cultures have been undermined and boundaries weakened. As they set their own different interpretations on this experience, we see them struggling to find appropriate attributions of blame, cause and agency. Like most of us, they want to feel that they are morally worthy people, deserving of respect and appreciated for what they do for others. And at the same time, each from his or her own position in what is inevitably a hierarchical order, they want to enjoy the material benefits of a decent standard of living. What the focus group participants tell us is that this ancient ‘struggle for recognition’36 has to be worked through in two domains that are increasingly hard to reconcile. Firstly there is the domain of the marketplace, where they are always consumers, and also for long periods employees and producers of all those things that appear to them as economic wants; and secondly they are members of families, in which each has to respond to the moral obligations that issue from daily encounters with the needs of others with whom they have an intimate attachment.37 It is almost invariably the women who lead and define the focus group conversations, which are usually intense and saturated with assertion and puzzlement about values, obligations and duties. The survey material has already provided an outer context for the moral anxieties. In answer to an interview question seeking clarification of the positive and negative factors driving changes to the family ‘today and over the last fifteen years or so’, our respondents were most likely, across all household types, to elect ‘more

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equal relations between men and women’ as the most positive change; and most likely, again across all household types (except the singles), to say that ‘consumerism’ was the most negative factor (Table 4.3). What we hear surfacing in the focus groups is ‘needs talk’ with a vengeance:38 not just economic wants, but social needs for intimacy, recognition, and security. From a sociological or even a moral-philosophical Table 4.3: Household Types and Attitudes about the Family Changes to family life

Couples with children

1. Positive changes Highest rank Better, more equal relations between women and men Second-highest More equal rank sharing of housework, caring and parenting 2. Negative changes Highest rank Too much consumerism and pressure to get more money Second-highest Breakdown rank of traditional values

Household type Couples Singlewithout parent children families

Single adults

Better, more equal relations between women and men More freedom for individuals to do their own thing



Too much consumerism and pressure to get more money Communication breaks down: family members don’t talk to each other

Too much consumerism and pressure to get more money Communication breaks down: family members don’t talk to each other

Communication breaks down: family members don’t talk to each other Breakdown of traditional values

Questions 1. ‘Thinking now about the positive aspects of these changes [to family life], please choose two items [from the following]: Better more equal relations between men and women now; more leisure time now; more equal sharing of housework, caring, and parenting now; less outside interference and pressures on the family today; more freedom for individuals to do their own thing; closer, deeper, richer, emotional bonds now; better standards of living make more things possible; more flexible outside work generally help family life; other; don’t know.’ 2. ‘Thinking now about the negative aspects of these changes [to family life], please choose two items [from the following]: Falling standards of living are hurting families; work pressures are hurting families; communication breaks down: family members don’t talk to each other as much; families more isolated now (cut off from extended family networks and community); weakening and more fragile emotional bonds now; relations between men and women changing for the worse; not enough leisure time; breakdown of traditional values hurting families; too much consumerism and pressure to get more money and buy things is hurting families; other; don’t know.’

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point of view, we see, unmistakably, a tremendous struggle. On the one side is tradition, in which moral precepts always seem to be given, inherited and concrete; on the other side is a high modernity, or a reflexive modernity, in which they are grounded in far more abstract notions of rights, respect for the person, and the ethics of communication.39 Once again ‘class’, income and education (for the moment, undifferentiated and taken together) cast a long shadow over these reports. Broadly speaking, our most anxious respondents are, as we saw in the last chapter, the ‘working class’ of people in manual and lower service jobs.40 ‘Class’ and income are only indirectly related. With this said, we are more often looking here – in terms of equivalent income that takes into account family size and composition – at individual households with an equivalent income of up to $30,000, which puts them in the lower half of our range. As we have seen (Chapters 2 and 3), in comparison with those in professional managerial and technical jobs, these Battlers are more than twice as likely to hold casual or part-time jobs and to find themselves with an equivalent income of less than $15,000. Those with incomes in that range are more likely to accurately recognise that their wages are ‘low’ or ‘very low’ and that their ‘incomes and job prospects are falling’. They are about twice as likely to report having difficulties in coping with rent or mortgage payments. More tellingly, and now in comparison with those on equivalent incomes of more than $45,000, they are about three times more likely to tell us that ‘there’s really no way I can solve some of the problems I have’.41 No luminary insight is needed to see that they are struggling for a sense of effective agency, for a sense of control, and that the lack of it is the most salient subjective consequence of economic hardship.42 Economic reform has run their coping strategies up against some hard limits. For the Battlers, in the lower socio-economic half of our respondents, the moral distress is suggested as follows. Penny, an ex-clerical worker and solicitor’s secretary, says, ‘People don’t take responsibility for their own actions … Unmarried mothers … pension and divorce law makes it too easy.’ Here the nub of her complaint could be lost self-restraint and failing personal responsibility – in which case, the individual is to blame. But she is also saying that unfortunate people have been gulled into a dependency that is both disgraceful and dangerous, and that it is probably soft elite dogooders who are responsible. But once again, as we saw with concerns about jobs in the last chapter, beneath the surface these concerns are still very much socio-tropic, or society-centred. That is why everyone understands what Jack, a Survivor fitter and turner, means when he says, ‘Money means

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a lot more today.’ He then goes on to elaborate the discussion about how ‘reform’ undermines an independence that was always hard-won with disciplined self-restraint. He says, ‘We used to save for a rainy day. You gotta earn the right to things.’ Someone else with a very elementary education eloquently clinches the point about the morally debilitating impact of the market thus: ‘Everything’s a business. Nothing’s for its own sake.’ In a different group another person, more a Survivor than a Battler, sharpens a very similar discussion with his equally well received observation that ‘We’re all blanketed by manipulative marketing!’ As we shall consider further in the next chapter, typically, in the more ‘working-class’ focus groups, these discussions flow naturally into what others would call civics and the negative impacts of economic reform on public behaviour. Often it is the impact on children that is most visible. For example, Kath, a housewife, complains that ‘There’s no discipline or respect. Children are not taught respect at school.’ And once again it is lost independence and the injuries of ‘consumerism’ to self-sufficiency that they see impacting on families through their children. A truck driver and his customer relations officer wife together complain, ‘Kids say they are bored … They used to colour in something … Now they expect to be entertained all the time.’ For Becca, a Battler, supervisor of the dairy section in a supermarket, the more shocking trend was: ‘Older people shoplifting because they don’t have enough money. It’s a disgrace!’ For the most part our respondents are clear about how the market, which they more often call consumerism or even the Almighty Dollar, is hurting the family. They echo Bill’s conviction with which we introduced this chapter, that ‘We are waking up to the cost of the reforms: loose morals, broken families!’ The rubrics for their interpretations quickly take a familiar form: Expectations are out of control! People live beyond their means! Moreover, they have no trouble in supplying concrete pointers to the sources of these troubles. Debt! Credit cards! Extended shopping hours! Advertising! Kids want everything with designer labels! Among other things, we see here the old virtues of a ‘working class’ (and a ‘lower middle class’) that came back, with the Pauline Hanson eruption, to haunt the elites that have so abused them for the best part of twenty years. These are old virtues vested in a traditional moral code – a conventional and pre-modern moral code. For these middle Australians, it has been grievously undermined simultaneously by economic reform and by a high modernity that is to them, for the most part, an alien way of life. They feel themselves caught in the middle and disempowered by reforms that put them in double jeopardy: leaving

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them with diminishing economic resources, and with inadequate cultural tools to rehabilitate themselves, and their families, in the changing cultural environment of the new capitalism. These Battlers and Hansonites, when they are prodded by others in the groups, the Survivors too, know intuitively that they have been used as fodder for economic ‘reform’. Mixed up with their angry remonstrations we discern the contours of an older lower-middle-class morality. In that all too easily despised outlook we read with Lasch, ‘its moral realism, its understanding that everything has its price, its respect for limits, its scepticism about progress’.43 As their lives are undermined, they struggle to reimpose an ethic of restraint, on themselves and others equally, with constant criticisms of ‘unreal expectations’.44 Our respondents are all too ready to blame themselves for what they see as both the origin and the consequence of unreal expectations. In their eyes the problem is that lost discipline and failing self-restraint have, in the face of all the seductions of the market, delivered them into what Hirsch calls the futile scramble for positional goods.45 They seem to know that in a zero-sum society positional goods, in the form of nicer homes, newer cars, more expensive holidays, deliver only short-term gratification and long-term frustration – except to the rich.46 As the broad middle wants, and then gets, more, so the standards of adequacy, expectation and comparison inexorably move upwards and out of reach. Insult is added to injury with increasing competition for still more of the same. Our respondents know that they have been sucked in by commercial culture. They generally watch commercial television and would often tell us (in response to our questions at the end of the meeting) that they watch programs like ‘The Money Program’, full of smart-money, get-rich-quick gimmickry, which is aimed at them but profitable, if at all, only for those who can afford to play the markets as a kind of sport, without serious human risk to family and future. Yet regardless of whether, and how, they are tempted to gamble with the markets (typically with small bundles of share stock in recently privatised public enterprises such as Telstra or the Commonwealth Bank), and regardless of whether they watch on or simply withdraw, they inveigh with the same angry denunciation against what they all see as the central problem: greed!

For those in our ‘middle class’ holding professional technical and managerial jobs (see Chapter 3), the familial experience of economic reform is different. The reader will recall that we are speaking here of universityeducated school teachers, middle managers, computer technicians and

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other professionals. Certainly the Improvers among them bemoan and denounce consumerism, markets and commercial culture with the same vehemence but without the same edge of desperation. They mostly assume that they can join the scramble for positional goods and edge forward a couple of steps in the struggle for material advancement. Like our ‘workingclass’ people they lament the increasing ‘gap between rich and poor’ (a common theme), but they hardly ever acknowledge that for every winner in a zero-sum game there must be a loser. The ethic of self-restraint is absent or muted. Typically the dual-income full-time workers with children focus their anxiety more on the invidious choices one must make in trading off leisure, say, for the house extension, or to take a holiday as a family. In this aspect of the struggle, as with so many others, education has made them far more articulate. In their troubled narratives we hear openly discussed ‘rational’ attempts to calculate the choices that they must make to improve their lot (and often to have their cake and eat it too) in a world of invidious trade-offs and forced substitutions of ‘goods’ that has been foisted upon them. In these ‘middle-class’ narratives, the themes of galloping expectations and discipline are still linked, albeit in a different way. Here the moral anxiety wells up in doubts over the struggle to reconcile the mortgage and the lifestyle with the demands of jobs that leave them drained and good for little else but passive leisure when they get home from the grind. They are not at all like our working-class Battlers and Survivors, who invoke conventional morality to shore up self-respect and a sense of respectability as defences against the feared scorn of others. For these tertiary-educated ‘improvers’ and ‘North Shore’ people (you will remember that these are tag-marks for emphases of meaning rather than hard-edged categories), the worries focus on whether the game is worth the candle, whether work is really going to deliver the goods, and whether family closeness can survive the pressure. To repeat the words of one focus group respondent, ‘It’s a burnout!’ Sometimes they seem to say to themselves that they are weighing the costs and benefits in complicity with a utilitarianism that, as others insightfully allege, ‘applies economic analysis to the family by destroying it’.47 They resent the commercialism that has ‘colonised the family’ and, in their perception, thrust invidious choices upon them. They make the same complaint that the market has invaded the familial domain. Yet both of these groups understand and meet this with a more abstract, effective, and in both cases, a more modern understanding of what will be necessary in order to face the markets without abject surrender or crippling injuries to self-esteem. Thereafter, the responses are somewhat

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different. They may well have preferred to live with better institutional protections against the market – for example, with guaranteed retirement benefits and the huge subsidies and services for families that are normal in Western Europe. Equally the ‘North Shore’ people generally know that they did not choose to have economic reform thrust upon them. Yet, confronted with the new order, they believe that by making appropriately strategic choices they will be able to maximise the gains and minimise the losses. This gives them a measure of confidence to look forward into the future with a measure of inner security, and perhaps – although we did not once hear it voiced – with the exhilaration of living constantly on the edge of a new challenge. With much trepidation, it is assumed that families can absorb the risks without too much pain. Although they may be indifferent to the moral promise of modernity, they have nonetheless understood that they have to internalise the risks, work out their own solutions for themselves, perhaps with others around them, and assemble the cultural resources they need to join the winners rather than losers from economic reform. For the Improvers who are unreconciled to economic reform, the same pressures take on quite different meanings. They resent what they see as a forced exposure of the family to the markets. They blame corporations, politicians and the reformers for foisting this upon them. Often there is talk about what Juliet Schor calls a downshifting, which trades off a substantial reduction in income so that one partner can leave the workforce (perhaps to look after the children) or drop back to part-time work.48 Apart from Craig and Lyn, we met only one other couple who had taken this course. It is generally not seen as an option because they cannot afford to step out of jobs with a career path; because now two incomes rather than one are needed to deal with the mortgage; or because, as we shall see in a moment, they so much want to give their children the best possible educational opportunities. The problem there is that as reform has eroded the public schools, many of them feel committed to putting their kids through a (generally modest-ranking) private school. The Improvers see themselves and their families, and indeed all except the top wage and salary earners, as losers from economic reform. They know they have more choices than many of our Battlers and Survivors; but those same choices are more likely to be experienced not as enhanced independence but in quite an opposite way: as a personal burden, a load on the family, and as a response to a forced internalisation of unwanted risks to themselves and their relations with others. We see here what others have seen as ‘a loss of happiness in market democracies’ imposed directly by a process of reform that treats familial relationships as externalities.49 However, like the North Shore People, who

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accept reform, our improvers are usually saved from discouragement or even destructive bitterness by a confidence that they can make some strategic choices in a more complex cultural environment. They have another resource. They know that there is nothing natural or inevitable about economic reform: they recognise it as a political artefact that has been driven by powerful interests. Here they have embraced the moral promise of high modernity. For them the injuries of reform appear in the light of what they always see as politically achievable social improvement. They have not lost sight of what others have imposed upon them. They know, as we shall consider in Chapter 6, that reform is all about power.

Here, and especially for the ‘middle-class’ people who complain constantly of the rat race, it is the women who speak of their feelings of guilt in the face of what they always see, almost irrespective of how well they succeed objectively, as their inner failure to measure up to their own standards in meeting the needs of others. Guilt must surely be the most strongly gendered emotion of our times. As Carmel, a working mother, says, ‘I have to do it perfectly! Bring up my kids well, buy them good things, do it all perfectly!’ For our respondents those moral anxieties spring into the foreground whenever they speak about the hidden costs of working (the externalities again!) and about family time at weekends: It’s frantic … All the things the kids have to do: ballet, sport, music lessons. They don’t ever have a meal together. [Consultant nurse speaking of her sister’s family] You have to give them those ‘extras’ that will stand them in good stead later on. You have gotta give your kids the best chances you can. [Occupation unknown] Kids’ parties! That’s really pressure – especially when there is so much housework to do at the weekends. [Teacher and mother of two young children] I’m working all the time just to bring home guilt money, for toys and stuff like that, because they just can’t do without them. [Customer relations officer and mother of two young children]

These ‘middle-class’ women feel themselves enslaved by performance criteria that they can never satisfy. For them the family is a counterfactual standard that sets what they actually do in their busy daily life against ideal

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normative standards that give them no relief from the need to perform even better as mothers, wives, lovers and daughters. They complain, as we shall see, that they do not have any ‘time for themselves’ and, more importantly here, that they feel endlessly divided into separate performances: wife and lover one minute, mother the next, then cheerful and expert employee, then attentive carer, and so on. These themes are often aired by excellent journalists in the weekend newspaper supplements, and they resonate strongly through our focus group narratives. The women say they need to feel that they are desirable, independent and intelligent. And, notably, we are speaking here not of corporate boardroom women but of physiotherapists, teachers, nurses and, perhaps with only a little exaggeration, of every woman who has been through a university and is both working and raising a family. The unremitting sense of guilt points to the failing insulation between separate spheres of value. As these firewalls fail, guilt becomes the normal experience of a surrender to ‘the dull compulsions of the market’ that force money and ‘utility preferences’ as the denominators of value into spheres of life where they do not belong. Indeed, especially for these young middle Australian women, their own social and psychological ‘investments’ for the future of their children are interpreted resentfully, as an imposed standard for yet another kind of performance. These young women experience parenting itself as a performance, which demands increasingly scarce time and, for the working mothers, depleted energies. From a sociological point of view, we can see easily what is happening. High modernity has uncoupled, or segregated, the constituents of family life – love and care, sex, parenting, leisure, and domestic work50 – into separate elements. Each person must now reassemble these, both as an increasingly differentiated and free-standing individual, each according to his or her own standards, and mutually, with a partner as a member of a family. For these ‘middle-class’ women, the traditional models have already broken up. There is no longer ‘a one best way’ or any ready-made template that will relieve them of the burdens of reflection that they now carry as a normal cost in dealing with self-doubt and guilt. True, the equal gender contract has not yet fully emerged. Yet, we see that it is already to the fore with two overriding norms of high modernity: plurality and mutuality. There can be no ‘one best way’ and so you must work it out and work it through and, in principle at least, negotiate everything with your partner. Relationship becomes what some would call ‘communicative action’ (Habermas) or, in the Giddens version, ‘the ethic of pure relationship’. (I prefer ‘mutuality’ for short!)51 The basic, and perhaps the only, principle is that one must mutually recognise the other as an individual, like oneself, with equal rights to have his or her needs addressed and, as far as possible, satisfied.

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This goes a good way to explaining the positive side of our story. The pressures of the moral struggle for the self in this intimate private sphere gradually bring on, and may even yet institutionalise, both the need and the achievement of ‘better, more equal relations between men and women’. This is an achievement that has been secured even in the teeth of economic reform. Our survey respondents rate it as the most positive development to come out of ‘changes to the family in Australia over the last fifteen years or so’, before more freedom, which they rank second (Table 4.3). The negative side of the story is all too clear. Given that reform is not a consensual process, the experience of dealing with its externalities, even in this most private realm of the family, means coming to terms with the power of others. As reform has broken up traditional cultural restraints and unsettled explanations of ‘how things work’, angry people try to make sense of their own experience with various attributions of agency and blame. As we shall consider further below, some clearly discern what the reformers have done to the family; others try to cling to traditional beliefs and often blame themselves, or even try to blame the younger generation.

Family Experience across the Generations How do age and one’s stage in the life course condition the familial experience of life in the new capitalism? How does being caught in the middle by economic reform show up in the longer time horizon that appears as we consider a present in which several voices speak from different stages in the life course? Our survey data suggests that, among four different household types, the singles come third, after sole parents (29 per cent) and couples with children (27 per cent), with 22 per cent of them rating ‘money and bills’ as their number one concern. With sole parents, singles are most likely to support paid maternity leave and most likely to support childcare benefits. Although they still take a predominantly negative view of ‘changes to the family over the last fifteen years or so’, they were the most likely to report these changes as positive.52 Given the size of our sample, we cannot reliably compare the experience of singles with and without children. The younger singles without dependants may not have direct experience of new economic pressures on families with children.53 Moreover, the lean and mean, deregulated labour market has not yet forced them into conflicts between home and work; and, thirdly, they may even be enjoying the freedom of university, travel, or other aspects of singles’ life in the city. Yet they know they are short of money. Along with other household types, and on the positive side, they rate ‘more equal relations between men and women’ as the most positive

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change affecting ‘families in middle Australia today, and over the last fifteen years or so’ (Table 4.3). We may infer that the young singles embrace the equality and freedom of modernity. It is only through their parents that they can have any memory of the secure affluence of the twenty-odd years of postwar boom conditions that ended in the 1970s. They accept, to a point, that ‘it’s tough out there’ in the new labour market and that this will make family formation much harder than it was for their parents. As we have seen, this is probably the principal reason for delayed and reduced fertility. Singles have little confidence that the financial burden of having children will be offset by tax subsidies for families with children, especially as userpays policies and cutbacks to public education, public health and community services impose other costs. Memory is both selective and evaluative – never morally neutral. And it is just here that our focus groups offer some interesting insights into the effects of inter-generational comparisons in conditioning understandings of the impact of economic reform. Marg, a retired clerical assistant, gives us an especially clear image of what she sees as the trajectory of changing family relations over three generations. Twenty years ago we couldn’t travel! I remember we had to sit on butter boxes instead of chairs when I was a kid [about forty-five years ago]. Wages are up compared with our generation, more outlets, labour-saving devices, transport. But family life was a lot happier then, when we made do with what we had. Our grandchildren … they don’t have a bright future at all do they? No decent jobs, no families!

Social researcher Hugh Mackay distinguishes three generations that we easily recognise in our focus groups. We noticed that these historical differences were more clearly marked among the Battlers and the Survivors who have been the losers from economic reform. The reason, we surmise, is once again that that they have suffered a double loss as economic reform has lowered their relative incomes, put them into defensive positions, and even distanced them from the cultural resources of a cultural modernity that might help them make the necessary adjustments. Mackay calls the people born in the 1920s and 1930s the lucky generation.54 We still find the historical memory of this generation manifest, for our older focus group participants, in the often living breath of their own parents. Usually we find them vehemently affirming a strong (premodern) conventional morality of thrift, self-restraint, and stable patriarchal marriage. But they are also grateful for the good fortune that set them down on this earth at the end of the Great Depression and then got

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them through a war, and into a postwar boom that they enjoyed but seldom took for granted. The further one goes down the social ladder, the more one finds the old Protestant ethic of Janet McCalman’s55 old and once-confident Melbourne middle class now eclipsed and frozen, several rungs down the social ladder. We find them, especially the older of these Battlers and Survivors, now locked into an attitude of deep suspicion towards the values of the boosters and boasters who seemed to arrive in the swelling postwar middle class too easily, without enough deserving effort. This was once the middle class to whom ‘Prime Minister Menzies successfully tilted his famous radio speeches to the Forgotten People’ of 1942 and 1943.56 It is this generation, now more often part of our ‘working class’, who see debt and conspicuous consumption not just as economically dangerous risk but also as a moral hazard. Jake, another retired fitter and turner in his early seventies, worries that ‘People want too much today: two cars, swimming pool. They don’t wait for it. We used to save for a rainy day. They keep trying to keep up with the Joneses.’ In another group an older person comments that today, ‘You see young people borrowing $400,000 with just a couple of ordinary jobs. No hope for them!’ The economic expectations of these people date back to the period before reform. If the world falls in on their grandchildren, for want of discipline, self-respect, thrift, prudence and restraint, they will tell the parents – their own children – ‘we told you so’. They do not believe that two incomes can save the new generation from dangers that even single-income families could more easily avert, twentyodd years ago, under the older regulated market. Their mistrust of the market and of economic reform has nothing to do with whether they vote Labor or Liberal. It is simply an integral part of their outlook and a type of moral hygiene that they try to bequeath to their children. The next generation, now among the already greying heads of our focus group participants, are Mackay’s baby boomers who believed ‘the economic escalator would go infinitely upwards’.57 Mackay says they are ‘poor planners, unenthusiastic savers and voracious consumers’.58 All our data suggest, as we have seen, that they are quickly losing their nerve. They talk endlessly about stress and pressure (‘It’s a burnout!’). Only the very upper end of our middle Australia sample still believe they can easily pass the baton and deliver the goods to their children on an upward escalator. The new structural factor, and the element which most clearly marks off their relative affluence and their outlook from our ‘working class’, is the dual-income household. Albeit in very different ways for both the North Shore People and the Improvers in our focus groups, this goes hand in hand with a cultural modernity.

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For the Improvers especially (we don’t know enough about the North Shore people to generalise strongly about them here) modern cultural values make for an easier negotiation of gender roles, and a sharing of roles within the family, that is at least headed towards real gender equality. The variation in their reported behaviours and attitudes suggests that it does not matter much how family members divide up the burdens and responsibilities of the household so long as they ‘work it out together’. Real equality consists in knowing one has an equal hand in deciding how things will be done. On the other hand, for the women in families stranded in the older pre-modern cultural pattern, there is often an experience of being stuck in helpless reproaches of their own daughters. One such older woman says, ‘A lot of [younger] women go out to work but they don’t know how to cook, how to economise.’ Another woman, the widow of a plumber, adds, ‘I know some women round here who want to work so much that they won’t even get their children’s breakfast.’ For the most part, economic necessity has cut the younger women loose from these now unreal norms. For the parents who cannot understand what has happened, there is a double jeopardy of distance from those they love and the self-doubt that goes with it. They are often stung with incredulity – and guilt – by the reproaches of their own mothers towards working women with young children. In our focus groups we have a few members of Mackay’s rising generation, born in the 1970s. For them now a prolonged social adolescence continues until stable reference points emerge from settled intimacy and settled work (the two elements that define stable adulthood in a postindustrial society). As settled full-time work with a future becomes something closer to the exception rather than the rule, it is perfectly understandable that the inner search for identity and mutual self-recognition, through friendship, travel, experimentation, should take on such defining importance – almost as life itself. Parenthood and stable commitment are postponed, along with commitments ‘to a system of religious belief, a political philosophy, a political party, a course of study, a sexual partner, or even a brand.’59 As we saw in the last chapter, there is another socio-economic breakpoint that is marked here by whether or not they have attended university. For those who pass into tertiary education and explain that ‘I don’t want to commit myself yet’,60 mid-term time horizons can still take shape ‘realistically’. Those without tertiary education generally move into a pattern of training, working and living that is inherently more insecure. In the whirlpool of plural moralities, and a world of often poorly paid and insecure work, money and the wage packet are the emblems of a fragile

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success measured necessarily within a shorter time horizon. For both groups it is more or less taken for granted that, in principle at least, girls can do anything and that everything should be shared in the home.61 And yet, disturbingly, as Belinda Probert shows, it is often those with the poorest economic prospects – in our sample the postman, car detailer, or panel beater – who hold out for the nearly impossible conventional ideal of the single breadwinner family with Mum at home looking after the kids.62 Once again economic reform has put them in double jeopardy, by stripping from them both the economic resources and the institutional supports that might help them make the transitions without having to internalise the risks incurred as shame and humiliation.

Pressure and performance are words that our middle Australians use to describe what is for them a changed experience of time. As we have seen, for many of our focus group respondents, and pretty well invariably for those in households with young children and parents at work, the most common buzzwords are ‘stress’ and ‘pressure’. The point here is that economic reform in general and, particularly for our ‘middle-class’ families, the intensification of work for two breadwinners instead of one, has changed the experience of time. These objective aspects of reform, among others – the pressure of debt and consumption, the insecurity of work – alter the experience of time in radical ways. As one observer puts it, this expands ‘the now’ until ‘time horizons shorten to the point where the present is all there is’. This brings along with it an ‘overwhelming compression of spatial and temporal worlds’.63 It goes a long way to explaining what Craig means when he says ‘It’s a burnout!’ As the market has invaded and broken up patterns of work, and unsettled demarcations between work and home, it has produced what other observers call spillovers from one domain, or value sphere, into another.64 This is what our focus group people, especially the women, mean when they speak about ‘no quality time’ or the invasion of work tensions into ‘time with the family’, or of having ‘no time for myself ’. Whether directly or indirectly, they are speaking here of ‘pressure’ as the strain involved in keeping different time registers apart so that each can be lived in a different way. They are overburdened by the need to internalise the so-called externalities of reform. The new capitalism says to them, in effect, the older protective shields have gone so now you fix it yourself in whatever way suits you best – so long as the market comes first and social needs second! Social needs are treated as a residual environment of a market that must always have

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primacy! But what our people want is precisely some substitute for the institutional demarcations that have been taken from them. They want to feel that they can be fully present and responsive-in-the-moment with their children at home. And, so that one does not foul the other, they want to have this marked off – without mobile phone calls! – from the pressure of organising next week’s work roster at home and in one’s head. We may see these struggles as yet another dimension of the unpriced costs of reform that have been dumped on ordinary people. Even personal equilibrium and good judgement are soaked with contingency as family members are forced, more and more, to define themselves as individuals in increasingly contractual (rather than mutual) relationships, which are just as likely to be alienating as they are enabling. Small wonder then that inter-generational differences in private family relations become a lightning conductor for interpretations and evaluations about economic reform in the public sphere. The whirlpool of new anxieties for working families, which the reformers would so much like to see quietly internalised as economic duties, breaks out in at least two ways. On the one hand, as Lasch puts it, ‘to see the world as a parent is to see it in the worst possible light’.65 Even if they accept what the market is doing to them at work, in the context of the family it is much more likely to be a hot potato. Again, in another way, even if they have already made their own peace with the market, worries about their children’s prospects call up all kinds of troubling doubts that lead quickly, as we have seen, to evaluations of what many of them realise are the false promises of reform. Parents cannot disown their own experience of having children, and of course they generally want to do the very best they can for their kids. Since they cannot wind back economic reform, they are stuck with it and they must get on with their parenting in a radically changed economic context. In that sense, at least, they must make their peace with it. But what about couple families who are now without children? We find them delivering the most unfavourable negative-to-positive ratio (75 per cent to 25 per cent respectively) in their judgements about what ‘has happened to families in middle Australia today and over the last fifteen years or so’. Similarly it is they who, by a small margin (the comparisons are not statistically significant), are most likely to say that quality of life is declining rather than improving.66 One interpretation could be that, without a redeeming hope for their children’s future, they more keenly experience the ‘ruined present’ and even the lost values of their familial past.67 Whatever the interpre-tation, children do confer meaning on a future that between 60 and 80 per cent of our middle Australians (depending on one or other of

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two questions) say is now more insecure, and harder to read, than it was for the last generation. Modernity requires of those who can muster the necessary resources an increasingly conscious, reflective and deliberate organisation of the self in response to what are now fragile and unstable boundaries between different spheres of life (work, family, leisure, religion, sexuality, self-improvement, etc.). That is one of several ways in which economic reform makes people unhappy.68 In these glimpses into the lived history of familial relationships, we see that economic restructuring has broken up the inherited stock of established practical knowledge about how one should raise a family. For those who are caught in the middle, and left stranded with traditional norms that their children reject, this is a doubly wounding experience.

Conclusions and Pointers Even though many middle Australians manage to successfully make what turn out to be generally defensive adjustments, families are the big losers from economic reform. They are caught in the middle: between the structural economic pressures of reform on the one side, and cultural norms and inherited family values on the other. For most of them, as Craig said at the beginning, ‘It’s hurting us!’ Writing about the family feels rather like grasping a balloon. As you take hold of one part of the surface, the invisible contents swell out at some other point. Others, principally corporations and their core highly paid workers, are the winners from economic reform. As they harvest the gains of a process that was, as we shall see in Chapter 6, never consensually agreed to, we find our middle Australian families struggling to deal with the externalities of reforms that others have thrust upon them. Some do it more adequately because they have the cultural resources to deal with the broken institutional supports for the family that have been deliberately swept away by reform; others, especially those on low incomes at the ‘working-class’ end of middle Australia, wind up suffering a double injury as they internalise the externalities more directly as shame, failure, or even as some economic duty to make adjustments. Only a fool, we know, would try to come to final conclusions about what is happening to the family. And yet, as we gather up our insights into the various ways in which our middle Australian families struggle with the new capitalism, some several reflections come to mind. A deregulated, lean and mean labour market is taking its toll on middle Australian families. From a structural point of view at least, the family is running out of coping strategies. At one end of the work cycle, young adults

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remain dependent upon the support of their families for an ever longer period before entering full-time work and setting up their own households.69 At the other end, retirement or retrenchment by age fifty-five becomes more common. This leaves middle Australians, who will live into their late seventies, stuck for the most part on pensions that are extremely meagre by OECD standards,70 giving them low income ‘replacement rates’ that come with tightly means-tested social security. Families are faced with the encroaching impossibility of saving and income smoothing: stretching incomes from the fat years to cope with consumption in the lean years, or to fund important life stage expenses such as tertiary education (for oneself or one’s children), a health crisis, moving house, or retirement. As the costs of such necessities as a (median) house rise in real terms, the men have to work longer hours and the women move into the workforce in increasing numbers. Whatever the mix of motives of the women (self-fulfilment, personal insurance for separation, or simple economic leverage), the scope for increasing female participation in the labour market to offset falling male lifetime earnings is not infinite. It hits relatively hard limits, which are set by the still unequally distributed demands of caring for children, and by other features of reform that include inadequate government support for families, a user-pays environment for services, and unequal retirement benefits for women.71 When saving seems impossible, and expectations are not lowered, increasing household debt becomes dangerous – especially as the risks are compounded by the chances of divorce and separation, and of unexpected unemployment (from which middle Australians were nearly immune only a generation ago). In relation to the natural economic expectations inherited from parents, middle Australian families today have little hope of getting ahead, even in boom economic conditions. Modernity interacts with class and gender to transform the way in which families face structural economic limits. Those most severely affected by economic reform are more likely to be at the ‘working-class’ end of the broad middle part of the distributional spectrum (typically because they have lost their jobs, or are struggling to make ends meet on meagre, or single, incomes that have not kept pace with prices). In this sense the negative structural economic impacts of reform impact from the bottom up. On the other hand, the normative and cultural currents of modernity soak from the top down. Modernity cuts people loose from traditional roles and expectations and, with higher education, opens the way for gender equality and mutuality to reshape the moral basis of combining work and parenting. In comparison with their mothers, women have a better chance to combine work, parenting, and household duties, equally and together with a partner, in a two-income family. And yet, declining fertility is but one

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sign that increasing numbers of women believe the costs of raising a family in the restructured environment still outweigh the benefits. The protective functions of conventional morality are failing. Adverse economic conditions combine with the cultural impact of modernity and thus conspire to disappoint just those conventional moralities that once secured protective restraints on consumption, and on what our middle Australians call unreal expectations. Those families who try to protect themselves from fevered consumption and debt by applying the old disciplines of self-restraint and modesty, find that delayed gratification is more likely to turn into no gratification at all, or less gratification, as a more unequal distribution of income stretches out the rainbow and puts the pots of gold beyond reach. Or, just as likely, their children openly flout norms that lose their force (as they melt into optional values and ‘lifestyle’ choices) in the face of an aggressive consumer culture – a culture that insists, on the one hand, that their parents’ wisdom counts for nothing and, on the other, that everyone needs designer labels. Patriarchal norms about family values and the ‘proper’ role of women can sometimes be made acceptable to both men and women with some forms of religious choice; but even then the likelihood is that modernity will return in the guise of therapeutics to force some degree of conscious and deliberate mutuality back into the bundle.72 In conditions where there are no longer any moral trump cards, and no ‘one best way’ of raising a family, there is an inevitable tendency for the imposition of conventional norms to produce more conflict and less harmony. ‘Family values’ have an open future. In one form or another the reformers, most social scientists, and sociologists (who ought to know better) are what we call positivists, who both minimise the status and function of the emotions and of morality in ordinary life. (They too quickly forget that we all treat our own values as tacit and practical knowledge of and for life itself and as tools for constructions of it.) For the same reason it is generally assumed, by realists and pessimists alike, that family values will evaporate as the structural impacts of modernity inexorably redefine our view of adult competence in ever closer approximation with an economist’s ideal of a fully reformed and maximally productive worker who is therefore completely mobile, and thus without children or family ties. That assumption is already built into the judgement that, in very modern societies like Australia, traditions, and with them family values, are ‘so eroded that they seem to pose no obstacle to anything’.73 Although the structural pressures are all too real, and frozen essentialist values are failing everywhere, our study does not suggest at all that people will submissively treat emotional bonds with partners, and responses to the needs of children, as residual obstacles to still greater increases in the productivity of labour. It is just as likely that

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modernity will steadily empower ever larger numbers of ordinary people to realise, in the private sphere, what the high theory calls communicative ethics – perhaps to a level that could transcend, oppose, and even defeat the pressure of the markets on social reproduction. With just a little corrective optimism we can see intimations of such a possibility in the passion with which the Improvers especially, and indeed many of our respondents, right across the political spectrum, value and strive for good communication – with their partners, children, and friends. For huge numbers of young people this has become a secular religion in a world, to be sure, where ‘it is all too easy to choose identity, but no longer possible to hold it’.74 For families ‘the dull compulsions of the market’ outweigh freedom of choice. People feel that they are forced to use money as a vehicle for decisions in a private sphere. What our middle Australians resent is something that economists might call the (forced) substitution of goods. They do not want to have to make trade-offs across domains or value spheres that ought, in their eyes, to be quarantined and held apart. They actively resist the imposition of what the public choice theorists call motivational or preference neutrality, a doctrine which says that motivations or preferences in one sphere should not be protected or quarantined from those in another – so that the market can have more freedom to impose prices and to make them live by what they call the Almighty Dollar as the denominator of all value.75 Trading off one consumption item against another – say, a swimming pool for a family holiday – is a choice that they can willingly assign to the pricing mechanisms of the marketplace. But our middle Australians tell us that money is a much less acceptable medium of choice for trade-offs of, say, family time for leisure. It is a wholly unacceptable choice where the economic structures imposed on them by others force them, deliberately, to treat children as luxury goods and oblige them to weigh the costs and benefits of having children against an extension to the family home, or a luxury car. Beyond this, life-eroding pain76 is the common experience of feeling oneself under a compulsion to trade off the demands of work, and of aggressive employers empowered with new levers of micro-economic reform, to demand more for less in unregulated hours, against the needs of others in the familial private sphere. The nub of the problem is not that the struggle for positional goods – a better car, a nicer home – is inherently frustrating, but rather that it forces one into a resented dependence on markets, and into ‘exchanges of desperation’ that erode familial and social life at another, deeper, level.77 The problem is that the ‘offerings of the market no longer satisfy, not because the payoff is not large enough, but because it is made in the wrong currency’.78

5

Civil Society and Communities What makes mass society so difficult to bear is not the number of people involved, or at least not primarily, but the fact that the world between them has lost its power to gather them together, to relate and to separate them. Hannah Arendt1

In April 2001 the then Governor-General of Australia, Sir William Deane, made a public speech declaring that Australians should make a formal apology to the Aboriginal people for the wrongs done to them. In our context here, it is the justification offered for his point of view that is most interesting. This immensely respected man who served Australia with such exemplary strength and dedication declared that, since the wrongs were done by the nation of which we are all part, we should apologise, as a nation, for those same injuries. He was of course responding to a common argument (often voiced by Prime Minister Howard in an effort to win over the Hansonites) that the majority of people – city-dwellers most of them – who may not today feel any direct responsibility for those injuries should not have to apologise or to carry any blame for what was done by others. Sir William Deane was right on at least two counts. He was right in calling up the empirical observation that, in times of war always, and on other occasions such as when Cathy Freeman won the 400 metres at the 2000 Olympic Games, Australians recognise themselves as active subjects of a nation society. In such circumstances they feel variously proud and implicated in what the nation does in their name. They accept the collective responsibilities and duties that go with participation in a nation society. And so he is right in the second normative, moral, sense that these involvements reach far beyond the family, beyond the network of friends and intimates, to both embrace and signal civil society – and the network of institutions, both formal and informal, that give it form. Few people accept that we are at war and in a state of nature with others the moment we step out beyond the known 111

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world of the family. We need to know that we are mutually bound to strangers with effective moralities that both enable and constrain behaviour within a reliable framework. Our sense of agency and effectiveness is based on it. Things of great consequence, both beneficial and terrible, are done to people in the name of the nation and as citizens and members of civil society. And yet, in Australia especially,2 people do not think much about ‘society’ and for that reason may have more difficulty than people in other nations – typically, here, other Western European nations – in deciding where, in what circumstances, and in relation to what domains of life, individual responsibility takes precedence over collective action. In Australia there is no classic tradition of human rights, and often only a fragmentary, weak moral vocabulary for identifying harm to what we sometimes call the social fabric. The reformers appeal to collective ideas only when it suits them to induce mass loyalty – but never when it might involve a limitation of their power, or some enabling collective intervention to make the economy serve the people rather than the other way about. It is in this context that we search for clues about middle Australia’s view of what the Improvers among them see as the damage done to Australian society by economic reform. We are challenging the established view that economic reform is always beneficial until proven otherwise. We want to reverse that burden of proof. Has economic reform weakened what Arendt sees as the capacity of society to gather us together and to separate us in ways that are friendly to our wider interests as participants in a democratic civil society? It is with these questions that we look to what our middle Australians have to say. In the first section we ask how middle Australians understand the changing temper and the problems of local and community life in the face of the new economy. How do they read the breakdown of community? Given that the newest American-inspired intellectual orthodoxy about civil society reads ‘associational density’,3 and volunteering in particular, as the font of civil society, we go on to ask what kinds of associations Australians join. How does the experience of volunteering shape civic values? The third section uses the responses of our middle Australians to gauge the accuracy, degree and consequences of the widely assumed retreat of the broad ‘middle class’ into their own purely household concerns. How, and in what way, is this civic privatism manifest in the ideas and beliefs held by middle Australians about the structure of their own society? Indeed, do they believe Australia is still an egalitarian society in which everyone has ‘a fair go’? In section four we tackle the media’s role in shaping communication beyond the family in society at large. If it is communication that gives life and breath

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to civil society, how then do our middle Australians understand the impact of the media on civil society, and on social life generally? In the last section we look at what our respondents tell us about trust in others and trust in government. We shall here follow the trail of the modern conviction that trust is the essential protein for civil society, for social capital, and for every form of regenerative association.

