Yesterday's man, page-19

not sure if this entirely answers it but here we go

I had written a long explanation of my views in the early hours of the morning only to see Hotcoppers flakey system disappear it and no amount of wizardry on my part could recover it

Maybe for the best and I’ll try to make it shorter so the HC platform can cope so here goes

When Keating started his reforms the economy had become moribund and reform was needed. But policies have a time and place and purpose and his policies were purposeful and intentional to address conditions at that time

Likewise the policies that had eventually led to the stagnation he sought to remedy. Post war growth and rebuilding was highly effective - until it wasn’t. In fact the very policies that had worked so well post war had outlived their usefulness with fat and laxy public institutions and low productivity with poor leadership and under performing organisations. (Private and public btw)

Keating refers in the speech for which I have included a link to the US and the UK as comparators. I think that’s highly relevant. Along with the freeing up of the economy and reform of the labour market we changed many other more subtle aspects of our society

What I believe Keating did not understand is culture (like many economists). While culture may shape choices, culture largely follows systems and structures. It must do because those systems and structures drive behaviour. Behaviour shapes culture. And culture shapes beliefs.

His changes required a change in perspective and in my view they promoted the already creeping views about individual rights, wealth and achievement and status at the expense of community that have led to greater inequity. Many of the unintended consequences were, in my view, entirely predictable.

Government services are delivered by private businesses supposedly to improve performance, but instead (and I think job services and aged care are good examples) we see another form of fat and happy but into private hands. We’ve sold the farm essentially and because of our size much of the farm is now owned by foreign investors. Superannuation was a good move but it led to the view as one lnp politician once said that the aged pension was a sorry admission of failure in one’s life. It failed to address the problems of unequal female participation in the workforce and with the shits in attitude towards the pension those without their own home live in poverty. (I have a nuanced view of this btw) We have become a harsher, more judgmental society. There are other changes that have emerged over the decades that change the way society and thus the economy operate yet our broad approach remains the same as division, poverty and social problems increase

These were, in my view, entirely predictable longer term outcomes. It would take too much time and too many words to explain but I’ve had the privilege of working with many of Australia’s largest and once iconic businesses. that told me that thinking there is a magic to private enterprise is false. What creates magic is purpose and vision and resolve. When those exist then effort follows easily And then it doesn’t matter who owns it

But if self gratification and personal wealth are the drivers of executive behaviour (and rem systems were built on the assumption they mattered) then growth has the wrong purpose

Anyway to cut a long story short over time conditions change - we are in a different era now and conditions are not the same as they were when the reforms were introduced. Nor are social values the same. Though I think people still want broadly the same things and a decent level of personal prosperity what differs is beliefs about the means by which these might be achieved. Just as post war policies outlived their usefulness so too are Keating policies rapidly unravelling our society.

Even if we found another much needed great reformer those reforms too will outlive their usefulness because none of us can predict the shift in culture and beliefs and behaviour that the new era of the digital world will bring

As to solutions. I don’t claim to know. What I do know is humans aren’t very good at being ready to change direction or to predict longer term consequences of their actions. Doing that requires a more cute understanding of how systems and people interact then most economists have.