Economic Rationalism in Canberra: A Nation-Building State Changes its Mind

ECONOMIC RATIONALISM IN CANBERRA

ECONOMIC RATIONALISM IN CANBERRA A NATION-BUILDING STATE CHANGES ITS MIND

MICHAEL PUSEY School of Sociology University of New South Wales

The right of the University of Cambridge to print and sell all manner of books was granted by Henry VIII in 1534. The University has printed and published continuously since 1584.

CAMBRIDGE UNIVERSITY PRESS Cambridge New York Port Chester Melbourne Sydney

For my children, Cara and Lisa. Published by the Press Syndicate of the University of Cambridge The Pitt Building, Trumpington Street, Cambridge CB2 1RP, UK 40 West 20th Street, New York, NY 10011, USA 10 Stamford Road, Oakleigh, Melbourne 3166, Australia © Cambridge University Press 1991 First published 1991 Reprinted 1991, 1992 Reprinted with corrections, 1992 National Library of Australia cataloguing-in-publication data:

Pusey, Michael. Economic Rationalism in Canberra. Bibliography, includes index. ISBN 0-521-33422-5. ISBN 0-521-33661-9 (pbk.). 1. Civil service - Australia. 2. Australia - economic policy - 1976-90. 3. Australia - economic policy - 1990 - , 4- Australia - Politics and government. I. Title. 338.994 British Library cataloguing-in-publication data:

Pusey, Michael 1939Economic rationalism in Canberra : a nation-building state changes its mind. 1. Australia, Public administration. I. Title 359.9471 ISBN 0-521-33422-5 ISBN 0-521-33661-9 pbk Library of Congress cataioging-in-publication data:

Pusey, Michael, 1939Economic rationalism in Canberra : a nation-building state changes its mind / Michael Pusey. Includes bibliographical references and index. ISBN 0-521-33422-5. — ISBN 0-521-33661-9 (pbk.) 1. Australia - Economic policy. 2. Australia - Social policy. 3. Australia - Politics and Government - 1945- I. Title. HC603.P87 1991 338.994 -dc20 91-2950 CIP

Transferred to digital printing 2003

iv

CONTENTS

Preface

vii

INTRODUCTION

Canberra in the balance The politics of meaning and the meaning of politics Method and purpose

1 13 23

PART ONE

Canberra: a state apparatus changes its mind CHAPTER 1

Images of contemporary Australia Problems and obstacles Windows and images Conclusion

29 33 37 43

CHAPTER 2

Profiles of Canberra's political administrators Social backgrounds Political orientations Enter the economic rationalists Government and administration under Hawke Technocrats? Conclusion

45 47 56 59 64 67 74

CHAPTER 3

The inner triangle The central agencies The market-oriented departments The program and service departments Conclusion

76 81 90 97 106

CONTENTS

CHAPTER 4

The instrumentation of state power The state changing its mind, or reforming the top of the Public Service Intellectuals and vertical structural integration Rationalisation and lateral structural integration From the invisible to the visible hand: the formal restructuring of Bastille Day 1987 Conclusion

111 113 126 134 146 153

PART TWO

State and society: reflections, refractions, reductions CHAPTER 5

'Rationalisation* and modernity: what has happened to the state's deliberative capacity? Canberra in the Whitlam years: the earlier normative context of reform What has happened to the state's deliberative capacities? The 'demoralisation' of the career service The depoliticisation of the politicisation of an apolitical career service Crisis of the state, or crisis of modernity?

159 160 169 182 188 195

CHAPTER 6

Integrity under stress: the Lucky Country enters the world economy Relative autonomy of the state? Responding to vulnerability (up the creek or down the Murray?) Vulnerability, culture and identity jittering into the future: evaluations and choices

218 224 234

Appendix A: Methods and procedures Appendix B: Major economic trends 1975-88 Appendix C: Major events 1975-90

245 258 260

Notes and References Index

263 301

VI

208 211

PREFACE

This book is the result of four years of work and, more to the point, of much good fortune. I was fortunate to have the support of many institutions and colleagues that I shall do my inadequate best to acknowledge. I was also allowed a unique access to the top echelons of the Canberra state apparatus at what turns out in retrospect to have been an extraordinarily opportune moment in its history. With the benefit of hindsight it is clear that many of the fundamental directions of Australia's passage toward the twenty-first century were either cast or were only just becoming visible in the moments in which this study was made. As events would have it no one before or since could have had quite such a privileged view of those events for a number of reasons. In 1985 and 1986, the costs and benefits of 'economic rationalism', and indeed the winners and losers of that orientation to national policy, were only dimly visible. Moreover, the climate of economic gloom and of general apprehension about the future of this nation had not really pervaded the consciousness of broader sections of the Australian population to the extent that it has today. And so for these and other reasons my respondents were exceptionally open and trusting in all that they proffered to us in the interviews. That is why the first people whom I must thank are the respondents themselves. As the preliminary results of this study attracted national media and press coverage in 1988 and again in late 1990, the changing cast of the Canberra bureaucracy has been increasingly politicised in a way that will please some of my respondents, leave others uncertain or dismayed, and perhaps anger others. Since I have been typed by many (perhaps wrongly) as the first person to have 'blown the whistle on the economic rationalists' in the Canberra administration, I need to tell my readers, and especially my

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ECONOMIC RATIONALISM IN CANBERRA

interviewees, that I have had much difficulty struggling with the responsibilities of my own positions in relations to these developments. Most importantly I need to say to the interviewees, to all of them and perhaps most of all those who do not like the judgments I have made, that I have to the best of my ability responded in kind to the intellectual and moral goodwill that made people open their views to the scrutiny and judgment of someone over whom they would have no sanction. ACKNOWLEDGMENTS Grateful acknowledgments are due to the indispensable assistance of several institutions. Most especially I wish to thank the Australian Research Council that supported the project for three years. And similarly I thank the Public Service Board, its former Chairman Peter Wilenski, and the former Director of the Research Branch, John Russell. The Board gave its official support to the study and was impeccable in its acceptance of my independence and of the guarantees I made to the respondents that no names would be seen or kept by anyone except myself and my interviewers. In a period where teaching and research resources have been extremely scarce I am especially grateful to the University of New South Wales. My colleagues in the School of Sociology and two successive Heads of School, Frances Love joy and Ann Daniel, have helped in every way they could and so did many other colleagues in this vital and stimulating Faculty of Arts and Social Sciences. The Faculty gave me some supplementary research support from its own funds for the best part of five years and, for that whole time, I have been immensely encouraged by the intellectual interest and practical help of our dean, John Milfull. Thanks go also to the staff of the Faculty's Public Sector Research Centre. And of course there would be no book without a publisher and in this case without first the faith and then the gentle and discerning advice of Robin Derricourt, the Managing Editor of Cambridge University Press. My heartfelt thanks go to those many people who gave so much time to the study. In the early stages so many people gave advice, help and encouragement that I have now space only to thank a few of them who must include Jiirgen Habermas, David Bennett, Sol Encel, Mira Crouch, Bob Connel, Chris Selby-Smith, Ivan Szelenyi, John Langmore, Robert van Krieken, Jane Marceau, Gavan McDonell,

vin

PREFACE

Jennifer Wilkinson, Elizabeth Fulop, Pieter Degeling, Stewart Clegg, Frank Jones, John Higley, Stephanie Short, Christine Crowe, Hal Colebatch, Winton Higgins, Tom McCarthy, Gian Poggi, Trevor Matthews, Noel Butlin, Elaine Thompson, and Michael Johnson. I am greatly indebted to Adrian Fordham for his endlessly patient help with technical aspects of the research design and, similarly, to Danny Hassofer for his assistance with the data processing and computing. Tim Rowse and Gillian Evans were wonderfully conscientious and skilled interviewers whom I cannot thank enough. And then there are those people who spent days, and even weeks, working through the drafts. Chris Selby-Smith, Leslie Fallic, John Western, Adrian Fordham, Jocelyn Pixley, and James Guthrie have all, from their widely differing perspectives, given this indispensable page by page criticism. I take all the responsibility for arguments and positions that are mine and often at odds with theirs. My colleague Maria Markus did all this and more and for her intellectual inspiration and friendship I certainly owe more than I can adequately acknowledge. Grant O'Neil and Meagan Chapman helped with some extra research while I was preparing the manuscript that I was then able to give to Carol Dettmann who is the best editor ever, and to Chapter & Verse who did the design work. Michael Pusey Sydney June 1991

INTRODUCTION

CANBERRA IN THE BALANCE

In the whole world cultural specificity and general factors of modernisation are related. The largest field for research in the social sciences is opened up by the comparative study of paths of development, each defined by its mode of relation between reason and cultural specificity - and also by the forms of rupture between them. Alain Touraine, 19891 Instead of the State being regarded any longer as an object of hostility to the labourer, it should now become identified with an interest in his works, and in all workers, extending to them its sympathy and protection, and watching over their welfare and prosperity. Alfred Deakin, 18902

D

eakin, a founding father of the Australian federal state, and one of several liberals and 'men of universal sympathy',3 uttered these words at a time when the 'Lucky Country'4 was the social lighthouse of the world. In these first moments of what was to be 'the age of the common man'5 in this male-oriented society, Australian men at least enjoyed the highest standards of living of any nation on earth. At the time of Federation in 1901 Australia was still, as it would be for much of the first half of this century, the model social democracy of the world, while Sweden (the successor model) was Europe's 'poorhouse fortress'.6 These were the benefits of a nation that was 'born modern' from a knowledge and conviction that the state would be the 'most likely protector of individual rights against other agencies of social coercion' and, indeed, 'that the major constraints on individual liberty were not public but private'.7 One hundred years later, as Canberra is swept by a locust strike of economic rationalism, the fate of

ECONOMIC RATIONALISM IN CANBERRA

this social experiment would seem to be in the unfriendly grip of ideas that come instead from Britain and the United States - the two great 'stateless societies' as Nettl once described them.8 The Australian experiment and its trials in this last quarter of the twentieth century have some universal significance. In the first place these trials measure the impact of modern economics on the destiny and integrity of a nation that has set great store both on the capacity of a state to steer the private economy and, equally, on its capacity to shape and to shelter Australia's own distinctive social democratic 'labourism' in the face of external pressures. Second, it points to the inner workings of a modern state apparatus and to the significance that programs of 'structural adjustment' and 'public sector reform' can have on those bureaucratic and public policy making institutions that alone stand between individual citizens and market structures. And third, since Australia was indeed 'born modern', these trials pose questions and perhaps even some practical answers about the fate and the social meaning of modernisation, culture, and public morality in a supposedly 'post-modern' world. The first four chapters that make up Part One of this book are centrally concerned with top public servants and, more specifically, with over 215 interviewees comprising nearly half of the Senior Executive Service (SES) population in the key departments of the Canberra federal state apparatus. In Australia nearly 20 years ago Encel showed that top public servants are centrally involved with ministers and elected politicians not only in implementing national and public policy but also in its formulation and, equally, in the brokerage of interests and the articulation of national ideals and goals.9 This assessment was later vindicated by the large comparative seven-nation study made by Aberbach and his colleagues in the United States, Britain, France, the Netherlands, West Germany, Sweden, and Italy in the course of the 1970s.10 Nowadays that view of top public servants is shared on both the liberal right and the new (and old) left of the political spectrum, and it is common to both empirical and socialtheoretically driven studies of the modern state. Nothing remains of the old positivist distinction, one that defined a whole generation of policy studies from Woodrow Wilson to Herbert Simon, which says that politicians choose the values of public policy and public servants the neutral means for its implementation. Along with elected politicians and some types of intellectuals, top public servants are the 'switchmen' of history; when they change their minds the destiny of nations takes a different course. It is for just this reason that their dispositions and ideas offer (like Freud's dreams) such a rewarding route for analysis beyond the surface of public politics and into the logic,

INTRODUCTION

the culture, and perhaps even the consciousness and the inner workings of a state apparatus. And so, with material gathered in the middle and late 1980s, these four chapters in Part One reconstruct, from crucial moments in the reform and development of the Canberra bureaucracy, a trend line of change and 'rationalisation' that may set the course of Australia's future for decades to come. In every country from the late 1970s programs of state and public sector reform have been driven by a conservative agenda. Although the vigour and scope of the changes have varied from one nation to another, in every case they followed conservative liberal maxims about the 'crisis' of 'ungovernable democracies' and of 'overloaded' states,11 and always aimed at moving some of the coordination functions of nation-societies away from states and bureaucracies to economies and markets. The justifications are universal and the political rhetoric that has been used to drive the reforms is familiar 'eliminating waste and inefficiency, and feather-bedding', 'saving the taxpayer's dollar', 'streamlining' the public sector, to make it 'lean and strong', and so on. Although the rhetoric may be the same everywhere, the structural context is not and in this respect some features of the Australian situation are important. In the first place, in comparison with other major OECD countries and despite the infrastructure costs to a small nation of some 16 million people in a vast continental territory, Australia has had, for at least a couple of decades, a small public sector, low levels of taxation and public expenditure, and very low levels of social welfare provision.12 Moreover in this Australian federation it was the central Canberra government that accounted, in its own right, for the major part of the fall in general government outlays from 36.9 per cent of GDP in 1984-85, to 32.1 per cent in 1989 and so to the lowest level of commonwealth (federal) government expenditure since 1973-74.13 Another aspect of the Australian context is that the groundwork for both economic and public sector reform was prepared in Australia by the Liberal (conservative) governments of Prime Minister Fraser that held power in Canberra from the end of 1975 to March 1983. Thereafter the reforms were designed and prosecuted not by the Liberals, who have traditionally been the party of business interests, but rather by a succession of Prime Minister Hawke's Labor governments that ruled in Canberra from 1983 into the 1990s. This has meant, among other things, that the major directions of these changes enjoyed a bipartisan consensus without any electorally effective opposition. Moreover, an abrupt contraction in the relative share of commonwealth expenditure produced (without any increases in revenues)