The Breakdown of Community? Australians take a distinctively cool and modern view of community.4 Our most prominent researchers of community and civil society, first among them Martin Krygier and Eva Cox, alongside other civic republicans, have all pointed to this distinctive feature of Australian society.5 Australia was, ‘born modern’.6 It never had the deep soil layer of pre-modern, ‘primordial’, religiously infused, village and rural community that is such a feature of older societies – including the United States – that were formed before the Industrial Revolution. We do not have the same strong motherhood feelings about communities and communitarian ‘habits of the heart’ as Americans do.7 One of our focus group respondents was heard to complain, ‘Communities? We don’t ’ave ’em any more … Just people of different ages living together under one roof.’ Yet upon asking with our survey how middle Australians feel about community groups, we discover that about 40 per cent respond either negatively or with indifference. Just under half respond with feelings that are ‘fairly warm’ to ‘very favourable’.8 The corresponding figure for consumer groups, for example, in both cases is 39 per cent. It appears that, although the idea of belonging to a community group evokes warm feelings for nearly half of our respondents, it does not much exceed the feelings we have for more interest-based and formal associations. Our urban middle Australians are a highly mobile and decidedly postindustrial population. Just under half of them report having moved house at some time over the last five years; some 30 per cent have lived at their present address for only three years or less, and about 40 per cent expect to move in the next five years. In Australia modern labour markets have long since dissolved the ‘associational density’ of an older, intimate, and sometimes nostalgically remembered world of the extended family, church and local community neighbourhood, each reinforcing the other. Among older middle Australians there is, as we saw in the last chapter, much regret over the breakdown of what they, especially, see as the stronger sense of community that they grew up with.

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However, practical civic community support is available beyond the family, and it’s a highly valued resource. Three-quarters of our respondents say they could count on a neighbour to look after a child in an emergency, 40 per cent on a regular basis. Emotional support is harder to come by, with only about half of our respondents agreeing that they could talk to a neighbour if they were ‘feeling down’. As one would expect, they turn mainly to relatives or friends for this support, which some 90 per cent of them have available – though probably not within walking distance. Yet middle Australians are very aware of social isolation, social need and community breakdown. About one in twenty of them said that they would have no close friend or relative to call on if they felt ill or in need of support and company. Over 80 per cent of our respondents believed that the number of people who would have found it hard to survive without the help of charities had increased over the last ten years, and nearly the same number expected the need for such help would increase over a like period. About one in every seven of these Australians said that they themselves felt poor either often or all the time. We find community defined in our focus groups by references to an unclear but no less important dimension of daily life and interaction lived between the family home and the workplace. Typically Australians define community indirectly and in relation to an amalgam of other social relations: interactions with neighbours in the street where they live; activities that are enjoyed with other families, especially where small children are involved; conviviality and leisure enjoyed with a network of friends; and the interaction and group feeling that is had from sport and from shopping.

How, more specifically, do our respondents speak about the causes and effects, for them, of weakening community? Nine points of reference emerge from the focus group narratives. 1. The space and amenity of the local neighbourhood, especially the street in which people live, figure prominently, especially for families with children. Kerrie, a former teacher now housewife with two children, tells us, ‘We are lucky. We live in a quiet cul-de-sac with only twelve houses and with a park at the end of the street. It’s safe outside.’ She goes on to explain. ‘Eleven kids play in this street. But there’s a drug dealer in George Street.’ As parents with small children puzzle aloud in focus groups about how (community) ‘life around here’ has changed over the last twenty years, they nearly always talk about the way in which kids used to ‘look after themselves’, playing with other children in the street or in


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the homes of neighbours. Already they are talking about lost social resources. The children, we were told, would go ‘down to the creek, or go off for several hours on their bikes’, or ‘kick a football on the oval [the sports ground]’. It was clear that this is now becoming, for them, the exception rather than the rule. During the day, and for much of the weekend, streets and neighbourhoods turn into empty bedroom suburbs, often with dangerous through-traffic as well. This is one concrete aspect of what the literature calls civic retreat into the private sphere.9 2. Another dimension of the same problem is brought on by increasingly unsocial working hours, imposed by the need to work overtime and by rostered or casual work in the evenings and on weekends. When both parents are working, we were told, there is no energy or time left for activities outside the home. Their understanding is confirmed by Australia-wide evidence showing, firstly, that for women especially, ‘the fragmentary character of women’s leisure lowers its quality’ and vitiates other wider social activity;10 and, secondly, that even in the supposedly easy life of the 1970s, Australians still had less spare time than the citizens of most other OECD countries.11 There is less of it now.12 The myth of Australia as the land of the long weekend owes more to the ingenuity of opinion leaders than to the practical realities of working families in the suburbs. 3. The decline of small business was frequently cited as an important problem for communities. As one of our respondents saw the problem, ‘Who’s going to have a chat with the single and lonely pensioner down the street when the butcher, the baker, the newsagent, and the chemist have all been swallowed by the big supermarkets and shopping malls?’ Our respondents clearly distinguished between what most of them saw as the anti-social role of big business, and the community-friendly small shopkeepers who know and depend on a local clientele. 4. Focus group respondents made several comments about the importance of national and local sport and sporting competitions. Again, people do not explicitly think of the local tennis club or even the bowling club as a bulwark of ‘the community’. Some approving importance is given to the large corporatised football clubs. They are already substantial business enterprises, offering a range of other inexpensive leisure and recreational activities in large premises that are used to supplement their income with important poker machine revenues (especially in New South Wales). Yet the more common lament is that all sport has become too commercial, ‘corrupted’ by money, and taken over by business moguls. In the words of Jake, a retired fitter and turner, ‘With television now

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there’s no communication. You just have to watch the advertisements and cop it. People have to be paid to play football!’ Another related complaint was that, for children especially, sport, athletics, tennis and the like are now ‘too competitive’, less fun. Thus sport has become an increasingly difficult and pressured weekend activity that is more likely to be seen as a demand on, rather than a source of, precious tension-free leisure time. 5. Ethnicity and immigration were, in this context, most often mentioned in terms of the positive lessons that Anglo-Australians should learn from the strong mutual support networks and extended family ties which they see as the norm among immigrant ‘ethnic’ groups. Speaking mainly of the Lebanese and of newly arrived Asian immigrants, our respondents say that they ‘work hard’ and ‘look after each other’. There is much admiration for the hardship and the huge sacrifices that are involved in getting established in a new society. In 2000 just about half of our respondents thought that ‘people from non-English-speaking backgrounds were losers from economic change’; only about 18 per cent voiced the defensive or perhaps paranoid view that they were instead winners. Evidence from the 1995 National Social Science Survey indicates that about three-quarters of the population believe that the contributions of immigrants have been a net gain for Australia. 6. Youth unemployment and under-employment were frequently cited as major problems. Our respondents often criticise what they see as the lack of commitment of young people to work and education. But for the most part, they quickly explain the predicament of young people ‘who just hang around with nothing to do’, and with ‘no hope’, as a consequence of declining real job opportunities, of a failing public education system, and of inadequate family support, rather than as some kind of wanton moral sickness. 7. Spatial segregation was seen by some of our focus group participants as a cause of weakening social bonds among former neighbours, especially as rising house prices force people to move far away from relatives and from established sources of social support. For example Brad, a courier driver, told us, ‘Our kids will be lonely, depressed, and won’t be able to buy houses unless they move right out [to outer suburbs]. No jobs out there. We will all be segregated [by the market].’ This invites a sceptical question: could it be that as people relocate they may find themselves among other newly arrived neighbours with the shared experience of all being in the same boat? Specialised research findings point instead, more typically, to much social isolation in the new outer suburban areas.13


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That problem has been aggravated as reform and deregulation lead to less publicly provided infrastructure and inadequate public transport and services. Significantly, we find that those of our respondents who tell us they have moved house over the last five years say they feel closer to the nation than they do to their own neighbourhoods. 8. As we saw in the last chapter, commonly heard worries about community solidarity were explained by reference to declining civic standards of public behaviour. For example, one person complains, ‘There’s no discipline or respect. Children are not taught respect at school.’ Another exchange in the same group between a housewife with children and the retired widow of a plumber points in the same direction. ‘They won’t give up their seats to seniors any more … They dump their bags [in the train aisle] and they expect you to climb over them … No respect for law and order … Parents don’t have rights any more … You have to say to your kids, “Did you mean to do that?”’ We saw that these traditional norms and sentiments were more often voiced by the Battlers and Survivors, especially those of an older generation, in their often negative reaction both to economic reform and to cultural modernisation in general. Clearly, there is some grieving here for what many people experience as the broken authority of tradition and its lost power to gather people together in respect for others. 9. Crime, especially drugs, was the most frequently adduced concrete symbol and experience of community breakdown. We were often told that, only a generation ago, people would go out shopping without needing to lock their doors and windows. Kids would ‘clear off down the street for hours’ without their parents having to worry about their safety. It is against this background that our respondents commonly measure the security and quality of their street. As they so often told us, their criterion is the absence or prevalence of ‘needles on the nature strip’, and of ‘dealers hanging about in the street’. No one in the focus groups spoke of serious violent crime, but worries about drug-related break-ins and the security of children were common, especially in inner urban areas. About three-quarters of our survey respondents (74 per cent) answered yes to a question asking whether they ‘worry about the possibility that you, or anyone else who lives with you might be the victim of crime’. About 18 per cent of those said that worries about crime affect daily life. Just over one-third (36 per cent) of our middle Australians said they felt unsafe walking alone in their suburbs after dark, with that concern ranking much more highly for women. Table 5.1 indicates the frequency of common worries about crime.

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Table 5.1: Perception of incidence of crime How common are these in your area? Homes broken into Cars broken into or stolen Graffiti on walls or buildings Teenagers hanging around on the streets Vandalism and deliberate damage to property Drunks or tramps on the streets People attacked in the streets Insults or attacks to do with someone’s race/colour

Per cent 60 55 48 44 30 25 14 10

N = 397. Responses either ‘very common, fairly common, not very common, not at all common, don’t know’ for each event. Table shows ‘very common’ and ‘fairly common’ responses.

The most commonly cited explanation for the problem of crime is ‘poverty, unemployment and economic dislocation’ (71 per cent). Our respondents were some five times more likely to cite these economic reasons as the most important cause of crime today than ‘low moral standards’ (14 per cent) or weak law enforcement (4 per cent). This points to some more general conclusions about the breakdown of community. For the half of our respondents who see a decline in the quality of life in Australia, the ‘breakdown of community and social life’ is indeed an important factor for some 62 per cent of them; as a cause of declining quality of life it ranks third after ‘too much greed, consumerism, and keeping up with other people’ (69 per cent), and increasing ‘financial and job insecurity’ (72 per cent).14 What this suggests is that our respondents see the pressures of the economy and the market as a general cause, and perhaps the principal cause, of the breakdown of community. These emphases warn against the easy application of communitarian and other American perspectives on the nature and state of civil society here in Australia.15 It seems clear that middle Australians typically think of community (when they think about it at all) as a form of life, more precisely as a dimension of modern suburban life, and not as a ‘thick’ moral substance or as primordial bonds (Gemeinschaft), or, indeed, in an American vein as ‘habits of the heart’.16 Australians, typically, have cooler feelings about community. They are, we surmise, much more likely to view the nation and its institutions, and even properly functioning government, as the font of civic values, rather than ‘the community’. As we saw, the breakdown of informal interactions, and of ‘associational density’, in this space between the family home and the workplace is indeed experienced as a diminution of quality of life and even of private autonomy. But this is constructed not


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as moral decline per se, but as a reduced capability for a whole range of beneficial and mutually enjoyable actions that arises for want of adequate resources, typically time and tension-free leisure. That is why Australians more readily, and accurately, associate community breakdown as a consequence of economic factors.

Social Capital and Volunteering Our reforming elites will not easily countenance the suggestion that the new turbo capitalism injures or depletes civil society and the capacities of ordinary people to maintain their own social environments.17 They prefer instead to side with some leading American civic republican and communitarian ideas that cast civil society in general, and volunteering in particular, as an endlessly self-replenishing font of social proteins. The opportunistic message of the reform jockeys is that we must above all keep up the pace of reform and rely more on volunteering to provide social resources that can no longer (why not?) be supported by the Nanny State. On average, each of our adult middle Australians belonged to two voluntary organisations (Americans in roughly the same period belonged on average to 1.84 such organisations).18 Yet Australians are not great joiners, and these affiliations are largely comprised of often perfunctory, routine, and undemanding memberships of such organisations as trade unions, professional associations, and sports clubs, as shown in Table 5.2. Would middle Australians join more associations if only they had less work and more time? We asked our respondents, ‘If you were able to change things a little, in what areas of your life would you most like to concentrate more of your energies?’ Their preferences are as follows: selfimprovement, 47 per cent; leisure, 35 per cent; community and friends, 29 per cent; family, 25 per cent; and work, 18 per cent. These responses resonate strongly with other aspects of the study, suggesting that middle Australians are much more unsentimentally individualistic, and more oriented towards personal challenges and achievement, than our communitarians and our more passionate joiners might suppose. As we see, about half of our respondents would choose to give more of their time to largely private and individual forms of personal development, education and training. The next most popular category, leisure, is again typically defined as a private form of rest and relaxation from work. Community and friends come third, and still leave us wondering how much of that time would be dedicated to civic work rather than just to convivial interaction with friends and neighbours.

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Table 5.2: Civic association: memberships of organisations, per cent Organisations Union Professional association Sporting club Church or religious group Social club Group dedicated to a cause (e.g. environment, civil liberties, consumer protection etc.) Drama/music/art club An association School council or other group Residents’ group Other group Political party Service club (Rotary, Apex, Lions etc.) Tenants’ association

Proportion who belong 32 32 29 21 19 18 14 11 10 7 6 5 3 1

Respondents can select more than one category, therefore percentages do not add to 100. N = 403.

Of our sample 17 per cent said that they did some volunteer or charity work for an average of between one and ten hours per week.19 Our results are not inconsistent with other, specialised, research into volunteering, indicating that volunteers, and highly committed volunteers in particular, are more likely to be older and more commonly found among those with post-secondary educational qualifications.20 A plausible inference is that we are once again looking at the hidden effects of labour markets. Older people have more time, and it may be that the more educated also have more confidence or passion, or both, than others who may have suffered more from economic reform. Our findings suggest that people who have at some stage worked for pay are some three times more likely to be volunteers than those who have never worked. No one can say whether that will continue to be the case if, as Lasch suggested, the pressures of reform leave stressed workers defensively retreating ever further into the family as a ‘haven in a heartless world’.21 Our data show that religion does enter the picture in the expected way, with believers more than twice as likely as agnostics to give time to voluntary work. Yet both believers and agnostics who volunteer are more likely than non-volunteers to express support and approval for the social security system. Fifty per cent of them say they are proud of it! Middle Australians who volunteer are twice as likely to reject the idea that ‘most people on the


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dole are fiddling the system’ and to reject the similar assertion that ‘if welfare benefits weren’t so generous people would learn to stand on their own two feet’. Civic involvement in volunteering militates against a free-market withdrawal of the state from social services and against elite-abetted blamethe-victim attitudes to those in need. The middle Australia data deliver their own verdict on mischievous attempts, especially in the wake of the Olympic Games, to promote volunteering as a replacement for state-provided community care and social security (the reformers want, of course, to move the ‘saved’ government spending to the private economy and the business sector). Middle Australians are not very hospitable to the very American (and implicitly libertarian) view of voluntary association as the principal or sole source of what Putnam calls social capital.22 In Australia, mutual recognition of oneself as a citizen in a decent society comes much closer to the mark. As we shall see, our respondents are more disposed to attribute responsibility for the depletion of civil society and social capital to the reform-induced retrenchment or inadequacy of supportive public provisions, in the form of regulated working hours, social security support, adequate job creation, and community services, education and childcare services, and the like.

The Structure of Society: Recognition, Denial and Egalitarian Aspiration We saw in Chapter 2 that our middle Australians have a generally accurate view of who have been the winners and losers from economic reform, and a pretty good idea as well about what has happened to their incomes over time. Moreover, we noted that their judgements are related fairly coherently to their own experience of how they have fared from the twenty years of reform. In the wake of two decades of elite proselytising for the inevitability, the necessity and (as they would so much like to have us believe) the desirability of economic reform, we found that our middle Australians had still not surrendered their own judgements about what is happening to Australian society. In our study of the experience of work, and of the family, we saw society-centred meanings and evaluations of reform surfacing, sometimes strongly, in a variety of ways. It is time now to mine the social intelligence of our middle Australians a little more deeply. How does middle Australia understand what social scientists call the social structure of Australian society? Our respondents keep telling us, correctly, that the rich are getting richer as the poor are getting (relatively) poorer; that social inequalities (a hotly proscribed subject

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for the reformers) are increasing over time; and that the ‘broad middle’ of Australian society is being hollowed out by reform. In putting these questions, we are not about to embark upon a study of anything so grand as class or the social structure per se. These topics are best left to the experts in that field. What we want to know is how middle Australians – whether correctly or incorrectly is not really the point – ground their own judgements about fairness, distribution and equity in what is happening to their society. Their perceptions are important for us for several reasons. One is simply that comparative studies in developed countries regularly demonstrate that quality of life, however measured, is inversely related to social inequality.23 The more equal the society, the higher the quality of life enjoyed by its citizens. Both the perception and the experience of unfairness corrode civil society, and with it, both individual and collective well-being. More particularly, we want to understand three strands of thought with this study: how much social inequality middle Australians see in their own society; how they see this changing over time; and what moral judgements they make about that trend. How then do middle Australians perceive the social structure of their own society, and how are those perceptions related to their own experience and judgements about what is happening to themselves and to others? To find out, we put to them a question from the International Social Science Survey.24 The question presents them with five diagrams (Figure 5.1) and asks them to decide which one best represents Australia today; how the society is changing, where they fit in the structure and, perhaps most importantly, how they think Australia ought to be structured. The five models form a scale. At one end is a very unequal Type A society, representing the smallest middle class with the largest proportion of the population at the bottom. At the other end of the scale is Type E that has the largest proportion of people at the top. Three-quarters of our sample (76 per cent) believe, for the most part correctly, that Australia today is a hierarchically structured society, like a pyramid, with a mass of people at, or closer to, the bottom (as in Types A, B, C). In Table 5.3 we see that 13 per cent hold a somewhat exaggerated, nineteenth-century view of a society with just about everyone at the bottom, a very hollowed-out or even relatively non-existent middle stratum, and a small dominating elite at the top. Given a broadly spread preference for more equality, we can somewhat speculatively tag these people as the Idealists – idealists because they are reacting with such abhorrence to inequality. A rather larger proportion of about one-quarter (22 per cent) we

Civil Society and Communities TYPE A A small elite at the top, very few people in the middle and the great mass of people at the bottom

..............................1 Top ..............................2 ..............................3 ..............................4 ..............................5 ..............................6 ..............................7 Bottom

TYPE B A society like a pyramid, with a small elite at the top, more people in the middle, and most at the bottom

..............................1 Top ..............................2 ..............................3 ..............................4 ..............................5 ..............................6 ..............................7 Bottom

TYPE C A pyramid except that just a few people are at the bottom

TYPE D A society with most people in the middle

TYPE E Many people near the top and only a few near the bottom

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..............................1 Top ..............................2 ..............................3 ..............................4 ..............................5 ..............................6 ..............................7 Bottom

..............................1 Top ..............................2 ..............................3 ..............................4 ..............................5 ..............................6 ..............................7 Bottom

..............................1 Top ..............................2 ..............................3 ..............................4 ..............................5 ..............................6 ..............................7 Bottom

Figure 5.1: Five possible models of the social structure of Australia

shall similarly tag as the Deniers. They hold the opposite view that Australia is, as the egalitarian mythology would have us believe, a very equal society that is more onion-shaped and not hierarchical at all – a society that resembles modern-day Finland or Sweden, where there is virtually no poverty and where just about everyone belongs to a broad middle class.

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Table 5.3: What kind of society is Australia today?, per cent Social structure

Per cent

Type A: elite Type B: pyramid Type C: modified pyramid Type D: middle class Type E: inverse pyramid

13 33 30 22 2

N = 387.

Let’s take another step and ask how these perceptions are related to the experience of middle Australia over the period of economic reform. For this purpose it is useful to arrange the diagrams in Figure 5.1 into two groups. A first cluster comprises middle Australians who see their society as Type A, B, or C, and thus as a hierarchical, relatively stratified, relatively nonegalitarian, closed society. Our second cluster see it as a Type C or D society: that is, inclusive, more open, and not hierarchical. Are these views related to their judgements of who have been the winners and losers from economic reform? Yes they are, as we can see from Figure 5.2. Those who see themselves as losers from economic change are once again much more likely to see this is a consequence of stratification, of % 100

91

90 80 70 60

52

48

50 40 30 20

9

10 0

Winners

Losers

Angry or unhappy

P < 0.001, V = 0.43, n = 263. ‘Don’t know’ responses excluded.

Figure 5.2: Winners and losers from economic change, by feelings about what is happening with middle Australia

Calm and satisfied


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power and, by implication, of economic reform. On the other hand, those who see themselves as winners are evenly divided about what they think is happening to middle Australia. Those who see themselves as losers from economic change are also much more likely to view Australia as an unequal society than the winners. One-fifth of those describing themselves as losers from change viewed Australia as an elite, Type A society, compared to 8 per cent of the winners. This contrasts with 30 per cent of the winners who said Australia today was a Type D middle-class society, compared to only 12 per cent of the losers.25 The numbers in Table 5.4 give average rank scores on the models of society (Type A to E in Figure 5.1) for the five different items. The lower the average rank score, the higher the degree of perceived inequality. So we see that the lowest average score is given to what our middle Australians see as the likely very unequal shape of society in thirty years’ time, one which they expect to be radically more unequal than it is today, more unequal than forty years, and ten years ago. They speak from a present that has been shaped by some twenty years of economic reform. And from that temporal perspective, they project a trend line that leads to greater social inequality than existed even ten, or forty years ago. At the other end of the range, they give the highest average ranking score, and therefore the highest preference, to the more equal type of society, one that best resembles, in their view, what Australia ‘ought to be like’. Their responses echo what our focus groups kept telling us, namely that middle Australians do not welcome increasing social inequality. They want Australia to change in the opposite direction, towards a more open and inclusive society that is more like an inverted pyramid with most people in the middle and few at the bottom. Despite all the driving propaganda for reform that would have them believe that everyone will benefit from economic reform, they see the real overall trends clearly. By implication at least, they continue to hold out against the actual trend and hope for a progressive improvement that would make Australia a fairer, more open, more equitable society. Table 5.4: Which model of the social structure do you think best describes Australia? Structure of Australian society 30 years from now Australia today 40 years ago 10 years ago Ought to be like

Average rank 26 2.22 2.62 2.79 2.82 4.56

N = 367; Friedman Two-Way Anova P < 0.001; Kendall’s W = 0.40.

(most unequal)

(most equal)

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Just as importantly, we discover a systematic variation in perceptions and actual experience, that once again successfully resists what our elites would have us believe. Perceptions vary systematically according to one’s experience of economic reform over the last fifteen years. Those who say that ‘people like me’ have been ‘losers from economic reform’ see more inequality in Australia today, and are more likely to say that society leans towards the most hierarchical and unequal Type A model, with respect to the past, the present, and the future (in thirty years’ time), than do those who say they have been winners from economic reform. The losers resent social inequality; they seem to believe they have been unfairly disadvantaged and that the collective obligations of the nation have failed them. A similar result appears for those who say that ‘people in the middle’ and ‘ordinary people’ generally have been losers from economic reform.27 They make this same judgement in relation to others, and do not speak only privately from a purely individual experience of being a ‘loser’. There is a similar relationship with equivalent income.28 Fifty-five per cent of those middle Australians in our working occupational ‘class’ believe Australia is an unequal Type A or B society, compared to 37 per cent of those in middle and managerial occupations. For the most part the winners from economic reform do not, or will not, admit to the much grimmer view of society that is held by those less fortunate than they. The relationship holds strongly with equivalent income, suggesting that real economic experience and material situation are of great importance. What these results show is that Australia’s egalitarian mythology of ‘the fair go’ is alive in the normative judgements and real-life experience of middle Australia. Our middle Australians are drawing conclusions about social inequality in Australia as it is experienced through the everyday reality testing and social life that goes on in civil society. Twenty years of economic reform have not yet induced them to forget about what is happening to them collectively as members of a nation society.

The Media The media are hugely influential in shaping the way in which we construct our images of society, of ourselves, and of course our judgements about national well-being and civil society. Most ordinary reasoning about the relationship of markets and governments to our own private lives is, of course, ‘mediated’ through the media. The media comprise the most socially and politically important communicative link between our private lives and the structures of power – markets and states – through which society


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is formally organised.29 Indeed, social cohesion, integrity, difference, identification, social representation and social emotion are, as our respondents suspect, deeply affected by what we hear, see and read through the media. For our middle Australians, ‘the media’ were a much-talked-about ‘problem’. In order to relate their understandings of the media with their different experiences, we put to our respondents the following question: ‘What counts most in changing your views and feelings about political and economic matters?’ We asked them to rate fourteen items from a list that included several forms of media, experts, workmates, friends, and neighbours on a five-point scale from ‘very strong influence’ to ‘no influence’.30 Table 5.5 gives the results – again, the lower the average rank score, the higher the self-reported influence (so, for example, we see that item one, newspapers, is given the highest influence). Once again, in this light, Australia comes out as a very modern society with a culture that is built on abstract and impersonal sources of authority – experts and educational institutions – rather than on ‘thick’, traditional, primordial bonds (of the Gemeinschaft kind). We discover that newspapers have the greatest influence, and religious and community leaders and neighbours the least.31 In the last two chapters we saw that labour market reform especially has eroded the time and energy available for active civic involvements. Our Table 5.5: Influence on political and economic matters Influence Newspapers Experts Educational institutions Television Spouse or partner Political leaders Close friends Other relatives Business leaders Talkback radio Workmates Community leaders Religious leaders Neighbours

Average rank 4.8 5.3 6.0 6.0 6.2 6.4 6.7 8.1 8.1 8.4 8.5 9.4 10.2 10.9

(highest influence)

(lowest influence)

N = 299; Friedman Two-Way Anova P < 0.001; Kendall’s W = 0.25, P < 0.001. Question: ‘What counts most in changing your views and feelings about political and economic matters?’

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middle Australians feel themselves driven to retreat for relaxation and to heal their wounds into a private sphere, in which families, and now communities, are slowly redefined more defensively as a haven from increasingly demanding workplaces. Families also seem to be caught up in a process of redefinition, becoming refuges from workplaces and from the outside demands of civil society – a development that is known in the social theory literature as civic privatism.32 In this climate, our respondents often told us that they feel themselves becoming judgemental of others, and nervous themselves, of turning into couch potatoes and of ‘vegging out’ too much in front of the television. Although doubtless some political correctness enters into what they say to each other in the focus groups, they nonetheless often say, to nods all around, that they consider television watching a morally debilitating form of passive leisure, an indulgence, and a cop-out – to which they readily admit succumbing themselves. They say that it vitiates ‘communication’ with other members of the family, and that it frustrates active selfimprovement. They told us that it ‘stops you getting involved’ with community and civic pursuits and, by implication at least, as active citizens in the political process. Their worries are well-founded. International comparative studies of television viewing in the advanced Trilateral nations show that in all these countries, including Australia, heavy TV use is associated with lower civic involvement and less interest in discussing politics.33 Our focus group discussions revealed a clear pattern, consistent with this comparative data, indicating that television watching is related to ‘class’, education, and work status. People in our typically universityeducated occupational ‘class’ said they commonly read quality broadsheets and watched ABC or SBS television. Those in our ‘working class’ more commonly said they watch commercial television. In short, we see here that our focus group participants were confirming other research findings indicating that media communication is typically stratified. But stratification here also implies a specialisation that aims different messages at different strata. Indeed, it could be that the media are busy ‘manufacturing consent’ as they create new class differences and social antagonisms that can be exploited to divide and rule, and hence as resources for the stabilisation of power from above.34 This was illustrated for us (in January 2001), with a politically apposite example of national reporting on Australia’s notoriously harsh detention centres for informal immigrants, many of them de facto refugees. These centres are in fact privatised prisons in extremely remote areas, run on lines that have brought Australia’s human rights record into international


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disrepute. Minister Ruddock was covered in the so-called quality press visiting Sweden in a contrived move to have himself seen as the representative of a government keen to learn about the humane management of illegal immigrants. This was covered by the national public broadcaster and some quality broadsheets, with this cynicism about the motives behind the visit as the implicit message. Within days commercial radio, television and talkback coverage focused on the same minister signalling his approval for the use of chemical sedation, harsher riot control measures, automatic deportation for ‘trouble-makers’ in some circumstances, and, in short, for a still tougher policy. Same minister, same policy issue, two entirely different messages: one message is pitched to a university-educated public, many of them Improvers; the other to those who have been most hurt by economic reform, and who matter most electorally – the beleaguered Battlers and Hansonites and Survivors of economic reform who want the government to get ever tougher on difference, multiculturalism, and in short, on every face of otherness. Again the difference between conventional (traditional) and ‘post-conventional’ or modern moral reasoning reappears. Although the contrasts can be easily overdrawn, we find media influences spread over a spectrum. At one end we find people who feel themselves engaged in the public sphere. For them the key function of the media is critical and independent truth testing.35 In this respect they think of the media from a modern progressive liberal point of view as the fourth estate. Those who engage as Improvers struggle against a defensive retreat into the private sphere, and they read the messages from a more actively collective standpoint, and in terms of what is good or damaging for society as a whole. Those whom we dubbed the globalised North Shore People are still at least half engaged with a critical public sphere. They are perhaps testing messages from the point of view of strategic benefits to various actors. Even if society is generalised in their minds to consist only of strategic actors, then, with that limitation, they are still making social evaluations. For both there is an easier acceptance of abstraction and complexity and, implicitly, a commitment to universalist criteria for testing truth(s).36 At the other end we have what is probably a roughly equal number of people who listen to the populist media, including the notorious redneck talkback kings and shock jocks of Sydney commercial radio, who are reported to control as much as 3 per cent of the vote in national elections. Our focus group respondents were aware of the revelations during 2000 of the morally, if not legally, corrupt ‘cash for comment’ radio broadcasts.37 The judge who heard one specific public action against Sydney radio 2UE’s

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John Laws signalled the seriousness of these influences with his startling public comment that Laws was ‘too famous to be put in jail’.38 Our middle Australians know that many presenters on commercial talkback radio and networked television are the puppets of mistrusted big business interests.39 But they need the certainty offered by the strongly personalised moral judgements of the presenters. Indeed, as we shall consider further below, there is a statistically significant relation between talkback radio having a strong influence on respondents’ views, and blaming attitudes towards the unemployed.40 For these wounded Hansonites, and for many of the losers from economic reform, abstract post-conventional reasoning and the ‘public sphere’ values of the university-educated part of the population are objects of the often intense resentments that they feel towards elites in general. It is a resentment that this end of the media deflects – in the American fashion – away from business and towards government and against all forms of state intervention in the ‘free’ economy. Indeed, Paul Kelly reminds us that, whereas once public opinion was mobilised ‘in street rallies, town halls and pulpits’, it is now more typically done through the ‘radio jocks who are the new mass mobilisers of and organisers of mass opinion’.41 The messages are of course hotly critical, but not in the universalist truth-testing sense. They militate against the search for truth within a critical public sphere, and against a national conversation and the search for the ‘strength of the better argument’.42 The messages are instead part of a ‘systematically distorted communication’,43 which is one of the many strategies of a wedge politics aimed at the consciousness, and the unconsciousness, of people who see themselves as the real Australians battlers. They are encouraged to think of themselves as belonging to a ‘community of descent’ – rather than to a community of citizens in the modern democratic sense of that term.44 The assigned role of these specialised and potent voices is to produce political resources in the form of social prejudices that will, come election time, give big business more political resources to divide and rule, and so to drive on with still more ‘reforms’.45 It is a way of giving voice to resentments and of corralling people deeper within a private sphere, in reactive defence against any real strengthening of the communicative potential of a democratic civil society to bind strangers together into a nation of citizens – one that uses difference as a resource for democracy rather than as a way of dividing it against itself. Notwithstanding these discernible differences, the comments of our middle Australians on the media are, on the whole, generally negative. Among the two-thirds (64 per cent) of our respondents who declared


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themselves unhappy or resentful about ‘what is happening to middle Australia today’, 38 per cent blamed the media (about half blame ‘big business’, which comes in third place after ‘the economic system’ and, top of the list, ‘politicians and governments’). Even former Deputy Prime Minister Doug Anthony, one of Australia’s most conservative (former) politicians, laments the government’s complicity in Australia’s exceptionally high concentration of media ownership.46 Such fears and misgivings are widely, perhaps generally, shared by our middle Australia respondents, who see Rupert Murdoch and Kerry Packer as symbols of all they most loathe about big business, multinational corporations, and the ugliness of corporate power in Australia – the ‘media mongrels’ as one respondent called them. In short, the mass media purvey many different and contradictory images of Australian society. And that is as it should be. Whether or not, on balance, they are a force for, or against, national well-being, civic values and community is too large a question. They simultaneously divide and unite people around issues that are both important and trivial, progressive and destructive. Whether the media, taken as a whole, injure or succour civic values, national identity, community and fellow feeling is also impossible to answer. Even though our ubiquitous Australian soap operas usually reflect inclusive social attitudes, commercial news and current affairs programs incline towards an American-style dumbing down of any potentially progressive and critical aspects of what former President Clinton called the national conversation. Criticisms of media bias, and of business censorship, are subsumed within the frequently vented resentment of our respondents that the media are driven by ‘the Almighty dollar’, something that they directly associate with the negative judgement that ‘we are getting too much like America’. We surmise that, with the possible exception of some of the Hansonites, most of our middle Australians have little enthusiasm for the big-businesssponsored policy of the Howard government to destroy the critical public sphere in general, the Australian Broadcasting Corporation in particular, and the vital contributions of both to a strong and democratic civil society.47 Whether explicitly, or by association or even denial, we see our middle Australians oriented to the media in a way that is again societycentred or socio-tropic. In the wake of twenty years of economic reform, they seem to understand that defensive withdrawal into private life erodes the bonding force of ‘communicative action’ with other would-be citizens in the impersonal world beyond the family.48 Even if – like the rest of us – they do not quite understand how the media act on them, their vehement denunciations of the big-business media indicate that they know that they

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have been used as the object of interests that are unfriendly to a democratic civil society. In more senses than one, the problem with the national conversation is what big economic interests have done to it.49 For mutually estranged persons, trust, and the cooperation that it alone makes possible, become a problem for themselves and for others.

Trust As we have seen, economic reform and cultural modernisation both undermine older forms of community, older patterns of association, and more traditional norms of social behaviour. Economic reform drives that process with, among other factors, forced occupational mobility, the withdrawal of publicly provided goods, and sponsored attacks on the very idea of collective sociability. (As one famous woman said as she opposed it, ‘There is no such thing as society.’) Cultural modernisation plays its part by displacing older forms of cultural solidarity and social identity with a proliferating array of ethnic, social, gender and other differences, each making its own claim for respect in what then becomes a far more complex social order. It is no surprise then that in a pluralistic democracy there can be, as we saw, no moral trump cards that silence other, often differently grounded, claims for fairness and equal treatment. Under these conditions, social integration occurs as much through accepted disagreement as it does through simple consensus. This greatly increases the difficulties involved in coordinating individual actions among strangers, with citizens and others beyond the family and the workplace.50 In other words, it forces us to rely less on face-to-face communication for whatever trust and reassurance we can find. And, whether we like it or not, we are forced to rely more on another kind of confidence and trust vested in what Giddens calls abstract systems, such as the economy, the market, government and the law.51 We have always needed trust in these institutions but now, with greater complexity and difference, we need still more of it, because the load is greater. That is one reason why we should worry that trust, or confidence in ‘the system’ and in other people – alarmingly, the two are related! – is declining. In modern-day America for example, Uslander observes: ‘As trust in others falls, so does participation in civic activities.’ So we have fewer resources for social integration and cohesion at a time when we need more. He goes on to observe, ‘In 1960, 58 per cent of Americans believed that “most people can be trusted”. By 1994 and 1995, a bit more than one-third (35 per cent) of Americans had faith in their fellow men and women.’52 Putnam cites similar findings with respect to trust in government;


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In April 1966, with the Vietnam War raging and race riots in Cleveland, Chicago, and Atlanta, 66 per cent of Americans rejected the view that ‘people running the country don’t really care what happens to you’. In December 1997, in the midst of the longest period of peace and prosperity in more than two generations, 57 per cent of Americans endorsed the same view.53

Our middle Australians were asked three questions about trust. The first, the international standard question on generalised trust, asked them to choose between the statements ‘most people can be trusted’ and ‘you can’t be too careful’.54 The other two were: ‘Generally speaking, would you say that this country is run by a few big interests looking out for themselves, or that it is run for the benefit of the people?’; and ‘How much do you trust the government in Canberra to do what is right? Do you trust it almost always, most of the time, or almost never?’55 The results are related to perceptions of social structure covered above and shown in Table 5.6. In each case we find an association between levels of trust and perceptions of inequality as measured in Table 5.6. People who perceived Table 5.6: Trust by perception of social structure, per cent Trust 1. People in generala Most people can be trusted Can’t be too careful 2. The country is runb For all people For a few big interests 3. Trust in government in Canberra c High Low a

Structure of Australian society today Elite Pyramid Modified Middle pyramid class 37 63

43 57

56 44

56 44

16 84

21 79

24 76

46 54

20 80

29 71

30 70

50 50

P < 0.05, Gamma = –0.22, n = 361; b P < 0.001, Gamma = –0.34, n = 325; P < 0.001, Gamma = –0.30, n = 374. Type E, the ‘inverse pyramid’, was not included in this analysis, as only 6 people, 2 per cent, indicated this category. Questions 1. ‘Generally speaking, would you say that most people can be trusted or that you can’t be too careful in dealing with people? Most people can be trusted, can’t be too careful, don’t know.’ 2. Generally speaking, would you say that this country is run by a few big interests looking out for themselves, or that it is run for the benefit of all the people? Run by a few big interests, run for all the people, don’t know.' 3. ‘How much do you trust the government in Canberra to do what is right? Do you trust it almost always, most of the time, only some of the time, or almost never? Almost always, most of the time, only some of the time, almost never.’

c

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society as unequal are more likely to have lower trust in others, in the operation of organised big interests, and in government. And conversely, those who believe that the society is more equal are more inclined to trust others, big interests, and government. This indicates that levels of trust in other people and in government are systematically related to perceptions of social structure.56 The middle Australia data also show clearly that, in the wake of economic reform, trust is related to real (equivalent) household income. As we can see from Table 5.7 there is not much difference in levels of trust among middle Australians on middle, upper middle and high incomes. But there is a glaring fall in trust among those in the low equivalent income bracket, which is where we expect to find most of our Battlers and Survivors – in short, among those people who have been most hurt by the upward redistribution of incomes, and indeed of life chances, brought on by economic reform. In these observations we see that those middle Australians in the lowest quartile of equivalent income declared themselves to be half as likely to trust ‘most people’ as those in the top quartile. Why? We know already that those in the top quartile are more likely to describe themselves as the winners from economic reform and to have had a university education; as we shall see, they are more inclined to vote for the government that is driving the reform agenda. Many of them fit the mindset of those whom we called the Deniers, holding a Type D view of society. For these higher-income, highertrust middle Australians, their own relative success has, whether for want of wider social awareness, or from bad faith, tended to confirm them in their distorted view of society. They believe incorrectly that we inhabit a society that is in fact very open, fair and equitable, and in which others are either sharing in the fruits of economic reform, or perhaps could do so if they would only ‘try a little harder’. As we shall see in the next chapter, these observations point to a more sinister aspect of the politics of economic reform which aims, sometimes Table 5.7: Trust in people by equivalent household income, per cent Agree with the statement: Most people can be trusted You can’t be too careful

$0–15,000

Equivalent household income $15,001–30,000 $30,001–45,000

$45,001+

33

56

53

59

67

44

47

41

P < 0.001, Gamma = –0.28, n = 349. ‘Don’t know’ responses excluded.


