WEBVTT 1 00:00:00.000 --> 00:00:06.460 Ladies and gentlemen, there's no better way that we could commence the Festival of Ideas daily program 2 00:00:06.460 --> 00:00:13.420 than by hearing Michael Pusey talk to us about the experience of middle Australia, 3 00:00:13.620 --> 00:00:16.840 how they experience how we are experiencing the economy. 4 00:00:17.460 --> 00:00:24.700 Michael hardly needs introduction, but let me nonetheless give you just a few insights into this remarkable man. 5 00:00:24.700 --> 00:00:31.660 He is a sociologist who has spent, I think, probably his entire professional life swimming against the tide 6 00:00:31.660 --> 00:00:34.520 with extraordinary effect. 7 00:00:35.580 --> 00:00:41.500 One of the more influential and notable sociologists who's had quite a remarkable career, 8 00:00:42.600 --> 00:00:49.700 both understanding in a deep way, but also reflecting from the outside 9 00:00:50.780 --> 00:00:54.000 what has been going on in the economy, 10 00:00:54.000 --> 00:00:59.240 and the paradigms and the almost act of faith, 11 00:00:59.400 --> 00:01:05.160 religious endorsement of the virtues of competition and the market, 12 00:01:06.020 --> 00:01:16.440 and the other dimensions of economic life that we've all come to accept, if not, well, understand, if not, actually accept. 13 00:01:16.900 --> 00:01:23.920 Michael's latest project has been on a close investigation of how Australians have actually experienced 14 00:01:24.000 --> 00:01:26.200 these economic changes that we've all lived through. 15 00:01:26.300 --> 00:01:30.380 What it feels like, how they feel about it, what they like, what they dislike, 16 00:01:31.300 --> 00:01:35.320 and it's that work that he's going to talk to us about today. 17 00:01:35.700 --> 00:01:40.740 He is a professor of sociology at the University of New South Wales, where he's been for many years, 18 00:01:41.980 --> 00:01:47.720 and I should say that my name is Sue Richardson and I'm an economist, 19 00:01:47.960 --> 00:01:52.400 as I have been all my professional life, and Michael's one of my dear friends 20 00:01:52.400 --> 00:01:53.980 and one of the people that I've... 21 00:01:54.000 --> 00:01:55.760 I regard extremely highly. 22 00:01:55.940 --> 00:02:00.640 So for me it'll be a great delight to hear Michael talk to us about how the economic changes 23 00:02:00.640 --> 00:02:05.260 that have been wrought on the instigation of members of my profession 24 00:02:05.980 --> 00:02:13.200 are actually being experienced by the people who are the, should I say victims, of these changes. 25 00:02:13.860 --> 00:02:15.840 Now we'll be quite strict about time. 26 00:02:16.580 --> 00:02:19.300 Michael will talk for about half an hour. 27 00:02:19.560 --> 00:02:23.920 I'll then invite people, of course, to discuss the ideas that he's put forward, 28 00:02:23.980 --> 00:02:28.400 when you do want to say something, please come to one of the central microphones 29 00:02:29.000 --> 00:02:34.740 in the passage here and give your name and then make your comment. 30 00:02:34.920 --> 00:02:37.400 Comments are welcome, or ask a question. 31 00:02:37.640 --> 00:02:42.280 But now let's hear what Michael has to say about how we've been experiencing economic change 32 00:02:42.280 --> 00:02:44.800 over the last 15 years. Michael. 33 00:02:51.140 --> 00:02:53.380 Thank you very much for those... 34 00:02:54.080 --> 00:02:56.480 two generous words. Thank you for coming. 35 00:02:59.340 --> 00:03:02.700 I've mischievously given this a different subtitle. 36 00:03:02.760 --> 00:03:05.480 I like this title a little better. 37 00:03:05.760 --> 00:03:11.200 It's called An Australian Story, The Troubling Experience of Economic Reform. 38 00:03:11.800 --> 00:03:17.540 It's in three parts and I'll just pause for just a few seconds between each of them 39 00:03:17.540 --> 00:03:22.160 and say don't think I'm going to have a heart attack, it's just that I want to give you some relief 40 00:03:22.160 --> 00:03:23.960 from my hectoring voice. 41 00:03:23.980 --> 00:03:26.280 Thank you. 42 00:03:28.480 --> 00:03:34.900 Anyone who turned 40 with the new millennium will have spent all their adulthood living through 43 00:03:34.900 --> 00:03:37.660 what we so blithely call economic reform. 44 00:03:38.540 --> 00:03:40.820 Everybody knows what it is. 45 00:03:42.040 --> 00:03:48.300 Deregulation, privatisation, labour market reform, microeconomic reform, user pays, 46 00:03:48.760 --> 00:03:53.860 cutting government spending, more competition, privatisation, tax reform, 47 00:03:53.860 --> 00:04:01.760 GST, welfare reform and now the latest instalment, the creeping privatisation of Medicare 48 00:04:01.760 --> 00:04:02.760 and the universities. 49 00:04:04.860 --> 00:04:11.120 Economic reform began in earnest in the early 1980s with the Campbell Report recommendations 50 00:04:11.120 --> 00:04:16.840 for financial deregulation, then with the floating of the exchange rate in December 51 00:04:16.840 --> 00:04:18.440 of the following year. 52 00:04:19.140 --> 00:04:23.420 It became a mantra some four years later. 53 00:04:23.420 --> 00:04:30.860 In May of 1986 with the then Federal Treasurer of Paul Keating's warning that without it 54 00:04:30.860 --> 00:04:33.700 we would become a banana republic. 55 00:04:35.460 --> 00:04:37.820 Some things were agreed on all sides. 