ECONOMIC RATIONALISM IN CANBERRA

a series of large budget surpluses that prompted the Minister of Finance in August 1989 to observe, correctly, that, Tew, if any, peopie would have believed that any Australian government would have engineered those changes. Most would have thought it even less likely that a Labor government would do so.'14 It is within this context that the economic and public sector reforms of the middle and late 1980s were launched. Indeed, the material for this enquiry was gathered just as Australia was presaging its own future first with a shift of its own Westminster/Whitehall Canberra bureaucracy towards a semi-American styled Senior Executive Service and then following the re-election of the Hawke Labor government in 1987 with a second wave of structural reforms which consolidated the institutionalisation of economic rationalism in Canberra. The two first chapters in Part One focus on the salient characteristics of these Senior Executive Service officers. In a search for the imprint of social, structural and cultural factors on the Canberra state apparatus, there is a need to know something about their background and their cast of mind. And here, initially, one can pick out three aspects of a more complex and larger pattern. Social selection is one of the links between social structure and state power. In line with other countries we find that those who come, roughly speaking, from the managerial and professional layer (and so from the top 5 per cent of the population) hold a quarter of the SES positions in the key departments covered here: only about 10 per cent of our respondent SES officers came from families in the 'bottom half of the population on this rough measure of socio-economic status. A grossly disproportionate number of young men from Australia's expensive top private schools are concentrated in some very specific locations - most notably the Treasury. There is also a direct relationship between social background and political orientations inasmuch as this same proportion who come from the top of the social ladder are three times more likely to hold conservative 'new right' political attitudes as those from the bottom half. Further we discover, more significantly, that orientations to policy have comparatively little to do with immediate issues and fashions that are here today and gone tomorrow. Instead the whole cast of policy is grounded in social structure and in the more pervasive and enduring formative influences of socio-economic background, family, and schooling and so in experience that was had some 20, 30 or 40 years earlier. Work in higher administration is so intense that one might have expected it to drown the effects of earlier experience. It is quite remarkable to find that it does not - early experience outweighs several other factors such as age, seniority, and type of work experience

INTRODUCTION

which most people would expect (as it turns out, wrongly) to have a direct and unmediated effect on what public policy makers and managers say and do. Beneath the mantle of other factors the indications are that social origins are important and that, in Canberra at least, 'noblesse n'oblige pas'; those who come from the most privileged social backgrounds are likely to have the most 'anti-social' policy attitudes. A second feature of this profile points away from what was, before Fraser, Thatcher, Reagan, and the Crisis of Democracy, the comfortable conclusion of the seven-nation study that top bureaucrats were 'committed centrists' who would generally serve as a counterweight to the ideological enthusiasms of elected politicians and so preserve a certain equilibrium in struggles over the national policy agenda.15 Top Canberra bureaucrats (certainly those who have prevailed in the 1980s) are nothing of the kind. In terms of an Australian historical and political spectrum, in which Marxist socialist ideas have had even less of an influence than in Britain, they are way to the right of centre. Even among those of our interviewees who designated themselves as 'centre-left', we find that nearly half wanted to see 'more individual initiative' and 'less state provision' and, similarly among several other related variables, that half of them wanted to dismantle a state adjudicated wage-setting system that has as everyone agrees been the mainstay of social democracy in Australia since before Federation in 1901. Indeed, only about one in six of them would fit even a very elastic profile of social democracy - and, as we shall see, it is precisely this minority who have, by no means fortuitously, suffered most from the vigorous changes of the 1980s. Third, it is through the power of a particular university economics curriculum that the recent past has had the strongest hand in casting the nation's future. In the crucial post-war period, the Canberra bureaucracy was largely built on the reputation of a very small and enormously influential group of generously minded economists who served both Labor and Liberal governments for nearly three decades until the late 1970s. Their prestige raised the expectation that the second generation of young economists with an entirely different life experience who now dominate the Canberra state apparatus would bring 'more of the same' attitudes and similar intellectual skills and norms to the policy and management process. Instead we find, much as Keynes would have expected, that 'in the field of economics and political philosophy there are not many who are influenced by new theories after they are 25 or 30 years of age'.16 Through the new generation national policy (and with it perhaps the fate of a nation) is held in the compass of the restrictive, technically-oriented, neoclassical economics curriculum that swept through

ECONOMIC RATIONALISM IN CANBERRA

the economics departments of Australian universities from about 1947 onwards. The older generation of economists typically came from modest social backgrounds and had some historical memory of the Great Depression, of economic crisis and unemployment, of war service and of ordinary life in Australia before the largely post-war, modern-day Canberra was even built. Whatever economics they learned at university was more often learned at night school, set within a liberal arts framework and thus within a philosophically informed view of society and the human condition. It was set too within a national experience in which both the state and the trade union movement along with business interests (well before the notion of Corporatism' was ever invented) were long established as constituents of nationhood, national identity, and economic development. Economists of the newer kind may, in contrast, have acquired what looks more like a trained incapacity to learn from all later experience. That is one inference to be drawn from the fact that a passage through an economics curriculum in their early 20s is the single factor that most strongly sets these young 40 plus-year-old captains of a nation-building state against its historical mission. But of course the public service of a federal and central government is itself a federation of departments17 in which power advantages can sometimes change quite quickly. And so the second half of Part One charts the pattern and impact that various 'selection effects', reforms, and 'rationalisations' have had on what matters, which is the actual structure and dynamic of power. How then is state power organised at this top end of the Canberra apparatus? With this question we take the next step in Chapter 3 and differentiate between three points of an inner triangle that has the three central agency departments (Prime Minister and Cabinet, Treasury and Finance) at its apex and, at the base on one side and in the pre-1987 classification, the market-oriented departments (Trade, Primary Industry, Resources and Energy, and Industry, Technology and Commerce), and on the other side of the base the program and service departments (Health, Social Security, Aboriginal Affairs, Community Services, Veterans' Affairs, and Education). Mirrored in the interfacing characteristics, political dispositions, and world views of top bureaucrats in these three different locations there is really an 'archaeology' in which three layers are sedimented one over the other. The central agencies at the top level represent a new and minimalist laissez-faire state set in norms that come from a dominating neoclassical economic rationalism that is anti-statist, anti-union, and either asocial or anti-social in its basic orientations to policy. By comparison with their counterparts in other departments,

INTRODUCTION

these central agency officers are younger by some five years, are twice as likely to have come from elite expensive Protestant schools, and are more oriented to private satisfactions of what all see as their superior political leverage over ministers and cabinet decisions. At a second level in this archaeology are the residues of an earlier Keynesian interventionist state which is represented here in a more practically oriented, 'hands on' economic calculus grounded in earlier norms of 'practical' cooperation with domestic Australian industry. On the lowest stratum we find the heavily eroded framework of a social democratic and welfare state set in fraying images and norms of society and of social needs. The relative position and the descending order of legitimacy and norm-setting clout of these three 'models of the state' is not something that has come about by accident or purely through some autonomous internal dynamic within the bureaucracy itself. What part have governments per se had in the process? Or, in the words of one person who was influential in early bipartisan moves to make the bureaucracy more obedient, 'who's master and who's servant?'18 It may be that the economists within the bureaucracy have corralled the reformist and economically oriented Hawke Labor government into a narrowing and increasingly exclusive commitment to an economic rationalism that is at odds with the broad thrust of the Australian Labor Party's policies; at odds, too, with some of the key redistributive 'social wage' clauses in its Accord with Australia's highly disciplined and 'economically responsible' trade union movement which is increasingly run by talented but ambivalent 'econocrats'19 in business suits. The preceding Liberal/National Fraser government had already steered the top of the bureaucracy into that course. Yet the evidence shows that under the Hawke Labor governments from 1982 to 1990 the bureaucracy was subject to very strong political control. The relative power positions of the major government departments covered in this study closely replicates the relative strength and representation of the three formally organised factions of this ruling Australian Labor Party in a highly disciplined and effective Cabinet. The government is dominated by its semi-Thatcherite 'Right' faction whose ministers control Prime Minister and Cabinet and Treasury and other key departments. At the other end of the spectrum, the ministers of the social democratic 'Left' faction minority hold 'only' the lean and not so strong program and service departments. Ministers of the 'Centre Left' faction, with an orientation that roughly corresponds to the Right of the British Labour Party, hold many of the portfolios in between. In short, beyond the largely unanswerable chestnut question about who has the greater power, there is the more significant reality

ECONOMIC RATIONALISM W CANBERRA

of an increasingly stable and symbiotic relationship between ministers and top bureaucrats which contrasts sharply with a past in which people on the two sides of this political-administrative relationship were likely to differ in age, life experience, education and social background. Since 1982 the increasingly dominant pattern is one in which ministers and their top SES staff see the world very much as male age-mates through a shared and restricting formative training in economics. Chapter 4 draws the evidence together to plot the trend lines and the dynamic of these reforming 'rationalisations' that swept in two waves through the Canberra state apparatus from 1984 (the first wave) to 1987 (the second wave) and beyond into the 1990s. We find that the managerialists within the newly formed Senior Executive Service, who favoured and then drove the reforms, were more likely to come from higher socio-economic backgrounds. Significantly, they also tend to see the world in terms that neutralise and then reduce the norms of public policy to those of private enterprise. A change of climate that was aimed at opening up the public sector had some clear correlates in the structure and operation of the promotions system during this formative period of the Senior Executive Service (even before its inception, as far back as 1982). Perhaps there is always an inherent possibility that the promotions system of any public service will be captured by minorities and then used, wittingly or unwittingly, to promote more of their own kind. Certainly the evidence suggests that structured inequalities in the classification of SES officers across the different categories of departments, combined with the actual operation of the promotion system, has given a cumulatively disproportionate power to the younger economic rationalists in the central agency departments of Treasury, Finance, and Prime Minister and Cabinet who now comprise some 70 per cent of the Senior Executive Service population of these departments. This is but one aspect of a mobility pattern that selectively ascribes lower status and promotability to generalists and other professionals while at the same time increasing the power, and in some respects the distance, between the central agencies and the industry and service departments over which they have an overwhelming domination. It is a dynamic that must have been already established in the period of the preceding Fraser governments. The process of reform and rationalisation is driven by an intellectual triumph of formal models over practical substance; once again it is almost perfectly replicated in the distribution and kind of 'intellectual' resources. Even at the most elemental level of analysis we see that the central agencies have the largest proportion of Senior

INTRODUCTION

Executive Staff with higher degrees, the market-oriented departments have less, and the program and service departments the fewest. Prime Minister and Cabinet, the department at the top of the pecking order, had the highest proportion and, at the other end, Aboriginal Affairs the lowest. In what turns out to be a complex politics of knowledge, the indications are that there is an equally selective access to outside and overseas experience as well. The people who are most likely to gather expertise overseas are not the people who need to learn how to run programs more effectively but rather those who want to learn how to close them down. All power relationships are, by definition, relational - intellectual power is no exception. The rationalisations have succeeded because older senior managers and policy makers, with more 'real-world' and 'hands-on' experience, have demurred to what they have, albeit under duress, accepted as the superior 'intellectual' capacities of the younger 'whiz kid' econometricians who in turn have killed off their elders' chances of advancement by branding them with accusations of being 'too close to their clients', and 'not sufficiently hard-nosed' or as incapable of taking 'the broader view'. All of this points to a dynamic of rationalisation that was accelerated by the second wave of structural reforms and the formation of the new structure of megadepartments announced July 1987. It is a dynamic that has come 'from the top down', from a strong Cabinet and its coordinating central agencies and so also from 'right to left', across the market-oriented departments and more forcibly still across the program and service departments, in a process that is anything but neutral and which has greatly reduced the redistributive function of the Canberra state apparatus and altered the whole cast of public policy. Part Two of the book is concerned entirely with the broader significance for society of these changing dispositions in the Canberra state apparatus. The framework for interpretation and evaluation rests here in the premise that 'developed' societies are obligatorily coordinated through the two structures of state and economy - and, further, that the features of each are to a large extent given in those of the other. The framework which is outlined in the latter half of this introduction takes from political sociology and social theory another fundamental assumption, one that is shared by both the Right and the Left: namely, that in delivering their functionally indispensable benefits, each of these coordinating structures exacts its own costs both for the individual and for civil society, culture, and identity. At both ends of the spectrum the cast of politics and the costs of coordination are clearly visible. At one end of the spectrum the experience first of