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implicitly and sometimes explicitly, at consuming civil society itself as a fuel for the furnace of the new capitalism. Our middle Australians seem reluctant, in effect, to concede that ‘it’s okay’ for libertarian economic reformers to provoke divisions and erode trust in others as a general supplyside strategy for producing greater dependence on markets (and, of course, corporations). They do not want to see civil society melted down as a resource for increasing productivity. There is no enthusiasm, as we shall see, for weakening all forms of social solidarity that resist the further penetration of market forces, nor for attempts to ‘sell’ this bundle as the ‘reform’ of Australia’s institutions or as a response to the ‘challenge’ of ‘globalisation’.

Conclusions Why is Australian civil society in trouble? In part at least because economic reform has blasted away institutional constraints on markets and other forms of support, solidarity, and ‘associational density’ that stand in its way. Economic reform has weakened the capacity of mass society to gather people together in mutual recognition of each other as friendly strangers joined as citizens of a nation society. People are left with depleted connections that were once concretely available from stronger, ‘thicker’ communities, local neighbourhoods, church congregations, and extended families – all typically, only a generation ago, more often than not within walking distance of their homes. As society has become more multicultural, secular, plural – in short, more modern – most of the ready-made certainties about how to live the good life have melted into air. For old conservatives and communitarians, the eclipse of traditional forms of life is a moral tragedy. For modernists, the same currents of social change offer, if only potentially, an increase in personal freedom, and indeed in social possibilities, both positive and negative, together with ‘the burdens of modernity’ (isolation, depression, reactive fundamentalism, lost identity, confusion, abstraction, and the mutual incomprehension of social differences).57 Yet everyone agrees that economic and social change has depleted the resources that were once provided by these older, denser, forms of association. As they have dissipated, people have felt forced to retreat more deeply into a private sphere that is itself over-stretched for the same reasons. Our middle Australians seem to recognise that many of the problems of civil society – fraying social ties, impersonality, indifference, retreatism, copping out, incivility, shallow commitments, and so on – stem more from

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economic dislocation than they do from any inherent moral laxity, sinfulness, selfishness, or indifference to the needs of others. They seem immune to a largely American-driven plea for them, in effect, to forget about organised power and to blame themselves for the thinning of social resources. The restless concerns of our respondents with troubled communication have something more to tell us about the condition of civil society. They are saying, in effect, that ‘it’s hard to know where you stand’, how to orient your actions to others, and how to find, and to read, reliable feedback in a depleted civil society in which informal communication channels seem scrambled with noise and contradiction. Most of what our respondents say agrees with Habermas’ argument that, in these difficult conditions, it is the quality and level of communication that matters most for the democratic self-monitoring and self-regulation of society. Systematically distorted communication, much of it corporately driven, adds to the burdens of modernity and makes it harder for people to function as competent adults in a liberal society capable, at some level, of locating and reconciling (not agreeing) their beliefs, principles, and gut feelings with those of others. Our middle Australians are complaining that changes in this dimension of civil society, namely in the public sphere where personal and impersonal concerns intersect, are somehow ‘not helping’; or worse, working against them; or worse still, turning them against each other unnecessarily. Social paranoia, racism and blaming the less fortunate are the minority response of a sub-set of people who feel themselves to be losing and hurting more acutely from economic reform. A more typical sign of the same anxieties about civil society is focused in mistrust of the ‘sensationalism’, the ‘Americanisation’, and the ‘bias’ of the media. Criticisms of a degraded public sphere point, if only implicitly, to counter-factual standards that hold out against organised power, and for truth, mutual respect, impartiality, justice and care for society. Communicative freedom is indeed the cardinal issue: and here, and in the preceding chapters, we see that middle Australians do not generally believe that commercial interests are on their side. In what they say, we hear a need to feel themselves part of a decent society that has, as we shall see in the next chapter, the resources to make markets serve social purposes rather than the other way about. With the lament that nowadays ‘it’s everyone for themselves’ our middle Australians point to the problem of failing trust. They are pointing to problems that are strongly taken up in the scholarly literature on trust and confidence, danger and risk.58 It is no accident that trust in others falls along with falling confidence in elites, organised power, government, and,


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especially, economic institutions. It would be too clever by half to write off these concerns merely as a symptom of a ‘reflexive modernity’, in which one is burdened now with the double problem of dealing both with the uncertainties of the external world and with the contingency of one’s own constructions of it.59 That is indeed a major part of the problem. But our middle Australians are worrying, more directly, about the damage done to civil society by the imposed requirement that the human costs and uncertainties of economic reform should have to be internalised by the individual as a private calculation of risk. Most of them do not accept the implicit assumption that I must internalise, as a private affliction, the costs that you have successfully externalised with your downsizing and your economic reforms. People see the irresponsibility of others as a danger. They do not readily accept that the power of elites, markets, corporations and reformers should be allowed to quietly disappear from public visibility, only to later reappear as an array of neutral factors that each individual must then take into account in a purely private calculation of risks, costs and benefits. Middle Australians have not given up hope for ‘a fair go’ and the moderation of market-generated social inequalities. They know that increasing inequality, economic insecurity and risk are structural problems, and so are produced by the operation of interests and organised power (much of which they accept as unavoidable and even necessary). What they do not accept is that these problems should be dumped on civil society, communities, neighbourhoods and individuals that have been hurt by the very same problem. They cannot recognise themselves in a view of civil society reduced, as our elites want, to the function merely of adjusting to economic change. Even if they do not participate, as volunteers, Improvers, or activists, they do not want to feel that participation in what the Critical Theory literature would call ‘collective will formation’ has been ruled out a priori. In a democracy the health of civil society has to be judged by its capacity to effectively mobilise the voice of citizens in the face of organised interests. Whether or not this happens depends on what Charles Taylor calls the ‘inflection of state policy’.60 It is to this problem that we now turn.

6

Politics, Power and Institutions While many decry the role that politicians play, only the politicians can make changes to the way the country conducts its business. Change can not come from the bureaucracy no matter how well motivated or gifted because the bureaucracy has no authority to rank priorities or make decisions. Nor can change come from the media and the opinions of columnists, no matter how important. In the end politicians have to have the foresight to see the need for change and the courage and strength to carry it through. Paul Keating, Prime Minister 1991–961

In this chapter we shall first look squarely at middle Australia’s perceptions and attitude towards big business, and government regulation of the corporate sector. We want to know, as far as we can, how middle Australia understands economic reform. How do they make sense of it? Do they see it as wind and rain, as a quasi-natural thing that just happens without visible agency? Or do they see it as something that is done politically, either to them, or for them and with them? How does the experience of economic reform flow through into attitudes, convictions and even prejudices that people hold about the politics of reform, the changing structure of the society and the distribution of its social and economic costs and benefits? Who do middle Australians perceive to be the winners and losers from economic reform? With these guiding questions established, we move in the third section to consider whether, and in what degree, middle Australia has accepted or rejected the market replacements for the institution that has, for about one hundred years, been charged with the fair distribution of most wage and salary incomes, namely the centralised wage-fixing and awardsetting system. Who are the winners and losers from these and other reforms? In the last section we look at whether the politics of economic reform are succeeding or failing in their stated aims of depoliticising its own progress, reducing expectations, and, in other words, weaning the people from what business elites see as their deplorable dependence on the Nanny State, an over-reliance on publicly provided goods and services, and other forms of public ‘encroachment’ into an expanding ‘free’ market sector.

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Politics, Power and Institutions

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As we suggested in the last chapter, citizenship and identification with the nation are more important than communal ties, primordial forms of identity, and attachment to ‘communities of descent’ in the old European sense.2 When we ask people how proud they are about various aspects of contemporary Australia, three-quarters of them put ‘proud of the way democracy works’ at the top of the list3 – but half say they are not proud of the way Australia dispenses ‘fair and equal treatment of all groups in society’.4 Despite the tags of ‘the Lucky Country’ and ‘she’ll be right mate’, our evidence suggests that Australians take a lively interest in politics. Coolness and sobriety should not be mistaken for indifference. Moreover, the number of swinging voters in federal elections has increased markedly, and not fortuitously, during the two decades of the economic reform program. Over one-third of our respondents (37 per cent) say they take ‘a good deal of interest’ in politics, and a further 44 per cent take ‘some interest’ (the comparable figures from the Constitutional Referendum Survey of 1999 are 35 and 46 per cent respectively).5 In response to a question that asked ‘In describing who you are, how important are these things?’ – and listed eleven items, our respondents rated ‘being Australian’ second only to their own ‘character and personality’. Ranked lowest were ‘social class’ with only 11 per cent saying it was very important, and political party (11 per cent), while the ‘country that you or your ancestors come from’ ranks well below items like ‘your education’, ‘your job’, and gender. But do middle Australians agree with former Prime Minister Paul Keating and his successors that economic reform is good for the nation? Part of the answer is given in the 1996–97 survey in response to a question asking our respondents ‘How would you rate economic reform (things like deregulation of business, privatisation, job restructuring, more competition, etc.)?’ We find just over one-quarter (29 per cent) of our respondents rate themselves ‘warm’ towards reform; slightly less (26 per cent) give a ‘cold’ rating; and 45 per cent are neutral. After twenty years of intense ‘political re-education’, this is not a very sanguine endorsement of reform! We want to know, as far as we can, how middle Australia understands economic reform. What cause-and-effect relationships do they see in the process of economic reform? How do they believe it impinges on them? How do they understand the various meanings and inflexions of economic reform? These are large questions. The place to start is with the focus groups, because they are the closest thing we have to natural conversations between middle Australians who speak to others with the expectation that they will be understood, in ordinary language and against background assumptions that are, as cultural studies specialists would put it, already

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in circulation. To set the stage for what our surveys have to say, there will be no need to distinguish here between Battlers, Survivors and Improvers because, in this context, it is the several inflexions that are all-important. Chris throws a comment into an exchange on a topic that someone else will label as ‘globalisation’: ‘It’s the international flow of capital driving it [economic reform]. You wouldn’t blame the government.’ Some of them are not so sure. Then someone else (Jake) says, ‘Globalisation is the new religion. Economists, J-curves and U-curves and all that stuff. Middle management cops the cuts. The top has ridiculously high incomes.’ The conversation has followed what its participants take to be obvious consequences for workplaces and remuneration. Both are associated with ‘J-curves’ and thus with the new abstractions of economic restructuring. In a different group a discussion about ‘economic reform’ calls up ideas about political economy that everyone recognises as Craig says, ‘It’s a vicious circle [more economic reform, more pressure on wages]. It’s all about competition gone mad. Don’t know who is going to stop it. We’ll get an underclass [of people] that will never work and too many losers: people without skills. Rural communities [especially] are doing it tough.’ In a third group we listen to a man called Mick, who relates the consequences of labour market reform to big business practices: ‘They go into mergers. They won’t wait for attrition and retirement. They just cut the workforce.’ Someone else says, to nods all around, ‘The government gives them open licence to do what they want.’ In a fourth group a conversation about reform ties the common theme of CEOs to labour market reform with a discourse that is readily understood by all the participants irrespective of educational levels: ‘Profits will be cut if the basic wage increases, so the CEOs want to hold down wages.’ Someone clinches the point with the comment, ‘Shareholder mentality: that’s all that counts.’ One young woman, who seemed at first nonplussed by the twists in another conversation, tossed in her own pithy summary of what she took to be the point: ‘More competition … Less control over your life!’ In one of our outer suburban groups we find Craig, the middle manager we met in Chapter 4, making connections between state action and corporate policies that all the other members of that very conservative group understood perfectly: ‘There’s no public interest in what companies do. I have to look after shareholders. Shareholder value is what “value” means now. There are no other values.’ In another group we find people, again with no tertiary education, relating what we might call trade policy to their own understandings of political economy: ‘We go from our own manufacturing to imports. That’s bad! Small businesses get swallowed up by big businesses.’


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From another participant: ‘We are worse off.’ And yet another, ‘The quality of the workforce is worse.’ All the focus groups routinely connect various aspects of reform with what they read – easily – as the distributional consequences in a number of often subtle ways. Frank says, ‘The middle will be carrying the burden and paying all the taxes for the rich.’ Another participant says, ‘Packer pays hardly any tax’ and again, another: ‘All care groups phone you up for money now.’ In a different group the connection is made between taxes and public provision thus: ‘Health, education, law and order are all going down because there’s no money to pay for them.’ Usually there is some anger: ‘No child will live in poverty by 1990! … Bullshit!’ Someone else continues, ‘Privatisation! Governments say they want a level playing field. Other people [in other countries] have subsidies!’ Another person pushes that same conversation along, ‘We let ’em walk all over us! [That’s why] people don’t trust [Australian] governments any more!’ In focus group discussion with their peers virtually all our participants are able, at the very least, to recognise the general features of the reform agenda: a floating dollar, privatisation, cuts to the public sector, user-pays policies, tariff reductions, enterprise bargaining, more competition, welfare reform, the deregulation of wages and business, higher productivity and higher unemployment. Some see it as ‘globalisation’, and in that measure unavoidable. Others, probably the majority, see it not necessarily as an option that could be easily rejected, but certainly as a politically driven program of both major parties. In some of the focus group discussions economic reform was seen, grudgingly at best, as tough medicine, something that you had to suffer for things to get better. But there was never more than a fleeting suggestion that things really would get better. In the focus groups virtually no one is sanguine. Critical scepticism seems to be the norm. It is one thing to nod assent to a dialogue partner and quite another to pull up connections out of the blue when filling out a questionnaire or responding to an interviewer. So what understandings do we find coming through the survey responses?

The Power of Big Business As we saw in Chapter 3, in the private sector about two-thirds of our middle Australians seem to be reasonably accepting of their bosses, their relations with management and the fairness of their own pay. So it’s not all gloom and doom. Indeed, from other studies on confidence in Australia’s institutions we find a declining but still majority confidence in Australia’s major

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companies. Despite this acceptance, middle Australians see, and are critical of, the broader political role of big business in the nation’s affairs and of its hand in economic reform in particular. In this respect our survey is picking up the resentments voiced in the focus groups about the power, and ‘political clout’ of big business, multinationals, big companies and CEOs. Specifically, we are picking up resentments towards the banks, Telstra, and the better-known business magnates – among whom ‘Packer and Murdoch’ were always the most frequently mentioned. The frequency of these responses is shown in Table 6.1.6 Nearly three-quarters of our sample believe that ‘big business has too much power’. This is no shallow mantra. Rather, as we shall see, this response to excessive big business power is systematically and coherently related to a number of key attitudes and attributes of our middle Australians. Firstly, we find that our results put the lie to the much touted idea that economic reform commands bipartisan electoral support. Although some 60 per cent of our respondents say that ‘it doesn’t matter which party is in power, in the end things stay much the same’, we surmise that our respondents nonetheless cast their votes with the conscious, hopeful and traditional assumption that a vote for Labor is a vote for restraints on big business. Huge majorities of Labor voters want such restraints ‘on multinational companies’.7 Yet in the year of a federal election (2001), as business elites accurately observed, ‘on the surface, the policy differential [between Labor and the Coalition] isn’t that great’.8 The hand of big business in crafting economic reform under Labor, and the working relationship with the allpowerful Business Council of Australia, are well summed up by a former senior Labor minister, John Dawkins, reported by the Australian Financial Review:

Table 6.1: Attitudes to big business, per cent Attitude Big business has too much power (n = 390) Multinational corporations have too much power in Australia (n = 389) There should be stronger government control over the activities of multinational companies (n = 389) Big business benefits owners at the expense of workers (n = 384) Governments are losing influence over business interests (n = 390)

Agree 73 69 72 57 60

All responses offer a 5-point scale with only ‘strongly agree’/‘agree’ and ‘yes!!’/‘yes’ responses presented here.


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Such was the intimacy of the relationship, Mr Dawkins claimed, that it has been useful on occasions to have the BCA appear to be a critic of the government’s performance. ‘It suited the government to have the endorsement of the BCA when it needed it, but to be able to create some distance on other occasions’ … According to Mr Dawkins, the BCA’s role of policy pacesetter and critic of the government’s progress had assisted the government to maintain the support of its own constituency on reform. He suggested that in the few years after the 1983 election, the ACTU was converted to the central elements of a pro-business agenda, and through its enhanced central power, was able to engage the entire union movement in support. ‘So while the BCA occasionally laments its lack of success, and lack of influence, it and its predecessors have, by their proxies in the government and the ACTU, achieved more than they could have expected from a government of their friends’ … Mr Dawkins said: ‘While it was important to have the BCA as part of the cheer squad, it was useful for other reasons for the BCA to be not identified as the author of the policies, and sometimes to appear as a critic of the government’s performance.’ 9

Before its defeat in 2001 and under the leadership of Kim Beazley, the ALP stood poised either to hold to its now more quietly voiced support for economic reform or even deliver more of the same (albeit in watered-down form).10 Yet, clearly, the determined and successful efforts of the Labor Party throughout the 1980s to demonstrate that it is the better economic manager of the nation, and that it can successfully deliver ever more economic reform, sits in great tension with the enduring expectations of Labor voters. Support for ‘government controls over multinational companies’ shows a nearly identical pattern with the judgement that ‘big business has too much power’. Moreover, the distributions are associated with feelings about ‘what’s happening to middle Australia today’, as we see in Table 6.2. Those who say that big business and multinationals have too much power are more than three times more likely to judge themselves ‘angry or unhappy’ with what is happening to middle Australia than those who say they are ‘calm and satisfied’. Similarly, those who want stronger regulation are more than three times more likely to say they are ‘angry or unhappy’ at what is happening. And as we see, these judgements are related systematically both to reported experience and, structurally, with equivalent household income. Moreover, respondents saying that big business has too much power and that government should exert more control over multinationals are more likely to see themselves as losers from economic reforms over the last fifteen

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Table 6.2: Attitudes to big business and control of multinational companies by selected variables, per cent Variable

Big business has too much power

Equivalent household income: $0–15,000 $15,001–30,000 $30,001–45,000 $45,001+ n

33 32 21 14 266a

35 32 20 13 258g

34 32 19 15 204m

n

77 23 248b

78 22 248h

80 21 190n

n

46 54 206c

44 56 203i

48 52 155o

n

20 80 224d

23 77 222j

19 81 175p

n

30 57 13 246e

34 52 14 240k

25 62 13 186q

n

26 74 282f

27 73 273l

22 78 216r

Feelings about middle Australia:* angry/unhappy calm and satisfied People like me are † winners losers Wage and salary earners are † winners losers Vote in 1996 federal election (House of Representatives): ‡ Liberal Labor Greens/Democrats Trust government in Canberra:* Most of the time or almost always Some of the time or never a

b

Support Big business stronger benefits control of owners at multinational the expense companies of workers

P < 0.05, Gamma = 0.25, n = 363; P < 0.01, V = 0.20, n = 342; c P < 0.01, V = 0.21, n = 285; d P < 0.001, V = 0.27, n = 303; e P < 0.001, V = 0.21, n = 339; f P < 0.001, Gamma = –0.47, n = 383; g P < 0.001, Gamma = 0.38, n = 362; h P < 0.001, V = 0.24, n = 342; i P < 0.001, V = 0.28, n = 284; j P < 0.01, V = 0.21, n = 301; k P < 0.05, V = 0.13, n = 337; l P < 0.001, Gamma = –0.38, n = 382; m P < 0.05, Gamma = 0.21, n = 358; n P < 0.01, V = 0.19, n = 337; o Not significant, n = 281; p P < 0.001, V = 0.22, n = 300; q P < 0.001, V = 0.25, n = 332; r P < 0.001, Gamma = –0.45, n = 378 * ‘Don’t know’ responses excluded. † ‘No idea’ responses excluded. ‡ Other parties excluded, no National Party voters in an urban sample. Only ‘yes!!’ and ‘yes’/‘strongly agree’ and ‘agree’ responses reported for column variables.


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years, and some four times more likely to see wage and salary earners as losers rather than winners from those reforms. In addition, they are twice as likely to have equivalent incomes in our lowest quartile of equivalent household income as compared with those in the highest quartile. To those who ask whether these responses could be a hangover from the experience of the 1991 ‘recession we had to have’, our follow-up survey gives its own answer. In the midst of one of the strongest economic booms in living memory, our middle Australian respondents declare themselves more likely at the end of 1999 as compared with 1996–97 to be losers from economic reform.11 Experiences and evaluations of economic reform are clearly related to what our respondents see as interests and interest positions. Of the majority of middle Australians who agree that big business has too much power (and who favour more government controls over multinationals) 82 per cent say that the country is run by ‘a few big interests’ rather than for ‘all the people’ (18 per cent).12 Questions about the limits of legitimate power come to the fore when we observe that these same perceptions about excessive big business power affect the trust which people have in government. The majority who see excessive business power are much less likely to agree that the government in Canberra can be trusted to do what is right ‘most of the time’ or ‘almost always’. They are, in other words, more likely to see themselves as the unwilling objects of illegitimate power. The new language of flexibility and reform may be, as Richard Sennett would have it, but another way ‘to lift the curse of oppression from the capitalist system’.13 It was never the purpose of this study to fathom how middle Australia feels about capitalism. What we can say is that our middle Australians deliver their own answers to the relentless efforts of our elites – the financial journalists, the think-tanks and business ideologists, the peak business organisations, the big accounting houses, the credit-rating agencies and the economic rationalists who dominate the Canberra policy apparatus – to redefine economic life as an equal partnership between business and its workforce. Despite huge efforts to persuade them to the contrary, our middle Australians still believe, in a ratio of nearly three to one ‘that big business benefits owners at the expense of workers’.14 Focus group discussions about the winners and losers from economic reform (one of five major discussion strands) would routinely take up themes that make the same points with the same emphasis. In one clip for example, Robbo, a seemingly conservative man, says, ‘Losers? Pay-as-youearn workers are losers.’ Someone else adds, ‘and they are tax prisoners’. In another group a similar exchange takes a familiar turn as Yanni says,

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‘Losers? People forced into casual jobs! Some people have to work three casual jobs!! Can’t take out a mortgage ’cos it’s too risky … No peace of mind. No security … And the jobs just disappear.’ Almost without exception we hear these themes about the costs of reform for workers associated with what they see as the other side of one coin. In but one example, Carli, a teacher, says, ‘Winners? The multinationals! The big companies. The banks. The managers and the CEOs on perverse salaries.’ The survey data show this to be a majority view. As we have seen (Table 6.1), just under 60 per cent of our respondents say that ‘big business benefits owners at the expense of workers’ – only 20 per cent disagree. And that view is related to the same perceptions and attributes as we saw above. Just over half of our middle Australians who say that big business benefits owners at the expense of workers say they are losers from economic reform (Table 6.2). Moreover, the huge majority of four in every five of our middle Australians who answered that big business benefits owners at the expense of workers, also say that they are angry or unhappy about what is happening to middle Australia and that the country is run by a few big interests rather than for all the people.15 And they are less likely to trust governments and more likely to be on lower equivalent incomes. Wage and salary earners do not believe that business is naturally disposed to give them ‘a fair go’. It is the job of government to make business do so. The further down the (real, equivalent) household income ladder we go, the greater is the likelihood that middle Australians will hold to that view, and the more they see governments in the pockets of big business and running the country with and for ‘a few big interests’ rather than for all the people16 – and the angrier they are about ‘what is happening to middle Australia today’.17 As Paul Keating proudly declared, major economic reform was indeed dropped on the people of Australia, from above, by the Hawke Labor government in 1983. Thereafter it was gradually intensified through the 1980s by successive Labor Hawke and Keating governments until the Howard Coalition won office in 1996. In outright contradiction of the electoral promise to let people ‘feel relaxed and comfortable’, the pace of reform was notched up with very deep cuts to the public sector (public health, education, and other services), and (under Minister Peter Reith), still more, aggressive, ‘reforms’ to the labour market that successfully delivered a huge shift in power from organised labour to corporations. Despite public resistance, Australia was made the world leader in the privatisation of publicly owned assets.18 In addition, the Coalition legislated a radical privatisation of government employment services, a ‘reform’ so radical that not even Margaret Thatcher dared attempt it in Britain.


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The irrelevance or disappearance of traditional differences between Left and Right, as proclaimed by the elite, owes more to wish-fulfilment than to reality. In key respects our middle Australians see themselves as the objects of power. They do not accept this alien form of power. This could well spawn more resentment and an increasing instability in national politics. As both parties have moved further and faster to the New Right, they appear to have overstrained what increasing numbers of voters see as legitimate politics. For business elites this will not matter, providing that effective power over the economy, and above all over who gets what, has been successfully shifted to the ‘free’ markets, or in other words to the new institutions of the new capitalism and thus to their own sphere of control.

Institutional ‘Reform’19 Despite the unremitting insistence of the elites on the superiority of their ‘reform consensus’, our survey evidence points, instead, to the enduring support of middle Australians for the older institutions. When we compare attitudes towards the old and, now the new, reformed, ‘free’ market institutions, we see how closely support for the redistribution of income is associated with the older and, for our middle Australians, the more legitimate regulatory institutions that have been more or less abandoned by both major political parties (see Appendix A). Popular support among middle Australia respondents for two sets of institutional arrangements is presented in Table 6.3. The first column represents elements of the older nation-building institutional arrangements that have defined Australian democracy virtually from its beginnings to the onset of the reform period. These include, most importantly, the arbitration system, centralised wage determination, and tariffs. The newer institutions are the market-based and deregulated institutional arrangements promoted by business and brought into being by both the Labor Party and the Coalition (see the chronology in Appendix A). We are pointing here to those ‘reformed’ and newer aspects of the nation’s institutional structure that have been variously prised from collective state ownership or control and colonised by, or surrendered to, big business, corporations and the market. These are the arrangements that our middle Australians have in mind when they speak about total or partial privatisation of Telstra and many public utilities and services; and of the augmented power accruing to the corporate sector from deregulation, contractions of the public sector, tariff reductions and, more broadly, ‘globalisation’. Our survey results show more consistent support for the older economic institutions than the newer ones. A majority of our respondents (51 per

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Table 6.3: Support for ‘old’ and ‘new’ economic institutions, per cent

Old institutions 1. Australia’s economic model 1945–85 (n = 367) 2. Industrial awards (n = 387) 3. National wage fixation (n = 387) 4. Government support of declining industries (n = 386) New institutions 5. Economic reform (deregulation of business, privatisation, competition) (n=397) 6. Enterprise bargaining (n = 386) 7. Individual contracts (n = 383) 8. Privatisation of major public services (n = 383)

For

Neutral/ don’t know

Against

51 69 59 31

39 14 17 27

10 17 24 42

29

45

26

41 42 18

18 20 28

41 38 54

Questions 1. ‘Do you think the kind of economic system Australia had between 1945 and 1985 or so – with most businesses private but some owned by the government, strong trade unions, and high tariff protection for manufacturing – brought you and your family: … only benefits, more benefits than harm, as much benefit as harm, more harm than benefits, only harm?’ 2. ‘The buying and selling of labour should be controlled by industrial awards. Agree strongly, agree, not sure, disagree, disagree strongly, don’t know.’ 3. ‘Wages and salaries should be set nationally in negotiations between the federal government in Canberra, national trade union confederations like the ACTU, and nationwide employer groups like the Business Council of Australia. Yes!!, Yes, ??, No, No!!’ 4. ‘Here are some things the government might do for the economy. Are you in favour or against support for declining industries to protect jobs? Yes!!, Yes, ??, No, No!!’ 5. ‘How would you rate economic reform (things like deregulation of business, privatisation, job restructuring, more competition etc.)?’ Feeling thermometer from 0 cold or unfavourable to 100 very warm or favourable. 6. ‘Wages should be negotiated in each individual company, rather than for the industry as a whole. Yes!!, Yes, ??, No, No!!’ 7. ‘Employers should have the right to negotiate earnings with each individual worker. Yes!!, Yes, ??, No, No!!’ 8. ‘Major public services and industries ought to be in private ownership. Agree strongly, agree, not sure, disagree, disagree strongly, don’t know.’

cent) favoured Australia’s economic system between 1945 and 1985 – specifically, in the words of the question put to them, a system ‘with most businesses private but some owned by the government; strong trade unions; and high tariff protection for manufacturing’. A majority of them thought it had brought ‘only benefits’ or ‘more benefits than harm’.20 Despite constant ideological attacks on what the reformers would like to deride as nostalgic attachments to a Golden Age, only 10 per cent thought the postwar


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economic system had brought ‘more harm than benefits’. In contrast, only 29 per cent gave a favourable rating to the new institutional architecture of economic reform (in a system with ‘more deregulation of business, privatisation, job restructuring and competition’).21 More ominously still for the reformers, during what they have touted as a great ten-year economic boom to the turn of the millennium, our middle Australians seem to have turned against them. Our follow-up survey indicated that from 1996 to 1999–2000 there was actually a sharp increase in support for the protection of declining industries.22 The central plank of the old institutional order has been the centralised wage-fixing and award system. We find that for middle Australians it still commands majority support among both ALP and Coalition voters, with 69 per cent of all respondents agreeing that ‘the buying and selling of labour should be controlled by industrial awards’.23 Clearly a good majority (59 per cent) of middle Australians still want centralised wage determinations. In place of the much heralded ‘reform consensus’, we find here that support again breaks to some extent along traditional political party lines, falling away to 35 per cent for Coalition voters.24 Indeed, opinions on enterprise bargaining are much more divided, with 41 per cent of respondents in 1996 supporting it, and the same number opposing it. On this latter point, we are reminded of the comment of one of our focus group participants, Alec, a pathology laboratory assistant, who said, ‘Enterprise bargaining …? Erosion of everyone’s conditions. Renegotiation of my job … I’m worse off on every point. I had to sign to keep my job.’ Everyone accepted what he was saying. Significantly once again, in the midst of an economic boom, support for enterprise bargaining fell from 45 per cent in 1996 to 39 per cent in 1999.25 We surmise that the majority of perceptions of inequality and of the ‘widening gap between rich and poor’ have contributed to political resentment towards ‘the system’. Weak support for these new economic institutions is associated with high levels of pessimism about the ‘job prospects and incomes of middle Australia’.26 It may be that strong economic growth over the period 1996–2000 may account for a small positive adjustment in follow-up panel data responses to the question, ‘Do you think the incomes and job prospects of middle Australians are rising or falling?’ Yet a great many of our middle Australia respondents continue to hold negative views about their economic futures. Significantly, we find that those with pessimistic expectations about economic and institutional change are more likely to say they are losers from economic change (reform) of the last fifteen years.27 At the same time, we discover a further strong association between the perception that incomes and job prospects are declining and feeling

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‘angry and resentful’ about what is happening to middle Australia.28 One does not need to be a clairvoyant to read here ‘in the middle’ the echoes of the social unrest that is simmering, as in European countries, at both the Battler/Hansonite and the more socially aware Improver ends of that spectrum. Public concern over the future of middle Australia goes a long way to explaining declining confidence in major political parties, and in political institutions and processes in general. Indeed, the secular erosion in trust seems to be related to the push for always ‘more’ economic reform. It may be true that political trust ebbs and flows with the life-cycles of federal governments. According to Murray Goot, trust in government rises immediately after a change in government and falls during its life.29 However, our contention here is that economic reform weakens trust in political institutions in a more fundamental way.30 For our respondents, low trust in government is associated both with a sense of declining job and income prospects, and with anger at what is ‘happening to middle Australia’ and, as well, with the identification of oneself as a loser from economic reform.31 In this respect we may not be so different from Americans, given that similar studies there confirm a relationship between trust and self-identification as a winner,32 and between low trust and job insecurity.33 As we shall see, there is no evidence to suggest that business-sponsored attempts to paint all government as the enemy have succeeded in their principal purpose of reducing public expectations of what government can and should do to solve social and economic problems. At least 60 per cent of our respondents believe that governments can do ‘quite a bit’ to correct ‘the gap between rich and poor’, and at least half think they can do quite a bit about job insecurity (see Figure 6.1).34 This suggests that, with respect to the distribution of income especially, Australians continue to hold governments accountable for clearly identified roles, tasks and functions – first among these the obligation to see that the economic system works fairly. Furthermore, we may surmise that their failure to perform is not construed by the public, as the economic rationalists would wish, as a ‘government failure’ in search of remedy with still more ‘market success’.35 In short, there is little sign that middle Australians are giving up on government and passively accepting the new reformist agenda with the expectation that the more decentralised, privatised, and market-based institutions can do a better job. This is certainly not the case with respect to the distribution of income. Australians know in their bones that the state must moderate the distribution of incomes.

*


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In 1995, in the wake of nearly fifteen years of economic reform, the National Social Science Survey provided some helpful entries for the scoreboard on public confidence both in the major players and in the direction of economic change. We already know that this national survey accords with our own in showing majorities of the population to be opposed to what they see as the excessive power of big business and multinational companies (Table 6.1). The 1995 NSSS data show that, for a list of ten economic and political institutions, the levels of confidence were ‘lower now than ten years ago in seven out of ten institutions’. With respect to those institutions that best symbolise, for the broad public, the power of big money, the survey has this to say: ‘In particular, there is a large drop of 20 points in the level of confidence in banks and financial institutions (from a position of having easily the highest confidence rating in 1984–5).’36 With respect to political institutions, and specifically the federal governments that have been driving the economic reform program, we see that it is they who record the nextlargest fall in public confidence of some 15 points. Conversely, and with respect to the institution that is most likely to hold out against reform, the survey notes that across the list of seven institutions covered in the survey ‘only the trade unions have a higher rating in 1995 than ten years before’.37 In spite of elite and media-driven attempts to turn the public against unions, ACIRRT figures for 1999 show that only 23 per cent of those surveyed thought that ‘Australia would be better off without unions’ – 44 per cent said that they would rather be in a union’.38 The reformers would like to believe that the maximum possible degree of marketisation produces a new, ‘reformed’, institutional order that has successfully changed the way people think about the structure of power in their own nation. They hope, and even assume, that the market makes power invisible. But, as we have seen, such confidence is premature. Indeed, we find instead that middle Australians are able to deliver their own reasonably clear – and contrary – judgements about the causes of economic change. In the interview we asked our middle Australians: ‘Over the last fifteen years or so Australia has experienced a lot of economic change and restructuring: things like deregulation, privatisation, enterprise bargaining, more competition, rising unemployment, and cuts to health, education and welfare. In your view what are the pressures driving these changes? Please choose two items’ (from the options in Table 6.4). From these results we see that middle Australia construes global competition as the biggest force for change. Yet, as we have seen from the survey responses and from the focus groups, they easily attribute this to the augmented role of big business and corporations that was the next most

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Table 6.4: Pressures driving economic change and restructuring, frequency Pressures driving change

International global economic competition Big corporations pushing for bigger profits and lower wages Progress, growth and modernisation Technology and communications We follow American influences Economists and financial journalists Rich people pushing for a bigger slice of the cake Other A few very wealthy and powerful big business people

Two most important pressures (n = 387)

Most important pressure (n = 373)

228 164 83 102 69 27 25 24 45

152 87 37 33 16 13 12 12 11

Respondents were asked to choose two items, therefore the first column adds up to more than the total sample size. They were then asked to nominate which of the two items was the most important. Question: ‘Over the last fifteen years or so Australia has experienced a lot of economic change and restructuring: things like deregulation, privatisation, enterprise bargaining, more competition, rising unemployment, and cuts to health, education, and welfare. In your view what are the two most important pressures driving these changes?’

commonly mentioned factor driving economic change. If we add the number of mentions for other specific actors, such as economists, rich people, and a few very wealthy big business people, the total number of mentions for what are now visible agents acting with real intentions and interests slightly exceeds those assigned to globalisation. What this suggests is that globalisation has not yet been securely accepted – as the reformists would hope – as a quasi-natural force or an invisible hand to which adaptation without protest is the only rational response. This impression finds some support again in responses to another question asking whether they thought it was business, or government, or both together, that were driving economic change and restructuring. Some 45 per cent of our respondents said that business was driving governments, and a further 38 per cent thought that both were driving it together (only 14 per cent thought that government was taking the lead). As we saw in Chapter 2, a huge majority of Australians believe that the gap between the rich and the poor is too large. At the end of the century, after ten years of boom conditions, we find that alarm over the distribution of income had increased still further. And yet, in what is only an apparent paradox, we find that only some 38 per cent of our middle Australians agreed, in 1996, with the proposition that ‘Government should redistribute


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income from the better-off to those who are less well off.’ Some 42 per cent disagreed with that statement. Our business elites have seen in this Australian ambivalence towards a European welfare state mode of redistribution an opportunity for pressing another aspect of institutional re-engineering with punitive welfare reforms that blame the victims of unemployment and poverty. The aim is to maximise productivity, using job insecurity and stigmatisation to induce Australians to accept any job at any price. The reason for the alarm over redistribution and for the reluctance to resort to welfare ‘handouts’ was made plain in Francis Castles’ definitive studies of what he so aptly called the ‘wage earners’ welfare state’.39 The centralised wage-setting system (together with tariff and immigration restrictions on cheap labour) gave Australia one of the most equal distributions of income in the world for the best part of twenty years after World War II. Its unique strength was that it obviated the need for a large welfare state along European lines by holding up the wages floor with full employment. The system prevented poverty from breaking out in the first place, and so allowed social security to function only as a residual safety net for those in dire need. Small wonder then that the deregulation of wages has always been the central stake in institutional reform. In the enduring hope for fairness and in the anger towards big business, we see a continuing preference for this, now largely destroyed, institutional backbone of distributional justice. A ten-year economic boom to the end of the century lifted the mood of the people and even slightly increased expectations about incomes and job prospects and confidence in the nation’s future. And yet even in this propitious climate, as the struggle to ‘reform’ the nation’s institutions has intensified, support continued to fall away in the last three years of the century. Levels of confidence in bedrock institutions, like the Constitution, that may still be seen to be out of the reach of big money, have not changed.40 But as soon as people sense the power of corporations and big money, confidence falls as it has done with respect to the law. Just on 70 per cent of our middle Australia respondents believe that there is ‘one law for the rich and one for the poor’.41 As elite opinion was so insistently proclaiming that the ‘hard yards’ and ‘hard work’ and ‘belt-tightening’ of economic restructuring had been done, and that ‘sound economic management’ was finally delivering its rewards, we see that confidence in banks and financial institutions has plummeted, along with trust and confidence in Australian companies and the federal government (this time, a Liberal government).

