The easiest way to avoid conflicts of interest

Amidst the hyperbole and counter-hyperbole of Ute-gate, some words of sense (yes, really) from Mark Latham:

Neoliberalism is not without its shortcomings as an economic philosophy, but one thing its favour is the avoidance of conflicts of interest. As it does not support interventionist industry programs and government hand-outs to the corporate sector, MPs cannot be compromised in their dealings with businesspeople.

AFR opinion page, 22 June 2009

The German neoliberals

As discussed last month, the term ‘neoliberal’ – though undergoing a shift and then disintegration of meaning along the way – seems to have started in Germany in the middle decades of the 20th century, been taken up in Chile in the 1960s by ‘neoliberal’ supporters, been taken over in subsequent decades by Latin American critics of markets, adopted by US academics from the Latin Americans, before arriving via them in Australia in the 1990s, with the term squeezing out ‘economic rationalism’ in the 2000s and being given mass media profile by Kevin Rudd’s Monthly essay.

My CIS colleague Oliver Hartwich, who being German is able to read the original ‘neoliberal’ material, has a paper out today on their ideas. Here’s the op-ed version for those preferring a summary.

Intellectual decline on the right?

The theme is the intellectual decline of the right; I really am curious; can anyone write a decent foundation that they are in decline from.

commenter Charles in response to my post on whether the crisis in American conservatism will spread to Australia.

There are different elements to political movements, often with overlapping memberships, which can include interest groups, social groups, political parties and intellectuals. The intellectuals will often have influence well beyond their numbers, as the people most able to coherently articulate the movement’s goals and arguments. Their loss of confidence in their own side can be a sign of an actual or coming crisis in the broader movement; while their success in public debates and growing confidence can be a sign that a movement is on the rise.

In American politics, we are seeing that loss of confidence. Richard Posner’s own recent book and the post I quoted yesterday are one sign of this. Here is a man with ideas about markets that have in the past been on the radical end even for free marketeers (such as his idea for a market in babies) who now says that ‘we need a more active and intelligent government to keep our model of a capitalist economy from running off the rails.’ We have former Reagan adviser Bruce Bartlett calling for tax increases in a new book. Conservative intellectual Ross Douthat co-wrote a book calling for the Republicans to support government intervention to win back the working class vote.
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Will the crisis in American ‘conservatism’ spread to Australia?

A reader suggests that there may be some post fodder in the Richard Posner’s recent comments about the decline of the American ‘conservative’ movement. These are the key passages:

My theme is the intellectual decline of conservatism, and it is notable that the policies of the new conservatism are powered largely by emotion and religion and have for the most part weak intellectual groundings. That the policies are weak in conception, have largely failed in execution, and are political flops is therefore unsurprising. The major blows to conservatism, culminating in the election and programs of Obama, have been fourfold: the failure of military force to achieve U.S. foreign policy objectives; the inanity of trying to substitute will for intellect, as in the denial of global warming, the use of religious criteria in the selection of public officials, the neglect of management and expertise in government; a continued preoccupation with abortion; and fiscal incontinence in the form of massive budget deficits, the Medicare drug plan, excessive foreign borrowing, and asset-price inflation.

…And then came the financial crash last September and the ensuing depression. These unanticipated and shocking events have exposed significant analytical weaknesses in core beliefs of conservative economists concerning the business cycle and the macroeconomy generally.

I’ll leave detailed discussion of the American scene to others who follow it more closely than I do, though Posner’s list seems broadly right to me. What struck me most when I read it was (again) the large differences between the political right (I’ll use this is as a less confusing catch-all term than Posner’s ‘conservatism’) in America and Australia.
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Do classical liberals and social democrats study different things?

The political identity survey included a question that asked graduates and uni students about their major field of study. The idea was to see whether there were significant ideology-related differences in their academic backgrounds.

There were quite a variety of responses, but I have tried to classify them into the following categories: arts, business, economics, law, science and engineering, and what I called ‘social’ degrees, which included education, the health professions, and social work. People who put two major fields of study were sometimes counted twice, if they fitted more than one of my categories. The results for classical liberals (205 respondents) and social democrats (308 respondents) are below.

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Ideological role reversal on the will of the people

Leftist critics of the right like Norman Abjorensen see them as opponents of popular sovereignty. Certainly, in the past conservatives have sometimes supported quasi-democratic upper houses as a way of keeping a restraint on popularly elected Labor governments. Labor responded by planning to abolish upper houses, successfully in Queensland, and didn’t get rid of its pledge to abolish the Senate until 1979.