ECONOMIC RATIONALISM IN CANBERRA

the Soviet Union and then of eastern Europe gives its own lessons about what happens to civil society when excessive burdens of coordination are given to states and bureaucracies. On the other hand different forms of social degradation and 'colonisation' appear where laissez-faire has allowed the burden of coordination to move to the other pole, to economy and markets, as it may have done under the auspices of economic rationalism in the 'great stateless societies' of Britain and the United States. In this orienting context social democracy is both in theory and in practice a quest on some imaginary horizontal line for a balance between economy and state. Similarly, on the vertical line, it is equally a quest for a reconciliation of coordination 'from the top down' with norms of democracy grounded per force 'from the bottom up' in immanent requirements of identity, civil society, and culture. We shall reassess the Canberra case study within this larger, and here oversimplified, framework. In looking over the case material we see that the triumph of economic rationalism points to a weakness of culture and civil society which is etched into the images of contemporary Australia that inform much or most of what is done in Canberra. We find that this state apparatus is caught within projections of reality that give primacy to 'the economy', second place to the political order, and third place to the social order. Indeed, perhaps the most central finding is that, since the 1970s, reality has been turned upside down and society has been recast as the object of politics (rather than, at least in the norms of the earlier discourses, as the subject of politics). Further, society has been represented as some sort of stubbornly resisting sludge, as a 'generic externality' and even as an idealised opponent of 'the economy'. The tail that is the economy wags the dog that is society and this inversion forces consideration of how and in what respects culture and identity can have any 'structure forming effects'. How has this taken place? What has happened to the state's deliberative capacity? How has the political-administrative discourse changed? In Chapter 5, which holds the core of the enquiry, these questions lead into a discussion of how it is that certain ideas (principally the idea of an economic 'system' that is not mineral or vegetable, or yellow, or sticky to touch - and which must for that reason be a symbolic and therefore a social construction) - have come to dominate nearly everything that these very intelligent people do in their fateful role as brokers and authors of a nation's destiny? How does, the 'system' acquire 'facticity', independence, objectivity, impersonality, and autonomy?20 In the answers to these questions there is of course no quarrel with economics per se but rather with an underlying scientism that seems to turn arbitrariness into givenness and imperiously

10

INTRODUCTION

asserts its own exclusive evaluative criteria for what will, in the wake of its 'reforms', count as intelligence, ability, and efficacy within and beyond Canberra. What wins is a kind of 'dephenomenalising' abstraction that tries to neutralise the social contexts of program goals in every area, whether it be education, industry support, public health, or water resource management. What counts, further, is the speed, elegance, and agility with which one can create a purely formal and transcontextual commensurability of reference across goals that are then treated as the objects of decisions that will be made on extrinsic criteria ever further removed from real tasks and situations. It is in the ethers of this new culture of political administration that one traces the widening course of whatever it was that critics were trying to identify, about 20 years ago, with such terms as 'technocracy' and 'technocratic positivism' and, more concretely, with images of town planners and huge engineering projects that seemed to push peopie around in a more or less physical sense. After more than two decades of intellectual soul-searching about modernisation and postmodernity, where power is concerned everything that matters now is both formed and intellectually challenged at much higher levels of abstraction and generality. At that reflexive and would-be reflective level, the system is constructed with resources taken selectively from disciplines which are allowing themselves to be reformed as the new 'manipulative sciences': psychology, accountancy, and neoclassical economics. The psychologists turn action, meaning, perception, need, and culture into units of behaviour; the accountants arrange these into organisational structures and technologies of control, evaluation and performance appraisal; and the economists abstract all of this into calculations of 'utility' and then into the models and functional coordinates of a system that becomes autarchic. It is under the aegis of this systems logic that a new generation of 'strategic visionaries' have taken charge of a vigorous program of public sector reform. Within 'the system', their 'mission' has been to 'demoralise' the public sector and so to produce in Canberra, purposely or not, that 'sickness in the soul of the public administrator'21 that now afflicts their American counterparts. In a 'shakeout' that is more like an organised forgetting, whole departments have lost not only their dead wood but also, and not by accident, their wise men and their corporate memories, in reforms that have been depoliticised in the name of 'flexibility, responsiveness and effectiveness'. At the boundary of what was once a friendly and intelligent Australian federal bureaucracy, and in the space that was once a 'public sphere' of constructive deliberation that the bureaucracy had itself nourished, there is instead an insulating distance that protects the

11

ECONOMIC RATIONALISM IN CANBERRA

political-administrative system from both intellectual and 'ordinary' culture, and so from participation, from interpretations of need, and from many of the normal and supposedly normative prerogatives and entitlements of citizenship in a liberal social democracy. In these reforms, and in the contested terms of relationship to the world economy that have driven the politics of reform, there are threats to the independence and integrity of a nation. The obvious disadvantages of geographic and economic isolation in an island continent for a small nation of only 16 million people have a real but limited significance since other nations like Sweden, Switzerland, and even Japan have enjoyed far fewer natural advantages than Australia. The increasing integration of the world economy exerts uneven pressures on different nations that are traceable not just to factors such as size, wealth, and pre-existing levels of industrialisation but also to structurally and culturally conditioned vulnerabilities. From the structural perspectives two questions emerge. First there is cause to ask whether the institutions of a supposedly 'strong' and nation-building state were really the borrowed cladding of a vanishing colonial inheritance that has (especially with the relative decline of Britain and its integration within the EEC) left Australia exposed to a recolonisation in the alien framework of a totalitarian American 'business democracy' along South American lines. Related to this is a the second question that hangs over Australian 'labourism'22 and with it a form of social democracy that was guaranteed not by 'welfare' but by a primary distribution of the nation's income through Australia's unique state-regulated wage-fixing system. That system always depended on 'the relative autonomy of the state', on its capacity to support domestic Australian enterprises both with public investments and tariff protection, and further, on its capacity to coordinate an exceptionally broad array of functions in the service of national development. Consequently, in the wake of the deregulation of first the currency and then the capital markets, further pressures in the late 1980s for the deregulation of the labour market will be seen, in retrospect, to have special significance for the integrity of a nation. From the perspective of civil society and national identity other related questions emerge. Where it has not already succeeded, economic rationalism tests the coherence of a national identity and a political culture that was, on the positive side, 'born modern' and free of the dragging anchors and the traditionalism of the Old World. More specifically it raises a question as to whether the promise of modernisation can be realised in effectively articulated norms and standards that may yet secure the national and public interest in the face of pseudo-universal 'market forces'. Accordingly, in this test,

12

INTRODUCTION

where reaction and closure are likely to be nearly as devastating in their consequences as capitulation, Australia's integrity will depend on the cultural resources that can be brought to the task of redefining the legitimate bounds of economic behaviour. Among the formidable range of pressures that militate against any such reaffirmation of integrity and practical sovereignty, one recognises many of the same conduits and agencies that have helped to mediate economic rationalism into the Canberra state apparatus. These include Australia's foreign-owned media, the New Right 'think tanks' and research centres that have had an enormous success in penetrating the Canberra apparatus, and, thirdly, international economic organisations such as the World Bank and the OECD. There is also need to contend with the diminishing intelligence that is available from an increasingly 'rationalised' Australian university system and, more fundamentally still, in the limitations that are inherent in what Manning Clark, Donald Home, and Hugh Stretton see, in the words of the latter, as 'the poor quality of leading Australians'.23 The stake in the play of these forces is a Canberra state apparatus that also stands 'in the balance' from the broader evaluative and theoretical standpoint.

THE POLITICS OF MEANING AND THE MEANING OF POLITICS In a search for an appropriate way of analysing the 'politics of meaning', Clifford Geertz long ago declared that the scholar has no choice but 'to build the theoretical scaffold at the same time that he constructs his [sic] analysis'.24 In his judgment that was the only way of holding analysis between the two poles of 'vacant generality' and 'blank description'. More than 20 years later it is immeasurably more difficult to find, in any of the social sciences, middle level concepts that can still give any stability of reference in the new morass of philosophical uncertainties which followed the collapse of traditional empiricism. Moreover, as a result of those same troubles, it is clear that the most biased positions of all are those that still hide in the unreformed empiricism of 'value-free' and positive science. Yet now, to survive, we must make sense of the old and the new meaning of politics. That task still asks for an approach that is, in Geertz' rather perfect formulation, 'at once circumstantial enough to carry conviction and abstract enough to forward theory'. In Part Two of this book I have tried to construct the theoretical scaffold through the analysis. It is done, for the most part implicitly, with concepts that come from three areas of debate about state and

13

ECONOMIC RATIONALISM IN CANBERRA

society. These concepts are introduced here with questions and then revealed in a way that will make my own evaluative positions clear. INDEPENDENCE, IDENTITY, AND 'RELATIVE AUTONOMY' Why is a once starving and supposedly ungovernable India going from strength to strength while the nations of South America sink into misery and destruction? Why is Paris still a beautiful city with streets that are safer than those of Washington? Can these questions be answered without some admission that the integrity of a state is at least a necessary and fundamental condition for the benefit and well-being of a national population? That admission runs very much against the grain of an American and British turn of mind that Nettl so aptly dubbed 'intellectual statelessness'.25 What has to be granted nonetheless is that, even from the point of view of economic history, 'the state emerges as the true independent variable, industrialisation being only an intervening variable in countries which are all capitalist in structure'.26 This more adequate assessment rejects, of course, what is again an Anglophone tendency to reduce 'the state' merely to the elected 'government'. It insists instead on a more modern and comprehensive definition of the state that includes the police, the military, the constitution, and especially in terms of our own perspective, the complex of legal, political, and bureaucratic institutions that together, and albeit variably, comprise the state apparatus of 'developed' nations like Australia. From another complementary perspective the state comes into view as an actor and as a complex of legal and bureaucratic institutions that not only 'structure relationships between civil society and public authority in a polity but also structure many crucial relationships within civil society as well'.27 There is scarcely need to add that all this calls up, from the eighteenth century, philosophical commitments that cover a spectrum: at one continental European end, the state is represented as the embodiment of ethics, reason, and collective will; at the other Anglophone, libertarian and Mayflower end, it is cast rather as George III, as the main impediment to 'freedom', to the 'pursuit of individual happiness' and to the natural right to the 'enj oyment of property'. Especially in our time, conflicts of ideology and power are distilled into contests over the proper 'role of the state' and of its relation to 'its' society. These are played out for good and evil through contests over public policy, public sector reform, structural adjustment, and economic modernisation of just the kind that is presented in our case material (in Part One). Several basic and interrelated concepts raise

14

INTRODUCTION

basic problems for consideration. On the one hand there is the notion of 'strong' versus 'weak' states that Peter Katzenstein and Stephen Krasner developed in part to explain relations between the United States and the nations of South America.28 This idea now has an all too fateful relevance to Australia's future which many have already cast in the terms of 'a client state'.29 In these evolving debates it is clear that Australia's predicament has much to do with the irony that its structures are in many essential respects symmetrically opposite to those of the United States (where the state has the full strength of an empire in relation to other foreign states - especially the smaller and middle ranking nations like Australia) but which is, as all the literature agrees, the archetype of a weak state in relation to economic interests within. Conversely, Australia's development was historically led by a 'strong' colonial and post-colonial state: the state led and capital 'followed' in a course which protected domestic industries and their workers from what would have otherwise have been crushing external pressures. There is no necessary relationship between the external independence of a state apparatus and its internal authority (in principle the two can vary independently). However in the case of Australia they are in practice almost two faces of the one coin. The 'relative autonomy' of the state is a concept that has suffered both from excessive abstraction30 and from flaws in a Marxist economic determinism of interests over civil society.31 If the 'relative autonomy' of the state is indeed to be understood as a measure of a state's independence from 'vested interests' and so of its capacity to hold economic development and private behaviour within the discipline of the 'generalisable', common, and public interest, then it is always imperfect and at the same time historically variable - for example most states muster a good deal of relative autonomy in the face of wartime emergencies. At this crucial and testing moment in the history of a nation which is, perhaps more than ever before, alone in the world without protective regional associations (like the EEC), there is a need to ask how much effective authority of this ostensibly strong state apparatus will survive the current changes. The narrow calculus of determining interests of the old Marxism was always misleading and, if any reminder was necessary, the events and thawing of Eastern Europe show that national identity has sometimes very dramatic 'structure forming effects' and that a culturally secured identity can, as in Poland, survive even 40 years of repression. And so 'relative autonomy' and other concepts that define the integrity and authority of a democratic state are, from another broader point of view, measured in terms of the ideological susceptibilities of a