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* In reflecting on what these findings mean, it is well to remember that most people do not think much about institutions. Institutions are what we might call embedded structures. This is at once their strength and the principal source of their vulnerability. Institutions embody and settle past conflicts with agreed and enduring rules that all ‘sides’ can live with. Through this means the otherwise naked clash of opposing interests is abated. The nation may then get on with its tasks of addressing whatever problems it has to face in a less corrosive political atmosphere and even, at best, and in the most successful countries, in a spirit of cooperation for the greater good of all.42 Because the potentially weaker parties to those older institutional settlements still trust in the framework, conflicts are less politicised. This is also the weakness of institutions in situations, such as the current one, where the powerful, the business elites, believe they can get more by undermining them. The trust of the people in their institutions becomes the very thing that is used against them to secure new strategic advantages for corporations and the markets.

Towards Active Government? In the new global economic order, the economic functionalists who drive economic reform in Australia believe that the central purpose of politics should be to confer the greatest possible advantage on large business enterprises that electoral tolerances will allow. They want the population to think of politics not as representative democracy, but as steering an economy that is run by corporations. For the reformers this involves, among other things, a re-engineering of the nation’s institutions that refocuses political opinion and debate on the reform agenda itself. For them the preferred topic for debate is the scope of competition policy, not its desirability; the degree and speed of the privatisation of telecommunications and utilities, not the values of public ownership; cuts to welfare, not social justice; taxation reform and the GST, not the desirability of progressive taxation; and the depth of cuts to taxation, instead of the desirability and efficiency of publicly provided goods such as education, health, and family services. Ultimately, success is measured by the degree to which this shift in the burden of coordination of the nation’s affairs can be depoliticised and the conflicts subdued and subsumed within the new economic institutions that are more friendly to big interests. The stakes are very high. Public expectations must be reduced and elite (business) expectations raised. The


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criteria the people use to judge what counts as progress have to be brought into alignment with what is decided for them, and measured by their support for those very pro-market institutions that diminish their share of the benefits. In this way the politics of economic reform raises its own questions about what the people want. Do they want more economic reform or do they want public intervention to moderate it? As we have seen, some twenty years of elite sponsorship of economic reform had, by 1996, not yet succeeded in producing a positive balance of public opinion on economic reform. It is true that institutional politics has largely succeeded in dismantling the institutional apparatus of ‘fairness’. The capacity of the key institutions – the centralised wage-fixing and arbitration system, progressive taxation, the public sector and the regulatory agencies – have all been successfully maimed or destroyed by the politics of institutional reform. In this respect we see a near total victory for the twentyyear program of economic re-engineering. This basic structural dynamic of economic reform has been sold to the public with the promise that all would benefit. It has been hugely successful in its central aims of making people ever more dependent on markets and corporations and of reducing democratic politics to economic interests. The people may have been overpowered by economic reform. But does this mean, as the reformers hope, that their expectations of government have melted away? To reach an informed judgement we put to our middle Australians the following question: Some people say Australian governments nowadays – of whichever party – can actually do very little to change things. Others say they can do quite a bit. Please say whether you think that Australian governments nowadays can do very little, or quite a bit [with respect to a list of 13 items].

Their answers appear in Figure 6.1.43 Across these thirteen items, an average of about 70 per cent of our middle Australians say that government can do ‘quite a bit’. Middle Australia appears not to have given up on government. Once again, in the wake of a decade of economic boom and after some two decades of forced political re-education, we find that these attitudes have not changed in the three years to the end of the century except in one respect: our panel results indicate a strengthening conviction that governments can do quite a bit to reduce the gap between the rich and the poor. Our middle Australians are telling us that their bedrock cultural expectations have not, as the reformers

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% 100

80

60

40

20

…

…

to kee pp to rice red sd uce ow un n … e mp to im l o ym pr … ent sta ove t to nd he im pro ard gen o e ve the f livinral h soc eal g ial th … a s to red ervicend uce s po ver … ty … to cut to ma crim ke … e bu to sin cre ate fai ess p r w ay mo a re job ges … s e t cur os … up ity to po red rt f uce a mi the … lies g to con richap be t tro w and ee l ec po n on … or om to ic c ho ld h ang soc … e iet to yt sup oge po the rt c r om mu nit ies

0

Australian governments can do … Very little

Quite a bit

Don’t know

Figure 6.1 Middle Australia’s perceptions of the capacities of government

assumed, obediently accepted this capture of the structures of power. Middle Australia still expects government to correct ‘market failures’ and to produce merit goods – public education, housing, health, and the like. Moreover, in these resilient expectations we see government still firmly vested with responsibility for the care of society and held accountable for all that this entails. These are normative expectations. Middle Australians expect government to reduce crime, reduce poverty, support communities, hold society together, intervene to reduce inequality in the distribution of income and, generally, to ensure that the market works rationally for the people rather than the other way about – that is, irrationally.


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Australia has not had a strong strand of socialist or even social democratic politics, unlike most European nations. Indeed Australia was ‘born modern’44 and has, for most of the twentieth century, stood out as a very successful example of what used to be called – before the era of economic reform – a mixed economy. The central principle was that states and markets, governments and business, would work together in synergy, with each contributing to national development what it does best. So for Australians, the idea of a forced choice between either libertarian free markets or state control has been an artificial opposition at best. But that is not the way the reformers see it. For some twenty years they have through the media, and always at election time, attempted to inculcate a libertarian, American-style ‘economic correctness’ which says, always, that private enterprise offers the ‘one best way’ to address just about every issue. Again, in order to reach a judgement about the success of these efforts we decided to put to our middle Australians a question from the British Social Attitudes survey that would confront them with this (invidious) either-or choice between private enterprise and state intervention. As expected, we find that more than one-third (36 per cent) say they cannot choose – precisely because the choice makes little sense – and over one-quarter (27 per cent) take the strong option of (exclusive) state intervention. Even when forced, so to speak, to go with the flow of reform, only 37 per cent will agree that (exclusive) private enterprise solutions are best. This suggests, again, that there is no consensus for the ‘new consensus’. To dig a little deeper, we cross-tabulated levels of support for economic reform with the responses to our either-or choice on private enterprise versus state intervention. Table 6.5 shows what we get from this experiment. We see that, faced with the (invidious) distinction, there is a strong association between support for economic reform and private enterprise and, on the other side of the coin, between opposition to economic reform and the preference for state intervention. This seems to confirm what we surmised from all the focus group discussions. Our middle Australians generally know what these political road maps and discourses entail. The majority of people who are neutral towards economic reform are similarly undecided in their preference for state versus private interventions. When we remember that for many people economic ‘reform’ is still naively taken at face value, namely as improvement, the illusion of the new consensus looks shakier still. Regularly in this study we have seen that middle Australians make judgements about economic reform in the light of their own social situation and experience. The particularity of their own social experience continues to provide the basis for their own judgements. The results indicate again

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Table 6.5: How to solve Australia’s economic problems by rating of economic reform, per cent 2. How to solve Australia’s economic problems 1. Private enterprise best 2. State intervention best Can’t choose

1. Rating of economic reform Unfavourable Neutral Favourable (n = 112) (n = 175) (n = 99) 13 54 34

39 17 43

60 15 25

P < 0.001, V = 0.32, total n = 386. Questions 1. ‘How would you rate economic reform (things like deregulation of business, privatisation, job restructuring, more competition, etc.)?’ Respondents to indicate their feelings on a ‘feeling thermometer’, giving 9 options from ‘0 very cold or unfavourable’ to ‘100 very warm or favourable’ (columns in table above indicate even division of categories into thirds). 2. ‘Private enterprise is the best way to solve Australia’s economic problems; state intervention is the best way to solve Australia’s economic problems; can’t choose’ [tick one box to show which you agree with more].

that real experience, rather than ideology, continues to ground their judgements, even about such difficult matters as macroeconomic policy and the preference for state versus private enterprise solutions to Australia’s problems. The same capacity to make judgements in the light of experience appears again. A majority of our respondents believe that quality of life in Australia is declining, and that life is getting harder for middle Australians. In looking ahead, only the minority who thought life was getting easier favoured private enterprise over state intervention.45 We already know from Figure 6.1 that around two-thirds or more of our respondents believe that governments can do ‘quite a bit’ to ‘improve the general standard of living’ and to ‘reduce the gap between the rich and poor’. It comes as no surprise, then, that those who judge ‘people like me’, ‘people in the middle’ and ‘wage and salary earners’ to be winners from economic reform over the last fifteen years may be rather more likely to favour private enterprise solutions.46 Other cross-tabulations show that part-time workers (among them those who have suffered most from the deregulation of the labour market) are more likely to favour public intervention.47 Although the differences are small, the same preference is inversely related to equivalent income. The lower the real income, the greater the preference for public intervention.48 Moreover, the relationship between an elite-dominated, Type A view of society and the preference for state intervention over private enterprise varies (a little) in relation to equivalent income.49 This gently confirms the message that came through the focus groups. Disadvantaged people know


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that unbridled markets redistribute power, income and resources upwards, and they want to reverse the trend. At the other end of the spectrum, those doing well are more likely to look favourably on private enterprise solutions to our problems. As we have seen, resistance to the institutional dynamics of economic reform is both strong, and in some aspects strengthening, even in the relatively short span of three years to the year 2000. For example, opposition to the privatisation of major public services has stiffened.50 And, more directly, even when our respondents are told that increased public spending might involve tax increases, they come out in favour of more active government and more ample public provision. In response to a question listing eight areas of government expenditure, we find that over three-quarters of our respondents want governments to spend more on education and health.51 The average rank order of preferences for more government spending (on a five-point scale) is as follows, with the lowest number indicating the strongest preference: education, 2.9; health, 3.0; the environment, 3.8; police and law, 4.1; culture and the arts, 5.5; old age pensions, 4.6; unemployment benefits, 5.8; and military and defence, 6.4.52 The panel data shows that in the three years to 2000 these preferences for more publicly provided services have strengthened for all but the environment and culture and the arts.53

Who Is to Blame? As we have noted, in 1996 only just under one-quarter (24 per cent) of our middle Australians were optimistic and thought that ‘the incomes and job prospects of middle Australians were rising’.54 More than double that number (60 per cent) thought that they were falling. Our panel indicates that, some three years later, in the wake of ten years of economic boom, and with politicians and reformers proclaiming that at last the rewards for economic reform were flowing through, those pessimistic expectations had still not shifted. This majority of pessimists were then asked, ‘Who do you think is to blame for this decline?’ Their answers are given in rank order in Table 6.6. Here it is useful to remember that these questions were first put to our middle Australians a few months after the 1996 election. Economic reform was at this stage focused on welfare reform. The Coalition was promoting tough welfare policies to hold down labour costs and to reduce access to welfare benefits. With these policies it sought to appease those who had voted for Pauline Hanson’s One Nation Party (those who have been most

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Table 6.6: Blame for declining income and job prospects of middle Australia Who is to blame for this decline? Big business, big companies, multinational corporations Governments and politicians None of these Various combined causes Ourselves; we’re not trying hard enough Technological change Global influences Free-loaders, dole bludgers, welfare recipients Employers Economic climate Immigrants It’s just bad luck Don’t know, decline to answer Other Total

Number

Per cent

92 51 18 14 12 10 9 5 5 4 3 3 2 7 235

39 22 8 6 5 4 4 2 2 2 1 1 1 3 100

Question: Do you think the incomes and job prospects of middle Australians are rising or falling? Who do you think is to blame for this decline? Only those who indicated that income and job prospects were falling answered this question.

hurt by economic reform) with a policy of getting tough on dole-bludgers – leading, in an American direction, towards the criminalisation of unemployment.55 The policy is designed to please the corporate sector, and to win over those who have been most hurt by reform, namely Australia’s ‘Reagan Democrats’ (the ‘Howard battlers’) from the Labor Party to the Coalition. The political aim was twofold: to maintain the strongest achievable push for more reform, and to hold down Australia’s already comparatively low welfare costs.56 The government has sought to deal with unemployment by shifting the onus of guilt, and the burden of obligation, from governments and corporations to the unemployed themselves. The larger, unstated, strategy is to keep the redistribution of national income moving from the wage and salaries share of the national accounts on the one side, to the ‘gross operating surplus’, or profit share, on the other – or, put a little differently, to keep the rate of unemployment as high, and the cost to business and to government as low, as electoral tolerances permit. Given that public attitudes to unemployment tend to be tougher in times of economic boom, the policy should be working. But even after ten years of economic boom, it’s not working. Even though our focus group discussions would, on occasion, enthusiastically take up many of the Battler and Hansonite blame-the-victim themes, the survey


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responses indicate that our generally moderate middle Australians have a limited appetite for these punitive policies. Even in 1996, after more than ten years of elite-abetted attacks on the welfare system under Labor, nearly 60 per cent of our respondents declared themselves ‘proud’ of Australia’s social security system.57 Only 12 per cent of our respondents believe that ‘people who live in need’ do so from ‘laziness or a lack of willpower’. At the other pole, some three times that number say that such need is a consequence of ‘injustice in our society’. The survey responses (Table 6.6) indicate that only a tiny handful of our respondents have been successfully induced to blame immigrants, free-loaders, dole-bludgers and welfare recipients for declining incomes and job prospects – even though they were presented, at election time, between a hard Coalition pitch and a softer Labor agreement to the same policy. This suggests again that the frontline politics of reform, here welfare reform, has failed, even though, for want of effective opposition, the desired policy objectives have been subsequently implemented. When pressed, some 69 per cent of our respondents say that ‘the economy controls us: by and large we have to adapt our needs and wants to the economic system’.58 In this respect they are hard-headed realists who reject the ideological economic fiction of consumer sovereignty – an idea that would have them believe that the economy’s invisible hand represents the best available collective reflection of their free will. It is just because the economy has this enormous power over everyday life that middle Australians feel resentment towards politicians and big business for not, on their behalf, setting reasonable controls on the way it operates. In this context, more specifically, we see again (in Table 6.6) that they overwhelmingly reject an elite-abetted politics of blame that would have them internalise as their own failure what they accurately perceive as the failure of the markets to redistribute national income fairly. Ninety-five per cent of our pessimists will not accept this explanation for their falling incomes and job prospects. In the midst of an economic boom they may rightfully expect that promises will be honoured and the benefits of painful (for the people) reforms shared. Middle Australians generally know they work hard, and they probably also know (see section one) that increases in productivity have succeeded at their expense by leaving them to compete for fewer full-time and more casual jobs, with less security of tenure, more unsocial hours, stagnating or falling real earnings, fewer holidays and far more precarious incomes.59 Although just under one-third of our respondents say that ‘management will always try to get the better of employees if it

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gets the chance’, employers per se are not the focus of resentment. This may mean that they do not directly hold their employers responsible for the consequences of economic reform. Within the traditional context of a justly regulated labour market, Australians have been generally accepting of employers, willing to give their bosses the benefit of the doubt most of the time, and, generally, accepting that their primary obligation is to work for a living – where they can. This too explains why we find such broad support for the work-for-the-dole policies.60 We see that middle Australia is most likely to blame big business, big companies and multinational corporations for their declining incomes and job prospects. As we have seen, they know that corporations are driving the reform agenda against them, and they know that governments are helping them on. Significantly, we also see that very few of these respondents resile from the distinction between big business and government. Here we again find some encouragement for the view that middle Australians see through the frontline politics of economic reform. At the very least, a majority of them are unwilling to let business and governments off the hook. They mostly refuse to surrender their accusing expectations to fatalistic and forgiving arguments about globalisation. That is why on the broader question of ‘what is happening to middle Australia today’, they hold ‘strong’ or ‘very strong’ feelings of anger or resentment towards politicians and governments, big business and the corporately owned media for what is happening to them.

In Conclusion and with Hindsight … Australians are not nearly so indifferent to politics as the reformers might hope. It is perhaps for that reason that such huge efforts have been put into circumventing democratic politics with a program of imposed, top-down economic ‘reform’. Institutional reform was meant, in its original ‘public choice’ formulation, to harness market disciplines to the public good.61 Yet from the beginnings of economic reform in Australia it quickly became clear that, in its practical implementation, institutional reform would pay only lip-service to public ethics.62 Australia was ‘born modern’, knowing that ‘the state, far from encroaching upon individual rights, would be the most likely protector of rights against other agencies of social coercion’.63 Australia has, at best, only a very weak tradition of noblesse oblige. Tough realists and Benthamites at heart, Australians learned from their foundation history that greedy and unscrupulous people with a lot of money were the real enemy from whom they had most to fear.


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As economic reform gathered momentum in the early 1980s, it quickly became a program aimed at the dismantling or constriction of all those foundational institutions upon which Australian fairness and equity have traditionally relied. Knowing that Australians would not easily surrender their birthright, the reform program set out variously, but always to the maximum achievable degree, to wind back or undo institutional restraints on the corporate sector. These corporate leaders, the faceless men, are now as before in our history generally egotistical and amoral people with little feeling for, or attachment to, the nation. Indeed, they seem to think of society as a wholly external environment, or even as some kind of quarry, and to think of political power only as a means to enhance their own advantages over it. In the lead-up to reform, the moderates in the Liberal Party, together with like elements in the National Party, always held out against letting the Coalition become, as it is today, little more than the front desk for the Business Council of Australia, for CEOs and vested interests. As soon as Labor sought to beat them at their own game, all hope of effective restraint was lost and the moderates were quickly purged from the party. Economic reformers would then, step by step, set about using economic reform as a ‘mandate’ for unbridled business power – not as middle Australia expected, as a means of harnessing new economic energies to the service of the people. Vested as institutional modernisation, economic restructuring has succeeded, to a degree that few would have thought possible, by attacking the nation at its point of greatest vulnerability. It has deployed against the people their own trust in and reliance on what has traditionally been a very pragmatic, progressive, nation-building role of the state, rather than harness that trust and reliance for the greater benefit of the nation.64 Institutional reform has been used to destroy institutions. Structurally, at least, it has succeeded in overpowering the people, even in stealing their institutional inheritance, but not yet in changing underlying norms and expectations. Our study has focused here in part on the subjective reception of institutional reform in a context in which its objective features are now, after twenty years of it, more easily discerned. In retrospect, it is clear that under the Howard Coalition a second wave of economic reforms has sought to engrain an American version of libertarian winner-take-all politics65 into the Australian landscape by using reform to cripple the institutions upon which all resistance would have to rely in the future. Even though Australia already had one of the world’s most flexible, responsive and adaptive labour markets, the central stake was always to destroy the institutional backbone of Australian distributional justice, the centralised wage-fixing and arbitration systems. But with most of that work already done by Labor, and with

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the central Canberra policy apparatus captured by pro-big-business economic rationalists, economic reform, under Howard’s Employment Relations Minister Peter Reith, moved on to shocking quasi-military and other covert assaults on the trade unions.66 Other attacks have focused on the independence of the High Court and the judiciary and even, under the cloak of parliamentary privilege, on individual judges. The government has used selective de-funding to weaken at least fifteen community and public advocacy organisations.67 Funding for future publicly financed nationbuilding projects has been cut off as Australia has become a world leader in programs of privatisation, with massive transfers of publicly owned assets – the Commonwealth Bank, half of Telstra, the airports – to private ownership.68 A step-by-step undermining of Medicare and the public health system has sought to entrench the interests of corporate health providers, while other reforms have levered middle Australians into a highly stratified private education system. Taxation reform and the introduction of the goods and services tax successfully shifted the burden of taxation away from producers (corporations) and on to consumers, especially middle Australian wage and salary earners. The marketing and sale of seats at the policy table (on energy and environmental policy, for example) has proceeded without a qualm of conscience for the public interest. Politically motivated assaults on the critical independence, and the attempted destruction by stealth, of the Australian Broadcasting Corporation, and even on some individual presenters, have sought to subdue criticism. The slow constriction of critical social research organisations has moved hand in hand with the imposition of corporate values and the wider subversion of the independence of our universities.69 And still, crucially, we find our middle Australians reluctant to surrender their appraisals about what has happened to them. They do not much fancy the reassignment of powers over the fair sharing of national income to abstract, unbridled and supposedly neutral ‘free’ market institutions. Less than 20 per cent of them accept the fraudulent libertarian ‘hydraulic model’70 that would have them believe that strong economies require weak governments. Middle Australians are losing confidence in just those topdown institutions that are most closely associated, in their minds, with economic reform: big business, corporations, multinationals, banks, and ‘reforming’ governments. And they know what they are talking about. In their perceptions and judgements about the several elements of the economic reform program – privatisation, industrial relations ‘reform’, the deregulation of corporations, cuts to public spending, competition policy, and so on – we find our respondents making alert, coherent, grounded and


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reasoned judgements about the causes and effects of economic reform, and about the consequences, for themselves and others, of the actions and inactions of economic actors and governments. Indeed, after some twenty years of reform and ten years of boom conditions to 2000, our panel indicates that public opinion in middle Australia is holding out against economic reform. Middle Australians are rejecting key features of the reform agenda such as enterprise bargaining. With respect to key responsibilities of government, we see that they are not obediently reducing, but instead increasing, their expectations of what government should provide in the way of public goods such as education and health. We may conclude that the frontline politics of economic reform, the attempt to win the hearts and minds of the people, is failing. Our middle Australians seem to sense that economic reform was foisted on the people as an answer to a problem that was defined by corporate leaders with their own interests very much to the fore. A quarter-century has passed since the ground-breaking 1975 report to the Trilateral Commission, The Crisis of Democracy, promoted ‘free’ market economic reform as the ‘one best way’ to solve national problems.71 Since then a once divided and badly coordinated business sector has skilfully managed this New Right program of reform to further its own interests, at the expense of the people. The structural reforms were promoted as a way of saving the nation from its own institutional inertia and from ‘overloaded governments’ groaning under ‘too much complexity’. Economic reform would aggregate interests, generally not those of the people, to create economic efficiency and reduce complexity. The key to success was always that economic reform, and ‘market forces’, should function over the heads of the citizens as an invisible hand that serves as a common denominator of all important ‘political’ problems – and, in the words of one famous economist, as the ‘solvent of knowledge’.72 The hope was that the people would then place their trust in what Giddens calls abstract systems and orient their behaviour accordingly to market and price signals; for the greater good of sound economic management, they would disengage from party politics and forget about politically contested interests.73 Our middle Australia data suggest that, judged in the light of these aims, the reformers’ attempts at persuasion are failing. Why? Because reform itself is more often and accurately seen as a political program driven by corporate or other big interests with discernible goals that are, often or usually, not those of ordinary citizens, of the broad middle class, or of wage and salary earners. Majorities of middle Australians see fairly clearly that wage and salary earners, ‘people in the middle’, ‘small business’, ‘people on

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low incomes’ and ‘ordinary people generally’ are losers from economic reform. Conversely, huge majorities of them see that the winners are ‘people on high incomes’, ‘big business’, ‘big companies’, ‘rich people with assets’, ‘politicians and people close to government’. Boom conditions are supposed to provide an ideal climate for the retreat from politics into a private sphere of contented consumption. Instead, the people increasingly see the visible hand of self-serving elite interests working against them. In only three years to 2000 our trend data point to strengthening, angry, perceptions of violated political trust, with three-quarters of our panel respondents saying that governments of any party cannot be trusted ‘to put the needs of the nation above their own party interests’. Moreover, we see that there is no consensus for a new consensus, which owes more to ‘manufactured consent’ than to any democratic assent of the people. Our study shows that the bipartisan, ‘Lib/Lab’, consensus for reform has struck a reef of still active Left/Right differences. From about 1975, when ‘global’ business interests in the leading OECD countries decided on active intervention to wind back what they saw as the creaking, bloated,74 overloaded, welfare state governments, it was clear that the first strategy would be to coopt the middle-of-the-road social democratic parties into the global ‘free’ market politics. The more pro-business, centre-right parties were already on side, despite what was then stiff opposition, here in Australia, from the small-l, moderate, wet, and economically Keynesian, liberals mistrustful of big business interests. In levering Australia into the Washington consensus, the greatest political challenge for the reformers was to win over what they saw as the Left opposition – the Labor Party and the Australian Council of Trade Unions – into a Lib/Lab duopoly that would ‘give the markets a chance’. Prime Minister Hawke and then Treasurer Keating obliged in 1984 with ‘the Hawke Trilogy’ commitments,75 which quickly delivered a very moderate Labor Party76 into a reform path from which it could not resile. With both major parties committed to the same regime, the people would have nowhere to go. The assumption has been that people would obediently reduce their expectations and adapt to the structurally re-engineered political landscape. To some extent this has succeeded, given that half, only half, of our middle Australians agree as a matter of fact, but not with approval, that ‘it doesn’t really matter which party is in power, in the end things go on much the same’. Reforming politics has moved on, always seeking to build resources for the moulding of public opinion and political choice ahead of time. In the first years of the new century we see a now largely captive political system


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steering reform along the same path, but with new inflections and different forms of simulated political competition. With the underlying legitimacy of the reform now visibly bankrupt, the Howard government has resorted, successfully this time, to a wedge politics of electoral trickery (the contrived ‘children overboard affair’, for example) to secure another three years for the consolidation of economic reform. Where possible, it will be advanced under the cloak of US-sponsored foreign policies of (corporate) globalisation and anti-terrorism. On the Labor side, the same basic strategy of protecting the gains from economic reform for the same power interests will be played out through the articulation of the Third Way. This is composed of policies in the style of Tony Blair, which repackage the Thatcher agenda with the deceptions of a cosmetic ‘humanistic’ commitment to moderate its impacts on families and the household sector.77 Our study suggests that attempts to keep the reform train moving by inflicting a double injury on those most hurt by economic reform with blame-the-victim and wedge politics, and through the media with intellectual remonstrations on the benefits and inevitability of globalisation, are all slowly failing. The lower half (roughly speaking) of the broad middle class are more likely to identify with the many losers rather than the few winners from economic reform. The breakout of the outer suburban Battlers and Hansonites on one side and of the equally disenfranchised middle-class Improvers on the other had, at least until the 2001 elections, slightly unnerved Australia’s New Right political class. It still threatens the end-game of economic reform, which is the political disempowerment of the broad middle class.

7

Judgements on Economic Reform [Economic reform] implies the reconciliation of three issues that cannot be reconciled without fault: these are, first, maintaining the strengthening competitivity [sic] in the rough winds of world economy, second, avoiding sacrifice in terms of social cohesion and solidarity, and, third, doing all this under the conditions and by means of the institutions of free societies. Ralf Dahrendorf 1

What does economic reform do to us? What does it do to the society? Has economic reform, or economic restructuring, or freeing up the markets, or globalisation, gone too far? Or about as far as it needed? Or even not far enough? How do we decide? On what criteria should we decide? Ask those questions and, as with the national conversation, your conversations with your friends will most likely change beat. More probably it will change from a conversation to a clamour of voices, each urging passionately, with the certainty of conviction, that the judgements must be made with an eye to history, or not at all in terms of history but in terms of what the global economy demands of us. Another pragmatic and reasonable friend will try to say that it’s what the people choose that will decide on whether enough is enough. And then someone else again, probably me, will say that the very problem with such wholesale structural change is just that the people cannot decide when enough is enough. But the clamour of voices goes on, and we soon see that there is no consensus about the new consensus. We discover that even the criteria for any possible consensus are essentially contested. We move to judgement on these matters against a background awareness that we live in a world in which the business of the new capitalism is dominated by some 37,000 transnational corporations operating in over 100 countries. Policy has to be made in the knowledge that corporations compete ‘to seek the highest possible profits by locating in low wage, low rent, low tax and low regulation countries and localities’.2 In the face of these forces Australia must, with other nations, respond to a new world economy that is coordinated over our heads for corporate interests by the IMF, the World Bank, the OECD, Moody’s and other credit-rating agencies, the 168

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World Trade Organisation, the Washington insiders, and the Davos meetings of the World Economic Forum. John Braithwaite reminds us that in this environment the state as a whole is ‘both an object as well as subject of regulation’. He points out, for example, that our air safety standards have for years been written by the Boeing Corporation in Seattle, our motor safety standards by the European Commission, and our food standards by the Codex Alimentarius Commission in Rome. From the end of the Cold War to 2001, the central aim of US foreign policy has been to establish what former WTO Director-General Renato Ruggiero called the ‘constitution of a single world economy’.3 Yet in just this new world order Peter Katzenstein, Theda Skocpol, Douglas North, Robert Putnam, Francis Castles and Linda Weiss4 – the list goes on – show that nations respond to these same pressures in hugely different ways, still with considerable ‘relative autonomy’, and with quite different economic and social outcomes for their citizens. Governments still have a great deal of choice, and if they choose, considerable effective power to shape economic and social outcomes for their citizens. Australia adopted all-out deregulated, libertarian, free-market economic rationalism as a choice – as a political choice. What is often less clearly recognised is that Australia was already a very market-oriented democracy before economic restructuring had gathered its full momentum in about 1985. There are no reputable independent comparative indices of structural adjustment and of openness to market forces. Yet from early in the 1980s Australia already had a floating currency, a very open trade policy, and a small public sector, with low rates of public expenditure and overall taxation. Given that some 60 per cent of the population depend directly on wages and salaries,5 the relevant benchmarking must give full weight to the OECD’s judgement that Australia already had, in 1988, an adaptive, flexible and responsive labour market, with a very high job turnover rate. An ‘extremely mobile’ labour force had already made its own large contribution to economic reform. From the beginning of the 1980s to the end of the century, labour productivity per person increased some 30 points and real hourly labour costs fell substantially.6 Over a long period from 1960 to 1996, other figures show Australia’s increase in productivity to have risen by an annual average rate of 2.2 per cent which is considerably better than the United States (1.4 per cent) but not nearly as impressive as other countries like France (3.4 per cent) that have better resisted the free market model.7 Radical reforms to the role of government have already seen Australia, at the end of the century, in second place only to Britain in the magnitude of its program of privatisation.

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An extended list of such benchmarks would show that the AngloAmerican model for economic reform has delivered results that do not compare well, on most basic measures, with those of the more regulated and protected Western European economies. They would help demonstrate that Australians were frogmarched into economic restructuring without an adequate context for evaluation. But then again, in the 1980s the foreign debt looked menacing. Or was it really? We are already climbing up the wrong sand dune, and not just because I am searching for judgements about what has happened to a society or even because the relevance of various economic measures is hotly contested among neo-classical, institutionalist, neo-Keynesian, and libertarian schools of economic thought. The fundamental problem is that there can be no still point for comparison. The search for balance, even for a violated balance, and hence for a point of equilibrium, gets closer to the mark, but it still appeals to a mythic past when things were really in balance. We can be reasonably sure that Australia was a healthier nation before economic restructuring than it is in the first years of the new century. But that is the wrong argument to make here, because it might easily leave one resisting something that must be conceded to friends and critics alike. We Australians have already internalised, adjusted to – in other words, swallowed – changes that seemed, before they occurred, quite unacceptable or impossible to contemplate. With that admission made, the struggle for judgement gets harder still. From here on, we have to look for thresholds and tolerances that are the more elusive – but no less important for our welfare – because they have to do with a dynamic equilibrium, or maybe even several of them, in the marketplace, in politics and in social relations. Each calls out with different messages – perhaps to people who are, as the populists tell us, not listening. We are forced to take big gulps of a future that is to some large degree manufactured and forced upon us, and which, more importantly, we do not understand. In reflecting on the material presented in the preceding chapters, I am proffering some judgements about when, and at what points, too much gulping overstrains what happens in the lungs, in the head, and in the heart. How much is too much? This is the question that I ask now in relation to time, globalisation, morality, legitimacy and trust.

Time For many of our middle Australians and many people of goodwill who have sometimes been its reluctant advocates, the promises of economic reform have now gone sour. We are becoming aware that, delivered in this form,


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economic development fights with quality of life. Our middle Australians talk so much about stress and pressure: they say they do not have ‘time to scratch themselves’, no time for tension-free leisure, not enough ‘quality time’ with their children and friends, and in Craig’s words no ‘reflective time’. In a breaking up of the apparently eternal pattern of ‘more income, more consumption, more career, and more conspicuous consumption’, Ulrich Beck sees something new. In his account I miss the edge of desperation and the sense of acutely constricted choice that we heard around us in the focus groups. Maybe middle-class Germans already belong to another universe?8 But I agree with the answer Beck gives to his own question of what all this might imply – namely, that some kind of temporal warp has disturbed once embedded calculations about utility and well-being and brought non-material factors to bear on the quality of life in a new way. In his words, For one thing, control over a person’s ‘own time’ is valued higher than more income, and more career success, because time is the key that opens the door to the treasures promised by the age of self-determined life: dialogue, friendship, being on one’s own, compassion, fun and so on.9

Clearly we are not looking here at pressures that arise as a simple function of extra hours spent at work or in overtime at work. The penetration of work into social time, the loss of structurally protected leisure in the evenings and at weekends, and a pervasive state of worried preoccupation about work (the mobile phone again!) gets closer to the bone. But whether or not you share my sense of alarm about what is happening to Australia depends in part on your judgements about what economic reform has done to mundane experience, to ordinary time horizons, and to the temporal dimension of quality of life. The new capitalism in Australia, ‘economic reform’ for short, is ‘deeply intertwined’ with personal ‘anxiety about time’.10 Our respondents are telling us, in the poetic words of Zygmunt Bauman, that ‘Nothing that has been binds the present, while the present has but a feeble hold on the future.’11 Much, or indeed ‘everything’, becomes economically contingent on whatever the markets, especially the labour market, will thrust upon you tomorrow, or next week, or at the end of the year, as you think about having children or about planning for retirement. Under these conditions, ‘the shorter the trip, the greater the chance of completing it’. So we shun disappointment ‘by avoiding all long journeys and commitments’.12 Time condenses into a state of perpetual urgency that thins out experience and interferes with the capacity to learn and

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remember. It eats away at the moorings of the self and corrodes our relations with others. This experience is one among many burdens of modernity and also a condition for pluralism. But will the reader agree with my (disputable) accusation that it has been deliberately forced upon us here through economic reform as a key strategy for achieving ever greater increases in labour productivity? For middle Australians, ‘inflation rates, stock exchange or exchange rate vagaries, the volatile fortunes of investments combine to make every hour of life rainy, and shift “control over the future” from the realm of calculation to that of gambling and magic’.13 With Richard Sennett I see something very menacing in what economic reform has done to the coherence of ‘civic time’, to the durable time that most of us need as a precondition for even the most elemental sense of security about our own life course.14 For most middle Australians, economic reform undermines the sense of personal control and is thus a leading social cause of psychological distress.15 For a very small minority of strong swimmers with the necessary personal and economic resources, time is experienced quite differently, with a buzz, as business and as a ‘challenge’. They can make intentional choices in time, and about how to use time to command an open future. In the present circumstances these differences increase mutual incomprehension about the lot of others and expose a divided Australia to still more reform.