But over the last 15 or so years there has been something of a role reversal. Conservatism developed a strong populist strain, while Labor governments and their left-wing supporters started thinking of ways to frustrate the will of the lower houses of parliament. This is most advanced in Victoria, where Labor changed the Legislative Council’s voting system to make it difficult for either major party to secure a majority, and introduced a charter of rights, handing substantial power to the judiciary, while reserving the parliament’s power to ultimately over-ride ‘rights’.

The political identity survey suggests that conservatives (combining self-categorised ‘conservatives’ and ‘social conservatives and economic liberals’) are now quite distinctive in their opposition to further ceding power to the judiciary and preserving the democratic system’s role in protecting individual freedoms, though a slim majority of the classical liberals in the survey also prefer the democratic system.
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A Friedman effect on school opinion?

One of the surprising features of the Australian political identity survey results for classical liberals was the large proportion with statist views on education. From a purely ideological perspective, it seems unlikely that a classical liberal could conclude that any monopoly control of curriculum was a good idea, and especially not a government monopoly. And from a purely practical perspective, the public education system isn’t exactly the greatest advertisement for the state as a service provider.

No 20th century classical liberal did more to argue the case for decentralising control of school education than Milton Friedman. So I wondered if the classical liberals in the survey who said that they had read Milton Friedman would have different views on education issues compared to those who had not. It turns out that they do.

friedman-curricula1
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Is ‘neoliberalism’ a Latin American export?

In 2001 I wrote an article for Quadrant tracking the changing terminology used to describe the Australian Right, in which I noted that ‘neoliberalism’ was starting to replace ‘economic rationalism’ as the favourite term of the left for the free-market right (with ‘economic rationalism’ having itself largely displaced ‘New Right’.)

I’d tracked down uses of ‘neoliberalism’ to 1989 and 1990 in Australia, but beyond noting its global academic use not worked out where it started internationally. I now think that this incarnation of ‘neoliberalism’ (there are other earlier ‘neoliberalisms’ that I doubt are connected) probably started in Latin America, and came to Australia via US academia.
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On what do classical liberals and conservatives agree?

Early last year I wrote a post on common ground between classical liberals and conservatives. The Australian political identity survey helps me test my argument, though given the relatively low conservative response rate I have combined the answers of those who described themselves as ‘conservatives’ (69 respondents) and those who described themselves as ‘social conservatives and economic liberals’ (94 respondents). Because of this, I have not analysed responses to economic questions, as the economic liberal responses would dominate. The comparison charts can be found here.

As I thought, conservatives and classical liberals hold similar views on schools – neither gives majority support to monopoly curriculum, and larger numbers agree rather than disagree that while the government should help fund school education, it should not deliver it. Both groups disagree that the trend away from federalism is a positive development (both groups, though much more so conservatives, are Coalition voters – the Howard government was way out of line with its ideological supporters on national curriculum and other forms of centralisation).

I thought conservatives and classical liberals would hold similar views on anti-discrimination law. Conservatives are considerably more likely to think that it should be repealed altogether. However, on the current debate – whether or not the exceptions to anti-discrimination law should be preserved – conservatives and classical liberals are both firmly on the side of exceptions.

I thought both groups were welfare sceptics, and this is certainly true. Both very much oppose further redistribution of income and tax-funded maternity leave. Conservatives are also more sceptical of family benefits than I would have thought, though not as sceptical as classical liberals.

Inevitably, however, there are differences, particularly on some social issues – though these are not as large as expected.
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Do classical liberals and social democrats agree on anything?

As with classical liberals and libertarians, general knowledge of the worldview associated with a political label – in the case of social democrats, that state power should be used to alter the outcomes of voluntary exchange to favour groups deemed as lacking power or material resources – was confirmed in the Australian political identity survey as being highly predictive of the views of people identifying as ‘social democrats’.

Indeed, more so than for classical liberals the social democratic results (more detail and analysis here) contain few surprises. The pattern observed in the classical liberal responses of on some issues significant minorities holding views apparently at odds with their philosophy is largely absent among social democrats. The main diversity of view among social democrats is not on which side of the debate they line up, but on how strongly they back the social democratic perspective.

For example, only a tiny minority of social democrats opposed unfair dismissal laws, with the ‘dissidents’ being people who wanted to exempt small business. Only a tiny minority opposed minimum wage laws, with the division being between those prepared to concede that the laws may cost some jobs and those who – despite apparently thinking prices are important, judging by their response to price control questions – believe that the laws of supply and demand do not apply to low-wage workers. Only a tiny minority would let schools choose their own curriculum, with the dissidents being those who favour state-based curriculum.
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