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How the Liberal Party’s labour market reforms got stuffed
Gerard Jackson
Senator Nick Minchin’s visit to Melbourne suggests that the Liberal Party is deeply concerned about how the public views its labour market reform legislation. It ought to be. Australians think the reforms stink — and who can blame them. The Government’s sales pitch was appallingly incompetent. So what does it do? It sends Minchin to Melbourne to enlist the invaluable aid of the HR Nicholls Society. (No wonder David Hannum was driven to say that “there’s a sucker born every minute”).
The HRNS appears to have conned Liberal Party apparatchiks into thinking that it is the expert on labour markets and that the Party need look no further for sound advice. Minchin seems to have taken this in to the extent that he was reported as saying that the Government is expecting the HRNS “to play a key role in formulating the next mandate”. This I gotta see. He is also reported as asking them for “forgiveness” (Josh Gordon, Canberra accused of fresh plans to strip rights, The Age, 9 March).
If anyone needs to beg for “forgiveness” it’s the HRNS mob. They have played at pushing free labour markets for more than 20 years — and what have they come up with? “The minimum wage is 58 per cent of the median wage”. That’s it. Hugh Morgan, a founding member of the HRNS and multimillionaire Party blue-blood, made this claim on
Lateline (ABC 10 August 2005). What he was unable to grasp is that the statistic is meaningless.
It is really scary to see a former CEO of a large mining company make a public ass of himself on television, or anywhere else for that matter. Yet Minchin is taking this nonsense on board. No wonder Labor Party researchers are licking their chops. (Our rightwing failed on labour market reform and minimum wages is an article that explains the only wage ratio that counts). As one union official said to me: “This is the same sanctimonious clown who publicly stated that shareholders should not have the right to know how much their CEOs are being paid. If Minchin had any sense he would sooner take hemlock rather than take any economic advice from Morgan.
The situation is really absurd. Here we have millionaires advising a Government minister on what needs to be done about wage rates and working conditions. The situation borders on the surrealistic. Although these people are complete economic illiterates who know nothing about economic history or the history of economic thought they have arrogantly taken it upon themselves to offer economic advice that would impact on millions of ordinary Australians. And many in the Liberal Party have been dumb enough to buy it.
This is mob would never ever dream of attempting to empathise with ordinary working Australians. It’s important to stress this fact because perceptions are vital in politics. And asking help of this lot will only strengthen the public’s perception that labour reforms are really about cutting wages and attacking working conditions.
In his novel Hard Times Charles Dickens’ caricature of a free marketeer was the calculating and apparently cold-hearted utilitarian Thomas Gradgrind. Dickens embodied in Gradgrind all of his own ignorance of economics. To Dickens, then, an excellent economist was a mere utilitarian calculator who turned his face away from the suffering and needs of others.
This dreadful picture is not much different from the one painted by our modern-day statists who sneeringly refer to free-market economists as economic rationalists. Both pictures are libellous caricatures, though Dickens could be excused because of Jeremy Bentham’s brutal proposals for the poor and his totalitarian panopticon.
Market economists (including the classical economists) are greatly concerned with poverty and low wages and have never supported the latter. As Professor Cannan said of the classical economists:
Of all the libels upon them invented by socialist and semi-socialist writers this is about the worst. They may have been, they certainly were, wrong about the cause of high wages, but they were always in favour of them.
Therefore, far from favouring low wages the classical economists supported high wages and rising living standards for the masses. What they did not support, unlike our unioncrats, and lefty politicians were wage policies that drove people out of work. They also did not flaunt a superior attitude to the “labouring masses”.
Unfortunately, Dickens’ Gradgrind has been given flesh and blood by some of our pompous know-it-all rightwing activists. Men who formerly enjoyed handsome salaries, generous perks (courtesy of shareholders and taxpayers and who also fancy themselves as political pundits, economic theorists and social commentators).
These are men who state that the poor should take what they can get. That if market conditions are such that the wages of the poor will be meagre, so be it. According to them, when the market speaks, it is to be obeyed. (I was recently mortified to hear a radio announcer refer to a member of the HRNS as the voice of the market).
Such men have no more understanding of the market than did Dickens. They portray the market as an impersonal mechanism, a machine that is indifferent to the fears, anxieties and suffering of others, particularly the poor and the unemployed. That they, while wallowing in palatial working environments and Toorak mansions, have the gall to tell the less fortunate that they should take what they can get and be grateful for it is truly sickening.
The free market is a process that is made up of free men and women striving to serve their own interests through mutual exchange. It is not a datum, a social law or a graven image — and above all, it is not a callous arrangement that is indifferent to the aspirations of the poor.
Only where markets have been allowed to function (even when badly hampered by the state) has poverty been truly alleviated. It was the market that created the unprecedented material abundance that Western societies now take for granted, not socialism or interventionism.
Unfortunately our pretentious utilitarians are unable to grasp that it is not their place to tell others, especially the unemployed, to take what is offered and be grateful for it. Instead, they prefer to preach their own callous caricature of the market and in doing so they not only reveal their ignorance of market processes they also bring them into disrepute.
These people are the best allies the left could enlist in its war against the market. Their arrogance and obvious lack of charity reveals that they are not fit to participate in the public arena. Their baleful mouthing only makes life harder for those who really understand what free markets are all about.
It says much about Senator Minchin’s judgement that he can be so easily hoodwinked
Labour market reform and the dismal failure of the HR Nicholls Society
How Australia's rightwing managed to discredit labour market reform
Australian economy: Senator Nick Minchin screws up on tax cuts
Gerard Jackson is Brookes’ economics editor
BrookesNews.Com
Monday 1 May 2006