Globalisation In the last years of the century ‘economic rationalism’ was losing steam as a public justification for economic reform.16 The same loaded messages about the overriding priority and the inevitability of still more economic reform rely now on the notion of globalisation. But as the sense of economic crisis has abated into a kind of induced normality, middle Australians see who have been the winners and losers from reform. With hindsight and critical awareness they ask themselves questions about vested interests, the role of corporations, and the costs and benefits of reform. In the light of their own experience of some twenty years of economic reform (see Chapter 6) it seems unlikely that globalisation will smoothly take the baton as a new idée force that can command belief in economic reform.17 In the anger of middle Australia towards big business I see emerging a problem that is both the legacy of economic reform and a pointer to its future course and consequences. It is a problem that issues from a program of economic reform that has successfully set out to force a whole


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nation society out of balance – or perhaps, more accurately, from a steady state into a dynamic imbalance. The central aim was always to build up, and then to sustain the momentum of, a forced shift in the burden of coordination from states, governments and the law on the one side to economies, markets and money on the other. The criterion of success has always been the degree to which the people can be made to accept ‘the dull compulsions of the market’ like wind and rain and hence as inevitable and quasi-natural forces. It is in this light that I remember a speech made by former Prime Minister Paul Keating about economic reform and institutional change in which he made a cryptic comment: ‘If you stop pedalling, the bike falls over.’18 Those in the room who thought that economic reform must continue to be the principal goal for public policy felt warmed by this homely metaphor. Perhaps they had not noticed that Keating was talking, both here and more explicitly in an earlier speech on changing Australia’s institutions, about the dynamics of change, and that he was arguing as an apologist and advocate of economic functionalism. He might just as easily have said that the only way to maintain the momentum of reform is to keep the whole national population reeling on the back foot. What I heard in this attempted justification for a general strategy were two admissions. First, he was admitting that there was no consensus for the new consensus and, implicitly, that deliberation is futile and a waste of political time and economic opportunity. The second assumption is that one must keep up the momentum so that all normative questions about what the people really want are always left behind, subordinated in advance by economic functions, and consigned to institutions that have already been ‘reformed’ so that they cannot effectively mobilise resistance to economic reform. Even if we admit that leaders must sometimes commit the rest of us to things that we do not properly understand, we still have much to fear from this dynamic of reform. It stands democracy on its head by making a virtue out of negating past achievements and undermining democratically wellformed national institutions – as, for example, by dismembering the arbitration and award system of income distribution. Our research indicates that after twenty years of economic reform middle Australia does not, on balance, accept the overriding priorities of reform and wants to conserve the hard-won institutional innovations of a successful past. With this in mind I am inclined to agree with Felipe Gonzales, the former Prime Minister of Spain, who says that, for ‘freedom’s children’ in developed nations, security (rather than acquisition) is the primary emotion.19 That is one reason for alarm at the now virtually total success of an earlier wave

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of reform, which sought to destroy the collective memory of the central Canberra policy apparatus along with its capacity for careful, wise, deliberative thought. At the top level of the public service, all the pragmatic nation-building economists, the institution builders and the Improvers have been handed over, bound and gagged, to economic functionalists.20 Policy can only be made by people with a trained incapacity to reason in a way that puts the general interests of the society and its citizens first.21 Another reason is that even those remaining institutions that have survived reform without collapse (the courts, the universities, the churches, the unions, the quality media, and others) are left with only a ‘weak capacity to detect latent problems’ and with even less strength to mobilise awareness in what remains of the public sphere.22 In sounding the disquiet of middle Australia, I read a growing awareness not simply that corporations are the only big winners from reform, but also unease about a reform process that mortgages the future to an ideological abstraction. Citizens are being asked to deliver themselves, their savings and their future, into the hands of a so-called global economy that promises only more uncertainty and more contingency. What the economic functionalists want is an unconditional surrender, not simply to corporations, but to a system, and a system theory, that coordinates markets for goods and services over our heads and without reference to social meanings, intentions, and consequences.23 The people are never told that the economy to which they are delivered, on the admission of even its most ardent advocate, functions as a ‘self-referential system in an over-complex, untransparent non-linear fashion … that is unpredictable’.24 It sentences policy and politics to a rain dance, an empty ritual that can – at best – only ‘calm aggressions and weaken tensions’.25 The (global) economy is ‘incompetent’. It never has been able to ‘include the reproduction of labour (whether as a capacity to work or employment) in its optimizing calculus’.26

Practical Moralities Richard Sennett thinks that the most troubling aspect of the new capitalism’s insistence on ‘flexibility’ has been its impact on ‘personal character’. In reflecting on the Australian experience of economic reform, we hear two emotions that are perhaps one: anger and moral anxiety. Anger is also resentment, and at the same time a window into the troubled ‘ethical value that we place on our own desires and on our relationship with others’.27 As we try to ground judgements about what economic reform may or may not be doing to the practical ethics of middle Australia, we find


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ourselves cast as arbiters of a contest that is not of our making: between a Homo economicus on steroids on the one side, and social improvement on the other. The frontline reformers are predominantly economic functionalists and narrowly trained (business-oriented) neo-classical economists. From that perspective social needs are reduced only to economic wants and competing claims on scarce resources.28 They see the market, prices, and ultimately money, as a neutral mechanism for adjudicating competing claims. For Geoffrey Brennan, Amartya Sen and other highminded scholars, and for the contractarians opposed to vulgar utilitarianism, economic reform vigorously pursued can, and should, be a way of making markets work for the common good. In their view, well-functioning markets draw the motivations of knaves and good people alike into virtuous circles that impose beneficent disciplines equally on each and all. Sen says that we should think of the economy and of markets like speaking, as a means of communication. Who can be against more efficient and effective communication? The experience of middle Australia presented in the foregoing chapters offers a resource for reflection on the reception of these ideas in daily life. Of course, this raises a question. Do the people have to like the market (and economic reform) for it to function effectively? It is certainly possible to argue that the initial justification for reform still holds: that is, in an ever more complex and plural society only the market can ‘reduce complexity’ and solve intractably contradictory political and moral claims by other means. But, does the experience of the last twenty years support that judgement? I think not, and I believe the experience of middle Australia bears this out. Our respondents are telling us that the market is attacking the social proteins they need to function as responsible, mature, persons. They are not collectivists, communitarians or bleeding-heart social visionaries, just modern individuals who know that the quest for personal happiness is intertwined with the rights, responsibilities, needs and moral emotions of others. As reform makes their quest for personal decency more contingent on economic calculation, they seem to cry out in affirmation of Robert Lane’s judgement on the market’s contributions to quality of life: The main issues are not invidiousness of choice, not that the market produces the wrong commodities, not that consumers choose them badly, not that there is ‘producer sovereignty’. The issue is that commodities themselves, and the income to purchase them, are only weakly related to the things that make people happy: autonomy, self-esteem, family felicity, tension-free leisure, friendships. This is the major defect of a want satisfying mechanism.29

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Too much market frustrates the quest for happiness, perhaps even for people who have lots of money. It certainly does for those who are forced to put their friendships, their families, and their values into the furnace, either for the sake of addictive acquisition or to cope with too much economic dependency and exposure. Economic reform is all about feeding the furnace, not the souls of the people. Market society is now a principal cause of depression. Labour market reform is a false exchange that makes payment for work in the wrong currency.30 These are disputable judgements. Others follow. In the rush to pack extra muscle and energy into the markets, the reformers have seized on what Geoffrey Brennan calls ‘motivational neutrality’.31 This is the principle that all motivations – all norms, values, and commitments – should, as far as possible, be exposed to markets and drawn into economic exchanges. It is the practical application of that principle to everyday life that has, in my view, caused such a boiling up of moral anxiety in middle Australia. At one level people feel that exposure to the markets simply means making yourselves captive to corporations that always demand more for less of their employees – to the maximum degree achievable in a deregulated environment. Yet exploitation in this classical sense is only part of the story. A deeper injury is inflicted as ordinary people without reserves of capital are scared stiff, and then when they are forced into it, wounded, by what the economists blithely call trade-offs between things that ought to be quarantined from each other – like milk and meat in a kosher kitchen. They routinely accept that ordinary consumption is about trading off one possibility against another according to your means – but not that the competing motivations of care for family members, for justice, for social recognition, for health, and for security should all be set at neutral par before the market as exchangeable wants. In this moral anxiety I read disquiet and sometimes outrage at the very idea that the Almighty Dollar should be forced ever more deeply into the fine grain of daily life as a ‘solvent of knowledge’, a denominator of value, and an automated code for all significant life choices. This is just what their denunciations of ‘materialism’ and ‘consumerism’ convey. For the economic purists, it is precisely this total exposure to the market that invests choice with the moral authority that comes with forced responsibility for one’s own actions.32 Ordinary people, for the most part, see it as just the opposite, as a forced surrender of practical morality to an unfriendly chaos. Inasmuch as they are part of the debate, they are saying to the economic purists that the ‘free’ market could only ever deliver on its


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moral promise if the advantages of the stronger parties were cancelled before the exchange begins. In practice, the reverse happens: ‘equal’ exposure entrenches unfair advantage and produces a new regime in which, as they tell us, ‘the rich are getting richer and the poor poorer’. In living on the receiving end of reforms that proffer these ideal justifications, middle Australians tend to draw the opposite conclusion: namely that free exposure to the naked power of stronger parties, usually corporations, makes them stronger still at our expense. What they see around them are not rich people imbued with a sense of noblesse oblige, or, in the phrasing of an old American ideal, people for whom ‘the care for external goods should lie on the shoulders … like a light cloak, which can be thrown aside at any moment’.33 The ugly reality of economic reform has taught middle Australia that the level playing field is a moral fiction. In the food chain for the new capitalism they see egoistic and predatory corporate moguls with wonderfully unchained animal spirits at the top and themselves at the bottom. When middle Australians use phrases like ‘changing values’, lost ‘respect’, failing restraints, ‘too much aggression’, ‘dog eat dog’, and ‘everything’s a business’, they know that they are talking about society. As a nation we have always had rather weak concepts of society, a feeble sense of civil society and of human rights, and a somewhat mechanistic (Benthamite) sense of public morality and distributional justice.34 And yet the moral anxiety of middle Australia is unmistakably social in its phrasing and articulation. Focusing on the impacts of reform on communities, families, work relations, and general moral standards, we are forced to make difficult judgements. Rapid structural change always loosens conventional standards. So is the moral anxiety just moral panic, or worse, reproachful disappointment that one’s own standards no longer have the power to elicit the deference and obedience of others? For the helpless few, this may be the case. But for the great majority, there is an awareness that we live in a plural society in which there can be no ‘one best way’ of living a good life, and no trump cards to settle differences over commitments, needs, duties and obligations. In other words they know, without necessarily ever having given a thought to what philosophers, social theorists and sociologists call high modernity, that they live in a quite changed world. In this world, as ‘freedom’s children’, they know that personal autonomy is an increasingly contingent, fragile and provisional achievement. Although moral anxiety has no single source, much of it is a revolt against what they see as the wilful damage that economic engineering and economic correctness do to the ‘values ecology’ of modern society. They know that violence is done when a social relationship is forcibly reduced to a contract, and they know that the strain of strategic

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and instrumental calculation requires support at another level with more civility, more connection, more mutually respectful reciprocity, and so on. I think that the experience of reform has given them an intuition that forced adaptation to an economic functionalism without limits signals the burning up of precisely those non-renewable social resources that hold us together in a nation society as friendly strangers and citizens.

Legitimacy (and Trust) Somewhere in ancient memory there is a popular song with a chorus line proclaiming that ‘You can’t get to heaven on a Berlei bra, ’cos a Berlei bra won’t stretch that far.’ The same goes for trust in governments. Our middle Australians are generally not utopian communitarians who want to project the trust we experience in personal relationships onto politicians and governments. Trust as a passion certainly cannot stretch that far!35 And it is this knowledge that makes us so nervous about the very different form of impersonal trust and reliance on others that we invest in political and economic structures, and here, more importantly, in the changed relationship between the two. They know that trust in politicians, in economic reform and in the efficacy of markets are means of aggregating interests and of dealing with uncertainty in a very complex world. In accepting the promises of reform, most of us know that we are making our own desires, tastes, expectations and choices contingent on limitations that others will impose in our name. No wonder we are nervous about what the literature calls political agency.36 Inasmuch as they have assented to economic reform, middle Australians have committed themselves to a blind date with a future that they know to be largely unpredictable and, to some substantial degree, uncontrollable. We do this in a historical and political context that provides its own background referents for the difficult judgement about trust (fides). And so middle Australians ask: to what extent is reform being done for me, and with me, in good faith, with my interests in mind? Beyond what point does my trust make me a gullible dupe and deliver me into the hands of other more powerful people, cynics, who want to take me for a ride – one from which I cannot later resile? When, in Max Weber’s elegant formulation, does legitimate domination (Herrschaft) cross over into arbitrary power (Macht)?37 Every important theory of social contract from John Locke to the present day struggles with this problem. In seeking to ground some answers in middle Australia’s experience of economic reform, three considerations come to mind. As we have noted,


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our history gives the lie to the American libertarian fiction that in order to have strong markets we need weak states. We seem to know in our bones that effective, competent individuals and strong societies need support in several dimensions at once, from strong markets, strong (good) government, and strong relationships with others.38 Secondly, we read in the experience of middle Australia what may well be a perverse effect of the unrelenting insistence on economic reform over a period of some twenty years. The reform rhetoric has been so insistent that, instead of relieving government of what people still take to be its legitimate responsibilities, it may instead have drawn added popular attention to political agency. As our ministers and prime ministers seem to sense, it could well have loaded them up with an extra onus of justification to demonstrate that reform delivers on its promises. Thirdly, in the responses of middle Australia to what is now the burning question of ‘why people don’t trust government?’ we discern a splitting apart of two quite different and indeed opposing theories of legitimacy.39 One works on the old bottom-up principles of legitimate representative government, the newer one on a minimalist top-down theory of legitimacy. In response to a whole range of questions, we find the expectations of middle Australians still grounded in basic notions of representative democracy. They properly assume that politicians are their representatives who will act, however imperfectly, for the people and on their behalf. In the difficult work of aggregating interests and making complex decisions, the people believe, or want to believe, that they are the macro-subject of political choices, and the politicians are the recipients and objects of the electoral choices and political decisions of the people. Those of us who have walked Parliament House and jostled with some of the reformers in the wider community hear something opposite, namely a view in which government itself appears to the elites as another branch of management. Extended as a working principle of a new politics for a new capitalism, this minimalist theory of legitimacy assumes that, if you can induce them to vote for you, you have a mandate to do anything you want to them. The underlying assumption – sometimes a conscientiously held conviction – is that the reformers themselves are the authors, originators, and subjects of a new politics of reform designed to induce compliance with their own applications of economic reform. They see themselves as the ‘new masters of the universe’.40 At the political level reform is, in their view, all about winning compliance for a self-regulating dynamic economic system. Success is measured by the degree to which the opinions, motivations and political choices of middle Australia fall in with price and market signals.

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In my experience the very idea that markets and governments belong to the people and ought to serve them is met with various degrees of derision, contempt and outright hostility. In the unsteady force field between these two competing principles of legitimacy there are – at least – three tendencies that are used below as prompts for some further questions and judgements. First, in reviewing the experience of economic reform, what inferences should we draw from the relationship between failing political trust and the perception that big business has too much power? How does this sit with middle Australia’s ambivalence towards economic reform? In this aspect of the experience I read an underlying tension – a tug of war – between opposing claims on both markets and the political system. For the people, economic reform is nearly always interpreted normatively as either an appeal to, or a betrayal of, Australia’s collective faith in national economic development. As I have argued, Australia is a generally very modern and distinctively Benthamite society that has placed great faith, for the most part justified, in (pragmatic) nation-building as a project and a goal.41 It is in this context that middle Australia judges the twenty-year push for economic reform. The still uncontroversial interpretation of the material presented here is that this effort to ‘sell’ economic reform as economic development and as nation-building is running out of steam and generating more scepticism than confidence. In my view, the corporate elites and spindoctors in both major political parties know this and are now trying to consolidate gains over the citizenry by steering their boats into a Blair-style Third Way. The more controversial interpretation rests on the judgement that reform will not ‘sell’ because middle Australia understands that big corporations now commonly define the society only as an external environment, an idiot host, a frustrating obstacle or an enemy. Middle Australia certainly knows that too many corporations refuse to pay tax, and actively subvert government where it suits them.42 A great many middle Australians – I will not say ‘most’ – understand correctly that the new breed of reformers – the corporate chiefs, the economic policy-makers, the think-tank opinion leaders, big media interests, the credit-rating agencies and peak business organisations – have no attachment to the nation or to its past, and no sense of duty, accountability or obligation to the people. Indeed, in the routine comments of middle Australians that we are ‘becoming too much like America’, I read an angry suspicion that reform is mostly about delivering people to a (bipartisan) ‘government of (big) business, by (big) business, for (big) business that is busy fooling all of the people all of the time’ – or at least trying to do so, again, to the maximum achievable degree. (These are especially harrowing judgements for a person who has at first hand deeply


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appreciated much of what the United States has stood for in the not so distant past.) Secondly, another judgement arises over the more specific meaning and impact of institutional reform. Middle Australians do not talk much about institutions. Yet, as we have seen, they know what is at stake when they are asked about their confidence in various institutions. In a less clear-cut way, we find them generally inclined to favour the old national institutions over the new market-based creatures of reform (privatisation, deregulation, competition policy, user-pays, cuts to the public sector, tax reform and the like). We find that most middle Australians think that governments can (and should) do ‘quite a bit’, and probably much more, to reduce distributional inequalities, rein in big business, support communities, moderate wages, and provide basic services like health and education. But how should we judge their manifest anger over the failure of governments to deliver in these and other areas? In laying most of the blame for ‘what is happening to middle Australia’ upon politicians, governments and big business, we see a preference for setting the responsibility for failure on systems rather than on more clearly identifiable subjects such as immigrants or dole-bludgers. It is possible – but not plausible – to read this tendency as some kind of victory for reform, namely as a cognitive acceptance of (or even the surrender of political agency to) impersonal system-like forces. Again, rather more accusingly, I read in these denunciations a revolt, at least at an intuitive and emotional level, against the master strategy of economic reform, namely functional differentiation. I think Australians understand that institutional reform is generally about reassigning power from representative institutions, citizens and recognisable agents to systems that are not even accountable in principle, let alone in practice. It is really about destroying citizenship as a modality of politics. Third, another robust and uncontroversial finding is that middle Australia has a clear view on the winners and losers from economic reform. They know that the people have been the losers and corporations the big winners. We should read this as an indication that Australia’s timehonoured commitment to ‘a fair go’ and to distributional justice is actively producing legitimate resentment towards economic reform. In relation to international evidence we see here in Australia that rising economic inequality brings on a loss of confidence in government, and that this is objectively confirmed with systematic variations of perception among winners and losers.43 This leads to a tentative judgement that deliberately induced economic inequality is seen here more as the result of corporate power, exploitation

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and greed than as the natural forces of a new global order. This power has not yet been neutralised and naturalised, by corporate elites, political elites – or by the media. International evidence demonstrates that the huge influence of the media, and of television in particular, is one of the most likely motors for the failure of trust in governments.44 Given that only governments can regulate corporations, the media war on government at all levels is one of the most reliable elite strategies for forcing increased dependence of whole national populations on economies, markets and money – in short, on corporations. Right across the media, from the editorial pages of The Australian Financial Review and The Australian through all the weekend supplements on money, markets and personal investment, and through commercial television, talkback radio and tabloid journalism, we read the same push to fascinate and engage a whole population with markets, business and money. In the reactions of middle Australia to the media and to what they identify with the superficially empty clichés of ‘greed’, ‘consumerism’ and ‘materialism’, we may discern a more subterranean resistance to ‘business culture’. I read here at least some hopeful suggestions that economic reform, rather like the 2000 Olympic Games on American television, has been so intrusive and so ‘over-packaged and overproduced’ that the selling of it has backfired.45

Finally … Middle Australians fear that we are becoming too much like the United States. Indeed, economic reform came to us mainly from Washington. We squander our own strengths by taking the made-in-America model of structural adjustment as a sufficient model for change. Libertarianism is the formative principle of America’s institutions. It is largely incommensurate with ours – and with those of most other modern democracies. The United States has been an inspiration to the world and a noble civilisation. Yet more than a hundred and fifty years ago de Tocqueville, writing on Democracy in America, warned that ‘Americans battled individualism, the fruit of equality, with freedom, and they have vanquished it.’46 In adopting the American model of libertarian economic reform, we have endangered our own coherence and integrity as a nation and weakened national solidarity. Reform has produced an unbridgeable moral distance between the people and the new apparatus of corporate power that runs the new capitalism – the predictable consequence of adopting American ‘elite’ republican federalism. Reform was meant to kill the public and the citizen, and to produce in their place only a ‘programmed individualism’ (programmed


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by incentives and prices).47 With economic reform has come a thinning of democracy and an induced retreat of the people into a purely private sphere of caring only for one’s own, of mood states, of consumption, of recuperation, therapy, and incommunicable anger at what is being done to them. On the other side of reform, government has given up on the people, destroyed the institutional conduits, pulled up the ladders and retreated into the corporate boardrooms. Our society has lost its capacity to separate us and to bind us together as it should. Economic reform only knows how to do more of the same. People have been programmed as manipulable units of production, devalued ones at that, for the new corporate capitalism, and so far as the reformers are concerned nothing more and nothing less than that. In hindsight, one can see that the relationship between economics and society has followed a clear trajectory. For most of the century preceding economic reform, practical politics reconciled economic exploitation with nation-building to produce one of the most peaceful, plural and dynamic democracies in the world. The economy was always seen, with the state, as one of two coordinating structures of society and managed to that purpose. Twenty years ago, as economic rationalism took hold in Canberra, society came to be seen as some kind of ‘stubbornly resisting sludge through which one must drive the economy’.48 Now, in the first years of this century, in the cult of performance, adaptation and flexibility we are made hostage to the insane idea that society is an expendable fuel for corporations. No wonder middle Australia is angry! Ordinary people know in their bones that mainstream politics, and the politics of economic reform in particular, is descending into the evil art of persuading people to accept policies that are not in their interest. We should not be surprised that a nation of some twenty million people feeling alone in the world should rather too fearfully follow some of the great movements of history. This is what we did in adopting the original version of libertarian free market economic reform. It was first operationalised as a political program in the 1975 report to the Trilateral Commission (the forerunner of the World Economic Forum), The Crisis of Democracy.49 It was in the context of the Cold War that we were first persuaded to accept the libertarian model as the best remedy for the sluggishness of most Western capitalist economies. More market requires less state. Inasmuch as that means less democracy, too bad! The way to fix democracy, and social democracy especially, was to have less of it. The single priority must be to let invigorated markets ‘reduce complexity’ and save government from too much ‘decision overload’, from too many ‘demands’, and, as we were led to

184


believe, from its own incompetence. What we have not noticed is that most of the small Western European nations that have most successfully resisted le modèle américain have enjoyed the fruits of modernity (prosperity, pluralism, social justice) with many fewer of the social costs of reform (unemployment, economic misery, destroyed communities, meaninglessness, personal instability, chronic insecurity, and reactive religious, racial and social politics). Modernity, pluralism and democracy are not well-served by libertarian ideology. Now that economic reform appears to have run its full term, the nation reflects on what it has adopted with increasing misgivings. The international comparative evidence shows that economic reform has for the most part failed in its own terms. Moreover in the developed Trilateral countries it has turned supposedly ungovernable democracies into ‘disaffected democracies’.50 They may be even more ungovernable now by reason of what was done to them – because people don’t trust governments any more. Fortunately, we have kept hold of some good sense: we still hold government responsible for what we think it ought to do, not to us, but for us and for society. We still want active public investment, better public infrastructure, full employment, economic security and, probably, a more effective redistribution of incomes. In short, an effective moderation of economic outcomes in the public interest. There may still be good reason to hope that the epilogue for economic reform is being written in an unexpected way. As economic rationalism, now economic functionalism, gradually began to reinvent itself as functional inevitability and an imperative for adaptation to the new global economy, we were all dragged along for a little while. It worked to some degree, inasmuch as we believed this to be a global system with its own, albeit invisible, constitution – though admittedly the combined forces of the IMF, the WTO, the World Bank, Davos, and the OECD were never quite invisible. But now since September 11 something else is happening. The United States has gone mad.51 It is demonstrating for all with eyes to see that libertarian economic reform was its preferred foreign policy for the ten years after the fall of the Soviet empire and for as long as it seemed to promise global – that is, American – economic hegemony. Until George W. Bush mistook himself as the new Jedi master of the universe and decided that a grab for more oil52 and a war on the Third World would be more popular.53 The conservative Australian prime minister who first took up the baton for economic reform now publicly warns of the dangers of a tooslavish following of ‘our great and powerful friend’ into an all too probable situation where ‘all the good assets in Australia are owned by ten foreign


185

corporations’.54 As the United States chose to press its own interests through agreements on intellectual property rights, Australia followed to the letter and at great cost to itself.55 The United States responded by abrogating still more of its commitments to world free trade with huge agricultural subsidies to its own farmers that are extremely damaging to Australia. It has refused to sign the Kyoto agreement, forced Australia to do the same, withdrawn from (or opposed) arms control, withdrawn from criminal accountability treaties, and from the international convention for the suppression of terrorist bombings;56 and it has seriously compromised Australia’s larger regional interests by forcing us, even before September 11, into a new cold war encirclement of China. The United States itself is now visibly the principal threat to world peace and international order (the lust for war is deeply frightening). Without credible authority at the world level, economic reform loses legitimacy as a governing principle at the national level. This leaves economic reform and the interests of corporations exposed, for all who wish to understand, as the naked power of big business and nothing more. No one can say how the bundle will unravel from here on. We may yet return to constructive peaceful nation-building with and for the people. But as we try to read the future, it is as well to remember that the chains of political cause and effect normally over-stretch historical memory. For example, in an instructive piece written ‘against the tyranny of the market’, the late French sociologist Pierre Bourdieu reminds us that a riot in the quiet suburbs of Lyon in 1990 was brought on by the housing policy of Giscard d’Estaing applied some twenty years before.57 So it will be with economic reform in Australia. Moreover as a twenty year old notion of ‘legitimation crisis’58 sinks quietly into the history of ideas, its practical impact will be felt for perhaps decades to come, across a whole range of issues that will be thrown up by what some of us hope will be the avenging return of constructive politics.

Appendix A: Chronology of Economic Reform (Prepared with the assistance of Ben Spies-Butcher)

Elections, Major Announcements and Events

Public Sector

November 11: Majority Whitlam Labor Government brought down by ‘constitutional coup’. Fraser Coalition Government elected in landslide.

Hayden Budget: cuts to public spending, and company tax introduced.

1973 1974 1975

1976

Report of the Coombs Royal Commission on Australian Government Administration, largely ignored by Fraser Liberal–National Government. December: Department of Treasury split in two. Department of Finance created with responsibility for overseeing total Commonwealth expenditure.

1979 1981 1982

1983

March: Federal election. Hawke Labor Victory (First Hawke Government) Unemployment hits 8.4 per cent for the year, reaching a post-war peak.

1984

December: Federal election. Labor re-elected (Second Hawke Government).

1985

186

May: Creation of the Senior Executive Service.

Appendix A

Budgets, Tax and Monetary Policy

Deregulation, Privatisation and Free Trade

187

Industrial Relations and Employment

July: 25% across-the-board tariff cuts announced as government policy.

Budget cuts and sharp tax increases introduced (1979–80). Campbell Report recommends financial deregulation. ‘Wages pause’ secured by Fraser Government to halt wage increases (1982–83). December: Exchange rate ‘floated’. Partial deregulation of the Banking Industry.

February: Accord between Labor Party and Australian Council of Trade Unions on economic policy.

February: Seventeen foreign banks given licences to trade in Australia.

Accord Mark II between Labor Government and ACTU: revision of Accord to allow discounting of wages and ongoing wage restraint.

Hawke ‘Trilogy’: pre-election promise to halt increases in total taxation, expenditure and budget deficits (each as a percentage of GDP) throughout its next term. May: Treasurer’s Economic Statement began the process of massive expenditure cuts ($1.25 billion). July: ‘Tax Summit’ convened by Hawke Government.

188

Appendixes Elections, Major Announcements and Events

1986

May 14: Federal Treasurer makes ‘Banana Republic’ speech. December: US credit rating agency Standard & Poors drops Australia’s credit rating from AAA to AA+.

1987

Federal election. Labor re-elected (Third Hawke Government). October: Stock market crash.

1988

Interest rates peak. Interest rates for 90-day bank bills average 18.30 per cent p.a. (1988/89).

1989

December: Standard & Poor’s downgrades Australia’s credit rating from AA+ to AA.

1990

March: Federal election. Labor re-elected (Fourth Hawke Government). August 21: Treasurer, Paul Keating, admits Australia is in a recession but claims it is ‘a recession Australia had to have’. The fall of the high-profile corporate ‘entrepreneurs’, including Skase, Bond, Connell, Elliott, and Herscu, in spectacular crashes, most involving criminal charges.

1991

December: Paul Keating becomes Prime Minister after successfully challenging Bob Hawke for the leadership of the Labor Party.

1992

1993

1994

March: Federal election. Keating wins the ‘unwinnable’ election against Hewson’s Coalition. The introduction of a goods and services tax (GST) is the central issue.

Public Sector

July: ‘Bastille Day’ restructuring of the Commonwealth Public Service into ‘megadepartments’.

September: Report of the Senate Standing Committee on Finance and Public Administration’s Enquiry into the Development of the Senior Executive Service gave bipartisan support for existing reforms and ‘rationalisations’. October: Special Premiers’ Conference, public promotion of the ‘New Federalism’. Mooted gradual shedding of federal government program and service functions to the state governments.

Appendix A Budgets, Tax and Monetary Policy


189

Industrial Relations and Employment April–May: Two-tier wages system introduced, with second-tier wage increases conditional on productivity increases.

HECS fees introduced for university students. User-pays principle adopted. Company tax rate cut from 49 to 39 per cent.

Across-the-board tariff reductions as part of ‘May economic statement’ begin.

March: Award restructuringstructural efficiency principle replaces two-tier system.

Telstra and Australia Post corporatised, now to be run according to a ‘for-profit’ principle. Partial deregulation of the banking industry.

Industrial Relations Act (1988) comes into effect. Certified agreements introduced.

October: End of the two-airline policy, competition allowed in domestic aviation market.

February: Abolition of minimum price scheme for wool. March: Across-the-board tariff cuts continue as part of the ‘Building a competitive Australia’ statement. Commonwealth bank privatised in three stages (1991, 1993 and 1996).

October: Enterprise bargaining principle introduced by Australian Industrial Relations Commission.

Regulation of foreign banks relaxed. Requirement for 50 per cent Australian equity in new mines abolished. Introduction of competition into telecommunications, with Optus beginning operations as second telecommunications carrier. Qantas privatised after taking over Australian Airlines (1992–95). Company tax rate cut from 39 to 33 per cent (increased again to 36 per cent in June 1995).

March: Quotas on textiles, clothing and footwear (TCF) and manufacturing imports eliminated. August: ‘Hilmer Report’ into National Competition Policy delivered. Airport privatisation. Legislation passed to allow leasehold sale of all Commonwealth airports.

December: Non-union agreements introduced as part of the Industrial Relations Reform Act.

190


Public Sector

1996

March: Federal election. Howard Coalition Government elected in landslide, claiming 93 of 148 lower house seats. (First Howard Ministry). Pauline Hanson elected to Federal Parliament.

Max ‘The Axe’ Moore-Wilton, appointed as secretary of Prime Minister and Cabinet, oversees the dismissal of more than 10,000 public servants including a record six heads of departments; Department of Housing and Regional Development and Department of Tourism abolished.

1997

March: Pauline Hanson’s One Nation Party formed.

1998

March: Federal election. Coalition re-elected with only 49.02 per cent of the two-party preferred vote (Second Howard Ministry). Queensland election. One Nation polls 22.68 per cent, winning 11 seats.

1995

Budget cuts reduce employment in the public sector by 9000.



191


January: GATS (General Agreement on Trade in Services) comes into effect. April: Council of Australian Governments (COAG) agrees to implement national competition policy package. November: Australian Competition and Consumer Commission (ACCC) and National Competition Council (NCC) established. Contracts introduced into the private health system. August: Budget cuts of $4 billion introduced in 1996/7 Budget by Treasurer, Peter Costello, cuts equal $7.2 billion over two years. ‘Inflation First’ principle adopted by the Reserve Bank. Formal inflation target of 2–3 per cent introduced.

November: Australian National (rail) privatised and Commonwealth divests itself of its share in National Rail.

November: Reith’s Workplace Relations Act passed. Individual contracts and non-union, collective agreements introduced. Access to unemployment benfits reduced. Activity test tightened with expected savings of $2.6 billion over four years.

January: Commonwealth Dental Scheme, providing free dental treatment for pensioners, abolished. January: HECS fees increased to better reflect ‘actual costs’. April: Wallis Inquiry into the Financial and Banking system completed. Full competition introduced in telecommunications; part sale of Telstra, 33 per cent in private hands (Dec. 1996–Nov. 1997); sale of mobile phone spectrum.

Award ‘simplification’ process strips awards back to a minimum of protection. January: Changes to the Trade Practices Act ban secondary boycotts by unions. Work-for-the-dole introduced. Young unemployed Australians can be forced to work for their dole payment or risk losing their entitlement. Welfare reforms: ‘competitive market’ introduced for the provision of employment services. Private and nonprofit organisations compete with governments to provide employment service and benefits. April–June: Waterfront dispute: 1400 wharf workers are dismissed without notice from their jobs at Patrick Stevedores and replaced with non-union labour, sparking a two-month-long industrial dispute.

192


1999

2000

May: Standard & Poor’s upgrades Australia’s credit rating from AA to AA+.

Public Sector



August: ‘Ralph Report’ on business taxation handed down. Recommends large cuts to capital gains tax and company tax.

October: Telstra privatisation (second stage): 49 per cent now in private hands. 30 per cent rebate for those with private health insurance introduced.

July: Taxation reform. Wholesale sales tax abolished and replaced with a 10 per cent goods and services tax. Company tax cut from 36 to 34 per cent. Biggest personal income tax cuts in history introduced.

‘Lifetime cover’ introduced, effectively increasing private health premiums for those who take out cover after turning 35, forces more young people into private system.


193

Appendix B: Methods and Procedures: Middle Australia Project

The sample consists of 403 ‘middle Australians’ in five Australian capital cities: Sydney, Brisbane, Adelaide, Melbourne, and Canberra. The respondents were randomly selected from a sub-set of the 9483 ABS Collection Districts (CDs) used by R. Gregory and B. Hunter for their study of changes in income distributions in urban Australia from 1976 to 1991.1 The sub-set consists of CDs with average household incomes below the 90th percentile and above the 20th percentile. Indexed to year 2000 prices this represents an average household income cut off of $57,541 for the 90th percentile and $36,483 for the 20th. Approximately one-third were selected from CDs in which household incomes had been rising steeply in the period from 1976 to 1991. ‘Rising steeply’ here means CDs in which average household income had risen over that period by more than one standard deviation from the mean overall change in household income. Conversely, another third of the sample were taken from CDs at the other end of the range, in which household income had been declining by more than one standard deviation. The steady group were taken from a like number of ‘middle’ CDs for which incomes had not risen or fallen more than 0.2 of a standard deviation on this criterion. Owing to an error, 53 cases were excluded from comparisons of perceptions among the three groups (rising, steady, falling). Two-thirds of the respondents were located in Sydney for reasons of cost in recruiting and sending interviewers to other states. The remaining onethird were roughly evenly divided among South Australia, Queensland, the Australian Capital Territory and Victoria. This makes the sample heavily biased towards the experience of the residents of Sydney. Although a number of items in the questionnaire and the interview are designed to establish the relation between imputed average income movements for CDs and the self-reported income levels and income movements of individuals and households within the sample, the main purpose was to build internal rather than external comparisons. Most of the questions used were reproduced from the British Social Attitudes Survey, the National Social Science 194

Appendix B

195

Survey and Australian Institute of Family Studies living standards study, with some additions. Once the CDs were selected, streets were chosen within them, and a list of phone numbers for each street was generated from the Telstra White Pages. These were then telephoned at random until the quota of participants for each CD was reached. Respondents were asked by phone whether they would be willing to undertake a self-completion questionnaire and thereafter a face-to-face interview. A standard pro-forma was used to describe the survey, and respondents were assured that it was a strictly confidential university-based project and that the data would not be used for commercial or government purposes. We explained that the survey would involve the completion of a large questionnaire and a face-to-face interview of approximately one hour duration. The acceptance rate was approximately one in five, indicating that there has been a fairly high degree of voluntarism in the selection process. This is not surprising given that the respondents were asked to give approximately three hours of time – about two hours for the questionnaire and one hour for the interview. Only three of the respondents failed to complete the questionnaire and interview set. The interviewers were instructed how to check the self-completion questionnaire with the respondent and on how to administer the MAP interview. Interviewers and researchers working on the project were required to make an ‘Ethical Requirements Declaration’, agreeing that no name or identifying characteristics of any of the respondents would be disclosed to anyone outside the research team; that lists of names and addresses and completed research materials would be stored in a secure place; and that procedures for the protection of confidentiality would be strictly respected. Each interviewer was assigned three CDs: one in which average incomes had been falling, one in which they had been steady, and one in which they had risen. Upon securing the agreement of the respondent to participate in the survey, the self-completion questionnaire was posted to them. The interviewers telephoned the respondents to arrange a time to conduct the interviews in the homes of the respondents. At the time of the interview, the completed questionnaire was collected and checked with each respondent, by the interviewer, in order to minimise missed answers. When it was not possible to check the questionnaire at the time of the interview, interviewers were instructed to telephone the respondents as soon as possible to ask them if they would answer any questions they had missed. Virtually all the questionnaires and interviews were completed in a three-month period from September to December of 1996, although a small number were returned in early 1997.

196

Appendixes

In 1996 four preliminary focus groups were conducted in Sydney in order to define major themes for the questionnaire and interview. In 2000 six ‘exit’ focus groups were conducted, always in the home of one of the respondents, to check and fill out the meaning of the survey responses and to fine-tune further data analyses. Two were conducted in sample CDs with falling incomes, two in CDs with steady incomes, and two in CDs with rising incomes. This covered a broad range of suburban areas of Sydney. Prohibitive cost was the only reason for not conducting focus groups in other capital cities. The names of the respondents have been heavily disguised to protect confidentiality. The names of particular suburbs, streets, and places of work, and in a couple of cases occupations, have been withheld for the same reason. A follow-up questionnaire was collected in the last two months of 1999 and early 2000, with a response rate of 50 per cent. No interview was conducted for the follow-up survey. The responses to both surveys from this subset of 198 middle Australians were combined to form a small ‘panel’ data set. This data set is used to examine trends in attitudes over the last few years since the initial survey was conducted. However, there are some significant differences between the characteristics of the panel data set and the original data set, making comparisons between the two difficult without detailed statistical analysis and weighting. Therefore, when the panel data are used in this book, it is only as suggestive of further trends found in the analysis of the complete 1996 sample.

Appendix C: Supplementary Tables

Table C.1: Household income inequality, relative to national median income Per cent of national median Country

Year

United States 1991 Japan 1992 Germany*** 1989 France 1984 Italy 1991 United Kingdom 1991 Canada 1991 Australia 1989 Austria 1987 Belgium 1992 Denmark 1992 Finland 1991 Ireland 1987 Netherlands 1991 New Zealand 1987–88 Norway 1991 Portugal – Spain 1990 Sweden 1992 Switzerland 1982 Average excluding US –

10th percentile*

90th Ratio of 90th to percentile* 10th percentile

Gini coefficient**

36 46 54 55 56 44 47 45 56 58 54 57 50 57 54 56 – 49 57 54

208 192 172 193 176 206 183 183 187 163 155 158 209 173 187 158 – 198 159 185

5.78 4.17 3.21 3.48 3.14 4.67 3.90 4.30 3.34 2.79 2.86 2.75 4.18 3.05 3.46 2.80 – 4.04 2.78 3.43

0.343 0.315 0.261 0.294 0.255 0.335 0.285 0.308 – 0.230 0.239 0.223 0.328 0.249 – 0.233 – 0.306 0.229 0.311

51

186

3.73

0.290

* The 10th percentile household receives a higher income than 10% of the population, but less than 90% of the population; the 90th percentile household receives a higher income than 90% of the population, but less than 10% of the population. ** The Gini coefficient equals 0 when income is perfectly equally distributed; it equals 1 when all income is concentrated at the top of the income distribution. *** Western Germany. Source: Reproduced from Lawrence Mishel, Jared Bernstein and John Schmitt, The State of Working America, 1998–99, Economic Policy Institute, ILR Press, Ithaca, NY.

197

–20

–52

167 115

–121

475 354

20–24

–91

509 418

–75

658 483

25–34

–86

870 784

10

694 704

35–44

Age group

–80

1,216 1,136

12

665 677

45–54

–93

1,365 1,272

–50

573 523

55–60

–111

1,414 1,303

–70

188 118

60+

Source: Bob Gregory, ‘Competing with Dad: Changes in Intergenerational Distribution of Male Labour Market Income,’ Bob Gregory, paper prepared for the Conference ‘Income Support, Labour Markets and Behaviour: A Research Agenda’, 24–25 November 1998.

Difference

43 23

–79

Difference

Accumulated income ($000s) 1976 1996

169 90

Weekly income ($) 1976 1996

15–19

Labour market income, per capita

Table C.2: Male labour market incomes, Australia, 1976 to 1996

Appendix C

199

Table C.3: Comparison of Middle Australia Project and National Social Science Survey data, per cent

Sector Private sector Commonwealth government State government Self-employed Employment status Working full-time for pay Working part-time for pay Working but not at work Unemployed, looking for work Retired School or university Keeping house Income (per annum) None $1 to $3,000 $3,001 to $5,000 $5,001 to $10,000 $10,001 to $15,000 $15,001 to $20,000 $20,001 to $25,000 $25,001 to $30,000 $30,001 to $35,000 $35,001 to $40,000 $40,001 to $45,000 $45,001 to $50,000 $50,001 to $60,000 $60,001 to $70,000 $70,001 to $80,000 $80,001 to $90,000 $90,001 to $100,000 $100,001 to $150,000 $150,001 to $250,000 More than $250,000

1996

MAP 1996 Panel

1999–2000 Panel

NSSS 1995

44 14 26 15 (n = 301)

40 15 27 18 (n = 143)

47 16 26 12 (n = 109)

48 11 25 17 (n = 1617)

46 17 3 4 14 5 11 (n = 363)

n.a.*

n.a.*

47 12 4 2 20 1 15 (n = 1550)

3.2 3.8 5.9 15.1 10.2 5.9 7.0 7.0 7.0 5.9 4.8 5.4 5.9 4.3 1.6 1.6 1.6 2.2 1.6 0.0 (n = 370)

3.2 3.0 3.5 12.2 8.6 7.0 8.1 7.6 9.5 8.4 6.8 4.6 5.4 4.1 1.9 0.8 1.1 2.7 1.1 0.5 (n = 186)

2.1 3.7 2.1 12.6 8.4 6.8 8.4 7.9 9.9 8.4 4.2 2.1 5.2 7.9 2.6 2.1 1.0 3.7 1.0 0.0 (n = 191)

10.2 2.5 2.4 5.8 6.7 9.3 10.4 10.4 9.3 9.1 7.3 4.1 5.1 2.3 1.6 0.8 0.6 1.1 0.5 0.3 (n = 1801) continued

200

Appendixes

Table C.3: continued

Gender Female Male Age 18–24 25–34 35–44 45–54 55–64 65 and over Education School Primary or less Incomplete high school High school Tertiary Vocational qualification Diploma Bachelor degree Higher degree Occupation Higher professional Higher administrator Technical and lower professional Clerical Sales Service Skilled worker Semi-skilled worker Unskilled worker Farm

1996

MAP 1996 Panel

1999–2000 Panel

54 46 (n = 390)

56 44 (n = 194)

56 44 (n = 194)

51 49

8 25 26 16 11 14 (n = 398)

4 15 26 21 14 20 (n = 93)

1 11 24 24 14 26 (n = 113)

5 15 23 21 15 21

4 32 64 (n = 403)

n.a.

n.a.

5 55 41 (n = 2,269)

25 11 28 16 (n = 403) 31.0 7.7 17.1 16.5 8.4 6.5 3.9 5.8 3.2 0.0 (n = 310)

NSSS 1995

37 13 19 6 (n = 2,338) 32.7 8.2 17.7 19.7 8.2 4.1 1.4 3.4 4.8 0.0 (n = 147)

28.5 9.9 25.0 20.3 7.0 2.9 3.5 1.2 1.7 0.0 (n = 172)

17.4 7.9 18.2 18.3 9.1 5.9 9.1 6.1 3.8 4.1 (n=1,674)

Table excludes those not in paid employment and missing cases. Totals vary from 100 due to rounding. * Questions on employment status were operationalised differently in the second survey, making direct comparison invalid.