15

ECONOMIC RATIONALISM IN CANBERRA

culture and a population accustomed to placing great trust in the coordinative functions of a very new and modern federal state apparatus. To all appearances, this apparatus was a highly professionalised post-World War II phenomenon (almost the model of the New Class) - male-dominated, of course, but less reclusive and introverted than Whitehall and certainly more deliberately distanced from special interests than Washington. In the case of small and middle ranking nations like Australia, the integrity of the state (and this means among other things its work of brokerage and intermediation) is tested amid the strains that emerge, in the new world economic order, between internationally coordinated positions and movements of capital, and the increasingly defensive positions of labour movements that remain perforce bound by the inherited structural and other particularities of national context and situation. These strains point once again, via the social structure, to the allegiances and intellectual orientations of national elites.32 Where the captains of business are nationalists first and capitalists second, both the national interest and the integrity of the state can be more easily secured within corporatist arrangements that respect identity as in Sweden and other countries of Western Europe. Conversely the case material in this book points instead to a more unfavourable situation, one more like South America than Sweden, in which key public and private elites are drawn into an anti-social internationalism that is set, with them, on overwhelming whatever independence and 'relative autonomy' stands in its way. CRISIS OF THE STATE, CRISIS OF SOCIETY? Every program of public sector reform poses its own question as to whether this or that reform, or structural adjustment, or saving, or expenditure review process, is a worthwhile and desirable innovation. At the same moment it quite inexorably begs or addresses a very large question indeed - what is the appropriate relation between the state apparatus and its society ? This is a complex matter and one that points to a literature that is hierarchically organised into four levels. At the lowest level of abstraction one can deal with the specific decisions of organisations. The problem here is that the decisions of organisations borrow their meaning, and even their validity, from a second level at which they are aggregated into something called 'public policy' (or even theories of organisational behaviour). At the second level it is plain enough that various articles of public policy are derivations, at a third level, from theories of the state. The problem here is that since none of

16

INTRODUCTION

these contain even a single molecule of sodium or iron they must be symbolic constructions, and cultural artifacts which come from society itself, and from social theories that explain how societies (and social actors, and cultures) construct, maintain, and reproduce themselves. The sociologist cannot avoid these problems or accept conventional demarcations between 'economies' and 'polities' and 'administration* as anything more than temporary expedients because these are also social constructions.33 The concepts that have guided this inquiry came initially from debates in the mid and late-1970s about the so-called 'crisis of the state'. These debates that broke out over what was previously (apart from the orthodox Marxist challenge) little more than a grumbling observation that at the end of the postwar boom the states of the 'developed' nations were in a condition of 'directionless consensus', and 'pluralistic stagnation'. 34 Thereafter those debates between Habermas, Offe, O'Connor and others on the Left, and Crozier and the Crisis of Democracy on the liberal Right, and then the American 'neoconservatives', shared an essential presupposition: whether the crisis was a 'fiscal crisis', a 'legitimation crisis', an 'overload crisis', a 'rationality crisis', or a 'motivation crisis', in all these forms it was assumed, correctly, that the 'crisis of the state' was epiphenomenal and, further, that it could not be solved with nuts 'n bolts solutions because it had a social origin - or perhaps, more accurately, because its origin lay in a relationship between state and society. These debates have an ongoing contemporary relevance because, as Part Two of this book demonstrates, they bring to the fore central problems that must be faced in deciding the criteria for 'progress' and modernisation that are at the root of every judgment about what can, or should, count as 'development', and thereafter, as 'reform', 'innovation', 'efficiency', 'facilitation' or whatever. From out of these debates the parallel lines of the state/society problem can be followed along a trajectory that reaches a ceiling of abstraction in the literature about modernity versus post-modernity. It is a trajectory that passes through this study and poses a central question that can be stated very abruptly indeed: is society plastic? Does it in practice bend to fit its own coordinating structures - markets and states? An affirmative answer gives the most powerful ruling elites what they usually seek, namely the certainty (both 'moral' and 'intellectual') that the highest form of leadership, responsibility, and 'states-man-ship' is successful manipulation. Yet there is more to it than that and at the root of this real and fateful question lies a conflict between the competing claims of social integration and system integration. And so the question recurs: is social integration in the form of 'consensus' and stable identity merely the product of system

17

ECONOMIC RATIONALISM IN CANBERRA

integration (successful coordination), or is it rather that the coherence and functional integrity of 'the system' (the coordinating structures, and the state ) are grounded in identity, civil society, community, and everyday culture(s)? These questions go straight to the problem of social reproduction and to the metatheoretical quandary that hangs over all state action and 'policy' and, more directly, over all that has been done in Canberra: what is to be done to make sure that in ten years' time 'our society' is in as good or better shape than it is today? One answer is given in the economic rationalism that is to a large extent the object of this study. The presumption of that economic rationalism is that the reproduction of society turns increasingly, or even exclusively, on a strengthened mode of system integration in which the burden of coordination is passed from the inferior medium of coordination of state bureaucracy to the supposedly better one of the economy. At the metatheoretical level this presumption, which presents itself as the obligatory frame for all policy, has a brilliant prophet and advocate in Luhmann who says, without apology: Especially with the help of the mechanism of money the economy builds its own values, its own goals, norms, criteria of rationality, and directions of abstraction, by means of which the behavioural choices in its domain are oriented. That these premises stand on their own is clear from the fact that they claim only a system-specific validity and thus do not need to be answerable to all of society...Thanks to these forms of differentiation society can...limit itself to giving the economy as a system the necessary protection.35 On that model, Australian civil society, identity, and its (always plural) cultures are quite explicitly defined in theory - and in the practice of our Canberra economists - as the malleable and consumable environment of a global economy which finds the necessary protection from 'its' society through internally and externally sponsored reductions of democratic citizenship to elite (business/finance) formal democracy. At this same level of abstraction the opposing viewpoint of Jiirgen Habermas, Alain Touraine, Claus Offe, Nancy Fraser, Maria Markus and others, sees in these developments a new kind of social and psychic 'colonisation' that may well be 'busy fabricating the shell of bondage which men will perhaps be forced to inhabit some day, as powerless as the fellahs of ancient Egypt'.36 From the perspective of this opposing view which informs the practice of the new social

18

INTRODUCTION

movements and of social democrats everywhere, the 'crisis of the state' has, with the benefit of hindsight, turned out to be a 'crisis of society'. Societies are threatened by their own coordinative structures and, most notably now, by an economic steering mechanism which violates the adaptive capacities of ordinary social life and threatens the social reproduction of culture and individual identity.

RATIONALISATION Economic rationalism and the reforms and 'rationalisations' of this Australian federal state apparatus pose an obvious question. What counts as a rationalisation and how do we know it's good for us? It is in the revealing answers to this question, or perhaps more frequently in the stratagems used to avoid it, that ideologies are dressed up as science, reform, public policy, development, structural adjustment, and modernisation. With respect to the rationalisation of the state apparatus and 'the machinery of government', it is once again a matter of reading what is done at one level in terms of clarifications that are only available at another. With a contemporary relevance that seems not to have dated by a day, and in terms once again common to both the Left and the Right, the classics of sociology provide the link with that larger world-historical process of rationalisation which has defined modernisation in these 'developed' and western nations: Marx and Weber agree that the strategic rationality of capital accounting and the uncoupling of labour from all immediate household and use-value criteria, from the rhythm of hunger and satisfaction, is the main driving force behind the formal rationalisation of capitalist societies. The immediate processes of labour and production are organised and regulated according to the dictates of this rationality, whose functionaries are the bureaucratic staff of capital.37 What is interesting here is this link between formal and strategic rationality. It may be assumed that basic industrialisation, with all that it involves such as the construction of infrastructure, urbanisation, universal education and so forth, amounts to only a long drawn-out middle stage in the modernisation process. Furthermore, it seems clear that with that stage passed, the meaning and justification of rationalisation becomes more and more dependent on ideas that are less and less simply justified by the task of building the economic apparatus of production.

19

ECONOMIC RATIONALISM IN CANBERRA

That was already the situation at the end of the so-called 'long post-war boom' when criticisms of 'directionless consensus' and 'pluralistic stagnation' began to assail state bureaucracies and those with the responsibility for public policy, continuing economic develops ment, and the 'rationalisation' of the state apparatus- The accumulating uncertainties within the state apparatus were perplexing and painful. The task of reason is not easy: to say no to the system is intellectually easy even if, on occasions, it takes some heroism. But how are we to say simultaneously both yes and no? How does one invent a strategy without making a game of strategies? How are we to reconcile spontaneity and organisation? How can we want efficiency and renounce technocracy? And, further, how do we steer a course between a rationalism which identifies rationality with rationalisation and an irrationalism which leaves us without resources?38 By definition, there are no ready made or ultimate solutions. How then, in the 1960s and through the 1970s to the threshold of our own period, did the best political administrators live and work with these uncertainties? Although there never was a golden age, elsewhere as in the Australian case, it was done at its best with a kind of 'practical rationality' that was much more closely tied to the goals and nature of the task at hand, whether that was community development, industry assistance, public education, urban development, transport and communications, or resource planning. Public policy and state action across a broad array of discrete functions was of course still subject to the pressure of coordination, and so to a formal rationality of consistency and coherence, both over time and laterally across different tasks and departments. The point is rather, as we shall see, that there were limits that prevented coordination from becoming a law unto itself and from distorting, or even destroying, the very functions it was supposed to rationalise. Moreover these bulwarks against managerialism were social in nature. Goal-directed and instrumental action (Zweckrationalitdt) was, to a significant degree, permeated with a Sittlichkeit, with some sort of public morality and, through the norms of a career service, with an 'ethic of vocation' that set problems of coordination within a cultural field that had some real normative force. This more balanced model of the modernisation process with its underlying priority of reconciling coordination with identity and culture is now under challenge both from the practice of an invading economic rationalism, and from the post-modernist high theory within some of our social science disciplines. Both equate rationalisation with

20

INTRODUCTION

coordination. Both assume, somewhat prematurely and even 'ideology ically\ that culture and identity no longer have any practical relevance. Accordingly, the first assumption of this economic rationalism is that the 'economy...obeys not an immanent logic of needs, but instead the need for an immanent logic*.39 Post-modernisation (if I may coin a term) no longer depends on a process of rationalisation that reaches for whatever interpretations of social realities may lie beyond the coordinating economic logic of 'the system'. On the contrary it offers itself instead as a saving response to the 'universal' emergency of unmanageable diversity and thus to a crisis produced by the failure of every other attempt at rational deliberation and agreement. According to the high theory of the doctrine of economic rationalism, epistemology has followed ontology (and philosophy) into oblivion. Supposedly, in this 'brave new world' in which the applied form of that doctrine did take hold in Australia somewhere around 1984, 'reality assumptions are structures of the system that uses them'.40 Culture and identity dissolve into arbitrary individual choices and, moreover, institutional arbitrariness is no longer a sign of failure but is instead put forward with deadly seriousness as a necessary condition, at the steering level, for the smooth and rational operation of a self-referential system. Opposition to this new anti-intellectualism is dismissed by apologists for the New Right only as a terrible 'rancour against (post)-modernity'41 of a few inconsolable 'value-intellectuals' who were, in any case, never properly equipped for life outside the womb in the twentieth century.42 There are at least two fundamental defects in the self-justification of economic rationalism and both point, albeit in a global and abstract fashion, to the opposing and better criteria for the evaluation of state action and public policy. The first defect is obvious. From its basis in a philosophically unreformed empiricism, neoclassical economics projects a Darwinist relation between system and environment that is then contradicted with an almost absolute refusal to adapt demands to the increasingly finite resources of the (physical) environment: in its constructions of time and in its incapacity to read or 'obey' the external environment, economic rationalism as a model for action is the very opposite of an adaptive system. This blinding 'objectivation' of the external environment, together with the distances that have been produced by such a violent rupture between nature and culture, resemble instead a model of the self-destroying system. In the context of this enquiry the second and more fundamental problem is that economic rationalism treats its inner environment of civil society in much the same way as the malleable object of development and rationalisation (and of 'politics' as well). Even in

21

ECONOMIC RATIONALISM IN CANBERRA

nation-societies where the residues of older social structures (such as church, remembered inheritance, extended family, and neighbourhood) have all been burned up in the engine of development in the space of a little more than a generation, the premise of the systems logic remains the same. This process of modernisation is dogmatically read as a confirmation of the assumption that the resources and conditions for social stability (accepting participation, motivated work, the rearing of children, and even the sustenance of ordinary individual identity) will go on finding their own Nationalisations' in individual calculations of utility coordinated ever more 'efficiently and effectively' through a market. In setting itself into this relation between the economic system and the social environment, the state apparatus takes on a form of rationalisation which looks more like aggressive nihilism than reason and which seems to endanger the reproduction of society itself. At the level of public policy, the rationalisations may have brought needed gains in efficiency in many areas of state action and this may indeed continue - there can be no quarrel with the notion of efficiency as such. The inherent problem lies instead at another level - with the criteria that define what count as costs and benefits; with the loss of social intelligence; and with the number and range of potentially constructive discourses that have been suppressed. At that level the fateful problems in the metalogic of rationalisation point to their own limits and correctives. In these last decades of the twentieth century it may be that an autarchic system that treats society as an idealised opponent is an even greater threat to the well-being of the species (and of its Australian genus) than nuclear warfare. What is needed then, at the level of the state, is a mode of rationalisation that will honour the normative promises of 'modernisation', 'development', and 'rationalisation' with a systems logic (if we need one) that obeys first the logic of immanent needs and in second place, the need for an immanent logic. How, at the level of public policy, can social needs find a rational articulation and achieve structure-forming effects in a process of modernisation and a world order in which there are no longer any metaphysical guarantees? The success of those small and middle-sized nations of Western Europe that have better protected themselves from the political technologies of 'freedom' and 'business democracy' point clearly enough to the restoration of social democracy in an economically friendly relationship with the environment. The new social movements, the Greens and especially the Womens' Movement, have shown that 'social life does not reduce to development'43 and that, as Habermas would have it, a potential for reason is always protected in the very forms of language and ordinary

22

INTRODUCTION

social interaction that we all share. From out of these social movements we see demonstrated at least the possibility of 'bringing about social relations in which mutuality predominates and satisfaction does not mean triumph of one over the repressed needs of the other'.44 We see also that cultural specificity and identity, and the Vast symbolic resources of society'45 can, in the West as in Eastern Europe, survive extremely unfavourable circumstances and spring to life in new forms of social action that very quickly strip away the un'necessary illusions'46 that have made populations the slaves of coordinating structures that try to define social life only 'from the outside in'. No one says that this will be achievable or easy in what was once the Lucky Country.

