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Left-Right; Right-Left: How about a fourth revolution?

The state triumphant? Jean Duplessis-Bertaux's "Retour de Varennes. Arrivée de Louis Seize à Paris, le 25 juin 1791" (1791) via Wikimedia.


Today I read respected economist John Quiggin's latest in "Governments are buying up where the market has failed. Is this the end of privatisation?" via the TJ Ryan Foundation website.  Apparently, privatisation has failed because the government decided to start buying back infrastructure. Given the article appeared in The Guardian, you will excuse me for being a little sceptical about this trumpeting of the state's triumphant return to delivering services.

Poor regulation is not the fault of businesses. Indeed, there are some major problems that government brought about all by itself: forgetting to structurally separate Telstra before selling it off, then wanting to buy part of it back through NBN, and let's not forget the roof insulation debacle

None of these problems were caused by market failure. Clearly, these were government failures. Political reactions that buy back the farm are about winning elections and little else. It is a far cry from a failure of the free market.

Not that Quiggin says all of these things, but he does seem to be against privatisation. But being against privatisation, where government sells the farm and then promises to irrigate it and weed it and harvest it and then give all the proceeds to the private sector, is not the same thing as market failure.

Market failure occurs where the private sector is unable to provide goods and services at a profit. Broadband services to remote communities is a case in point.

But this is where ideology comes in. Rather than funding, transparently and directly, the actual cost of services to remote communities, it must be cross-subsidised. This means that the true cost of providing to the bush is hidden, and the costs of inefficiencies are buried in monoliths like NBN Co.

And while Quiggin acknowledges that this is not a return to socialism (or, more appropriately, social democracy), given that land titles offices are to be leased out (NSW) or sold (SA), it is largely a return to nationalisation of particular industries. This has happened time and again in the UK, Australia, and Canada, and so on with telegraphs and railways and other services, especially during war time. (There is even talk of the ACT Government buying back Canberra Stadium so it can bulldoze it to the ground and then build its own stadium - again - in Civic. But remember the original debacle that was Bruce Stadium?)

Quiggin notes that Pauline Hanson is using citizens' dissatisfaction with the private sector (which governments get blamed for anyway) and combining this with racism - a form of left-right politics where public ownership is combined with right-wing social policies.

The Hawke government, which introduced the majority of the reforms based on economic liberalism (or economic rationalism as it was known here), had more of a right-left agenda. Since Howard, we seem to be stuck in a race to the conservative right, or centre-conservative/right2 ideology - the biggest government in history, pretending to be a small government, touting freedom while taking away the rights and freedoms of citizens more than ever.  

I made a joke to my class the other day about living in Australia versus living in the developing world. In many developing world countries, you can do whatever you like as long as you do not criticise the government, In Australia, you can criticise the government all you like but you are not allowed to do anything.

What has never been tried is a liberal-liberal approach. Imagine a free market with same-sex marriage, free trade agreements with universal health care and education, market competition for goods and services in the metropolitan areas and government-provided services in the frontier areas.

The trouble is not privatisation, but a half-baked attempt at it. And it isn't the same thing as libertarianism a la Ron Paul. Regulations are necessary. But should the government really have anything to do with holding back same-sex marriage? This has nothing to do with government.

But before we think that re-nationalisation is a new turn in politics, don't forget Kevin Rudd's essay in The Monthly on the Global Financial Crisis back in 2009. Choosing one economic orthodoxy over another is all history has witnessed since before the Great Depression.

Re-nationalising has been done before, and it will be done again. And it will be undone again, too. But what is missing is not the right economic policy, it is the right combination of economic AND social policies. Why liberal economics can't work with liberal social policy we may not know until it has been attempted. And whether this can produce better results than China's emerging model is another story.

While much of the above is a stream of thought, I have a few ideas of what to do about it. First, I might follow up on a recent Lapham's Quarterly podcast where John Micklethwait talks about his co-authored book (with Adrian Wooldridge) The Fourth Revolution: The Global Race to Reinvent the State. (Lapham's Quarterly is the magazine I have always longed for, and Lewis Lapham is like the Mortimer and Adler of "Great Podcasts". If you don't subscribe yet and you are into politics or history, then this is the duck's!)

Second, I need to consider rating policy decision such as Snowy 2.0, NBN, electricity, South Australia's great big Elon Musk battery, and so on, and putting together a quantitative paper. Some of Patrick Dunleavy's recent work might serve as an example.

But why oh why we can't have liberal economics and liberal social policy I will never know. And while I don't even pretend to have the temerity to critique Quiggin's views, I think there is something to be said for the paradigms that continue to wax and wane in the economy and society. 

That this all began in 1776 with Adam Smith's Wealth of Nations, in his argument for market liberalism, together with the United States Declaration of Independence, also from 1776, and its focus on political "liberty", provides an interesting starting point for an historical argument about the never-quite-coming together of these two ideals: liberty-liberty.
Note: See also William Hogeland's (2017) Autumn of the Black Snake: The Creation of the U.S. Army and the Invasion That Opened the West via Lapham's Quarterly.