3.5 3.5 4.0 4.8 4.3 4.5 5.6 6.7 9.9 8.5 7.9 8.0 7.8 6.8 5.7 7.0 9.5 10.5 10.7 9.2 8.1 8.5 8.4 7.9 7.0 6.2

1975

16.5 13.0 13.8 9.5 8.2 10.2 9.3 10.5 11.5 6.7 4.3 8.4 9.4 7.3 7.3 8.0 5.3 1.9 1.0 1.8 3.2 4.2 1.3 0.0 1.2 2.4

Consumer Price Index annual rate of increase2

–1.9 –1.9 –2.9 –3.2 –3.5 –1.7 –4.1 –5.9 –4.0 –3.8 –5.2 –6.1 –5.0 –3.8 –5.4 –5.9 –4.3 –3.2 –3.9 –3.9 –6.1 –4.4 –3.4 –4.1 –5.6 –5.3

96.6 98.2 98.4 97.3 96.6 99.0 103.3 105.0 102.9 103.7 102.4 100.0 98.3 98.8 100.8 100.3 101.6 103.6 104.4 104.5 106.6 110.6 111.9 115.5 117.4 116.6

109.9 109.1 108.9 106.2 105.0 105.0 106.5 107.1 102.6 102.1 101.1 100.0 97.3 95.8 96.8 96.8 96.7 96.2 96.0 96.2 97.2 97.5 96.1 96.5 95.7 96.0

22.9 23.2 23.6 23.7 22.8 23.3 24.2 24.6 24.9 24.3 25.7 26.2 26.9 26.2 25.2 24.9 24.6 22.9 22.1 22.3 23.2 23.9 24.4 24.0 24.6 26.2

61.7 60.9 60.0 60.3 56.7 56.2 57.3 58.8 59.7 55.9 56.1 56.4 54.8 53.4 52.9 54.3 54.6 53.9 53.1 53.2 54.1 54.3 55.2 54.1 55.1 54.1

Current Account Real average Real unit Commonwealth Wages share of Deficit as weekly earnings labour costs government total factor percentage (non-farm) (base (non-farm) (base revenues as income (Trend)7 of GDP3 year = 1986/87)4 year = 1986/87)5 percentage of GDP6 16.0 16.2 16.8 16.5 17.0 17.7 18.2 17.4 18.3 20.4 20.9 20.2 21.6 22.8 22.3 21.2 21.7 22.6 23.6 23.9 23.3 23.2 22.8 23.8 22.7 23.7

Profits share of total factor income (Trend)8

1. Source: (1975–1980) Pusey; (1981–1993) Labour Stats, Australia, ABS 1991; (1994–2000) Labour Force, Preliminary, ABS 6202.0, (1994, 1996, 1998, 2000), August. 2. Source: Consumer Price Index, Australia, Table 2A, CPI: A; groups, Percentage change (Financial Year), ABS, Dec. 2000, 6401.0 3. Source: Balance of Payments and International Investment Position, ‘Ratios’, Table 40, Time Series, ABS, 2002, Current prices data for June, 5302.0. 4. Source: ‘Labour Cost/Earnings Measures’, Treasury website, http://www.treasury.gov.au/economicdata/unitlabourcosts/www_Dec01.xls 5. Source: ‘Labour Cost/Earnings Measures’, Treasury website, http://www.treasury.gov.au/economicdata/unitlabourcosts/www_Dec01.xls 6. Treasury, Budget 2001–02, Appendix D, ‘Historical Budget and Net Debt Data’, (AGPS). 7. Source: Australian National Accounts: National Income, Expenditure and Product, ‘Other Selected Series’, Table 41, Time Series, ABS, 2002, 5206. Trend data for March. 8. Source: Australian National Accounts: National Income, Expenditure and Product, ‘Other Selected Series’, Table 41, Time Series, ABS, 2002, 5206. Trend data for March.

1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Unemployment rate1

Year*

Table C.4: Key Australian economic indicators, 1975–2000, per cent

35–40 hours 45% 2.2 mil

25%

< 35 hours 14% 0.7 mil

8%

8%

14%

Unpaid or compensated in other ways d, e 63% 1.2 mil*

41+ hours 41% 2.0 mil

Paid explicitly for extra hours d 37% 0.7 mil*

‘Permanent employees’b 55% 4.8 mil

Labour Force

12%

11%

Engaged for less than 1 year 47% 0.96 mil

‘Casual’ and contract employees c 23% 2.0 mil

Employed Workforce 8.7 mil

Engaged for more than 1 year 53% 1.1 mil

Table C.5: Employment status, Australia, April–June 2000

2%

Dependent on client f 30% 0.2 mil

4%

Independent of client 70% 0.4 mil

Engaged on a contract basis 30% 0.6 mil

15%

Not engaged on a contract basis 70% 1.3 mil

Owner Managers 22% 1.9 mil

Unemployeda 0.6 mil

Source: ABS, Employment Arrangements and Superannuation, April to June 2000, Catalogue No. 6361.0 and ABS, The Labour Force, July 2000. This table was kindly supplied by Dr John Buchanan of ACIRRT. Richard Hall, John Buchanan and Gillian Considine, ‘You value what you pay for’ Enhancing, employers’ contributions to skill formation and use, Dusseldorp Skills Forum, Sydney, 2002 p. 20. The table appears in John Buchanan and Ian Watson, ‘The Failure of the Third Way in Australia: implications for policy about work’ Competition and Change, vol. 5, no. 1, Dec. 2001, pp. 1–37. a This figure is an average of figures for April to June 2000 from the ABS Labour Force Survey. The corresponding number of employed people is 9.0 million. It is unclear why estimates of the size of the employed workforce differ between the two surveys. b Permanent employees are those employees with leave entitlements not working on a fixed-term contract. c Includes employees with leave entitlements working on a fixed-term contract, self-identified casuals and employees without leave entitlements who did not identify as casual. d This assumes that anyone who usually works more than 40 hours a week is working ‘extra hours’. Paid and unpaid figures are based on proportion of all those permanent employed persons who worked extra hours in the last 4 weeks in their main job (including part-timers). e Compensation for extra hours includes time off, non-cash benefits and provision in work agreement, contract or salary package. Approximately 8% of employees who worked extra hours worked both paid and unpaid for these hours. f ‘Dependent on client’ is where the contract prevented the contractor from subcontracting their own work or working for multiple clients; or the client had control over their working procedure.

Appendix D: Income and Equivalent Household Income

Throughout the book a measure of equivalent per capita household income is used instead of raw income data, as this is considered to be an inadequate measure of standard of living. Standard of living, expressed as economic welfare, can be considered as the resources individuals have available for consumption.1 This is often measured as gross domestic product (GDP) per capita. At the micro level, the unit of analysis is the household. However, raw income does not provide an acceptable measure of standard of living, as it must be divided among the members of the household. Larger households have fewer per capita consumption resources than smaller households earning the same income. Dividing total income by the number of household members would provide a measure of per capita income, but would not take into account the economies of scale obtained by household members cooperating in the use of their resources, and thus it would underestimate the standard of living of each individual. Equating welfare to potential consumption does not discriminate according to the choices made by different households, such as saving and spending on different items. A problem may arise in the Middle Australia data, in that respondents were asked for their gross income, without deducting tax or superannuation. This will affect the distribution of equivalent income scores. For example, people on middle incomes with larger families are taxed at a high rate, which reduces their potential per capita consumption. If differential taxation were accounted for, the equivalent per capita income of these households might change in relation to households that earn smaller incomes but are taxed less. However, the existence of the GST, health insurance payments, franked dividends and the like make estimating such differences in standard of living speculative, and not fruitful for the purposes of the project. An alternative approach has been developed by the Social Policy Research Centre, estimating consumption resources in the form of budget standards for different household types.2

204

Appendix D

205

Stein Ringen argues that equivalent income can be taken as a measure of the economic standard of living of each individual member of the household. However, this assumes that income is distributed equitably within the household. This view has been criticised extensively by feminist scholars and researchers investigating the well-being of children, who have pointed out the inequitable distribution of income within the household. In light of those critiques, the general unreliability of self-reported income data, the measurement problems posed by differential taxation and price differences according to region, equivalent household income should not be equated to actual standard of living in this study. We assume that households cooperate on the use of income, and we apply a weighting to household members to take account of their position within the household and their likely consumption of resources. The OECD equivalence scale has been used for the Middle Australia Project, allocating a score of 1.0 for single adults and/or first household members (potential consumption is equal to disposable income), 0.7 for the next adult and 0.5 for children. Children aged 18 years or over are considered to be adults and weighted at a score of 0.7. Adjusting household income using the equivalence scale provides a basis to compare the economic standard of households of different sizes. ‘Other adults’ have not been included in the scale, as we did not ask the income of other adults in the household or whether they were sharing expenses with our respondents. Also, only a small number of households reported that other adults were living in the house, so there should not be a major distorting effect on the data. The income question asked respondents to include all income sources, including wages, investments and government entitlements. They were asked to not deduct taxation and other payments. Respondents were not asked to write a specific dollar amount, but were provided with a series of income ranges. We then took the midpoint of the range indicated as an estimate of the person’s yearly income (this is why the median values of the raw data are round numbers). So, strictly speaking, these are estimated income values.3 The Tables D.1 and D.2 provide four summary measures of the income distributions – mean, median, standard deviation and range. The best summary measure to use is the median income (shown in bold). The median is the most appropriate statistical measure of central tendency for income data, as income distributions are skewed excessively by higher values. The median is the middle value of the distribution of household incomes.

206

Appendixes

The three columns indicate the samples; • Column A: Original sample: The 1996 large sample of 403 people. • Column B1: Panel sub-sample 1996: The smaller sample of 198 people who responded to the follow-up survey. These values are their 1996 answers. • Column B2: Panel sub-sample 1999–2000: The smaller sample of 198 people. These values are their 1999–2000 answers. The ‘n’ figure at the bottom of the table is the number of valid responses given to these questions (missing responses are excluded). The high standard deviation results from an income distribution that is skewed towards lower-middle household incomes on the one hand, with a long tail of higher incomes on the other. This characteristic is replicated in the equivalent household income distribution. Table D.1: Household income, dollars Summaries

Mean Median Standard deviation Range n (valid cases)

Original sample (n = 403) 1996

Panel sub-sample (n = 198) 1996 1999–2000

56,819 45,000 48,558 286,000

64,729 50,000 51,589 277,500

65,973 50,000 54,327 326,000

370

164

187

Table D.2: Equivalent household income, dollars Summaries

Mean Median Standard deviation Range n (valid cases)

Original sample (n = 403) 1996

Panel sub-sample (n = 198) 1996 1999–2000

30,510 24,352 25,968 199,000

31,864 26,103 25,374 157,711

33,410 27,500 24,632 143,934

370

164

187

Table D.1 is gross household income, calculated as ‘your income’ plus ‘spouse/partner income’. It indicates that the 1996 median income of the smaller sub-sample of 198 people ($50,000) was slightly higher than the

Appendix D

207

median income of the full, original sample ($45,000). This difference reflects the higher incomes of middle-income households during this period, and it may also be due to better response rates by higher income earners, resulting in a selection bias. Alternatively, it could result from the increased number of valid responses (23) given to the income question by the respondents in the panel sub-sample in the 1999–2000 survey. The median household income of the sub-sample stayed approximately the same from 1996 to 1999–2000. Table D.2 presents the equivalent per capita household income of the sample. The table indicates that the median equivalent household income for the original 1996 sample was $24,352. Again, the sub-population of people that responded to the follow-up survey has a slightly higher equivalent income than that of the original sample. The median equivalent income of the sub-population was also largely similar in 1999–2000 to that reported in 1996, although this might further vary for families whose children left home during the period between surveys, resulting in a smaller equivalence scale value for these households. The division of equivalent household incomes into sub-categories is summarised in Table D.3. These categories were chosen by subdividing the distribution of equivalent household income into four roughly equal groups. The uneven distribution reflects the skew of the distribution. Table D.3: Equivalent per capita household income categories used in Middle Australia analysis Equivalent income range

$0–15,000 $15,001–30,000 $30,001–45,000 $45,001+ Total

Original sample (n = 403) 1996 Frequency Per cent 113 116 76 65 370

30.5 31.4 20.5 17.6 100.0

Panel sub-sample (n = 198) 1996 Frequency Per cent 44 52 36 32 164

26.8 31.7 22.0 19.5 100.0

2000 Frequency Per cent 44 58 42 43 187

23.5 31.0 22.5 23.0 100.0

Notes

Abbreviations ABS Australian Bureau of Statistics AWIRS Australian Workplace Industrial Relations Survey MAP Middle Australia Project Chapter 1: The Experience of Economic Reform 1 Lester Thurow, The Future of Capitalism: How Today’s Economic Forces Will Shape Tomorrow’s World, Allen and Unwin, Sydney, 1997, p. 34. 2 Richard Sennett, The Corrosion of Character: The Reasoned Consequences of Work in the New Capitalism, Norton, New York, 1998. 3 ‘Albert Camus, The Madness of Sincerity’, SBS TV. I think the quote is taken from Camus, L’Étranger. 4 Robert Hughes, Australia: Beyond the Fatal Shore, Episode 3: ‘Money, Class and Power’, ABC Television, 13 August 2000. 5 And of those whom Janet McCalman calls the ‘boosters and boasters’. See McCalman, Journeyings: The Biography of a Middle Class Generation, 1920–1990, Melbourne University Press, 1993, p. 263. 6 Thurow, The Future of Capitalism, p. 246. 7 Ulrich Beck, Democracy without Enemies, trans. Mark Ritter, Polity Press, Cambridge, 1998. 8 Hugh Collins, ‘Political Ideology in Australia: The Distinctiveness of a Benthamite Society’ in Stephen R. Graubard (ed.), Australia: The Daedalus Symposium, Angus and Robertson, North Ryde, NSW, 1985. 9 See Richard Eckersley (ed.), Measuring Progress: Is Life Getting Better?, CSIRO Publishing, Collingwood, Vic., 1998, esp. Part Three, pp. 123–97; and the heroic work done by the Australia Institute in Canberra in adapting the Genuine Progress Indicator to Australia. 10 Fred Hirsch, The Social Limits to Growth, Routledge, London, 1977. 11 All the judgements made in this paragraph are amply supported by leading international scholars of quality of life. The most notable among them are Alex Michalos, Ed Deiner and Joe Sirgy; see also the work of Robert Cummins at Deakin University. 12 Robert E. Lane, The Market Experience, Cambridge University Press, 1991; and The Loss of Happiness in Market Societies, Yale University Press, 2000. 13 Mark E. Warren, ‘Introduction’ in Mark E. Warren (ed.), Democracy and Trust, Cambridge University Press, 1999, p. 15.

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Notes to pages 7–11

209

14 D. Parham, P. Barnes, P. Roberts and S. Kennett, Distribution of the Economic Gains of the 1990’s, Productivity Comission Staff Research Paper, Ausinfo, Canberra, 2000, p. xxix. See also M. Pusey, ‘Reclaiming the middle ground … from new right “economic rationalism”’, in Stephen King and Peter Lloyd (eds), Economic Rationalism: Dead End or Way Forward?, Allen and Unwin, St Leonards, NSW, p. 13. 15 See William Nordhaus, ‘The Falling Share of Profits’, Brookings Papers on Economic Activity, no. 1, 1974, pp. 169–208. These figures refer to the net rate of return on the replacement cost of net capital stock and apply to the profit rate in the non-financial corporate business sector – down from 7.9 in 1948 to 4.9 in 1977. 16 Michael Crozier, Samuel P. Huntington and Joji Watanuki, The Crisis of Democracy: Report on the Governability of Democracies to the Trilateral Commission, Task Force Report No. 8, New York University Press, 1975. The report declares, ‘The Trilateral Commission was formed in 1973 by private citizens of Western Europe, Japan and North America to foster closer cooperation among these regions on common problems. It seeks to improve public understanding of such problems, to support proposals for handling them jointly, and to nurture habits and practices of working together among these regions.’ The Trilateral Commission, comprising business leaders from North America, Europe and Japan, is but one of five leading global business organisations that were formed to advance and coordinate corporate policy interests. The others are the World Economic Forum, the Bilderberg Conference, the International Chamber of Commerce and the World Business Council for Sustainable Development. Their impact has been immense and has led to what some prominent scholars now call the ‘transnational capitalist class’. For excellent detailed historical and empirical analyses of these organisations, their membership and impacts, see Leslie Sklair, The Transnational Capitalist Class, Blackwell, Oxford, 2001; W. K. Carroll and M. Fennenma, ‘Is There a Transnational Business Community?’, International Sociology, vol. 17, no. 3, 2002,pp. 393–420; W. I. Robinson and J. Harris, ‘Towards a Global Ruling Class? Globalisation and the Transnational Capitalist Class’, Science and Society, vol. 64, no. 1, Spring 2002, pp. 11–54. 17 From the record of discussion in the plenary session of the Trilateral Commission, Kyoto, 31 May 1975: Crozier, Huntington and Watanuki, Crisis of Democracy, p. 173. 18 Dr David Morgan speaking on Labor in Power, Episode 1, ABC Television, 8 June 1993. For the early historical context, see Greg Whitwell, The Treasury Line, Allen and Unwin, Sydney, 1986. 19 Jane Kelsey, Economic Fundamentalism: The New Zealand Experiment – A World Model for Structural Adjustment, Pluto Press, London, 1995. 20 Michael Pusey, ‘Reclaiming the Middle Ground’ and Economic Rationalism in Canberra: A Nation-Building State Changes its Mind, Cambridge University Press, 1991. 21 The dynamics of this process – one that has a long history – were brilliantly charted by Karl Polanyi, The Great Transformations, Beacon Press, Boston, 1944. 22 Pusey, Economic Rationalism in Canberra. 23 The influence of the BCA has steadily increased since the mid-1980s. It was badly outflanked at the 1983 Economic Summit, took no coherent position to the tax summit in 1985, and was split over the issue of the GST. Its influence grew thereafter through the 1980s and 1990s with highly effective campaigns for industrial relations

210

24

25

26

27

28 29 30 31 32 33 34

35 36

37


reform and competition policy, and has probably reached an all-time high over the course of the Howard Coalition government. The National Farmers Federation and its predecessors have generally pushed a ‘reformist’ policy on globalisation and multilateral trade, while supporting interventionist positions on domestic market arrangements. Malcolm Alexander (School of Humanities, Griffith University), ‘The Internal Organisation of the Australian Corporate Elite: A “small” world analysis’, paper delivered to Australian Sociological Association Annual Meeting, December 2001. Similar arrangements at the global level are detailed in William K. Carroll and Colin Carson (Department of Sociology, University of Victoria, British Columbia), ‘The Network of Global Corporate Elite Policy Groups: The Structures for Trans-national Capitalist Class Formation?’, paper presented to the XVth World Congress of Sociology, 7–13 July 2002, Brisbane, Qld. John B. Judis, The Paradox of American Democracy: Elites, Special Interests, and the Betrayal of the Public Trust, Pantheon Books, New York, 2000; see also Nicholas Lehmann, ‘Can Populism be Popular?’ New York Review, 16 November 2000, pp. 48–51. See a paper commissioned by the Committee for Economic Development of Australia (CEDA), prepared by I. Marsh, ‘Globalisation and Australian Think Tanks’, Sydney CEDA Information Paper No. 34, 1991, and cited in Leslie Sklair, ‘Conceptualising and Researching the Transnational Capitalist Class in Australia’, Australian and New Zealand Journal of Sociology, vol. 32, no. 2, August 1996, pp. 1–18. Crozier, Huntington and Watanuki, Crisis of Democracy, Appendix 1, p. 194. From the cover of George Soros, The Crisis of Global Capitalism: Open Society Endangered, Little, Brown and Co., London, 1998. Robert Skidelsky, ‘The World on a String’, New York Review, 8 March 2001, pp. 10–14. George Soros, ‘The Man Behind the Meltdown’, Sydney Morning Herald, 30 November 1998, Features, p. 13. See G. Soros, ‘A Critique of Economics’, ch. 2 in Crisis of Global Capitalism: Open Society Endangered. Felix Rohatyn, ‘The Betrayal of Capitalism’, New York Review, 28 February 2002, pp. 6–8. Dr H. C. ‘Nugget’ Coombs, quoted by David Washington, ‘A Call to Regain Lost Independence’ in The National Graduate, Australian National University, Autumn 1993, pp. 9–10. See Tim Rowse’s excellent biography, Nugget Coombs: A Reforming Life, Cambridge University Press, 2002. In order not to break the flow and narrative of the chapters that follow I have generally relegated theoretical discussions to the footnotes. More explicit statements of concepts are in my publications Economic Rationalism in Canberra, esp. pp. 169–71; ‘Economic Rationalism and the Contest for Civil Society’, Thesis Eleven, no. 44, 1996, pp. 69–87; and ‘Globalization and the Impacts of Economic Rationalism on Quality of Life in “Advanced” Societies’, in Donald Lamberton (ed.), Managing the Global: Globalization, Employment and Quality of Life, IB Tauris, London and New York, 2002. Stein Ringen, ‘Well-being, Measurement, and Preferences’, Acta Sociologica, 1995, vol. 38, no. 1, pp. 3–15.


211

38 For the use of a large number of questions taken from the International Social Source Surveys of 1995, I would like to thank Jonathan Kelley and his colleagues and the Research School of Social Sciences at the Australian National University. 39 As reported in R. G. Gregory and B. Hunter, ‘The Macro Economy and the Growth of Ghettos and Urban Poverty in Australia’, address to the National Press Club, April 1995, available as Discussion Paper No. 325 of the Centre for Economic Policy Research, Australian National University, Canberra; see also related publications of the authors and the centre. 40 These studies have a long history dating back to the Henderson inquiry of 1975. See notably Ruth Fincher and John Nieuwenhuysen (eds), Australian Poverty: Then and Now, Melbourne University Press, 1998. Moreover we have the leading published reports and discussion papers on poverty from the Social Policy Research Centre at the University of New South Wales. Several excellent non-government organisations and large charities, such as the Brotherhood of St Laurence, have conducted finegrained studies of poverty in Australia. 41 Indeed the Gini coefficient for the gross income of our MAP sample is 0.44, as compared with an ABS figure of 0.45 for the national population in the year 1994/1995. 42 Why not include Perth, Darwin, and Hobart? Because it would have cost too much and would have exceeded the requirements of a study that is always more heuristic than ‘scientific’ in its purposes and design. In most countries of comparable size to Australia one finds, in practice and at the most, only one or two strictly national research organisations with the resources to mount studies that are larger than this one and thus more technically representative of a whole national population. Rural towns were also, regrettably, excluded for reasons of cost.

Chapter 2: Incomes and Meanings 1 Robert Lane, The Market Experience, Cambridge University Press, Cambridge and New York, 1991. 2 ‘Death of the Fair Go’, Weekend Australian, 17–18 June 2000, pp. 1, 6, 21–2. 3 ‘Death of the Nation’s Great Middle-Class Dream’, Weekend Australian, 17–18 June 2000, pp. 21, 24. 4 See Appendix C, Table C.1, which is derived from P. Gottshalk and T. M. Smeeding, ‘Household Income Inequality’, in Lawrence Mishel et al., The State of Working America, Cornell, 1999, p. 371, Figure 8c. 5 Hugh Mackay, Generations: Baby Boomers, their Parents and their Children, Pan Macmillan, Sydney, 1997. 6 Geoffrey Bolton, The Oxford History of Australia: 1942–1988, Oxford University Press, Melbourne, 1990, p. 90. 7 In 1966, 4% of the population lived in poverty – measured by the Henderson poverty line – compared with 14% in Britain and about 20% in the United States. See Bolton, The Middle Way, p. 90. 8 Peter Saunders, ‘Longer-Run Changes in the Distribution of Income in Australia’, Economic Record, vol. 69, no. 207, 1993, pp. 353–66. 9 I. W. McLean and J. J. Pincus, Living Standards in Australia 1890–1940, Working Papers in Economic History No. 6, Australian National University, 1982.

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10 W. M. Corden, Trade Policy and Economic Welfare, Oxford University Press, London, 1974, p. 108, quoted by Francis Castles, ‘Australia and Sweden: The Politics of Economic Vulnerability’, Thesis Eleven, no. 16, 1987, pp. 112–22. 11 I rely here on Bolton who points out, more precisely, that in 1966, 4% of Melbourne families were below the Henderson poverty line. See Bolton, The Middle Way, p. 90. 12 M. Sawyer, Income Distribution in OECD Countries, OECD Occasional Study, Paris, 1976. Peter Saunders and Sue Richardson both caution that generalisations about income distribution before 1982 rely to some degree on informed guesswork. Until 1969 measurements of income distribution and inequality were severely hampered by the very rudimentary nature of available statistics that were based for the most part on aggregate information from taxation returns. Only since 1982 has the Australian Bureau of Statistics released data in a form that allows researchers to construct their own measures of historical movements in income inequality. 13 ABS, Average Weekly Earnings Australia, 1941–1990, Cat. No. 6350.0, Table 1. 14 Bolton, The Middle Way, pp. 230–1. 15 Francis G. Castles, The Working Class and Welfare: Reflections on the Political Development of the Welfare State in Australia and New Zealand, 1890–1980, Allen and Unwin, Sydney, 1985. 16 See Judith Yates, ‘Is Australia’s Home-Ownership Rate Really Stable? An Examination of Change between 1975 and 1994,’ Urban Studies, vol. 37, no. 2, 2000, pp. 319–42. Yates notes that Australia has a very stable pattern of home ownership which has remained at a rate of 70% for three decades. However, she shows that there has been some movement in the rate of home ownership which is sensitive to income, age and, importantly, household type. She further suggests that falling rates of home ownership among young low income earners might be traced to higher youth unemployment, labour market insecurity, and a rising earnings dispersion (p. 337). 17 From 1985 to 1996 the (P10 to P90) ratio increased by 17.3%. See P. Saunders, ‘Trends in Earnings Distribution’, in ABS, Australian Social Trends 2000, Cat. 4102.0 pp. 145–48. 18 Paul Kelly, ‘Our Split Personality Society’, Weekend Australian, 17–18 June 2000, pp. 1, 6. 19 R. Gregory, ‘The Shann Memorial Lecture: Growing Locational Disadvantage in Australian Cities’, Centre for Economic Policy Research, Australian National University Discussion Paper No. 96–14, June 1996, p. 5. 20 Ibid. 21 R. Gregory, ‘Income Support, Labour Markets and Behaviour: A Research Agenda’, Centre for Economic Policy Research, Australian National University, November 1998, p. 7. Male incomes are used here because they provide the most reliable midand long-run indicator. The significance of rapidly changing female participation in the labour force is dealt with in Chapter 4. 22 P. Saunders, ‘Economic Adjustment and Distributional Change: Income Inequality in Australia in the Eighties’, in P. Gottshalk, B. Gustafsson and E. Palmer, Changing Patterns in the Distribution of Economic Welfare: An International Perspective, Cambridge University Press, 1997, pp. 60–83, esp. p. 70. 23 See Appendix C, Table C.2. 24 At this age they have generally moved out of the education phase of early adulthood into the workforce.


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25 ‘Death of the Nation’s Great Middle-Class Dream’, Weekend Australian, 17–18 June 2000, pp. 21, 24. 26 D. Iremonger, ‘National Accounts of Household Productive Activities’, paper presented to the Time Use, Non-Market Work, and Family Well-being Conference, Washington, DC, 20 November 1997. Also D. Iremonger, ‘Measuring Volunteering in Economic Terms’, ch. 5 in J. Warburton and M. Oppenheimer (eds), Volunteers and Volunteering, Federation Press, Sydney, 2000. 27 Ann Harding and Harry Greenwell, Trends in Income and Expenditure Inequality in the 1980s and 1990s, National Centre for Social and Economic Modelling (NATSEM), Discussion Paper No. 56, December 2001. 28 Question: ‘Which of the things on this card would you say is your biggest worry: my health, family problems, crime, money or bills, things happening around the world, all equally, none of these, don’t know.’ Things around the world 23%, money or bills 22%, family problems 16%, my health 12%, crime 11%, none of these 9%, all equally 7% (n = 395). 29 This difference may be due to a number of factors, such as random differences in the respondents arising due to the limited response rate of the second sample; people with higher incomes remaining in the same address over the period of the two samples and thus being more likely to receive the follow-up survey; people with higher educational attainment being more likely to respond to two surveys. 30 When we compare the income profiles of our sample with the much larger sample for the National Social Science Survey, our middle Australia sample turns out to be a pretty good proxy for the whole national population. See Appendix C3. 31 ABS, Income Distribution, Australia, 1997–8, Cat. No. 6523.0, 1999, Table 28, p. 41. 32 Amartya Sen, Inequality Re-examined, Russell Sage Foundation, Clarendon Press, Oxford and New York, 1992. 33 This measure also approximates economies of scale attained through the sharing of resources by members of a household: see Appendix D. 34 Furthermore, household income is only an estimate, based on the reported income of the respondents and their estimations of their spouse’s income. 35 Equivalent household income is the most sensitive measure because it best captures the real (income) resources that the individual has available after one has taken into account the number of dependent children in the household. See Appendix D. 36 Question: ‘How often do you and your household feel poor nowadays?’ Never 51%, every now and then 35%, often 8%, almost all the time 5%, don’t know 1%. 37 There is some need for caution here because a large number of respondents were not able to answer the question on their partner’s income or on people living in the street. Your income: increased faster than prices 18%, just kept pace 41%, fell behind 41%, n = 399. Partner’s income: increased faster 18%, kept pace 44%, fell behind 38%, n = 232. Most of the people who live in this street: increased faster 11%, kept pace 54%, fell behind 35%, n = 256. 38 Rising or falling ‘steeply’ means by more than one standard deviation. ‘Steady’ is defined as a movement of no more than 0.2 of a standard deviation on either side of the mean. For details see Appendix B. It should be noted here that the trends are all the more remarkable given that the income movement characteristics of the CD (consisting usually of no more than one or two streets) refer to the average characteristics of the people living in those streets and not to the particular

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39

40 41

42

43 44 45

46 47


individuals concerned, whose identity has been protected by the Australian Bureau of Statistics. Our respondents were randomly selected from these CDs and so it is therefore possible, and even likely, that many of them will have experienced income movements over time that are quite different, say, because they have recently moved into an area of low but rising incomes to take advantage of increasing house prices. Another factor that makes the figures still more remarkable is that these average movements in income are set in the 1976 to 1991 time frame, so responses gathered in 1996 and 1997 will already have been diluted by some six years of attrition to the income movement characteristics of the CDs which may not necessarily stay set on the same rising, falling, or steady path. Some streets will surely have attracted people whose income movements over time have run counter to those of their new neighbours! See R. Gregory and B. Hunter, ‘Further Remarks on Increased Neighbourhood Inequality’, Social Security Journal, Australian Government Publishing Service, Canberra, June 1995, pp. 6–20. Since 1992 Commonwealth public sector jobs have been cut by 33.3%. See ABS, 1992, 1998, Cat. No. 6248.0. See Vera Hoorens, ‘Self-favouring Biases for Positive and Negative Characteristics: Independent Phenomena?’, Journal of Social and Clinical Psychology, vol. 15, no. 1, 1996, pp. 53–67; ‘Self-favouring Biases, Self-presentation, and the Self–Other Asymmetry in Social Comparison’, Journal of Personality, vol. 63, no. 4, December 1995, pp. 793–817. Another reason may be that the term ‘loser’ has very pejorative psychological connotations when applied to the self. To admit that one is a loser is to accept that one is psychologically inadequate and not merely someone who has lost out an in an economic sense. See the related findings of Peter Saunders, ‘Perceptions of Equality’, Social Science and Policy Research Centre Newsletter, no. 75, December 1999, pp. 1–6. ABS, Income Distribution, Australia, 1997–98, Cat. No. 6523.0, Canberra, 1999. Paul Dekker and Peter Ester, ‘Attitudes towards Income Inequality in Modern Society: A Cross-national Comparison’, paper presented to the XVth World Congress of the Political Science Association, Buenos Aires, July 1991. The results are based on the 1987 International Social Survey of 1987 and the countries in this comparison are Australia, the United States, Italy, Britain, the Netherlands, (West) Germany, Switzerland, Austria and Hungary. Stefan Svallfors, ‘World of Welfare and Attitudes to Redistribution: A Comparison of Eight Western Nations’, European Sociological Review, vol. 13, no. 3, 1997, pp. 283–304. It should be noted, however, that our middle Australia data responses differ somewhat from those of the 1995–96 National Social Science Survey. The answers to the question ‘Large differences in income are necessary for Australia’s prosperity’ for the Middle Australia Project and the National Social Science Survey were as follows:

Survey

Response to ‘Large income differences necessary’ (%) Yes!! Yes ?? No No!!

MAP (n = 385) NSSS (n = 2,258)

8.6 7.8

8.8 39.6

30.1 28.7

36.6 21.7

15.8 2.2


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48 Clifford Cobb, Ted Halstead and Jonathan Rowe, ‘If the GDP Is Up, Why Is America Down?’, Atlantic Monthly, vol. 276, no. 4, October 1995, pp. 59–78. 49 John Braithwaite, ‘Economic Policy: What the Electorate Thinks’, in Jonathan Kelley and Clive Bean (eds), Australian Attitudes, Allen and Unwin, Sydney, 1988. 50 Geoffrey Harcourt, ‘Capital Theory: Much Ado about Something’, in Harcourt, The Social Science Imperialists, Routledge, London, 1982. 51 Amartya Sen, John Muellbauer et al., The Standard of Living, ed. Geoffrey Hawthorn, Cambridge University Press, New York, 1987. 52 Lane, The Market Experience, p. 7. 53 Geoffrey Brennan and Loren Lomasky, Democracy and Decision: The Pure Theory of Electoral Preference, Cambridge University Press, Cambridge, 1993, p. 10. 54 Amartya Sen, On Ethics and Economics, Basil Blackwell, Oxford, 1987, p. 32. 55 Brennan and Lomasky, Democracy and Decision, p. 130. 56 For spheres of value see Robert Brubaker, The Limits of Rationality: An Essay on the Moral Thought of Max Weber, Allen and Unwin, London, 1984, pp. 72–3. Stein Ringen uses arenas in a similar way. See his ‘Well-being, Measurement, and Preferences’, Acta Sociologica, vol. 38, no. 1, 1995, pp. 3–15, and the longer arguments in Citizens, Families and Reform, Clarendon Press, Oxford, 1997. My own list here owes more to Lane, The Market Experience. Chapter 3: Jobs, Work and Fairness 1 Claus Offe, Disorganised Capitalism: Contemporary Transformations of Work and Politics, Polity Press, Cambridge, 1985, p. 83. 2 Neo-liberal economic ‘reform’ is in fact very inefficient from the point of view of economic sustainability, meeting real needs, and (full) employment of available human resources. 3 John Buchanan and Ian Watson explain this partiality with exemplary clarity thus: ‘The preoccupation with labour related issues as the pivotal policy area for competitive success is misleading and unhelpful. Labour is only one factor of production. To put it starkly – the best trained, most flexible and cheapest workforce in the world cannot make up for inadequacies in the operation of capital markets and policies and institutions of industry development.’ ‘The Failure of the Third Way in Australia: Implications for Policy about Work’, Journal of Competition and Change, vol. 5, no. 1, December 2001, pp. 1–37. 4 See Jane Kelsey, Economic Fundamentalism: The New Zealand Experiment – A World Model for Structural Adjustment?, Pluto Press, London, 1995, p. 18. 5 M. Pusey, Economic Rationalism in Canberra: A Nation-Building State Changes its Mind, Cambridge University Press, 1991, ch. 6. 6 B. Dabscheck, The Struggle for Australian Industrial Relations, Oxford University Press, 1995, p. xii. 7 See note 12 in Chapter 2. 8 B. Norington, ‘Howard Keen to Act Quickly on Unions’, Sydney Morning Herald, 27 March 1996. 9 Organisation for Economic Cooperation and Development, OECD Economic Surveys, Australia, Paris, 1988, p. 70. 10 Frank Stilwell, The Accord … and Beyond, Pluto Press, Sydney and London, 1986; OECD Economic Surveys, Australia 1989–1990, Paris, 1990, section iii, pp. 57–81.