METHOD AND PURPOSE The method47 of the enquiry has followed the larger aim of setting a substantial empirical study of a modern state apparatus within the horizon of a social theoretical perspective - so that both might be the stronger. Today that task is made more difficult by the general recognition of a growing distance between social theory and its increasingly unsteady objects of social enquiry: unsteady because every 'method' defines its own objects according to criteria that are ridden with the new philosophical uncertainties of our own (post-modern) age in which as some will say, polemically but sometimes with good cause, that only 'soft' minds make 'hard' (ideological, methodologically blinded, and scientising) studies. Another 'given' is that in this area of political sociology one is from the outset dealing with problems that are strongly contested and refracted. To give what may well have been an immodest project any chance of succeeding, there was need to give a priority to clarity, economy, and accessibility. To achieve this the whole enquiry was built on a core of material gathered from a large body of structured interviews with top senior public servants. In this respect I followed in the footsteps of others. In the introduction to a fine and rather perfectly titled book called the The Private Government and Public Money: community and policy inside British politics, Hugh Heclo and Aaron Wildavsky noted a long time ago that 'in short, the expenditure review process is an immense window into the reality of British political administration'.48 The seven nation Aberbach studies proceeded from similar methodological assumptions that need not be confined either to the study of elites nor to empiricist methodologies. At a crucial period in Australia's history (and at the perfect moment for enquiry) the aim of this book has been to open just such a window both into the reality

23

ECONOMIC RATIONALISM IN CANBERRA

and future of political administration in Canberra, and into the social world to which it belongs - and apart from which it has no social meaning. This does not quite mean that the formal structures of a 'state apparatus' are treated as shadows or equated with the verbal utterances of top public servants. It means, rather, that we rely on the structure of the sample, and of the interviews, to do the work of defining, and even, in a non-empiricist sense of 'representing', what is happening. So, for example, what the central agency economists say about economic policy and Australian society should, when it is set against what the program and service department people say, adequately generate its own outer parameters and 'discursive structures' in a way that will satisfy our single overriding requirement of opening political administration to the social theory, and vice versa. In this way the interview material, and what is done with it, has to stand in for what others will almost inevitably see as more important matters. For example, it is clear enough that the problem of gender and inequality goes far beyond the gross inequality in the representation of women at this top end of a civil service - prima facie the indication was, in any case, that the outlook of the 6 per cent of women was not markedly different from that of the men. From the point of view of someone whose first interest is gender studies, the problem is that the whole system is male-dominated and that women as a social category fall into the social environment of a system that casts them, in a sense, as a just another 'externality'. Does this means that, in joining the interview material with the later evaluations and interpretation in Part Two, one must explicitly launch a discussion about patriarchal theories of the state? This could not be done, it seems to me, without at the same time addressing corporatist, pluralist, and public choice, Marxist, and even social democratic (my own position) theories of the state and of social reproduction. And so none of them is addressed explicitly. To do so would trivialise them all and destroy the structure of an already ambitious project. The intention is not to peremptorily define the questions, or indeed the answers, that arise from these several theories and paradigms but rather to lay out some material (I will later say 'data') and to set it in a discourse that should be useful to others who want to look through the lenses of these other perspectives into what a couple of hundred extremely intelligent power-brokers say and otherwise reveal about a social world that defines them as much as they define it. The core of concrete material presented in Part One of the book was based on some 240 ninety-minute interviews that were conducted from May 1985 to October 1986 - a time when the Canberra federal

24

INTRODUCTION

state apparatus was in the throes of momentous changes. The sample covered about one-seventh of the whole Australian government Senior Executive Service and nearly one half of the SES in the key government departments chosen for study. The intention of those choices is to give a body of material that catches the various reflections and refractions of this relationship between a state apparatus and its social context, both structural and 'cultural'. To that end, the interviewing was done in three groups of departments. Here and throughout, to avoid confusion, I shall refer to the departments as they were before the name changes that came with the restructuring and super-department amalgamations of July 1987. One parcel covered the three 'central agencies' or coordinating departments of Prime Minister and Cabinet, Treasury, and Finance, which interface with all other departments as well as with all of Australia's organised power groupings. The second parcel covered the 'market-oriented' departments of Primary Industry, Resources and Energy, Trade, and Industry, Technology and Commerce, which interface principally with the business and industry sector. The third group comprised the 'program and service' departments of Health, Education and Youth Affairs, Aboriginal Affairs, Social Security, Veterans' Affairs, and Community Services, which interface with community groups, agencies, professionals, and clients in the social service area. Since the object of the enquiry was always the broader relationship between a state apparatus and its social and economic context (rather than the Senior Executive Service per se), some departments, including a few large and otherwise important ones, were excluded from this selection for methodological reasons. Some were of minor importance (Administrative Services, and Sport Recreation and Tourism); others were not so relevant to the aims of the enquiry (like Foreign Affairs and Defence), and still others (like the then Department of Employment and Industrial Relations) had mixed functions that did not fit the criteria on which the three categories of departments were selected. Moreover, without further expanding a very large 'sample', it would not have been possible to cover more departments without at the same time thinning the numbers of interviewees in any single department to the point of compromising our chances of grasping their distinctive character and their contributions to the events in our period. Since the interviews covered about half of the SES population in our three categories of departments, they most certainly contain a representative sample of that population. With respect to the total SES population of approximately 1,600 officers, the only claim is that approximately one-seventh of them were interviewed and, although it can be safely assumed that they would in

25

ECONOMIC RATIONALISM IN CANBERRA

many respects fit the profiles that emerge from our data here, this is of no special importance for the aims and results of this enquiry. As I have suggested the book is arranged in layers so that it can better reach a range of readers with different interests. The first two chapters stay very close to the ground and do not yet deal with differences and similarities across different arms of the structure. Chapter 1 begins the task of setting out the prevailing images of contemporary Australia that inform and define orientations to policy and management of this executive and policy making echelon. Chapter 2 deals entirely with system-wide characteristics of the Service, within the limits of this sample: social selection, biographical information and key answers given to policy orientation questions. This material is then used, as a backdrop in Chapter 3, for a differentiation between the three categories of departments and of differing relationships both with the centre (the central agencies and the Cabinet) and with their respective environments. In Chapter 4 all this is carried one step further with more material that looks at some broader patterns in the construction and deployment of intellectual resources, and so at the politics of knowledge, that are driving the restructuring and rationalisation of the state apparatus. With the basic material set out 'systematically' and in a way that is as accessible as possible to the widest possible range of positions, the discussion moves in Part Two and the key Chapter 5, to some assessment of the 'immanent logic' of the material and of 'the system' and its environment. In that discussion, an examination is made of the significance of public ideas, metatechnologies, social power and of various means of defining the field of action. In the light still of the material presented in Part One, these problems are related to ideas that come from Habermas and Luhmann and from other people who have sought to understand modernisation and post-modernity. In the last chapter, the discussion is set more explicitly into the context of problems that arise from Australia's historical legacy and from its changing relation to the world economy.

26

PART ONE

CANBERRA: A STATE APPARATUS CHANGES ITS MIND

CHAPTER 1

IMAGES OF CONTEMPORARY AUSTRALIA

A

fter a few orienting comments about the larger context of the empirical enquiry (which are offered mainly for the reader who is not familiar with the Australian situation) this chapter begins the task of representing some general images and perspectives of contemporary Australia that prevailed in 1985 and early 1986 among one-half of the top bureaucrats in the key departments of the Canberra state apparatus. Since no one is especially interested in ephemeral impressions that are here today and gone tomorrow, we are looking for the more basic enduring outlines of an interpretative and explanatory perspective that these public servants bring to their work of steering and shaping a nation. Progressively, in the succeeding chapters, an increasingly differentiated picture will emerge from these first orienting outlines. This picture points both back and forwards in time to later changes and to a trend line of 'development' that is the object of the enquiry as a whole. From the top of Canberra's Black Mountain tower one can look to the east over the Brindabella and the Tidbinbilla Ranges and south towards the Snowy Mountains. To the west one looks over an equally breathtaking landscape into the vast distances of an island continent. It is not without some relevance that the city below is an island of another kind. It is remote from the the rest of Australia because, in order to ensure that federal government would not become the pawn of the two largest states of Victoria and New South Wales, the Australian Constitution of 1901 decreed that the capital must be at least 100 miles (160 kilometres) from Sydney. The Australian Capital Territory with its current population of some 240,000 people was designed (by an American architect) before World War I. It is very new, and indeed most of it has been built since the mid-1960s. The visitor will see no used car dumps and scarcely a single dilapidated house in a beautiful setting that is, naturally enough, dominated by the large complexes of government offices.

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The Canberra federal state apparatus emerged from World War II with a monopoly of income tax powers that it never relinquished to the (now) eight states and territories (New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, the Australian Capital Territory, and the Northern Territory) that depend on it for more than half their revenues. It holds constitutionally prescribed powers over foreign trade and external relations, customs and immigration, banking and currency, corporations, industrial arbitration, and communications. In the post-war period, and especially from the late 1960s, Canberra has greatly augmented and, in some instances, directed or appropriated developments in areas such as arterial roads and railways, education, health, and social services, which are constitutionally the responsibility of the states. It is partly for these reasons that, especially by comparison with the United States or even Canada, since World War II the Canberra federal state apparatus has enjoyed a considerable authority and prestige which has in many respects overshadowed the other two tiers of government the states and local government respectively. This points to two other related political cum constitutional aspects of the Canberra state apparatus that are important here. Like other federations, the Australian federal state apparatus is built on such familiar principles of liberal thought as the division of powers, the provision of constitutionally secured 'checks and balances', the primacy of 'free' or private enterprise, and the division and limitation of state power - all within a Westminster/Whitehall framework. This has led to predictable tensions, competition, and conflict between the states and the federal (or commonwealth - the two terms are synonymous) government. These conflicts are refracted into the competing political ideologies of the two principal political parties: on the right the Liberals, in coalition with the rurally based Country/National Party, have traditionally been the party of business interests; on the other side is the long-established and traditionally 'progressive' Australian Labor Party. The result is that Labor has traditionally been centralist, a centralism which has been: inspired by its desire to intervene actively in the economy to promote growth, foster rising living standards and full employment, equality of opportunity, and, on occasion, a more equitable distribution of income and wealth, combined with the belief that these objectives can only be effectively achieved from the centre because this eliminates the opposition which would otherwise come from conservative state governments.1

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Not surprisingly the non-Labor parties have traditionally preferred to stress 'states' rights' and 'freedom of choice' in an attempt to thwart social reforms and to oppose the redistribution of either profits or state revenues to wage and salary earners. And so, predictably enough, the conservative preferences have traditionally been backed with appeals to the liberal principles embodied in the federation: The defence of state rights and federalism by conservative governments, although cloaked by the ideology that federalism is essential for the preservation of individual liberty and freedom of choice, is largely designed to put a brake on...excessive government intervention and thereby safeguard what it calls the rights of free private enterprise...Continuing conservative support for the institutions of federalism is also inspired by the fact that in Australia at least, they constitute real barriers against socialism, imagined or otherwise.2 However, since the early 1980s, and in the light of the eight years of Hawke Labor governments, these 'traditional' features of the Australian federal apparatus may have changed for good. They need, at the very least, to be reviewed in a wider context. One notes, first, that in Canberra in the course of the 90 years since federation, it is the conservatives (and from the 1950s, the Liberals) who have governed most of the time. Labor governments have held office for only 28 of those 90 years in generally short and precarious terms of office in which they were either blocked by hostile senates or were governing in the shadow of war. Second, at the time of writing, the Australian Labor Party was governing, both federally and, albeit sometimes with the thinnest of majorities, in five out of the eight states. Yet all these Labor governments in 1990 were typically and to a varying extent business-oriented and strongly economistic in their policy orientations - to a degree that has sometimes occasioned publicly damaging corruption allegations and such telling epithets as 'Western Australia Incorporated'. And, third, the evidence gathered in another study of approximately one hundred business regulatory agencies showed that Australian business regulatory agencies, do not at all fit the image of a sternly interventionist or of an 'anti-private enterprise' federal government. Indeed, this image (common to both sides of the traditionally opposed 'centrist' versus 'state rights' positions) is denied by evidence demonstrating that the enforcement strategies of Australian business regulatory agencies have typically been very permissive and applied 'with manners gentle'.3 Other considerations point in the same direction. Throughout the

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1980s there has been a laissez-faire attitude towards notoriously loose corporate accounting practices; virtually no control over foreign investment; a feeble capital gains tax (introduced in September 1985); no death duties; and no broad-based taxes on services. All this raises new doubts about the authority of this very new federal apparatus, which does not have the ballast of long-established tradition, and also doubts about the longer term prestige of a structure that relies on leitmotiv of post-war reconstruction, on images of huge infrastructural engineering, energy, and resource projects of the Snowy Mountains Authority, and, more problematically, on the centrally driven social reforms and interventions of the early 1970s. Prestige of this kind is bound up with ideas of modernity and modernisation that are increasingly problematic. The Australian economy and the federal government's responsibilities for economic management are conditioned by some more or less unchanging conditions. With a population of only 16 million people, Australia's domestic manufacturing industries have a comparatively small home market which allows only limited economies of scale. For this and other reasons Australia has traditionally relied for its export income on agricultural commodities and raw materials exports; as the value of these traditional exports has been falling, Australia has since 1973 faced an adverse trend in its terms of trade.4 Moreover, in the later 1980s Australia's exports accounted for only about 15 per cent of Gross Domestic Product (in the same period the figure was about 30 per cent for Sweden, Norway, and Denmark - and about 25 per cent for Canada). Consequently the growing current account deficit cannot be reversed through trade without establishing new export industries in appropriately specialised 'niches' in a rapidly changing global economy. But development of this kind faces all the inherent comparative disadvantages of geographical and cultural isolation from potential markets in the industrialised nations of the northern hemisphere. And so, in the limitations and interplay of these and other factors there is considerable scope for special pleading and blackmailing pressures that are exerted on the federal government by the business community to maintain or enhance endangered profitability with tariff protection or subsidies, with reduced taxation, and most characteristically, with reductions of wages and salaries that are determined in Australia through a unique centralised wage fixing system. When the Hawke Labor government came to power in Canberra in March 1983, the Australian economy was in serious trouble. For at least a decade, and over the eight preceding years of the conservative Fraser Liberal National Party governments, Australia was second only to the United Kingdom among the leading OECD member countries on the so-called 'misery index' (the sum of annual unemployment

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rates and the annual average increases in consumer prices).5 Growth in real per capita income had declined to zero in 1980 and recovered a little before falling again to just over 1 per cent when the Fraser government was voted out of office. Largely as a result of the durable and effective Accord between the Australian Council of Trade Unions and the Australian Labor Party, over the eight year period of the Hawke governments to 1990 there was consistent and disciplined wage restraint; a series of budget surpluses from 1987; continuing reductions in taxation to pre-1973 levels; greatly increased profit shares; a recovery of investment; a virtual elimination of public debt; a sustained fall in the rate of inflation; and considerable increases in employment - see Appendix B (pp. 258-9). Yet, on the other hand, the current account deficit has worsened and the net total of accumulated external debt has increased from 10.5 per cent of GDP in 1982 to 45.2 per cent of GDP in 1989;6 there has been a continuing fall in the real income of most Australians; and, perhaps most pertinently here, these years saw unremitting constrictions of a public sector that was already small in comparison with other leading OECD countries.

PROBLEMS AND OBSTACLES It is against this background that our study began in 1985 and 1986, with 215 ninety-minute interviews with approximately half of the Senior Executive Service staff of what were (before the Bastille Day amalgamations of July 1987) 13 key departments of the Canberra state apparatus. The initial purpose was to see how these people, who would clearly have a decisive role in charting the nation's future, understood the problems and obstacles facing contemporary Australia. In order to draw from them the general context for their responses to the more specific questions (these are dealt with in the next chapter) we asked them the following questions: - Before we turn to some more specific questions may we begin by asking you what you see as the two main problems facing Australia today? Please indicate which you think is the more important of the two. (Q-20) - What do you see as the main obstacles to the solution of these problems? (Q.21) What we wanted was their identification and listing of problems and obstacles per se and, equally, some initial insight into the intellectual framework that they would use to define and explain what they saw. It was partly for this reason that these two questions7 were linked in this way. The same frames were used (with checks to eliminate tautologies) to code answers to both questions.8

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What then did our top Canberra bureaucrats see as the main problems facing Australia today? Table 1 • 1 Perceptions of two most important problems facing Australia today as seen by SES officers. Most important problem (in rank order) 1. 2. 3. 45. 6. 7. 8. 9.

Per cent of SES mentioning problem

Economic problems (general) Attitudes and values Uncompetitive industries Lack of consensus Unemployment Education system Wage and salary levels too high Social inequalities Public sector spending

26.1 25.6 16.3 15.3 14-8 8.9 7.4 7.4 6.4

Notes 1. SES N = 215. Total number of responses = 430. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 20.

General worries about the structure and performance of the Australian economy were at the forefront of their concerns and were mentioned by 26 per cent of our respondents. Others, who were also troubled about economic problems, pointed to the uncompetitiveness of Australia's industries and more specifically of its manufacturing industries (the primary industries are among the most efficient and competitive in the world). Excessive wage and salary levels and the level of government spending were also mentioned as economic problems. If we simply add up these responses and include the sprinkling of mentions that go to other clear-cut economic problems such as the taxation system, the economic costs of unemployment,9 inflation, interest rates and the like, we find that a little over a third of the responses are pointing to what are unambiguously seen as economic problems. This is not uninteresting as far as it goes, but it greatly underrates the significance that our respondents gave to 'the economy'. The significance of the economy becomes clear when we look at what the respondents understood by 'attitudes and values', the next most frequently mentioned problem after generic economic problems.

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AUSTRALIA

Our respondents were clear and forthright about what they meant. They talked insistently about the 'failing work-ethic' of Australians and about what they saw as 'free-loading', and an attitude of indifference to work and to 'the economic situation', and they parodied and summarised these attitudes with such phrases as Tm all right Jack' and 'she'll be right mate'. So, with very few exceptions, attitudes and values were defined from an economic, and strongly normative perspective, as a lack of commitment to what our interviewees saw as 'productive work'. The same is true of the mentions that were coded as 'lack of consensus' because this was defined, again mainly in economic terms, as uncertainty and conflict over the goals, directions and structural problems of the national economy. They were pointing here largely to what they see as the broader context of industrial relations problems. The dominant image in their minds was of the economic costs of noisy bickering between government, employers and unions over national economic goals and the restructuring of the economy. Their identification of the education system as 'a problem' followed exactly the same logic. The education system was a problem because it did not appear to be sufficiently attuned to the specific demands of the labour market. It was not 'relevant' to the needs of business and industry and insufficiently attentive to research, development, and skill-formation in 'high tech' and other industrial fields with export or import replacement potential. Many references to the education system slid off into comments that blamed it for the 'Lucky Country' mentality10 and thus, again, for a complacent indifference to Australia's (economic) situation in the world. In short, the education system was defined by those people who saw it as a problem principally, or solely, as a means of producing human capital and, certainly, only in terms of its relation to the economic system. So, of these nine most frequently mentioned problems all were defined from an economic perspective, except for unemployment and social inequality. When we add the other economic problems that do not appear in Table 1.1, we find that something in the order of twothirds of the perceived problems facing Australia today were defined in economic terms. What did the respondents see as the main obstacles to the solution of these problems facing Australia today? If we treat the obstacles in the same way we get a rank ordered list as in Table 1.2. The main obstacle to the solution of Australia's problems was the selfish indifference of an undermotivated population to economically productive work. And this impediment to the nation's prosperity was manifest in Australia's chronic industrial relations conflicts - that is what they said and meant. Once again we see a certain kind of

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economic logic in the definition and weighting of these obstacles. Our respondents defined industrial relations problems first of all in economic terms as an impairment to productive capacity.11 It is significant here that industrial relations were not mentioned in relation to the successful and durable Accord that was made between the trade unions and the Australian Labor Party in 1981-8212 and thus in terms of the different problems - of social justice and equity - that might arise in determining what might count as a fair and socially desirable context for and solution of industrial relations problems. Industrial relations matters were not raised as a problems of assigning (fair) shares, and still less as matters of exchange and agreement between two constituencies of equal legitimacy, but, rather, as economic problems and as an impairment to the productive capacity of the national economy. Table 1,2 Perceptions of most important obstacles to the solution of problems facing Australia today. Obstacles (in rank order)

Per cent of of SES mentioning obstacle

1. Attitudes and values 2. Industrial relations 3. Vested interests (= trade unions) 4. Institutional inertia 5. Failing leadership 6. Uncompetitive industries 7. Education system 8. Lack of consensus 9. Wage and salary levels too high 10. Declining markets

80.2 63.9 55.9 48.5 41.2 31.0 29.9 28.2 23.7 20.9

Notes 1. SES N = 215. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. SES interview Question 21.

References to Vested interests' had the same kind of thrust. There were some references to the powerful medical associations and to the farmers' union which had been quite ruthless in the pursuit of their own interests in the mid-1980s. However, for the most part it was the large trade unions, in both the private and public sectors, who were seen as vested interests (even though they represent a very substantial proportion of workers in this strongly unionised nation). 1 3 Denunciation and blame were a constant feature of these references

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to trade unions. They were blamed again and again for their 'selfishness'; for hurting the economy with excessive pay claims; and for unnecessary and damaging disputations that impeded the restructuring of the Australian economy and vitiated Australia's export industries and its competitiveness in the world economy. Many of the respondents who identified what is summarised here as 'institutional inertia' were pointing, at least implicitly, to both industrial relations and the education system. However, in these responses there was a broader concern with what the late Alan Davies called Australia's 'talent for bureaucracy'14 and with a certain general sluggishness of Australia's institutional structures in the face of what our respondents saw as an increasingly urgent need to modernise and meet the 'challenges' of increasing exposure to a rapidly changing world. In these references there was certainly still some emphasis on the economic consequences of what were seen as the rigidities of Australia's centralised wage-setting system. And, similarly, there was often an implied or voiced criticism of what was, ostensibly, the education system's lack of dynamism in facing up to the problem of Australia's under-skilled industrial workforce. Many, perhaps most, of these responses may have been prompted by concerns about economic matters, however they are distinguished by the fact that institutional structures were taken more seriously as more complex historical and social artifacts, rather than simply as appendages to the national economy or, worse, as 'grit in the gearbox'. The references to failing leadership were, for the most part, again imbued with more than a tinge of conservative and moralising anger at what these respondents saw as the lack of statesmanship among Australia's politicians. More often than not our respondents were complaining here of the cowardice or the self-regarding caution of politicians who were 'soft on the unions' and 'soft' on the issue of tariff protection for Australian industries. In most of these complaints there was an inward smile of approval towards the policies of Mrs Thatcher or Mr Reagan in the early 1980s and an underlying assumption that the standard for testing the worth of a politician ought to be the vigour with which they cleared the way for economic change.

WINDOWS AND IMAGES In the rank ordered frequencies with which these problems and obstacles were cited we can already discern, beyond the objects and particulars, some of the outlines of the 'mindset' and of the constructs that our respondents were using both to identify and even more importantly to explain Australia's problems. There were clearly

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some 'elective affinities' among what our top public servants saw as the related elements of both the problems and the obstacles to their solution. To get a better hold on these patterns of association and explanation, a factor analysis was made first of the cited obstacles, and then of the problems and the obstacles together. Table 1.3 outlines the two principal factors (or, in other words, the patterns of association) that showed up in the factor analysis of the cited obstacles to the solution of Australia's problems. We see that the underlying economic rationalism which first appeared in the frequencies showed up again in the pattern of associations among the responses. Table 1.3 Associations among obstacles to the solution of Australia's problems.

Obstacle

Factor 1 Per cent of SES mentioning obstacle loading

Factor 2 loading

Factor I

Taxation system Public sector spending Wage and salary levels too high

11.3 11.9 23.7

.62 .56 .53

-

31.0 28.2 63.9 20.9

— .33 -

.72 .65 .58 .43

Factor 2

Uncompetitive industries Lack of social consensus Industrial relations Declining markets

Notes 1. SES N = 215. Total number of responses = 645. 2. Totals do not add up to 100% because of availability of multiple response. 3. Only factor loadings of > 0.3 are included. 4. SES interview Question 21.

When the cited two 'most important problems' facing Australia today and the 'obstacles to their solution' were treated as separate variables and factored together we got a reconfirmation and an elaboration of these patterns in the responses. Specifically, in Table 1.4 we find three separate patterns of association (factors) among these identified problems and the obstacles cited for their solution. Each of the three factors points in its own way to an underlying economic rationalism that is still more visible in what are obviously mutually supporting aspects of a larger picture.

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Table 1A Relationships between problems facing Australia today and obstacles to their solution.

Problems and Obstacles

Factor 1 loading

Factor 2 loading

Factor 3 loading

Factor 1

Economic problems (unspecified) Obstacle - Uncompetitive industries Obstacle - Industrial relations Obstacle - Lack of social consensus

.69 .68 .48 .46

— -

— -

-

.66 .59 .59

.42

-

-

-

.61 .60

Factor 2

Uncompetitive Industries problem Obstacle - Wages and salaries too high Obstacle - Declining markets Obstacle - Taxation system Factor 3

Industrial relations problem Obstacle - Vested interests Notes 1. N = 215. 2. Only factor loadings of > 0.3 are included. 3. SES interview Questions 20 and 21.