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11 Don Rawson, ‘Gradually Then Suddenly: The Fall of Arbitration’. Mimeo supplied by author. 12 The reform act came into effect at the end of March 1994. See R. McCallum and P. Ronfeldt, ‘Our Changing Labour Law’, in Ronfeldt and McCallum (eds), Enterprise Bargaining: Trade Unions and the Law, Federation Press, Sydney, 1995, pp. 1–30. 13 Restoring Full Employment: A Discussion Paper, Australian Government Publishing Service, December 1993, p. 55. 14 Commonwealth Treasury of Australia, Economic Roundup, Winter 2000, Canberra, 2000, Statistical Appendix, p. 43. 15 ABS, Australian Social Trends 2000, Cat. No. 4102.0, p. 108. 16 Organisation for Economic Cooperation and Development, Employment Outlook 1999, Paris, p. 74. The OECD ranks Australia second only to Spain in temporary employment as a proportion of all jobs (averaged over 1990–97). The OECD classifies casual employment in Australia as equivalent to temporary employment in other OECD countries. 17 See J. Buchanan, K. Schofield, C. Briggs et al., Beyond Flexibility: Skills and Work in the Future, Board of Vocational Education and Training, Sydney, October 2001. 18 Ken Boston, AO, Managing Director of TAFE NSW, Director-General of Education and Training, opening address to The Future of Work Conference, 31 July 2001, New South Wales Department of Education. 19 ‘The rate of economic and social change is too fast and I don’t like it’: agree 44%, neither agree nor disagree 33%, disagree 23%. Peter Saunders, Cathy Thomson and Ceri Evans, ‘Social Change and Social Policy: Results from a Survey of Public Opinion’, Social Policy Research Centre, University of New South Wales, Discussion Paper No. 106, May 2000, p. 22. 20 We used a trained market researcher to set up the groups with randomly selected respondents and standard pro-forma explanations, of purpose and organisation and nominal payment, for all the groups. 21 In the first place, I have never believed, and do not wish to assert, that classes are collective actors that somehow ‘do things’ in their own right; secondly, because class often evokes socialist and sometimes ‘elitist’ standpoints that I do not share; and thirdly, because the arguments over the respective weight to be assigned, in studies of class, to perceived status as opposed to sheer market advantage seem to me to be largely exhausted and intractable. With this said, it does seem self-evident that the new entrenchment of property rights that has come with economic reform is stratifying the society in ways that vindicate the arguments of many ‘class analysts’. 22 This is a common finding. See ‘Introduction’ in J. Baxter, M. Emmison and J. Western (eds), Class Analysis and Contemporary Australia, Macmillan, South Melbourne, p. 4. 23 Respondents to the Middle Australia Project, in reporting an equivalent household income between $0 and $15,000, were evenly divided as to whether they considered their lifestyle working class (30%), middle class (33%) or half and half (36%). Respondents reporting an equivalent household income in the ranges $15,001–30,000, $30,001–45,000 and $45,001 and over, were much likely to consider themselves middle class: 56%, 70% and 79% respectively; n = 348, P < 0.001, Gamma = 0.48. 24 The respondents are classified according to self-reported occupational categories given in the questionnaire in exactly the same way as the National Social Science


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Survey from which the items were taken. The list given here is filled out with some of the occupations of our focus group respondents. Amartya Sen, ‘The Standard of Living: Lecture II, Lives and Capabilities’, in G. Hawthorn (ed.), The Standard of Living: The Tanner Lectures, Clare Hall, Cambridge, 1985, Cambridge University Press, 1990, pp. 20–38. Service/working: $0–15,000, 35%; $15,001–30,000, 38%; $30,001–45,000, 18%; $45,001+, 8%. Middle/managerial: $0–15,000, 18%; $15,001–30,000, 29%; $30,001–45,000, 28%; $45,001+, 25%; n = 297, P < 0.001, V = 0.29. Question: ‘When you think about what is happening with middle Australia today how do you feel?’ Angry and resentful 10%, a bit unhappy 54%, calm and satisfied 25%, don’t know or none of these 11%; n = 396. The data set is not large enough to allow complex multi-variate analysis. Robert B. Reich, The Work of Nations: A Blueprint for the Future, Simon and Schuster, London, 1991. See ABS, Australian Social Trends, 1999, Cat. No. 4102.0, 1999 and Australian Social Trends, 1997, Cat. No. 4102.0, p. 90. See Organisation for Economic Cooperation and Development, OECD in Figures: 2000, Paris, 2000. According to the composite measures of employment in ‘industry’ and ‘services’ used by the OECD, Australia recorded the second-lowest employment share in industry among the OECD nations surveyed, with about 22% of employees in this category compared with an OECD average of about 29%. R. Callus et al., Industrial Relations at Work: The Australian Workplace Industrial Relations Survey (AWIRS), Commonwealth Department of Industrial Relations, Australian Government Publishing Service, Canberra, 1995. See also ABS, Australian Social Trends, 2000, p. 126. Manufacturing comprises 24% of total retrenchments measured over a three-year period ending July 1997. For the strong link between job insecurity and deregulated labour markets see the comparative OECD evidence presented by Andrew Clark and Alex Grey, ‘Is Job Insecurity on the Increase in OECD Countries?’, DELSA, OECD, Paris, March 1997, DEELSA/ELSA/WP5(97)5. Callus et al., Industrial Relations at Work. Question: ‘I think of my own labour as something that I offer for sale just like other things in the marketplace.’ Agree strongly 8%, agree 49%, not sure 8%, disagree 28%, disagree strongly 7% (don’t know excluded), n = 386. Question: ‘The buying and selling of labour should be controlled by industrial awards.’ Agree strongly 15%, agree 54%, not sure 14%, disagree 16%, disagree strongly 1% (don’t know excluded), n = 391. Organisation for Economic Cooperation and Development, Employment Outlook, Paris, 1993, pp. 132–3. The OECD study includes two measures of job tenure – shortterm (number of employees changing employment over a year), and average tenure of employment. Australia records among the lowest average tenure of employment and also ranks among OECD countries with high short-term job mobility. John Buchanan and Ian Watson, ‘The Failure of the Third Way in Australia: Implications for Policy about Work’, Journal of Competition and Change, vol. 5, no. 1, December 2001, pp. 1–37. Work intensification is difficult to measure objectively but there is suggestive evidence that working is becoming more intense on at least two fronts. First, for many

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44 45 46 47 48 49


workers the working day is getting longer, with average hours worked for full-time employees now exceeding 40 hours per week (ABS, Social Trends, 2000, p. 108). Second, the component of productivity that reflects changes in work practices among other things – multifactor productivity – has been the main contributor to overall growth in productivity in the 1990s. This component reached a record growth rate in the 1990s while the other component, which reflects capital deepening, stayed at its long-term growth trend (see D. Parham et al., ‘Distribution of the Economic Gains of the 1990s’, Staff Research Paper, Productivity Commission, Melbourne, November 2000, pp. xvii-xviii). Also, AWIRS results suggest a negative relationship between work intensification and job satisfaction: see Callus et al., Industrial Relations at Work, p. 274. These questions, taken from the Australian National University’s International Social Science Surveys Australia for 1995, are listed here in rank order by the mean scores – in brackets – of Middle Australia Project respondents in the 1996 survey. How well he/she does the job (1.90), How complex/difficult job is (1.96), How much responsibility in job (1.97), How dangerous job is (2.14), Energy and diligence of worker (2.21), Responsibility for big decisions about money (2.42), Years spent in education and training (2.49), Requires supervising others (2.60), What workers in other industries get for similar work (2.64), How dirty and unpleasant the work is (2.69), What others in firm get (2.74), Responsibility for hiring/promotion (2.86), What is needed to support family (2.89), Whether person has children (3.48), What workers get in New Zealand (3.95), What workers get in Western Europe (4.03). Helen Trinca, ‘Under Pressure’, Sydney Morning Herald, Employment Section, 28 March 1998, pp. E1–2, quoted in Lars Osberg, Economic Insecurity, Social Policy Research Centre, University of New South Wales, Discussion Paper No. 88, October 1998, p. 1. Alain Ehrendberg, Le Culte de la Performance, Calmainn-Levy, Paris, 1991; see also J. Habermas, ‘The European Nation-state and the Pressures of Globalization’, New Left Review, no. 235, May–June, 1999, pp. 53–4. Question: ‘Is this true of your job … I have a lot of freedom to decide what I do at work? Yes!!, Yes, ??, No, No!!’ The following percentages are Yes!! and Yes answers: Middle/managerial 73% (n = 139); service/working 49% (n = 101); P < 0.001, V = 0.25. Osberg, Economic Insecurity, p. 29; see also A. Tversky and D. Kahneman, ‘Loss Aversion in Riskless Choice: A Reference-Dependent Model’, Quarterly Journal of Economics, vol. 106, no. 4, pp. 1039–61. Public sector employees 43% (n = 89); private sector employees 27% (n = 101); P < 0.05, V = 0.17. ABS, Australian Social Trends, 2000, p. 108; the public sector share of total employment has fallen from 26.8% in 1989 to 20.1% in 1999. See Appendix C, Table C.3. It is not surprising that respondents randomly chosen from capital city areas should include large numbers of public servants. Christopher Lasch, The Revolt of the Elites and the Betrayal of Democracy, Norton, New York, 1995. These findings are independently confirmed by the National Social Science Survey and will be discussed in Chapter 6. Sydney Morning Herald, 8 March 2000, p. 1.


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50 Dr Switkowski is quoted from his interview with Kerry O’Brien, The 7.30 Report, ABC Television, 7 March 2000. See also A. Davies and K. Morrison, ‘Telstra Slashes Jobs to Attract Investors’, Sydney Morning Herald, 8–9 March 2000. 51 See Peter Saunders, The Ends and Means of Welfare, Cambridge University Press, Melbourne, 2002, pp. 127, 196–197. 52 Richard Sennett and Jonathan Cobb, Hidden Injuries of Class, Knopf, New York, 1972. 53 R. Sennett, ‘The New Capitalism’, Social Research, vol. 64, no. 2, Summer 1997, pp. 161–80. 54 I am again deliberately using Sennett’s evocative title (see above). 55 I am drawn to Habermas’ formulation of what happens in such circumstances: ‘As soon as specialised knowledge is brought to bear on politically relevant problems, its unavoidable normative character becomes apparent … This by itself shows that problems of functional coordination, when handled politically, are intertwined with the moral and ethical dimension of social integration. It is against the life-historical background of violated interests and threatened identities that the effects of deficient systems integration are first experienced as pressing problems.’ Jürgen Habermas, Between Facts and Norms, trans. W. Rehg, MIT Press, Boston, 1996, p. 351. 56 Ian McAllister and Clive Bean, ‘The Electoral Politics of Economic Reform in Australia: The 1998 Election’, Australian Journal of Political Science, vol. 35, no. 3, pp. 383–400.

Chapter 4: Working Families 1 Ulrich Beck, The Risk Society, Sage, London, 1992, p. 123. For this quotation and for many good leads that I have taken up in this chapter I am especially grateful to Dr Brendan Burchell of Cambridge University, for his kindness in sharing with me his draft chapter on just these themes and problems. See B. J. Burchell, D. Lapido and F. Wilkinson (eds), Job Insecurity and Work Intensification, Routledge, London, 2002. 2 Question: ‘Thinking about your family, and others that you know, do you think family life is:’ much the same 9%, changing a bit 37%, changing a lot 54% (n = 396). 3 Question: If ‘changing a bit’ or ‘changing a lot’: ‘Is it the positive or the negative aspects of these changes that stand out most in your mind?’ Positive 32%, negative 68%, don’t know 4% (n = 332). 4 See pp. 2, 25–9. 5 Burchell, Lapido and Wilkinson (eds), Job Insecurity and Work Intensification, p. 184, quoting Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community, Simon and Schuster, New York and London, 2000. 6 See Mark Latham’s views, discussed in a newspaper article with the headline warning ‘Labor to Hitch Itself to the New Outwardly Mobile Voter’: Sydney Morning Herald, 19 March 2002, p. 1. The outer arc is contrasted with a middle arc of supposedly ethnically troubled areas and, most relevantly here, with an inner ‘globalised arc’ whom Latham and others see as more responsive to the issues of the people we have called the Improvers. 7 U. Beck, A. Giddens, and Scott Lash, Reflexive Modernization: Politics, Tradition and Aesthetics in the Modern Social Order, Polity Press in assoc. with Blackwell Publishers, Cambridge, 1994.

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8 Peter MacDonald, ‘Young people in Australia today: A socio-demographic perspective’ in Roisin Thanki and Cathy Thompson (eds), Mortgaging our Future? Families and Young People in Australia, Social Policy Research Centre, 1996, pp. 1–8. 9 See Chapter 2, esp. note 16. Also Judith Yates, ‘Is Australia’s Home-ownership Rate Really Stable? An Examination of Change between 1975 and 1994,’ Urban Studies, vol. 37, no. 2, 2000, pp. 319–42. 10 According to Reserve Bank figures, from $201 billion in June 1995 to $404 billion in January 2002. See Matt Wade, ‘Home Loans Drive Debt Explosion’, Sydney Morning Herald, 2–3 March 2002, p. 4. 11 Although a cost has been paid by parents for decades, the issues now are (a) the cost relative to income, which – despite government subsidies – is high for lower incomes, and (b) availability and quality. The privatisation of the industry has compromised quality, and there is a shortage of care for babies under two. Just as importantly, the arrangements are mostly informal, causing quality problems. 12 Jürgen Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, trans. W. Rehg, MIT Press, Cambridge, Mass., 1996. 13 From a sociological point of view one is looking here at what Habermas calls the ‘seam between the System and the Lifeworld’. See J. Habermas, The Theory of Communicative Action, vol. 2, trans. T. McCarthy, Beacon Press, Boston, 1987. 14 David de Vaus and Ilene Wolcott (eds), Australian Family Profiles: Social and Demographic Patterns, Australian Institute of Family Studies, Melbourne, 1997, p. 3; Christine Kilmartin, ‘Young Adult Moves’, in Australian Institute of Family Studies, Family Matters, no. 55, Autumn 2000, p. 36. 15 Until recently this was also the position of Prime Minister John Howard, one that he has now softened along lines advocated by Catherine Hakim. See Hakim, Work–Lifestyle ‘Choices’ in the 21st Century, Preference Theory, Oxford University Press, Oxford, 2000. 16 Peter Saunders, ‘Household Income and Its Distribution’ in ABS, Australian Economic Indicators, June 2001, Cat. No. 1350.0, Table 1. 17 Vaus and Wolcott (eds), Australian Family Profiles, p. 56. 18 Ilene Wolcott, ‘Work and Family’, in ibid., pp. 84–5. 19 Men, 14% agree (n = 178); women, 11% agree (n = 209). 20 I hope that I shall be excused for this word-play on the title of Jürgen Habermas’s famous early work, The Structural Transformation of the Public Sphere: An Inquiry into a Category of Bourgeois Society, trans. T. Burger, MIT Press, Cambridge, Mass., 1991. 21 Question: ‘Some people say that Australian governments nowadays – of whichever party – can actually do very little to change things. Others say they can do quite a bit. Please say whether you think that Australian governments nowadays can do very little, or quite a bit, to support families?’ Very little 11%, quite a bit 84%, don’t know 5%. 22 See J. Buchanan and L. Thornthwaite, ‘Paid Work and Parenting: Charting a New Course for Australian Families’, Chifley Research Foundation, University of Sydney, August 2001. 23 For a girl aged three years, living at modest but adequate standard. Peter Saunders, Jenny Chalmers, Marilyn McHugh, Collette Murray, Michael Bittman and Bruce Bradbury, Development of Indicative Budget Standards for Australia Policy, Research Paper No. 74, Department of Social Security, Canberra, 1998.

Notes to page 90

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24 Another way of measuring the costs of having children is in terms of forgone earnings, which amount to $239,000 for the first child of a woman with a university degree. See B. Chapman and Y. Dunlop, The Forgone Earnings from Childrearing Revisited, Discussion Paper No. 47, Centre for Economic Policy, Australian National University. 25 Deborah Brennan, The Politics of Australian Child Care: From Philanthropy to Feminism, Cambridge University Press, Melbourne and New York, 1994. 26 Graeme D. Snooks, Portrait of the Family within the Total Economy: A Study in Longrun Dynamics, Australia 1788–1990, Cambridge University Press, Melbourne, 1994, p. 1. 27 Stein Ringen, Citizens, Families, and Reform, Clarendon Press, Oxford, 1997; Duncan Iremonger, ‘The Value of Care and Nurture Provided by Unpaid Household Work’, Family Matters, no. 37, April 1994, pp. 46–51. 28 Peter McDonald and Rebecca Kippen, ‘The Implications of Below-Replacement Fertility for Labour Supply and International Migration, 2000–2050’, paper presented to the 2000 annual general meeting of the Population Association of America, Los Angeles, March. 29 OECD, Family. Market and Community: Equity and Efficiency in Social Policy, Paris, 1997. 30 Peter McDonald, ‘Gender Equity, Social Institutions and the Future of Fertility’, Working Papers in Demography, No. 69, Research School of Social Sciences, Australian National University, 1997, Table 1, p. 10. 31 Question: ‘Who is the person mainly responsible for general domestic duties in this household? Respondent mainly, someone else mainly, duties shared.’ Respondent mainly responses?: Female respondents 65% (n = 205), male respondents 28% (n = 174). 32 M. Bittman, Juggling Time: How Australian Families Use Time, Australian Government Publishing Service, Canberra, 1992; M. Bittman, Recent Changes in Unpaid Work, Australian Bureau of Statistics Occasional Paper, Cat. No. 4154.0, Canberra, 1995; M. Bittman and J. F. Pixley, The Double Life of the Family: Myth, Hope and Experience, Allen and Unwin, Sydney, 1997; ABS, Time Use Survey, Australia, Cat. No. 4150.0, Canberra, 1998; D. Ironmonger and F. Soupourmas, ‘Less Work, More Play: Has the Pattern of Time Use in Australia Changed from 1974 to 1997?’, paper presented to a conference of the International Association for Time Use Research, The State of Time Use Research at the End of the Century, University of Essex, Colchester, 6–8 October 1999, . 33 In 1974, there was a marked preponderance of working days of less than eight hours. By 1997, more than one-third of the working days of prime-aged metropolitan males lasted longer than 9 hours; more than one in five metropolitan prime-aged workers worked more than 10 hours a day; and one in eight worked longer than 11 hours a day: M. Bittman and J. M. Rice, ‘The Spectre of Overwork: An Analysis of Trends between 1974 and 1997 Using Australian Time-Use Diaries’, Labour and Industry, vol. 12, no. 3, 2002, pp. 5–25, esp. p. 15. Using their definitive ACIRRT study figures, John Buchanan and Ian Watson make a somewhat similar observation thus: ‘The proportion of full-timers working very long hours – more than 48 per week – nearly doubled over this time period [from the late 1970s to the late 1990s], jumping from 19 per cent of all full-timers to 32 per cent’: Buchanan and Watson, ‘Failure of the Third Way'.

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34 Merrin Thompson, Women and Retirement Incomes in Australia: Social Rights, Industrial Rights and Property Rights, Social Policy Research Centre, University of New South Wales, Discussion Paper No. 98, May 1999. M. Thompson, ‘Retirement Income in Australia: Social Rights, Industrial Rights, and Property Rights’, paper presented to conference of the Australian Sociological Association, Wollongong, NSW, December 1997. 35 Although our data shows no statistical differences, these struggles are surely, as the huge literature insists, imbued with many gender differences. See for example: Williams, J. Unbending Gender: Why Family and Work Conflict and What to Do About It, Oxford University Press, New York, 2000; and N. Folbre, The Invisible Heart: Economics and Family Values, New Press, New York, 2001. 36 Axel Honneth, The Struggle for Recognition: The Moral Grammar of Social Conflicts, trans. J. Anderson, Polity Press, Cambridge, Mass., 1995. 37 Stein Ringen, Citizens, Families and Reform, Clarendon Press, Oxford, 1997. 38 Nancy Fraser, ‘What’s Critical about Critical Theory? The Case of Habermas and Gender’, New German Critique, vol. 35, 1985, pp. 97–131. 39 Beck, Giddens and Lash, Reflexive Modernization. 40 In rather more classical sociological terms, they would be seen as belonging to a lower middle ‘class’. See Joseph A. Kahl, The American Class Structure, Rinehart and Co., New York, 1957. 41 Question: ‘There is really no way I can solve some of the problems I have.’ Agree: $0–$15,000, 21%; $45,001 and over, 6%. 42 Catherine E. Ross and John Mirowsky, ‘Households, Employment, and the Sense of Control’, Social Psychology Quarterly, vol. 55, no. 3, 1992, pp. 217–35. 43 Christopher Lasch, The True and Only Heaven: Progress and its Critics, Norton, New York, 1991, p. 17. 44 As we shall see, the Howard government’s attempt to recoup the Hanson vote (about one million votes) may be seen as a belated attempt to save the used reactor rods so that the fuel can be recycled again for the same purpose. 45 Fred Hirsch, Social Limits to Growth, Routledge, London, 1976. 46 Lester C. Thurow, The Zero-Sum Society: Distribution and the Possibilities for Economic Change, Basic Books, New York, 1980. 47 Hirsch, Social Limits to Growth, pp. 95–6. The criticism is made against prominent economist Paul Samuelson. 48 Juliet Schor, The Overspent American, Basic Books, New York, 1998. 49 Robert Lane, The Loss of Happiness in Market Democracies, Yale University Press, 2000. 50 Beck, The Risk Society, ch. 4. 51 A. Giddens, The Transformation of Intimacy: Sexuality, Love and Eroticism in Modern Societies, Polity Press, Oxford, 1992. 52 Positive changes to family life: single person 41% (n = 93), couple with children 31% (n = 115), sole parent 30% (n = 23), couple without children 25% (n = 87). 53 Some caution is warranted here since we have no accurate means of determining the proportion of young singles without children and older singles with parted children or living snugly in retirement. The sample comprises 60 singles: 50% of these are below the age of 34; 22% are between 35 and 54; and 28% are 55 and over. 54 Hugh Mackay, ‘Three Generations: Three Australias?’, address to the Sydney Insitute, 17 November 1997, mimeo.


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55 Janet McCalman, Journeyings: The Biography of a Middle-Class Generation, 1920–1990, Melbourne University Press, 1993. 56 R. G. Menzies, ‘The Forgotten People’, pamphlet published by Robertson and Mullens, 1942, cited and wonderfully treated in Judith Brett, Robert Menzies’ Forgotten People, Macmillan, Sydney, 1992. 57 Mackay, ‘Three Generations: Three Australias?’ 58 Ibid. 59 Ibid. 60 Manuela du Bois-Reymond, ‘“I don’t want to commit myself yet”: Young People’s Life Concepts’, Journal of Youth Studies, vol. 1, no. 1, 1998, pp. 63–79. 61 H. Mackay, Generations, Macmillan, Sydney, 1997, ch. 4. 62 Belinda Probert, ‘The Social Shaping of Work: Struggles over New Boundaries,’ in Peter Saunders and Tony Eardly (eds), States, Markets, Communities: Remapping the Boundaries, Proceedings of the National Social Policy Conference, Sydney, 16–18 July, Social Policy Research Centre, University of New South Wales, 1997, pp. 5–27. 63 David Harvey, The Condition of Postmodernity, Blackwell, Oxford, 1989, p. 241, quoted in Timothy W. Luke, ‘Identity, Meaning and Globalization: Detraditionalization in Postmodern Space-Time Compression’, in P. Heelas, S. Lash and P. Morris (eds), Detraditionalization, Blackwell, Cambridge, Mass., 1996, p. 122. 64 B. J. Burchell, D. Lapido and F. Wilkinson (eds), Job Insecurity and Work Intensification?; M. Joseph Sirgy, The Social Psychology of Subjective Quality of Life, forthcoming. 65 Lasch, The True and Only Heaven, p. 33. 66 Question: ‘On balance do you think our quality of life is improving or declining?’ Declining: couple without children 53% (n = 92), couple with children 52% (n = 128), single person 48% (n = 110), sole parent 48% (n = 27). Not statistically significant. 67 I am selecting here from a longer passage as follows: ‘the technological and commercial acceleration of most means of transportation communication, production, and administration introduces “processes that so revolutionize the objective qualities of space and time that we are forced to alter, sometimes in quite radical ways, how we represent the world to ourselves”. This expansion of “the now”, until time horizons “shorten to the point where the present is all there is” … brings along with it “an overwhelming sense of compression of our spatial and temporal worlds”.’ Harvey, The Condition of Postmodernity, quoted in Luke, ‘Identity, Meaning and Globalization’, in Heelas, Lash and Morris (eds), Detraditionalization. 68 See Lane, The Loss of Hapiness in Market Democracies. 69 Other signs of the economic pressures on families are not hard to find. On the one hand we know that those young people who are not in the labour market and who cannot rely on the support of their parents are now probably the most disadvantaged group in society. The growing importance of ‘inter-generational transfers’, of housing assistance and other assets, to young couples setting up house is another symptom of the thinning real labour market incomes available to the younger generation. 70 McDonald and Kippen, ‘The Implications of Below-Replacement Fertility for Labour Supply and International Migration’. See also, Beyond 2000: The New Social Policy Agenda, Socio-economic change and social policy issues paper by the secretariat,

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given at conference at Chateau de la Muette, 12–13 November, OECD/GD (96), 170, OECD, Paris, 1996. Linda Hancock, ‘Reforming the Child Support Agenda: Who Benefits?’, in Just Policy, no. 12, March 1998. Philip Rieff, The Triumph of the Therapeutic: Uses of Faith after Freud, Penguin University Books, UK, 1973. Paul Piccone, quoted in P. Heelas, ‘Introduction’, in Heelas, Lash and Morris (eds), Detraditionalization, p. 2. Zygmunt Bauman, ‘Morality in the Age of Contingency’, in ibid., pp. 50–1. Geoffrey Brennan and Loren Lomasky, Democracy and Decision: The Pure Theory of Electoral Preference, Cambridge University Press, 1993, pp. 9–18. François Dubet makes this point in relation to the so called new freedoms of the modern marketplace by noting that people ‘experience this freedom in the form of anxiety, the incapacity to choose and worry about the consequences of choices. They experience it negatively [through their] denunciation of the constraints and the obstacles in the path of their plans and projects. Generally speaking acting subjects are more likely to live out their actions in distress rather than happiness … And the wish to be the author of one’s life is more a moral aspiration than a [concrete] achievement’. La Sociologie de l’Expérience, Fayard, Paris, 1994, p. 99 (the translation is mine). Michael Walzer, Spheres of Justice, Basic Books, New York, 1983, pp. 95–102. Robert Lane, ‘The Joyless Market Economy’, in Frank Ackerman et al. (eds), Human Wellbeing and Economic Goals, Island Press, Washington, 1997, pp. 29–33. R. Lane, ‘The Joyless Market Economy’, paper delivered to Conference on Economics, Values and Organisation, Yale University, New Haven, Connecticut, 19–21 April 1996.

Chapter 5: Civil Society and Communities 1 Hannah Arendt, The Human Condition, University of Chicago Press, 1981, p. 205, quoted in Michael Sandel (ed.), Liberalism and its Critics, New York University Press, 1984, p. 7. 2 Australia is very much a Benthamite society that was ‘born modern’. For the arguments here see M. Pusey, Economic Rationalism in Canberra: A Nation-Building State Changes its Mind, Cambridge University Press, 1991; and Hugh Collins, ‘Political Ideology in Australia: The Distinctiveness of a Benthamite Society’ in Stephen Graubard (ed.), Australia: The Daedalus Symposium, Angus and Robertson, Sydney, 1985. 3 Robert Putnam, Bowling Alone: The Collapse and Revival of American Community, Simon and Schuster, New York, 2000. 4 Martin Krygier, ‘The Sources of Civil Society’, Quadrant, October 1996, pp. 12–23, and November 1996, pp. 26–32. 5 Eva Cox, A Truly Civil Society, ABC Books, Sydney, 1995; Martin Krygier, ‘The Sources of Civil Society’, Quadrant, October 1996, pp. 12–32. 6 Richard Rosecrance, ‘The Radical Culture of Australia’, in Louis Hartz (ed.), The Founding of New Societies, Harcourt Brace, New York, 1964. 7 See Robert N. Bellah et al., Habits of the Heart: Individualism and Commitment in American Life, Harper and Row, New York, 1985; and the journal edited by America’s leading communitarian advocate, Amitai Etzioni, titled The Responsive Community: Rights and Responsibilities.


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8 The question measures pure affect on a ‘feeling thermometer’. 9 Habermas, Between Facts and Norms, trans. W. Rehg, MIT Press, Cambridge, Mass., 1996, p. 364; Putnam, Bowling Alone. 10 Michael Bittman, ‘The Rush Hour: The Quality of Leisure Time and Gender Equity’, Social Policy Research Centre, University of New South Wales, Discussion Paper No. 97, February 1999. 11 Michael Bittman, ‘The Land of the Lost Weekend? Trends in Free Time among Working Age Australians, 1974–1992’, Society and Leisure, vol. 21, no. 2, Autumn 1998, University Press of Québec, pp. 353–78. 12 As demonstrated by the excellent research collected by the ACTU. See ; and Ian Campbell, Cross-National Comparisons: Work Time around the World, ACTU, Melbourne, 2001. 13 Lyn Richards, Dreams and Realities in a New Suburb, Oxford University Press, Melbourne, 1990. 14 The percentages are for multiple mentions of the respective items from a list of 10 items administered in the interview. 15 One thinks here first of the immensely influential writings of Robert Putnam (see Bowling Alone). 16 Bellah et al., Habits of the Heart. 17 The title of a recent book by a prominent former American Cold War warrior, Edward Luttwark, who now sees the new capitalism as a principal threat to the integrity of American society: Turbo-capitalism: Winners and Losers in the Global Economy, HarperCollins, New York, 1999. 18 Eric M. Uslander, ‘Democracy and Social Capital’, in M. E. Warren (ed.), Democracy and Trust, Cambridge and New York, 1999, p. 135. 19 I am grateful to Barbara Pocock for pointing out to me that recent national data on volunteering show that, overall, the proportion of Australians volunteering has increased from one-quarter in 1995 to almost one-third in 2000, but with no change in the average number of hours per volunteer. I agree with her hunch that this may reflect improved data collection methods. 20 See the several contributions in J. Warburton and M. Oppenheimer (eds), Volunteers and Volunteering, Federation Press, Sydney, 2000; specifically Mark Lyons and Susan Hocking, ‘Australia’s Highly Committed Volunteers’. 21 Christopher Lasch, Haven in a Heartless World: The Family Besieged, Basic Books, New York, 1977. 22 Putnam, Bowling Alone. 23 See Robert Erikson et al. (eds), The Scandinavian Model, Welfare States and Welfare Research, M. E. Sharpe Inc., Armonk, NY, and London, 1987. The argument here is that the two main paradigms for quality of life research (European-oriented social indicators, and the Anglophone approach that relies more on subjective well-being scales) both demonstrate that average quality of life for whole populations correlates with standard measures of social inequality. For the most authoritative findings relating inequality to subjective well-being and measures of happiness, see the various contributions to the journal Social Indicators Research. 24 Taken, with thanks, from the International Social Science Surveys Australia 1995 module administered by Jonathon Kelley at the Australian National University, p. 52 of that questionnaire. These models do not distinguish between different dimensions

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of inequality. There is no final objectively correct answer to the question because the degree of inequality varies according to the weight set on different dimensions, of which at least six figure prominently in the social stratification literature – class (command over economic resources), status (prestige, honour), gender, age and generation, race and ethnicity, and spatial, most notably rural and urban etc. J. Kelley, M. D. R. Evans, C. Bean and K. Zagorski, International Social Science Surveys 1995, Research School of Social Sciences, Australian National University, 1995. ‘People like me’ are losers from economic change: elite 21%, pyramid 42%, modified pyramid 26%, middle class 12%. ‘People like me’ are winners: elite 8%, pyramid 29%, modified pyramid 33%, middle class 30%. P < 0.001, V = 0.28, n = 281. ‘Inverse pyramid’ responses excluded due to low responses (< 2%). ‘No idea’ responses excluded. This test measures association between three or more variables. The test statistic, Kendall’s coefficient of concordance, is an extension of Spearman’s rho for two variables, and describes the strength of the relationship among the variables. It requires at least an ordinal scale and makes no assumptions of distributional normality. See Jean Dickinson Gibbons, Nonparametric Measures of Association, Sage Publications, Newbury Park, Calif., 1993. ‘People in the middle’ are losers from economic change: elite 16%, pyramid 40%, modified pyramid 29%, middle class 15%. ‘People in the middle’ are winners: elite 8%, pyramid 22%, modified pyramid 34%, middle class 35%. P < 0.001, V = 0.28, n = 290. ‘Ordinary people generally’ are losers from economic change: elite 16%, pyramid 39%, modified pyramid 28%, middle class 17%. ‘Ordinary people generally’ are winners: Elite 9%, pyramid 15%, modified pyramid 35%, middle class 41%. P < 0.001, V = 0.30, n = 292. ‘Inverse pyramid’ responses excluded due to low responses (< 2%). ‘No idea’ responses excluded. Equivalent household income by Australian society today: P < 0.05, V = 0.13, n = 353. ‘Inverse pyramid’ responses excluded. Habermas makes the point thus: ‘The core of civil society comprises a network of associations that institutionalises problem-solving discourses on questions of general interest inside the framework of organised public spheres’: Between Facts and Norms, p. 364. The list is as follows: television, talkback radio, newspapers, your spouse or partner, other relatives, political leaders, business leaders, educational institutions, experts, close friends, religious leaders, neighbours, community or ethnic leaders, workmates, others – please specify. Unfortunately, space did not allow a distinction between broadsheets and tabloids. J. Habermas Legitimation Crisis, trans. T. McCarthy, Polity Press, Cambridge, 1988; and Between Facts and Norms. For example, A. Wolfe, ‘In Defence of the State’, Social Policy, vol. 10, no. 1, 1979, pp. 16–18. Pippa Norris, ‘The Impact of Television on Civic Malaise’, in S. Pharr and R. D. Putnam (eds), Disaffected Democracies: What’s Troubling the Trilateral Countries?, Princeton University Press, 2000, pp. 231–51. Howard S. Herman and Noam Chomsky, Manufacturing Consent: The Political Economy of the Mass Media, Vintage, London, 1994. See also Stuart Hall et al., Policing the Crisis: Mugging, the State and Law and Order, Macmillan, London, 1978.


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35 Pippa Norris (ed.), Critical Citizens: Global Support for Democratic Government, Oxford University Press, 1999. 36 It is always important for us to remember that in a modern, plural society there can be no one single truth, but that this does not in any way lead to the so-called postmodernist prejudice that truths are a priori arbitrary but, rather, to the opposite conclusion that the critical appraisal of truths becomes all the more urgent. 37 Australian Broadcasting Authority, Commercial Radio Inquiry: Report of the Australian Broadcasting Authority Hearing into Radio 2UE Sydney Limited, Sydney, February 2000. 38 Stephen Gibbs, ‘Laws Too Famous to Jail, says Judge’, Sydney Morning Herald, 9 June 2000, p. 1. 39 N. Chomsky, Necessary Illusions: Thought Control in Democratic Societies, CBC Massey Lectures, CBC Enterprises, Toronto, 1989. 40 There is an association between reporting that talkback radio has an influence on respondents’ views about political and economic matters, and agreeing with the statements ‘Most unemployed people could find a job if they wanted to’ (P < 0.001, Gamma = 0.25, n = 375) and ‘Most people on the dole are fiddling in one way or another’ (P < 0.01, Gamma = 0.27, n = 369). 41 Paul Kelly, ‘Shock-Jock Democracy’, in ‘Inquirer’, Weekend Australian, 3–4 March 2001, p. 25. 42 This is the sense in which new conceptions of the public sphere have developed in the wake of Habermas’ hugely influential volume, The Structural Transformation of the Public Sphere, trans. T. Burger, MIT Press, Boston, 1991. For an excellent recent application of these ideas, see Craig Calhoun (ed.), Habermas and the Public Sphere, MIT Press, Cambridge, Mass., 1993. 43 The term was coined by Habermas in his early deliberations about the relation between ‘ideal speech’ and ideology. See Michael Pusey, Jürgen Habermas, Tavistock, London, 1987. 44 See Habermas, Between Facts and Norms, esp. Appendix 2, ‘Citizenship and National Identity’. 45 With a cross-national perspective Leslie Sklair documents the links and interdependencies between the reforming elites in government, the corporate sector, and the media: ‘Conceptualising and Researching the Transnational Capitalist Class in Australia’, Australia and New Zealand Journal of Sociology, vol. 32, no. 2, August 1996. 46 Doug Anthony (former leader of the National Party). Anthony was a long-time Deputy Prime Minister. His comments appear in an article in the Sydney Morning Herald opposing further cross-concentration of ownership in the electronic media under the title: ‘The “eclectrifying” case for a united conservative front’: 29 March 1990, p. 17. 47 For an instructive comparison between the ABC and the commercial media, see G. Turner, ‘Manufacturing the News’, Culture and Policy, vol. 7, no. 3, pp. 127–64. 48 I am attracted again to Habermas’ definition of the problem as follows: ‘The tight connection between an autonomous civil society and an integral private sphere stands out even more clearly … The more the bonding force of communicative action wanes in private life … and the embers of communicative freedom die out, the easier it is for someone who monopolises the public sphere to align the mutually

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estranged and isolated actors into a mass that can be directed and mobilised in a plebiscitarian manner.’ Facts and Norms, p. 364. See Chomsky, Necessary Illusions; Norris, ‘The Impact of Television on Civic Malaise’; and Leslie Sklair, Sociology of the Global System, 2nd edn, Prentice Hall, UK, 1995. Anthony Giddens, The Consequences of Modernity, Polity Press, Oxford, 1990. Ibid., pp. 79–100. Eric M. Uslander, ‘Democracy and Social Capital’, in M. Warren (ed.), Democracy and Trust, Cambridge University Press, 1999, p. 131. Alan Ryan, ‘My Way’ New York Review of Books, 10 August 2000, p. 49 (quoting Putnam). The question is taken from Ronald Inglehart’s World Values survey: see Appendix 5 in his Modernisation and Postmodernisation: Cultural, Economic, and Political Change in 43 Societies, Princeton University Press, 1997. These two questions were taken from the British Social Attitudes surveys. See R. Jowell, J. Curtice, L. Brook and D. Ahrendt with A. Park, ‘British Social Attitudes: The 11th Report’, Social and Community Planning Research, Dartmouth Publishing, Aldershot, 1994. These findings are broadly in line with Ronald Inglehart’s international comparative studies showing that high trust goes with higher-than-average education and with what Inglehart calls ‘materialism’. They also save us from Inglehart’s American ideological blindness in interpreting his own very interesting data. He cannot explain why high trust is associated with both ‘post-materialism’ and materialism! What does this mean? Our data point to an answer that American opinion leaders do not want to hear, namely that levels of trust depend on different experiences of the new capitalism and of economic reform in various countries. The post-materialists are in fact people with a political preference for a social democratic moderation of economic risks to civil society. How else should we plausibly explain what Inglehart’s own data are telling him, namely that it is the social democracies, Iceland and the Nordic countries, in which people have both the highest levels of trust and the most equal distribution of incomes? See Inglehart, Modernisation and Postmodernisation. I borrow this phrase from my colleague and friend Clive Kessler. I am thinking here principally of the writings of Giddens, Luhmann, Dunn, Beck, and Fukuyama. U. Beck, A. Giddens, and Scott Lash, Reflexive Modernization: Politics, Tradition and Aesthetics in the Modern Social Order, Polity Press in assoc. with Blackwell Publishers, Cambridge, 1994. Charles Taylor, ‘Modes of Civil Society’, Public Culture, vol. 3, no. 1, Fall 1990, pp. 91–118.

Chapter 6: Politics, Power and Institutions 1 Transcript of speech by the Prime Minister, the Hon. P. J. Keating, to ‘Reshaping Australia’s Institutions’ meeting, Australian National University, 22 February 1994 (proof transcript kindly supplied to me on request by Mr Keating’s office). 2 As indicated in the last chapter, these tendencies run against the application of Putnam’s classically American arguments about citizenship and civic engagement to the Australian situation.


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3 Question: ‘How proud are you of Australia in each of the following: The way democracy works?’ Proud!! 20%, Proud 57%, Not proud 17%, Not proud!! 3%, Can’t choose 3% (n = 386). 4 Question: ‘How proud are you of Australia in each of the following: Its fair and equal treatment of all groups in society?’ Proud!! 7%, Proud 40%, Not proud 41%, Not proud!! 11%, Can’t choose 1%, n = 382. The National Social Science Survey of 1995 reported the following results: Proud!! 12%, Proud 42%, Not proud 34%, Not proud!! 8%, Can’t choose 5% (total greater than 100 due to rounding). 5 See Professor Murray Goot, ‘Distrustful, Disenchanted and Disengaged? Public Opinion on Politics, Politicians and the Parties: An Historical Perspective’, in David Burchell and Andrew Leigh (eds), The Prince’s New Clothes: Why do Australians Dislike their Politicians?, University of New South Wales Press, Sydney, pp. 9–46, 2002. 6 Some of the questions used in this and the following tables in this section are replicated from the National Social Science Surveys, others were taken from the British Social Attitudes surveys, others again are our own. 7 Of respondents who voted Labor in the 1996 federal election (House of Representatives), 75% supported stronger government control over the activities of multinational companies, compared to 62% of Liberal voters, and 85% of Greens and Democrats voters (P < 0.05, V = 0.13, n = 337). 8 Business Section, Sydney Morning Herald, 20 February 2001, p. 25. 9 Pamela Williams and Stephen Ellis, ‘Dawkins Kisses and Tells on BCA’, Australian Financial Review, News and Features, 15 July 1994. 10 For example, in early 2001 in the first months of the Bush Junior administration, the Labor Opposition instantly pledged its support for a mooted Free Trade Agreement with the United States. 11 ‘People like me are …’: 1996 panel sample: winners 40%, losers 38%, no idea 22% (n = 179). 1999–2000 panel sample: winners 32%, losers 55%, no idea 13% (n = 195). Difference significant P < 0.01 (Wilcoxon matched-pairs signed rank test and Sign test). 12 Question: ‘Generally speaking, would you say that this country is run by a few big interests looking out for themselves, or that it is run for the benefit of all the people? Run by a few big interests, run for all the people, don’t know.’ P < 0.001, Gamma = –0.68, total n = 330. 13 Agree strongly or agree, 56%; neither, 23%; disagree or disagree strongly, 21%; n = 384. 14 Richard Sennett, The Corrosion of Character: The Personal Consequences of Work in the New Capitalism, Norton, New York, 1999, p. 9. 15 Of respondents agreeing that big business benefits owners at the expense of workers, 16% also agreed that the country is run for all people, compared to 84% stating that it is run by a few big interests (n = 195, P < 0.001, Gamma = –0.59, total n = 325). 16 Of respondents earning an equivalent household income of between $0 and $15,000, 18% agreed that the country was run for all people, compared to 43% of those earning over $45,001 (P < 0.01, Gamma = –0.26, n = 311). 17 Of respondents earning an equivalent household income of between $0 and $15,000, 81% said they were angry or a bit unhappy about what is happening to middle Australia, compared to 58% of those earning over $45,001 (P < 0.01, Gamma = 0.32, n = 325).