Furthermore, at the base of this framework or outlook, there are two webs of deeply sedimented assumptions that are more or less unvarying - which is why they show up strongly in the frequencies and not in the factor analysis. IMAGES OF SOCIETY First, we find the contours of a certain negative image of society in the 'mind' of our SES personnel and more specifically here, in their view of other peoples' attitudes and values. We know what content they give to these categories; namely 'selfishness', indifference and several other facets of what was seen as a failing work-ethic. These same moralising attitudes are quite common among elites everywhere and are therefore not so very revealing. Our top bureaucrats are strongly motivated high-achievers. For the most part they came from privileged social backgrounds that gave them relatively little direct experience of ordinary working people even before they moved to

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Canberra when they lost the opportunity of ever getting any more. Here, as with their counterparts in other countries, they belong to a tiny upper-middle class fraction of the population.15 They have secure careers that involve them deeply in 'challenging', interesting, meaningful and rewarding work and so they were, presumably, projecting their own work-ethic and their own sense of involvement in what they do, onto the vast majority of the working population who have boring, dead-end jobs. But there is more to it than that. This moralising about 'selfishness' and indifference to work points, among other things, to a strongly utilitarian image of the individual and society. Australians spend too much time baking their brains out on the beach or, worse, boozing in front of the television. And they expect a weekend to consist of two whole days without work. They get four weeks vacation a year, and long-service leave after ten years of work, and overtime loadings for work done out of normal hours. The individual ought to want to work more, and harder. The insistent attribution of selfishness and freeloading is a kind of curse and sentence that falls back on the individual (and on trade unions) because it has no stable social object and so, in this respect, we are in the intellectually interesting position of trying to explain the structure of a vacuum from the inside. In these moralising images the underlying assumption was that the strength and vitality of Australian society - whatever that may mean - resided in the strength and vitality of its economy. And this in turn depends, then as now, on the entrepreneurial flair of the few and on the striving, discipline, industriousness, and productive work of the many. The common good was somehow cast, vicariously, as the total of exchanged economic values, as the gross domestic product, and in a way that defined all withheld effort and unpaid activity as selfish, reprehensible and 'antisocial'. That was the dominant viewpoint. There were other 'minority images' of society. One of these shows up in the identification, in fifth and seventh place respectively, of unemployment and social inequality as main problems facing Australia today. These problems were raised as social problems and within a social context. For many respondents the focal point of these references is the pain and despair of poverty and of unemployment, especially youth unemployment. In a few cases there were similar and specific references to other socially disadvantaged groups such as the aged and non-English speaking immigrants. Although there was no statistically systematic relation here between problems and causes, it is worth noting that, as we shall see later and rather as one would expect, those who nominated unemployment and social inequality as problems put themselves on the centre-left of the political spectrum

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and held on to this residual but still classical image of class-bound structural social inequality. Thereafter the social images point in varying directions. Sometimes they alluded to the longer term social costs of these present-day problems of inequality and unemployment and hence to the 'grapes of wrath': to the seeds of crime, social division, hatred and intolerance to which they would give rise in the future. Sometimes the social image was expressed more indirectly through references that focussed not so much on the social structure or on relations of social cause and effect, but rather on normative structures and on what were seen as declining ethics of social reciprocity and social responsibility. Finally, there was another image that centred not on inequality, but rather on the breakdown of the Australian family and a lost sense of community, of belonging, and of Aussie mateship and solidarity in the face of adversity. A manual check of the 50 or so mentions that were coded in this way suggests that something like a half of these respondents came from Roman Catholic backgrounds and that many of these interviews were tinged with critical attitudes towards trade unions and with generally conservative views, and with implicit or explicit criticisms of what they often saw as 'social materialism'. However these 'images of society' are, as we have said and in contrast to what our respondents had to say about economic problems and obstacles, by no means systematic. There are some blurred patterns and a few visible outlines here and there which can be seen almost as distractions from the equally, or perhaps more important discovery that most references to 'the social are weakly defined. The sense of confidence with which the majority describe economic phenomena contrasts markedly with the uncertainty with which the minority search for appropriate social constructs. Indeed, for the most part such social constructs were eschewed and social considerations were raised in a different form - not as coherently framed constructs but rather as 'issues' such as unemployment, inequality, poverty, the family, women, Aborigines, and migrants, in something like that order. It is clear that our respondents sometimes thought and worried about issues, but hardly ever about 'society' as such. IMAGES OF POLITICS AND THE POLITY These were, for the most part, similarly manifest only as transposed residues and reflections of economic factors of production and exchange. Most importantly, we find in this context some certainties about

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interests in general and Vested interests' in particular. Our respondents had clear-cut criteria for deciding what counts as an 'interest'. Wants, needs, goals and the like (the important differences between these notions do not matter here) were reckoned to be 'political', and perhaps even 'social', phenomena up to the very moment that they are expressed as actions, or as 'things' that are intentionally proffered for exchange in the marketplace. In that moment political and social actors and actions are redeemed and naturalised into 'the economy'. It is for just this reason that banks, developers, and huge corporations were seen predominantly as economic factors rather than as 'political' and 'social' interests. It is only when the framework is reconstructed in this way that one can make sense of this apparently obsessive preoccupation that our respondents had with 'vested interests' and with the trade union movement to which this term is most typically applied. A 'vested interest' was defined in these images as almost any kind of human institution or group of actors that obstinately stood outside 'the economy'; that constrained the outer boundaries of its operations, or, worse, that sought to interfere, 'internally', with its free operation. It is clear now why trade unions were defined so strongly as 'vested interests'. They, or rather their leaders, behave in such a perverse and selfish fashion because they keep one foot outside the labour market and seek to use 'political' means to alter the fair value that it might otherwise set on the 'freely' proffered work of the membership. A clear comparison can be made here with the activities of billionaire corporate takeover barons who exploited Australia's loose accounting practices, made fortunes at their shareholders' expense, and put a whole nation into debt with massive overseas borrowings (much of which was used to finance the asset-stripping of productive Australian industries). Even if we allow for some coding errors, and for what may have been the implicit intentions of some references to undifferentiated economic problems, there is still no possibility that corporate fraud and shady business practices, or takeovers and the overseas borrowing that have been used to finance them, could have scored more than 1 or 2 per cent of mentions - either as problems or as obstacles to their solution. More to the point, it is plain now why such people were not defined as 'vested interests'; namely because their actions count as 'economic activity' and were thus seen as economic facts rather than as political interests. However the condemnations of trade unions also had a second and entirely different root in the unhappy experience many of these top bureaucrats (especially those in the large social service departments) had had with their own public sector unions. It is this second

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and further aspect of the problem that gives these references to vested interests a broader meaning that has coloured and conditioned the respondents' images of politics in much the same way as the moralising comments on attitudes and values have conditioned their images of the social order.16 These two dominant political preoccupations - Vested interests' and industrial relations - together accounted for half of all the mentions that were coded as political problems. And here we have some further evidence of the derivative status that was given to political matters in Australia: these political difficulties are twice as likely to be mentioned, not as political problems in their own right, but rather as obstacles to the solutions of problems that were defined directly or indirectly as economic problems. In the other few direct allusions to political problems and obstacles our respondents pointed to what they saw as failing political leadership, to constitutional problems inherent in a federal system of government, and to the harmful effects of political polarisation and of small single-issue political parties.

CONCLUSION In the view of our respondents from the top policy making echelon of the Canberra public service, the main problems facing Australia were deemed to be economic problems. Some of the obstacles to the solution of these problems were of a strictly economic nature. Australia was, then as later, faced with declining markets for its major exports; its manufacturing industries were uncompetitive; and, from the point of view of our respondents, wage and salary levels were too high and the taxation system discouraged 'incentive' and enterprise. But these problems were defined in the terms of an economic rationalism that reached out to explain a broad sweep of social and political phenomena as obstacles to their resolution. And of course these explanations pointed, along the same lines, towards the preferred solutions that were clearly mooted in the insistent references to a failing work-ethic, to the complacency of the Lucky Country mentality, to the education system, to industrial relations and vested interests, and to failing political leadership. They felt that Australians have had it too easy and it was time they were more exposed to the international economy and the discipline of the market in the 'real world'. Strong and courageous leaders were needed to quell the noisy bickering. It was time to take on the Vested interests' and to deregulate the labour market with the abolition of the centralised wage-fixing system and thus, once and for all, to kill off the unions and to restructure the economy.

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Judgments about the appropriateness of the diagnosis or the therapy would be distracting. It is more important, instead, to make a few comments on what has been learned about the disposition of this part of the Canberra state apparatus to society and politics. A key point is that the economic framework was 'systematic' and that the references to social and political phenomena were not. Social factors were seen first of all as impairments to economic performance, and then as specific issues and problems. There was no evidence of any coherent view of society per se and as a whole. 'The economy' was certainly hardly ever seen as a subordinate part of Australian society conceived in some coherent way as a society. Indeed this way of looking at things borders on heresy and the idea that 'the economy' should be subordinated to anything was a luxury that 'we' could not afford. And yet once again indignation at the hubris of such a notion is a distraction: the important point is rather that when the 'real world' is seen in this way it follows, in Hamlet's words 'as night follows day' that traditions, cultures, norms, institutions, social needs and communities will be routinely assumed to have no independent value-setting command over the economy. Accordingly, 'politics' was reductively defined in much the same fashion as forceful economic management. And this says something about how our top bureaucrats expect to both judge and serve their ministers. These windows and images give a context for the more specific orientations to policy and management that are covered in the Chapter 2.

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CHAPTER 2

PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS'

T

he grand truism of sociology is true also of Canberra: the Australian federal state apparatus is 'socially constructed'. Every part of it, including its legal, economic, and formal organisational structure, is a product of the society that gives it money and legitimacy. It is by deploying (and reproducing) these resources of money and legitimacy, among others, that the federal state interacts with markets and with other aspects of its environment, and functions as a coordinating medium for the whole social system. These rather bland generalisations remind us again that sociological research must begin with a basic presumption that is an axiom of the discipline itself. It has to be assumed that the total experiential and educational baggage of the individuals who work in this 'social location 1 (for our purposes the top Canberra bureaucracy) is the product of a continuing process of socialisation - of what used to be called, in an older language, their 'primary and secondary socialisation'. And this includes all later educational experience and, most importantly in the case of people who have spent decades of their lives in the workplace, all later and ongoing occupational socialisation as well. Just as the economist begins with the assumption that 'the economy' is the measure of resources known and unknown, so we must begin with the assumption that the perceptions and actions of our top public servants have a systematic relationship to the society of which they are such obviously important members. It is the task of the empirical enquiry to uncover and to describe the many aspects of this two-way relationship - a relationship that is never narrowly determined and that is always mediated by many different social factors, but one that must, nonetheless, be shown to have a demonstrably systematic pattern. To embark on an empirical search for the pattern of this relationship is obviously to beg essential theoretical questions about the very

45

ECONOMIC RATIONALISM IN CANBERRA

nature of that relationship, questions that also ask for methodological justifications. Important as they assuredly are, these problems have to be dealt with elsewhere. The modest task of this chapter is to present a substratum of basic data. Later, in subsequent chapters, the data will be amplified with other material and then used to support a series of arguments and assertions that many readers will find overly daring and perhaps unacceptable. So, the ground must be prepared carefully with this presentation of a large parcel of data that are intentionally drawn almost exclusively from direct responses to the fixed choice or 'closed' questions (and thus from the most closely structured part) of these long interviews with our 215 Senior Executive Service officers nearly half of all the SES staff in the 13 key departments.2 These questions were keyed to the other open-ended questions that will be presented with the more extensive discussion that follows in the next two chapters. For the moment the overriding purpose is to stay very close to that part of the basic data that most easily speaks for itself, so that the properly sceptical reader may not escape a necessary engagement with the 'hard' (empirical but not empiricist) evidence for the more contentious arguments that will follow later, especially in Part Two of this book. The first section of this chapter deals with some basic social characteristics of the respondents: essential demographic and biographical information about birthplace, age, gender, socio-economic status of family background, and schooling. With these bearings we shall be able to locate our political administrators in the larger Australian social structure, and we shall see what broad processes of selection have been applied at different points along the road to Canberra and to their present location. Of course, this information is of quite a different kind to the other data presented in the following sections of this chapter, which aim at building up a coherent picture of the judgments, assessments, and perceptions of the respondents on a whole range of matters concerning administration and government. What then is the connection between the two? The fairly obvious answer is that social actors view the social world through windows that are part of its structure - their actions are premised on what they see and, of course, what they see depends very much on how they and others have designed the building and on which way the windows are facing. In some respects we will find that all our political administrators are looking out of the same windows. Sometimes they will be looking from different windows with variously overlapping perspectives; and sometimes they will see very little in common. Often we shall succeed in our aim of following the corridors between the windows and of relating the whole thing to a

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PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

social ground map of the Canberra state apparatus and, by implication at least, of Australian society - the larger task of the whole enquiry. The second section looks at the political orientations of these top bureaucrats and this is followed in the third section by a first 'quick fix1 on the economic rationalists who from about 1984 began to spring from the wings on to the centre stage. The fourth section presents a broad picture of the Senior Executive Service officers' working relationship with the whole system of government of which they are part and more specifically with the second Hawke Labor government. This is followed, finally, in the fifth section, with a first appraisal of some the evidence that will be needed in considering some fascinating and important questions about 'technocracy': the role of intellectuals and experts, and the different types of imperatives - economic, social and 'political' - which shape the process of government and the instrumentation of state power.

SOCIAL BACKGROUNDS AGE AND GENDER The international comparative study of higher public servants conducted by Aberbach and his colleagues in the early 1970s showed that the average age of senior public servants was 53 years (the same as the average age of our top Australian bureaucrats in 1976) and that they had spent an average of 25 years of service as bureaucrats.3 In Australia, in 1986, we find that these senior bureaucrats, at a comparable top 1 per cent level of the Canberra public service, are considerably younger. Their average age is 47 and they have spent an average period of 20 years as public servants. But, as we shall see later, there are differences in the age distribution across the three different categories of departments that were chosen for study. The seven-nation study also documented what everyone knew to be the case: selection into the ranks of the top 1 per cent of civil servants was governed by what Aberbach and his colleagues called the 'iron law of andrarchy':4 in short they found that less than 1 per cent of these top jobs were occupied by females. In Australia a decade and a half later, and after a strenuously applied program of affirmative action, the picture is changing. And yet the Senior Executive Service is still an andrarchy, though certainly a much less exclusive one. A paper presented by Prime Minister Hawke goes to the heart of the matter and explains that more affirmative action is necessary because, even after due allowance is made for the fact that the average

47

ECONOMIC RATIONALISM IN CANBERRA

length of service for women is considerably shorter than for men (a factor that obviously reduces chances for promotion), there was still an element of social discrimination that was unexplained by this and other factors. In an Australian Public Service of which about half of all the employees are women, Differences in levels of men and women are not explained by differences in length of service; nor by differences in qualifications; nor by concentration of women in states with lower promotion rates.5 We see from Figure 2.1 that the proportion of women drops steadily as the count proceeds up the levels of what was, in the old Canberra nomenclature, the 'third division' of university educated clerical and administrative staff. Although the proportion of women has been rising from a floor of 1 per cent in 1976, women SES officers were still a small minority of only 6.1 per cent of SES officers in June 1986. Fig* 2 A Proportion (per cent) of staff in SES who are women and are in classes of the 'third' (clerical/administrative) division.

Class 8-9

Class 10-11

SES

Source: Australian Public Service EEO Survey 1986.

In the material presented below and in subsequent chapters, some will notice that there is, regrettably, and for reasons that are purely methodological, 6 no separate breakdown of male and female responses. More regrettably still, women have been excluded from the sample altogether in the next section on ethnic and national origins the reasons for this will soon be plain. For the moment it is perhaps enough to explain that the Senior Executive Service population has such a small number of women - the number of SES women officers in the departments in our sample usually comprised one, two, or three individuals - that comparisons between male and female responses

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PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

would not only be statistically meaningless but, more alarmingly, would be a sure way of betraying a sacred trust and identifying our interviewees. ETHNIC AND NATIONAL ORIGINS Most people are now aware that Australia is no longer a British enclave in the Pacific Ocean; not, at any rate, in anything more than a purely ceremonial sense. A quick walk through the central business district of Sydney is enough to remind an Anglo-Saxon visitor that one of the most successful programs of migration in the world has produced a multicultural population of which about one-third are of nonBritish origin. However, although this great variety of ethnic origins is already a feature of the larger population of Canberra public servants, it is not yet reflected in the composition of the SES (see Figure 2.2). Fig* 2*2 Birthplace of SES officers compared with Australian population males aged 30 to 64. M

Total Australian males SES males

Born Australia & New Zealand

Born UK Ireland

Other birthplace

Notes 1. The figures are for males aged 30-64 years, from 1986 Census, Australian Bureau of Statistics, Table CX0001. 2. SES N = 197. Separate figures for women SES are not entered because numbers are too small for valid comparison - of the 19 women in the sample, 18 are Australian born. 3 SES interview Question 4.

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An effort has been made to rectify the imbalance in the proportion of staff who come from non-English speaking backgrounds. It appears that in the mid-1980s approximately 17 per cent of the larger population of Canberra public servants came from non-English speaking backgrounds7 as compared with a slightly larger proportion for the whole Australian population.8 With respect to these top public sector executives we find that the proportion of the SES born in the United Kingdom is, indeed, about the same as for the population as a whole. However there is clearly a somewhat dramatic under-representation (by a factor of 5) of senior staff from non-English speaking backgrounds9 and this situation has not changed between 1985 and 1990. FAMILY AND SCHOOLING The evidence suggests that these top Canberra public servants do indeed tend to come from high-status social backgrounds, but not in quite the same measure as their counterparts overseas. Aberbach and his colleagues emphasised that in six10 nations in the early 1970s a massive proportion (some 74 per cent) of the top bureaucrats in the USA, France, Britain, the Netherlands, Italy and West Germany, had fathers in managerial or professional jobs. Although cross-national comparisons of this kind are fraught with all kinds of technical difficulties,11 the broader outlines of the picture are still quite clear. In terms of social origins, the top echelon of the Canberra bureaucracy is highly 'unrepresentative' of the wider Australian population but still more egalitarian12 than it was on average in these six other countries where not very much has changed France is still ruled by TEnarchie' 13 of top functionaries from the 'grandes ecoles', and from l'Ecole Nationale d'Administration in particular, and they are still socially selected in the same way today as they were a decade or two ago, and the same is true of those those in Whitehall. We see in Table 2.1 that 27 per cent of these members of the Canberra Senior Executive Service came from families with a father in the managerial and professional stratum - that is from an aggregated top social group comprising bands one and two. Scales of occupational prestige remain one of the most direct means of measuring 'socio-economic status' and they are one of the best practical indicators of social class. The information given to us by our SES officers was classified on the Ann Daniel scale, however, since scales are normed differently Table 2.1 includes the Broom and Jones ANU2 scale and so compares our SES sample on two scales that are both

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PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

based on 1981 Australian workforce occupational prestige distributions.14 The differences across the two scales disappear when the top two bands are lumped together and the result then shows, fairly unambiguously, that top Canberra bureaucrats are between four and five times more likely than the rest of the Australian population to have come from a small elite of 5 or 6 per cent of Australians with fathers in these higher professional and managerial occupations. Table 2.1 Prestige of father s occupation for male SES officers.15 Prestige of father's occupation

Senior Executive Australian Australian males (scale A) 2 males (scale B)2 Service males1 (%) (%) (%)

Band one) managerial & Band two) professional

5.77 21.63 27.40

0.69 4^2 4.91

3.26 125 6.51

Band three) middle-class Band four )

23.56 -25.48 49.04

14.89 30.24 45.13

17.16 18.09 35.25

10.10 433 14.43

32.17 17.78 49.95

46.51 1L23 58.24

Band five) lower social Band six ) background

Notes 1. N = 208 valid entries less 19 women (subtracted because no statistically valid comparison is possible) = 189 of SES selected sample of 215. Again the women are excluded here because the numbers are too small to be statistically meaningful and yet it is interesting to note that the proportion of women from the top two bands is exactly the same as for the men. 2. Scale A is the Ann Daniel scale; Scale B is the Broom and Jones' ANU2 scale. 3. SES interview Question 3.

Since there is in Australia as elsewhere a ubiquitous relationship between socio-economic status of family background and educational attainment, one should not be surprised to find that much the same kind of pattern applies to the data concerning the secondary schooling of our top bureaucrats. They are at least four times more likely to have attended an elite private school than their age-mates in the larger Australian population. If we assume that our top bureaucrats left school at 18, then the youngest of them will have left school in 1972 and the eldest in about

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1939. However the point is that the great majority of them left school between 1945 and 1965 when school retention rates were quite different from those applying today. Moreover we find that these retention rates differed across the three sectors of Government, Catholic and GPS Private. More specifically, we discover that pupils in the expensive elite 'Greater Public Schools' (which are all private!) were much more likely than those in the rest of the school population to stay on to finish school in the senior secondary and matriculation grades. In 1965, the first year for which national figures are available, we see that these elite GPS students comprise only 5 per cent of all school leavers.16 When we look at our Senior Executive Service population we discover that nearly 15 per cent of them come from these elite schools. Indeed the earlier studies of Cass and his associates, based on the data from the 1976 report of the Royal Commission on Australian Government Administration (the 'Coombs Commission'), sets the number of SES officers from GPS schools at what they flag as a conservative, understated, estimate of 18.5 per cent.17 In short ex-GPS school students are greatly over-represented among our SES officers: SES officers are, by comparison with the larger population, three or four times more likely to have come from elite GPS schools. Table 2*2 Secondary schooling of Australian public service Senior Executive Service officers. Government Catholic GPS (elite secondary secondary private secondary)

Australian Population, 1965 All school leavers1 Secondary Senior secondary Senior Executive Sample2

76.0 73.6 63.8

19.0 17.7 19.9

5.0 8.7 16.3

39.1

27.9

14.9

Notes 1. This series of figures is taken from Boreham, Cass and McCallum18 whereas the figures for secondary and senior secondary were supplied by the Australian Commonwealth Government Schools Commission. 2.N = 176. 3. SES interview Question 2.

Again it is interesting to note that Aberbach's six nation study showed that 'in advanced industrial nations virtually the only significant path

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PROFILES OF CANBERRA'S POLITICAL ADMINISTRATORS

to the top of the polity passes through the university*.19 In Australia there are virtually no differences in the social prestige of different universities20 of the kind that mark off the 'Ivy League* from other American universities, or 'Oxbridge* from what used to be called the British 'Red Brick* universities - and, more sharply still, the 'grandes ecoles' from the rump of the French university system. Although, in later discussions below, we shall be much more interested in the disciplinary field and type of degree(s) held by our top officials, it is still worth noting that the six nation finding is, of course, also true of Australia today, and that 98 per cent of our SES officers hold one or more university degrees. And yet, before this fact is taken completely for granted, it is as well to remember that only a decade or so ago there were still complaints in the academic literature21 and elsewhere that the top public service was 'unrepresentative' and 'elitist' because even then it contained such an enormous proportion of people with university degrees. That complaint is not heard today because the once contentious debates about 'meritocracy' have been buried under what has become the completely normal expectation that higher administration must be done, exclusively, by people with one or more university degrees. Of course, the point that really matters here is not the sad fact that some would-be contenders for entry into Canberra's top civil service have been the victims of witting or, more probably, of unwitting and institutionalised forms of discrimination. Our concern in this study is not with specific social inequalities, but rather with the effects upon society itself of a pattern of differentiation and selection through which people with certain characteristics come to acquire positions of enormous power within it. It is a study, among other things, of the structure of power in Australia. Even though there is an overlapping interest, it is not a study of inequalities of employment opportunity in the Canberra public service. Table 2.3 gives an impression22 of the selection effects of the several factors covered above on Canberra and the way it is structured. So what is the relevance of these selection effects? In Britain and France those who press that question with the obvious and repeatedly demonstrated findings that an overwhelmingly large proportion of top civil servants in Britain and France come from privileged social backgrounds, from Oxbridge or 'les grandes ecoles',23 are met with what has become a standard defence. One is told that the top Whitehall bureaucrats have passed through Oxbridge only because that is where the 'best people' go and that beyond this simple fact any relationship between selection and social background is purely coincidental and has no relevance to what these people think and do at their office

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ECONOMIC RATIONALISM IN CANBERRA

desks. Sometimes attempts are made to bolster that standard defence with the slightly more sociologically plausible argument t h a t any residual effects of social backgrounds will, in any case, pale into insignificance as they are buried under 20 years of experience on the job; and that this will be especially true of talented high-achievers who are, for that very reason, extremely involved in intense and ereative intellectual work which opens them all the more strongly to the formative influences of the workplace. Table 23 Chances of entry to the Senior Executive Service of a person born from (approximately) 1920 to 1940.

Characteristic

Selection Effect

Father did not have a senior Four times fewer chances of entry managerial or professional occupation? Not born in Australia, New Zealand or the United Kingdom?

Four times fewer chances of entry

Not male?

Fourteen times fewer chances of entry

Did not enter a Greater Public School? Four times fewer chances of staying on to senior secondary (matriculation) level Did not graduatefroma university?

Virtually excludedfromentry to SES.

These two arguments are plausible but mistaken. Among our sample of top Canberra bureaucrats we find that, even after an average of 20 years of work experience, there is still a clear and strong relationship between socio-economic status measured by the prestige of father's occupation and the general political orientation of our Senior Executive Service officers. We find that those who belong to the already disproportionately large group which comes from top managerial and professional family backgrounds are three times more likely to say that their politics are centre right or conservative than are their less privileged counterparts from lower social backgrounds (bands 5 and 6).24 Although it is not as strong, there is still evidence to suggest that images of society and 'theories' of social stratification are related to the type of secondary school attended some 20 years earlier. The respondents were asked whether:

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-

In a developed and fairly affluent society like ours relations between capital and labour are: a. more complementary and equal than they are unequal and exploitative b. more unequal and exploitative than they are complementary and equal c. these categories are no longer particularly relevant — why not? (Q. 27)

Fig, 23

Images of society related to secondary education.

60

more complementary and equal

50 -I

more unequal and exploitive

40 %

not relevant 30

20

10 State Secondary

Catholic Secondary

Independent

GPS

Notes

1. N = 215; X2 test

2. SES

p