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18 Bob Walker and Betty Con Walker, Privatisation: Sell-off or Sell-out?: The Australian Experience, ABC Books, Sydney, 2000. 19 Much of the material in this section is taken from a paper co-authored with my two research assistants Dr Shaun Wilson and Nick Turnbull, presented to the Australian Sociological Association Conference, Flinders University, Adelaide, December 2000. They were the principal authors of the paper. 20 Question: ‘Do you think that the kind of economic system Australia had between 1945 and 1985 or so – with most businesses private but some owned by the government, strong trade unions, and high tariff protection for manufacturing – brought you and your family’: Only benefits or more benefits than harm 51%, As much benefit as harm 40%, More harm than benefits or only harm 10% (n = 367). 21 Question: ‘How would you rate economic reform (things like deregulation of business, privatisation, job restructuring and more competition, etc.)’ on a scale from 0 to 100. Scores above 60 (which corresponded to ‘more warm than cold’) were categorised as pro-reform; scores between 40 and 60 were considered as neutral; and scores between 0 and 40 (which corresponded to ‘more cold than warm’) were categorised as anti-reform. 22 Question: Government should give ‘support for declining industries to protect jobs’. 1996 panel: agree 35%, don’t know 23%, disagree 42% (n = 191). 1999–2000 panel: agree 53%, don’t know 18%, disagree 29% (n = 195). Difference significant, Sign test P < 0.001 and Wilcoxon matched pairs signed ranks test P < 0.001. 23 Liberal: agree 49%, disagree 29%; Labor: agree 84%, disagree 8%; Democrat/Green: agree 78%, disagree 11% (n = 333). 24 This compares with 76% support for national wage setting by Labor voters and 72% by Democrat/Green voters (P < 0.001, V = 0.29, total n = 336). 25 Sign test P < 0.05, n = 185, Wilcoxon signed ranks test P < 0.1. This test also confirmed that – although support for enterprise bargaining fell overall, with 59 respondents directing their ranking more towards disagreement – 34 respondents indicated a stronger preference towards support for company-level wage negotiations. This provides a further suggestion of divisions within the sample around the regulation of employment. 26 Question: ‘Do you think the incomes and job prospects of middle Australians are rising or falling?’ Significant association between a positive outlook and support for enterprise bargaining (P < 0.001, Gamma = 0.44, n = 323, ‘don’t know’ excluded), individual contracts (P < 0.001, Gamma = 0.42, n = 321) and privatisation of public services (P < 0.05, Gamma = 0.30, n = 318). 27 Of those angry or unhappy with what is happening to middle Australia, 63% described themselves as losers from economic change, compared to 16% of those describing themselves as calm and satisfied; P < 0.001, V = 0.43, n = 263, ‘no idea’ and ‘don’t know’ excluded. 28 Of those who felt that their job and income prospects were falling, 85% described themselves as angry or unhappy; in comparison, of respondents who felt that their job and income prospects were rising, 52% described themselves as calm and satisfied (P < 0.001, V = 0.37, n = 307). 29 M. Goot, ‘Keeping the Bastards Honest, by the People …’, AQ: Journal of Contemporary Analysis, September–October 1999, pp. 16–24.


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30 See J. S. Nye Jr, P. D. Zelikow, D. C. King (eds), Why People Don’t Trust Government, Harvard University Press, Cambridge, Mass., and London, 1997. 31 Of respondents who did not ‘trust Australian governments of any party to put the needs of the nation above the interests of their own political party’, 70% were more likely to be angry or unhappy about what is happening with middle Australia than those who expressed trust in government. In the panel study 1999–2000, there was a strong association between identifying as a loser from economic reform and having low trust in government. 32 P. Katzenstein, ‘Confidence, Trust, International Relations, and Lessons from Smaller Democracies’ in S. Pharr and R. Putnam (eds), Disaffected Democracies: What’s Troubling the Trilateral Countries?, Princeton University Press, 2000, pp. 121–48. 33 O. Patterson, ‘Liberty against the Democratic State: Regean, Thatcher and the Politics of Retrenchment’ in M. Warren (ed.), Democracy and Trust, Cambridge University Press, 1999, p. 189. 34 Fifty-two percent of respondents thought the government could do quite a bit ‘to create more job security’, and 61% thought it could do quite a bit to ‘reduce gap between rich and poor’. 35 See Jonathon Pincus, ‘Market Failure and Government Failure’, in S. King and P. Lloyd (eds), Economic Rationalism: Dead End or Way Forward, Allen and Unwin, Sydney, 1993. 36 Clive Bean, ‘Citizen Beliefs and Attitudes about Australian Institutions: An Overview’, paper presented to Reshaping Australian Institutions Conference, Australian National University, Canberra, 2–3 November 1995. 37 Figures kindly supplied by Dr John Buchanan of ACIRRT. 38 ACIRRT, ‘An analysis of the 1996, 1997 and 1999 Newspoll Industrial Relations Survey’, a report prepared for the NSW Labor Council by the Australian Centre for Industrial Relations Research and Training, University of Sydney, 1999, p. 4. 39 Francis G. Castles, The Working Class and Welfare: Reflections on the Political Development of the Welfare State in Australia and New Zealand, 1890–1980, Allen and Unwin, Wellington, 1985; and F. G. Castles, ‘Australia and Sweden: The Politics of Economic Vulnerability’, Thesis Eleven, no. 16, 1987, pp. 112–21. 40 It is Bean, ‘Citizen Beliefs’, who makes this observation on confidence in the Constitution. The interpretation is mine. 41 The survey question is taken from the British Social Attitudes Surveys: ‘There is one law for the rich and one for the poor’ 69%, or ‘Rich or poor, everyone gets treated the same’ 14%, or ‘Can’t choose’ 17% (n = 388). The comparable 1995 BSA figures are 74% and 13% respectively for the substantive answers. Another interview question confirms this judgement. Our respondents were asked ‘Now suppose two people from different backgrounds – one rich, one poor – each appear in court charged with a crime they did not commit. What do you think their chances are of being found guilty?’ ‘The rich person is more likely to be found guilty’ 1%, or ‘They have the same chance’ 21%, or ‘The poor person is more likely to be found guilty’ 75%, ‘Don’t know’ 3% (n = 395). 42 It is well to note here that we mean a negotiated cooperation that allows people to deal with conflicts that are often necessary and useful. 43 These results first appeared in M. Pusey, ‘Wellbeing and Quality of Life’, in Richard Eckersley (ed.), Measuring Progress, CSIRO Publishing, Collingwood, Vic., 1998.

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44 ‘Australians were born modern, believing that the state, far from encroaching upon individual rights, would be the most likely protector of rights against other agencies of social coercion. Unlike the doctrinaire liberals … Australians believed that the major constraints on individual liberty were not public, but private.’ Richard N. Rosecrance, ‘The Radical Culture of Australia’, in L. Hartz (ed.), The Founding of New Societies, Harcourt Brace, New York, 1964, p. 310. 45 Question: ‘Looking ahead over the next ten years or so, do you think life is going to get easier or harder for ordinary middle Australians in the foreseeable future?’, compared with attitudes on how to solve Australia’s economic problems. Of respondents indicating life would get easier for middle Australians, 48% also stated that private enterprise is the best way to solve Australia’s economic problems, compared to 16% favouring government intervention (P < 0.05, V = 0.15, n = 320, ‘don’t know’ excluded). Question: ‘On balance do you think our quality of life is improving or declining?’ compared with attitudes on how to solve Australia’s economic problems. Of respondents who believed that the quality of life is improving, 48% believed that private enterprise was best, compared to 18% favouring government intervention (P < 0.001, V = 0.22, n = 326, ‘don’t know’ excluded). 46 Question: People like me are winners/losers’ compared with attitudes on how to solve Australia’s economic problems. Of those stating that ‘people like me’ are winners, 45% also supported private enterprise, compared to 22% favouring government (however, this relationship was only significant at P < 0.1, V = 0.14, n = 281, ‘no idea’ excluded). Question: ‘People in the middle are winners/losers’ compared with attitudes on how to solve Australia’s economic problems. Of those who replied that people in the middle were winners, 43% also supported private enterprise solutions, compared to 21% supporting government intervention (not quite significant, P = 0.10, n = 296, ‘no idea’ excluded. The relationship was significant when ‘can’t choose’ was excluded – P < 0.05, V = 0.14, n = 199). Question: ‘Wage and salary earners are winners/losers’ compared with attitudes on how to solve Australia’s economic problems. Of respondents who stated that wage and salary earners were winners, 50% supported private enterprise solutions, compared to 22% favouring government intervention (P < 0.01, V = 0.19, n = 299). 47 Of part-time workers (n = 59), 31% favoured government intervention, compared to 22% favouring private enterprise; of full-time workers (n = 161), 41% supported private sector solutions, compared to 28% supporting government; ‘other’ employees (unemployed, retirees, students, home makers, n = 134) also favoured the private sector (37%) over the state (25%) (P < 0.1, V = 0.15, total n = 354). 48 Equivalent household income $0–15,000, private enterprise 29%, government 33% (n = 110); $15,001–30,000, private enterprise 37%, government 25% (n = 112); $30,001–45,000, private enterprise 37%, government 23% (n = 74); $45,001 and over, private enterprise 54%, government 29% (n = 65). (P < 0.05, V = 0.15, total n = 361.) 49 A slightly larger proportion of respondents indicating that Australia is an elite society (Type A) believed that government intervention was best (36 to 34%, n = 50). This varied inversely according to the perception of Australian society, with half of those indicating a middle-class (Type D) society favouring private enterprise solutions (51 to 15%, n = 82). (P < 0.01, V = 0.16, total n = 372.)


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50 See corroborating evidence in David Hayward ‘The Public Good and the Public Services: What Role for the Private Sector?’, Dissent, no. 8, Autumn–Winter 2002, pp. 8–12. 51 Health: spend more or much more, 77%; education: spend more or much more, 79% (n = 362). 52 Question: ‘Listed below are various areas of government spending. Please show whether you would like to see more or less government spending in each area’: spend much more, spend more, spend the same as now, spend less, spend much less, can’t choose’ (Friedman Two-Way Anova P < 0.001; Kendall’s W = 0.35, P < 0.001, ‘can’t choose’ excluded, n = 362). 53 The proportion of respondents in the panel sample supporting ‘more’ or ‘much more’ spending on services rose from 1996 to 1999–2000 for the following variables: health (72 to 84%, P < 0.01, n = 189), police and law (59 to 67%, P < 0.05, n = 188), education (77 to 81%, P < 0.05, n = 189), military and defence (14 to 37%, P < 0.001, n = 186), old age pensions (43 to 51%, P < 0.05, n = 187) and unemployment benefits (15 to 17%, P < 0.05, n = 182). It declined, but not statistically significantly, for the environment (58 to 53% – not significant, n = 182) and culture and the arts (24 to 20%, not significant, n = 186). ‘Can’t choose’ was excluded for all significance tests. 54 Sixteen per cent of our respondents answered ‘don’t know’. 55 At the federal or national level the United States has formally abandoned welfare programs, and set absolute time limits on state level welfare programs. About 2% of US adult males of working age are in prison. ‘Welfare’ in the United States is shot through with race politics and generally heard as code for giving money to a largely black and ‘deviant’ underclass. 56 P. Saunders, The Ends and Means of Welfare, Cambridge University Press, Cambridge, 2002, p. 29, Table 2.3. 57 The National Social Science Survey reported that 51% of Australians were ‘proud!’ or ‘proud’ of our social security system. 58 This compares to 22% who agreed that ‘We control the economy: by and large the economic system has to respond to our needs and wants.’ 59 This is also how Australia appears in comparison with Western European countries, where the same pressures have been more successfully moderated through the political process. 60 The ‘work for the dole’ question was only asked in the panel sample, with 74% of middle Australians supporting work for the dole for unemployed young people (n = 197), and 55% supporting work for the dole for all unemployed people (n = 196). For more discussion on welfare policy in Australia and the Middle Australia Project data, see Shaun Wilson and Nick Turnbull, ‘Wedge Politics and Welfare Reform in Australia,’ Australian Journal of Politics and History, vol. 47, no. 3, 2001, pp. 384–402. 61 Geoffrey Bennan and Loren Lomasky, Democracy and Decision: The Pure Theory of Electoral Preference, Cambridge University Press, 1993. 62 Until the late 1980s some of the business think-tanks and reform jockeys were still trying to persuade the public that public services were an assault on their basic freedoms, that the market would distribute money and power more fairly than other institutions, and even, in a favourite line of the BCA, that corporations needed to be

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72 73 74


placed on a more equal footing with the individual by removing unions and governments as third parties to conflicts. By the end of the 1980s it was clear that this organised humbug would not wash with the wider community, and that more stealth and even less candour would be necessary to keep the reform train moving. Richard N. Rosecrance, ‘The Radical Culture of Australia’, p. 310. Michael Pusey, Economic Rationalism in Canberra: A Nation-Building State Changes its Mind, Cambridge University Press, 1991. Robert H. Frank and Philip J. Cook, The Winner-Take-All Society, Free Press, New York, 1995. Trinca, H. ‘Showdown on the Waterfront’, Sydney Morning Herald, 31 January 1998; ‘Webb of Intrigue’ on The 7.30 Report, ABC Television, 9 March 1998. See Deborah Brennan and Bettina Cass, ‘The Communitarian Imaginary: Deconstructing the concept of “Community” in Australia’s Welfare Reform Debate’, paper presented at National Social Policy ‘Competing Visions’ conference, University of New South Wales, 4–6 July 2001. Bob Walker and Betty Con Walker, Privatisation: Sell-off or Sell-out?: The Australian Experience, ABC Books, Sydney, 2000. Over at least fifteen years mounting pressure has been put on the Australian Research Council to assign funds in a way that is more friendly to business interests and less friendly to basic research that is perceived to be critical and ‘progressive’. The Howard government has exerted similar pressures, with selective de-funding, on social policy research organisations. The inspired phrase of Professor John Braithwaite, Australia’s leading author on regulation theory and regulatory policies, and former director of the Australian National University’s ‘Reshaping Australia’s Institutions’ Project. See Peter Grabosky and John Braithwaite, Of Manners Gentle: Enforcement Strategies of Australian Business Regulatory Agencies, Oxford University Press, in association with Australian Institute of Criminology, Melbourne, 1986; and Ian Ayres and John Braithwaite, Responsive Regulation: Transcending the Deregulation Debate, Oxford University Press, New York, 1992. For references to the ‘hydraulic’ model, see J. Braithwaite, ‘Institutionalising Trust: Enculturating Distrust’, in V. Braithwaite and M. Levi (eds), Trust and Governance, Russell Sage, New York, 1998. The Trilateral Commission was but one of five leading international business organisations leading the push for globalisation. See other references in this volume and also William Carroll and Colin Carson, ‘The Network of Global Corporations and Elite Policy Groups: A Structure for Transnational Capitalist Class Formation?’, paper presented at the XVth World Congress of Sociology, July 2002, Brisbane, Qld; and Leslie Sklair, The Transnational Capitalist Class, Blackwell, Oxford, 2001. L. C. Robbins, An Essay on the Nature and Significance of Economic Science, 2nd edn, Macmillan, London, 1935, p. 156. A. Giddens, The Consequences of Modernity, Polity Press, Cambridge, in assoc. with Basil Blackwell, Oxford. Throughout the 1980s, John Howard – who was later to become the Prime Minister – and Peter Reith – later the Minister for Industrial Relations – would constantly speak of Australia’s bloated public sector, knowing full well, presumably, that it was then already one of the leanest governments in the OECD.


235

75 Prime Minister Hawke committed his own party to a ‘trilogy’ of measures adopted in 1984, apparently without its consent, to halt increases in taxation, public expenditure, and budget deficits, each as a percentage of GDP. See Frank Stilwell, The Accord and Beyond: The Political Economy of the Labor Government, Pluto Press, Sydney, 1986. 76 Peter Beilharz, Transforming Labor: Labour Tradition and the Labor Decade in Australia, Cambridge University Press, 1994. 77 The policy options have already been closed off by reform.

Chapter 7: Judgements on Economic Reform 1 Habermas, quoting Ralf Dahrendorf (Blätter für Deutsche und Internatonale Politik, vol. 9, 1996) in ‘Learning by Disaster? A Diagnostic Look Back on the Short 20th Century’, Constellations, vol. 5, no. 3, Blackwell, 1988, pp. 307–20. I have made ‘economic reform’ instead of ‘neo-liberal economic reform’ the predicate of this sentence. 2 This sentence and the figures in the one preceding it come from Majid Tehranian’s opening remarks to the International Conference on Human Security and Global Governance, sponsored by the Toda Institute for Global Peace and Policy Research and the Centre for Peace and Conflict Studies at the University of Sydney, 28–30 November 1998. 3 Ibid., p. 1. 4 Linda Weiss, ‘Bringing Domestic Institutions Back In’, in L. Weiss (ed.), States in the Global Economy: Bringing Domestic Institutions Back In, Cambridge, 2002. 5 The ABS reports that in 1999, 57.9% of the population was employed. The standardised labour force participation rate was 63.7%. 6 See Appendix C, Table C.4. 7 L. Mishel, J. Bernstein and J. Schmitt, The State of Working America, 1998–99, ILR Press, New York, 1999. 8 Ulrich Beck, ‘Politics of Risk Society’, ch. 1 in Jane Franklin (ed.), The Politics of Risk Society, Polity Press, Malden, Mass., 1998. 9 U. Beck, Democracy without Enemies, trans Mark Ritter, Polity Press, Cambridge, 1998, p. 8. 10 Richard Sennett, Corrosion of Character: The Reasoned Consequences of Work in the New Capitalism, Norton, New York, 1998, p. 97. 11 Zygmunt Bauman, ‘Morality in the Age of Contingency’, ch. 3 in Paul Heelas, Scott Lash and Paul Morris (eds), Detraditionalisation: Critical Reflections on Authority and Identity, Blackwell, Oxford, 1996, p. 51. 12 Ibid. 13 Bauman, ‘Morality in the Age of Contingency’, in Heelas, Lash and Morris (eds), Detraditionalisation, p. 52. 14 Richard Sennett, ‘The New Capitalism’, Social Research, vol. 64, no. 2, Summer 1997, pp. 161–80. Even in admitting with Sennett that modern abstract time is an enabling condition of plural society, I agree with his judgement that ‘What has been carried into the present from the past are a set of subjective values, values for making time coherent and durable, but in entirely personal terms. This personal durable time intersects with the new economy of work in particularly disturbing ways.’ I see this

236

15 16 17 18

19 20 21 22 23 24 25 26 27 28 29 30 31 32

33 34


problem as one more aspect of the forced internalisation of risk – forced upon us by economic functionalism. See John Mirowsky and Catherine Ross, Social Causes of Psychological Distress, Aldine de Gruyter, New York, 1989. See Pusey, Economic Rationalism in Canberra. Pierre Bourdieu, Acts of Resistance: Against the Tyranny of the Market, trans. R. Nice, New York University Press, 1998, p. 34. Paul Keating speaking at the University of New South Wales on social policy, 11 November 1996; and his earlier speech to ‘Reshaping Australian Institutions’ conference, Australian National University, 22 February 1994 (see Chapter 6, endnote 1). Beck, Democracy without Enemies, p. 10. ‘Freedom’s Children’ is Beck’s title to the first chapter. See Pusey, Economic Rationalism in Canberra, esp. chs 4 and 5. See John Ralston Saul, Voltaire’s Bastards: The Dictatorship of Reason in the West, Penguin Books, Toronto, 1993. Jürgen Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, trans William Rehg, MIT Press, Cambridge, Mass., 1996, p. 358. Ibid., p. 500. Niklas Luhmann, ‘Politics and Economy’, Thesis Eleven, no. 53, May 1998, pp. 1–9. Ibid. All words in quotation marks are taken from ibid. At a couple of points I have altered the punctuation in the original to make the translation and meaning clearer. Sennett, The Corrosion of Character, p. 10. Daniel Bell, ‘Models and Reality in Economic Discourse’, in Daniel Bell and Irving Kristol (eds), The Crisis in Economic Theory, Basic Books, New York, 1981, p. 56. Robert Lane, ‘Markets and the Satisfaction of Human Wants’, Journal of Economic Issues, vol. xii, no. 4, December 1979, pp. 799–827. Robert Lane, The Loss of Happiness in Market Democracies, Yale University Press, New Haven, 2000. Geoffrey Brennan and Loren Lomasky, Democracy and Decision: The Pure Theory of Electoral Preference, Cambridge University Press, 1993. James M. Buchanan, a Nobel laureate, is one of several economic theorists making these claims for what I call economic totalitarianism. For example see his comments that I have chained together thus: ‘Economists, almost alone, understand the notion of choice itself … [and] … Economists who believe in Homo economicus … must not be duped or lulled into the neglect of elementary principles … [nor] … fail to recognise that incentives remain relevant in all choice situations. [There is, he says] ‘near unanimity’ that attempts to impose ‘particularised constraints on voluntary exchange [government intervention, tariffs, price floors and ceilings, or prohibitions on entry and exit to the market] destroy potential [generic] value’: ‘Economics in the Post-Socialist Century’, Journal of Economic Literature, vol. 101, no. 404, January 1991, pp. 15–22. Max Weber, The Protestant Ethic and the Spirit of Capitalism, George Allen and Unwin, London, 1930, p. 181. See Hugh Collins, ‘Political Ideology in Australia: The Distinctiveness of a Benthamite Society’, in Stephen R. Graubard (ed.), Australia: The Daedalus Symposium, Angus and Robertson, North Ryde, NSW, 1985, pp. 147–71.


237

35 J. Dunn, ‘Trust and Political Agency’, ch. 3 in J. Dunn, Interpreting Political Responsibility, Polity Press, pp. 26–44. 36 Ibid. 37 Max Weber, Economy and Society, ed. G. Roth and C. Wittich, vol. 2, ch. 3, University of California Press, 1978. 38 This is John Braithwaite’s idea. 39 Joseph S. Nye Jr, Philip D. Zelkow and David C. King (eds), Why People Don’t Trust Government, Harvard University Press, Cambridge, Mass., 1997. 40 See excerpts from Christopher Lasch, The Revolt of the Elites and the Betrayal of Democracy, Norton, New York, 1995, published in the Independent Monthly, March 1995, pp. 38–43. 41 See Pusey, Economic Rationalism in Canberra, chs 5 and 6. 42 John Braithwaite notes that ‘we reached a situation in the late 1990s where a majority of the corporations which were the responsibility of the Large Business and International Line of the Australian Taxation Office were paying no company tax’. See J. Braithwaite, draft paper for ‘Reshaping Australian Institutions’ Conference, Canberra, August 2001. 43 A prominent international study of the likely causes for failing trust in governments cites rising economic inequality as one of 17 factors and, in the view of its authors, one that tends to languish for want of precisely the evidence presented here. See Nye, Zelkow and King (eds), Why People Don’t Trust Government. 44 See ibid. 45 Mark Danner, ‘The Lost Olympics’, New York Review of Books, 2 November, 2000, pp. 66–7. 46 From Democracy in America, p. 591, quoted by Beck, Democracy without Enemies, p. 2. 47 This is Beck’s phrase. See Beck, op. cit. 48 See Pusey, Economic Rationalism in Canberra. 49 Michel Crozier, Samuel P. Huntington and Joji Watanuki, The Crisis of Democracy: Report on the Governability of Democracies to the Trilateral Commission, Task Force Report No. 8, New York University Press, 1975. I chose to head these conclusions with Ralf Dahrendorf ’s words for a particular reason. In 1975 when the report was tabled, Dahrendorf was already an elder statesman of European economic policy. In deference to his standing he was present at the plenary meeting of the Trilateral Commission in Kyoto on 31 May 1975 and asked to respond. A quarter of a century later his reponse gives a breathtakingly accurate foresight into the consequences of its implementation. His remarks (see the appendix to the report) include the following passage in which he counsels, with deliberate understatement, against ‘the belief that the very progress which they [the postwar democracies] made possible for a large number of citizens must now be undone because it feels uncomfortable for some. They have to avoid the belief that a little more deliberate discipline, and a little less freedom of expression would make the world a better place, in which it is possible to govern effectively.’ 50 Susan J. Pharr and Robert D. Putnam (eds), Disaffected Democracies: What’s Troubling the Trilateral Countries?, Princeton University Press, 2000. 51 See Joan Didion, ‘The Washington Insiders’, New York Review of Books, 24 June 1999, pp. 72–80.

238


52 Iraq holds about 10% of the world’s oil reserves. One strategic aim of the attempt to topple the Sadam Hussein dictatorship is surely to install a compliant government that will break the OPEC cartel and sign over control of the Iraqi oil to USdominated corporations. Something very similar was done to Indonesia with support for the overthrow of President Sukarno and the installation of President Suharto in 1966. 53 Americans are so profoundly withdrawn into the private sphere, so overawed by the Presidency, so used to media-packaged politics, so ignorant about the rest of the world, and so thoughtless about world politics that they seem quite unable to see in Bush’s television performances what others see: namely the posturing of a monkey puppet for Big Oil, Big Business and Big Power, and a man bereft of all the talents and moral endowments of a statesman. When in the wake of September 11, he puts the rhetorical question ‘Americans ask: “Why do they hate us so?”’, the answer from friends abroad, and most thinking people everywhere, is, ‘because you do not ask the question for yourselves’! 54 As quoted from Malcolm Fraser’s talk on Margaret Throsby’s Guests, ABC Classic FM, 29 August 2000. 55 See Braithwaite, draft paper for ‘Reshaping Australian Institutions’ Conference. 56 See John Langmore, ‘US Still Wants to be World Sheriff ’, Sydney Morning Herald, 6 May 2002, Comment, p. 11. See also conservative Michael Ignatieff ’s ‘Barbarians at the Gate?’ New York Review of Books, 28 February 2002, pp. 4–6. 57 Bourdieu, Acts of Resistance, p. 39. 58 J. Habermas, Legitimation Crisis, trans. T. McCarthy, Heinemann Educational, 1976.

Appendix B 1 As reported in R. G. Gregory and B. Hunter, ‘The Macro Economy and the Growth of Ghettos and Urban Poverty in Australia’, address to the National Press Club, April 1995, available as Discussion Paper No. 325 of the Centre for Economic Policy Research at the Australian National University (and in a number of related publications of the authors and the centre).

Appendix C 1 Richard Hall, John Buchanan and Gillian Considine, ‘You value what you pay for: Enhancing employers’ contributions to skill formation and use’, Dusseldorp Skills Forum, Sydney, 2002, p. 20. The table appears in John Buchanan and Ian Watson, ‘The Failure of the Third Way in Australia: Implications for Policy about Work’ Journal of Competition and Change, vol. 5, no. 1, December 2001, pp. 1–37.

Appendix D 1 The key resource for this paper is Stein Ringen, ‘Households, Standard of Living, and Inequality,’ Review of Income and Wealth, vol. 37, no. 1, 1991, pp. 1–13. Most of the introductory section is drawn directly from his paper.


239

2 See Peter Saunders, Jenny Chalmers and Marilyn McHugh, ‘Research Design and Methods,’ in P. Saunders et al., Development of Indicative Budget Standards for Australia, Policy Research Paper No. 74, Department of Social Security, Canberra, 1998, pp. 54–112. 3 However, all income data must be treated with some suspicion, in that many people have difficulty estimating their income and respondents are reluctant to report their real income when they do know it. The method used in the Middle Australia Project survey is a reasonably reliable one and has been used in other studies. Therefore assessments of income should always be treated as subjective estimates.

Index

accounting houses, 11, 48, 145 action and behaviour, 14–15, 129 adjustment to reform, 66, 102, 107 anger of middle Australia, 2, 53–62, 101, 124, 143–4, 146, 149–50, 174 see also resentment of middle Australia arbitration, see wage setting associational density, 112–13, 135 Australia, compared, 9–20, 22, 37–8, 47–8, 49, 52, 74, 98, 108, 112–13, 115, 119, 124, 157, 169, 184, 197 Australian Broadcasting Corporation, 131, 164 Australian Labor Party, 8, 142–3, 146, 161, 163, 166–7 awards, see wage setting Battlers, see Hansonites and Battlers Bauman, Zygmunt, 171 Beck, Ulrich, 76, 171 behaviour, see action and behaviour big business, 130–2, 164 power of, 42, 69, 71, 79, 140–7, 150–1, 160, 180–5 trust in, 132–4 see also business Blair, Tony, see Third Way blame for impacts of reform, 67–75, 79, 96, 98, 159–62, 181 Bolton, Geoffrey, 22 Bourdieu, Pierre, 185 Braithwaite, John, 44, 169 Brennan, Geoffrey, 175, 176 budgets, national, see government, capacities of; public intervention business, 11

240

see also big business; CEOs; corporations; regulation; small business Business Council of Australia, 11, 48, 51, 142, 163 see also big business; business capitalism, models of, 9 see also economic reform; new capitalism; private enterprise; reform Castles, Francis, 41, 48, 169 CEOs, 69, 71, 142, 146 see also big business charities, 114 children, 82–90, 102, 106, 114 see also families choice, 78, 81, 84, 86, 89, 91, 97, 110, 157, 169 class and classes, 3, 22, 49, 54–6, 54 n.21, 91, 92, 108, 126–9 see also education and class Coalition, see Howard, John; Liberal Party community, 114 breakdown, 112–19 competition and economic reform, 96 Constitution, the, 153 consumers and consumerism, 93–5, 97, 103, 109, 118 contingency, see risk and reform Coombs, H. C., 14 coping strategies of middle Australians, 4, 15, 28–9, 59, 89–90, 107 corporations, 2, 3, 10, 12, 25, 47, 76, 79, 147, 168, 174–6, 185 see also big business; business; CEOs

Index

costs of reform, 76, 80, 95 see also externalities of reform; winners and losers Cox, Eva, 113 crime, 117–19, 156 Dahrendorf, Ralf, 12, 168 Dawkins, John, 143–4 de Tocqueville, 182 debt: foreign, 170 household, 29, 81, 95, 103, 108 democracy, 4–5 pride in, 139 representative, 178–82 ungovernability of, 8, 182–4 depression, 176 deregulation and economic reform, 51–2, 80, 147–50, 158 see also labour market reform differentiation of value spheres, 15, 105–10 distribution, comparative, 49 see also income, distribution of; income gap between rich and poor distributional justice, see ‘fair go’; fairness economic efficiency, 165 economic engineering, 4, 6, 9, 44, 47–9, 74, 153, 154, 177 see also economic reform; reform economic functionalists, 10–12, 48, 145, 173–8 economic fundamentalism, see economic engineering; economic functionalists; economic rationalism; economic reform economic institutions, old and new, 147–54 economic rationalism, 183 definition of, 9, 172 economic rationalists, 10–12, 145 see also economic functionalists economic reform, 1, 20 and elections, 139 and Labor, 8, 142–6, 161–7 depoliticisation of, 151, 154, 162, 165

241

drivers of, 10, 99, 151–2 legitimacy of, 20, 36–44 limits, 38, 88, 108 purpose, 1, 7–10, 20, 29, 44, 49, 155, 176, 181–3 resistance to, see politics, of reform; reform, acceptance of see also competition and economic reform; deregulation and economic reform; economic engineering; reform economic restructuring, see economic reform economists, 10 see also economic functionalists education and class, 53–6, 104, 108 efficiency, economic, 47 egalitarianism, 121–6 elites: confidence in, 69 resentment towards, 68–74 enterprise bargaining, 148–9, 165 see also economic reform; institutional reform expectations of middle Australians, 59, 154–9 externalities of reform, 66, 105 see also economic engineering ‘fair go’, 3, 48, 181 see also income, distribution of; income gap between rich and poor fairness, 20, 36, 44, 45, 75, 112, 139, 181 families: pressures on, 83 roles, 84–92 focus groups, 14–17, 54, 194–6 Fraser, Malcolm, 8 global economy, see globalisation globalisation, 2, 47, 71, 140, 147, 152, 160, 166–7, 172–4 government, 9 capacities of, 150, 155–7, 181–4 role of, 150, 154–9 trust in, 144–5, 178–82 see also budgets; business; big business

242

Index

government spending, preferences for, 159 see also budgets; government, capacities of greed, 96, 118, 182 Gregory, R, 16, 23–32, 194 Habermas, Jürgen, 136 Hanson, Pauline, 41, 72, 95, 159 Hansonites and Battlers, 58–61, 91, 94, 97–8, 103, 111, 129, 131, 150, 167 happiness, see quality of life Harding, Ann, 23–4 Hawke, Bob, 8, 51 hollowing out: of income distribution, 23 of middle class, 21–5 home ownership, 22, 22 n.16, 81 see also mortgage, home household duties, 84–92 Howard, John, 9, 51, 111, 163, 164, 167 Hughes, Robert, 3 identity, 65, 75, 79–80 immigrants, 116, 160 incentives and inequality, 37, 38 n.47 income, 25–6 adequacy of, 19, 27–9, 96 and job prospects, 149–50 and prices, 29–32 distribution of, 3, 6, 19, 21, 26–7, 30, 69, 83, 150 (see also winners and losers) equivalent income, 25–6, 204–7 male, 24 moderation of, 150 see also fairness; profit share of income; trust; wages; winners and losers income gap between rich and poor, 21, 25, 37–44, 97, 152, 155, 158 industry, 11, 51–3 manufacturing, 50, 53–62, 148 inequality, 20–1, 37, 122 n.24, 149 desirability of, 37 induced, 181 see also fairness; incentives and inequality; winners and losers

institutional reform, 147–54 institutions, 147–54, 181–5 international, 7, 168, 184 political, 150, 153, 163–4, 173 social, 67, 91, 98, 105, 111 investments, 47–8 invisible hand of markets, 45, 161, 174–8 see also economic engineering; economic functionalism jobs, meaning of, 48 see also income; labour market; work Katzenstein, Peter, 169 Keating, Paul, 9, 10, 51, 138, 166, 173 Kelly, Paul, 130 Krygier, Martin, 113 labour market, 120 flexibility, 51, 80, 169 see also income; jobs; labour market reform labour market reform, 47–53, 56, 69, 74, 176 Lane, Robert, 19, 175 Lasch, Christopher, 106 law, confidence in, 153 legitimacy of reform, 162–7, 178–82 see also morality, and economic reform leisure, 119, 175 see also pressure, experience of; quality of life; sport Liberal Party, 77, 142, 163 Mackay, Hugh, 102–3 management, relations with, 68, 141, 161–2 see also business market: as a natural force, 179 (see also economic engineering) functions of, 174–6 penetration of, 176 see also economic functionalism; economic reform; invisible hand of markets; reform

Index

materialism, see consumers and consumerism; greed McCalman, Janet, 103 media, 8, 79, 126–32 see also public sphere; television memory, see time men, and workforce, 84 middle Australia, 3, 14–16 see also anger of middle Australia; coping strategies of middle Australians; expectations of middle Australians; resentment of middle Australia Middle Australia Project, 14–18, 194–6 middle class: hollowing out of, 21–5 see also class and classes modernity, 73, 80–8, 91–2, 94–6, 98–100, 102–3, 107–10, 113, 132, 172, 177, 184 money, 2, 5, 20–1, 182 and bills, 25–6 as a medium, 45, 110 meaning of, 29, 44–5, 94, 96 see also economic engineering; economic reform; reform morality, 112, 119, 136, 174–8 and economic reform, 62–5, 92, 97–101, 103–9, 112, 174–8 mortgage, home, 27–8, 61, 78, 94–5 see also home ownership Murdoch, Rupert, 13, 131 mutuality, 100, 109 national conversation, 131 National Party, see Liberal Party new capitalism, 8, 10, 107, 183–4 new consensus, 48 see also reform, acceptance of; Washington consensus New Zealand, 9, 22, 48 North, Douglas, 169 Offe, Claus, 47 One Nation, see Hanson, Pauline; Hansonites and Battlers performance pressures, 62, 99–100

243

pluralism, see modernity politics: interest in, 138 of reform, 162–7, 183 poor, see poverty positional goods, 5, 96–7, 110 poverty, 22, 27–8, 38–44, 61, 118, 156 see also charities; income; welfare power of big business, see big business; trust pressure, experience of, 105–7, 171–2 see also performance pressures; work private enterprise versus public intervention, 157–9 see also capitalism; economic reform; new capitalism private sector, 141, 154–9 see also public sector private sphere, 2, 87, 110, 112, 115, 128, 136, 166, 183 see also public sphere privatisation, 52, 62, 146, 147, 159, 169 Probert, Belinda, 105 productivity, 47, 80, 109–10, 169, 172 see also labour market reform profit share of income, 6 public intervention, 154–9 see also government, capacities of public sector, 6–7, 60, 70 see also government, capacities of; private sector public sphere, 129, 136, 174 see also private sphere Putnam, Robert, 121, 132 quality of life, 42, 58–61, 106, 118, 122, 122 n.23, 158, 171, 175 recognition, 65 redistribution dimensions of, 6 see also income, distribution; winners and losers reform: acceptance of, 17, 20, 58-62, 70–1, 126, 180–2 and trust, 135

244

Index

reform: cont’d costs and rewards, 91, 184 of labour market, see labour market reform neo-liberal, see economic engineering; economic functionalism; economic reform politics of, 139, 162–7, 180–2 winners and losers of, 2 see also adjustment; externalities of reform; institutional reform; risk and reform regulation, 48, 161 of business, 13, 20 see also wage setting resentment of middle Australia, 41, 71–4, 142, 150, 174 see also anger of middle Australia restructuring, see economic reform; reform rich and poor, see income, distribution of; income gap between rich and poor; winners and losers risk and reform, 66–7, 136 Rohatyn, Felix, 14 Saunders, Peter, 23, 24, 89 Schor, Juliet, 98 Sen, Amartya, 26, 175 Senior Executive Service, 10 Sennett, Richard, 1, 67, 72, 73, 145, 172, 174 Skocpol, Theda, 169 small business, 70, 115, 140 social capital, see Putnam, Robert social cohesion, 75, 132, 168, 182 see also trust social contract, 47–51, 64, 70–5, 88 social justice, 47–9 social security, see welfare social structure, 17, 112, 121–6 see also class and classes Soros, George, 11 sport, 115 see also leisure standard of living, see quality of life structural adjustment, see economic reform; reform survivors of reform, 57 tax policy, 140–1, 154 television, 127–9

think tanks, 11, 48, 180 Third Way, 167, 180 time, 170 and quality of life, 105–7 horizons, 6, 15, 101, 105–7 Trilateral Commission, 8 n.16, 12, 165, 183–4 trust, 5, 132–5, 178–82 and power of big business, 144–5 and social structure, 133 in government, 132–3, 150, 159–66, 178–82, 184 in other people, 132–5 political abuse of, 145, 178–82 related to income, 133–5 unions, 49–50, 151 United States, 41, 78, 113, 180–2, 184–5 utilitarianism, 97, 175 values, spheres of, 105, 109–10, 117, 174–8 see also morality volunteering, 119–21 wage and salary earners, 6, 146, 165 as losers, 32–7, 144–5 wage setting, 48, 138, 147, 163 wages as share of income, 6–7, 160 Washington consensus, 48 Weber, Max, 178 Weiss, Linda, 169 welfare, 39–40, 154, 159–61 winners and losers, of reform, 32–6, 53, 74, 75, 80, 97, 107, 121, 124, 144–5, 165–7, 172, 181 women: and workforce, 24, 83 guilt of, 99–100, 104 leisure of, 115 work, 62–6, 82–92 and workplaces, 60–1 as a commodity, 65 pressures of, 60, 65, 97, 105 unsocial hours, 115, 171 see also labour market reform work for the dole, 162 see also welfare working class, see class and classes

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