56 00:04:38.260 --> 00:04:44.580 One of them is that economic reform came as a take no prisoners, top down reengineering 57 00:04:44.580 --> 00:04:46.100 of a whole nation society. 58 00:04:46.920 --> 00:04:53.080 We were told that we had to shake off our history of protection and institutional inertia. 59 00:04:53.080 --> 00:04:58.200 And make ourselves ready for competition in the ruthless global economy. 60 00:04:58.540 --> 00:05:01.960 Do it or wither as a coconut monarchy. 61 00:05:02.940 --> 00:05:07.780 No one was left in any doubt about the mighty challenge facing us. 62 00:05:08.100 --> 00:05:15.160 But almost no one remembers that the economic reform bundle, or if you prefer structural 63 00:05:15.160 --> 00:05:21.780 adjustment, laissez faire, freeing up the markets or economic rationalism, all these 64 00:05:21.780 --> 00:05:23.060 terms mean the same thing. 65 00:05:23.060 --> 00:05:30.440 Came to us out of the Cold War as a one best way of fighting our way out of a long post 66 00:05:30.440 --> 00:05:35.520 war boom that had given more peace and plenty to ordinary people than it should have done. 67 00:05:36.500 --> 00:05:43.600 In the early 1970s international business organisations were forming to bring the drifting 68 00:05:43.600 --> 00:05:46.620 free world capitalist nations to their senses. 69 00:05:47.300 --> 00:05:53.000 Something had to be done first about the so called British disease, about creeping status 70 00:05:53.060 --> 00:05:58.880 and about the long term fall in the profit share of large corporations. 71 00:06:00.280 --> 00:06:06.760 In 1974 the Brookings Institution declared that the after tax profit rate for United 72 00:06:06.760 --> 00:06:14.300 States corporations had fallen since 1948 from just under 8% to just under 5%. 73 00:06:15.060 --> 00:06:19.380 The long post war boom was not working so well for big corporations. 74 00:06:20.860 --> 00:06:28.400 In 1975 the report of the Trilateral Commission, that was one of the first global peak business 75 00:06:28.400 --> 00:06:35.820 associations, turned free market economic theory into a political program that would 76 00:06:35.820 --> 00:06:43.560 shift the burden of coordination from overloaded governments, paralyzed with too many irresponsible 77 00:06:43.560 --> 00:06:49.360 demands, do you remember the language, and shift that burden of coordination from overloaded 78 00:06:49.360 --> 00:06:50.660 governments to the markets. 79 00:06:51.480 --> 00:06:55.140 Thatcher and Reagan would crash through and make it happen. 80 00:06:55.620 --> 00:07:01.340 The markets would reduce expectations and administer the needed disciplines to the people, 81 00:07:01.480 --> 00:07:07.400 the unions, the professions, the media and those damned value intellectuals. 82 00:07:07.800 --> 00:07:14.220 This would give capital a chance, beat the socks off the old Soviet empire, get rid of 83 00:07:14.220 --> 00:07:18.300 big government and pull the European social democracies into line. 84 00:07:18.520 --> 00:07:18.680 The 85 00:07:20.360 --> 00:07:25.740 Malcolm Fraser prepared the way with the Campbell Report, that would later recommend 86 00:07:25.740 --> 00:07:32.860 financial deregulation, and with some restructuring of the federal bureaucracy, and the young 87 00:07:32.860 --> 00:07:35.200 dry economists were brought up into position. 88 00:07:36.080 --> 00:07:41.840 The hard men of labour were waiting to show they could deliver better economic management 89 00:07:42.360 --> 00:07:46.900 and better outcomes for business than the old guard in the Liberal Party. 90 00:07:46.900 --> 00:07:51.580 In 1982 they won government and got their chance. 91 00:07:52.240 --> 00:07:58.360 From there on the people would have nowhere to go, with two main parties competing with each other, 92 00:07:58.440 --> 00:08:02.020 to deliver always more economic reform. 93 00:08:06.320 --> 00:08:12.040 After 20 years of reform, well, the results have been dramatic. 94 00:08:12.140 --> 00:08:16.880 As the advocates of reform will hasten to say, we now have a new government. 95 00:08:16.880 --> 00:08:23.120 We have a strong economy, one that survived the Asian meltdown of 1997 unscathed. 96 00:08:23.700 --> 00:08:31.880 Employment is high, interest rates are low, and now it's powering on and indeed leading the developed world 97 00:08:31.880 --> 00:08:36.520 with GDP increasing at somewhere near 3.5% per annum. 98 00:08:37.020 --> 00:08:38.460 All that is true. 99 00:08:39.040 --> 00:08:42.940 But if GDP is up, how come Australia is down? 100 00:08:43.980 --> 00:08:46.860 The economy has indeed been resourced. 101 00:08:46.860 --> 00:08:47.140 The economy is structured. 102 00:08:47.600 --> 00:08:56.440 As with every other nation, our national accounts keep tabs on who gets what by dividing national income into three slices. 103 00:08:56.900 --> 00:09:04.860 The government share, the wages and salaries share, and the gross operating surplus, or in other words, the profit share. 104 00:09:05.660 --> 00:09:09.500 And sure enough, economic reform has kept its promise. 105 00:09:10.180 --> 00:09:14.500 Over the 20 years, from 1980 to the turn of the millennium, 106 00:09:14.500 --> 00:09:19.640 the total wages share has fallen from 60% to 54%, 107 00:09:19.640 --> 00:09:25.540 as the profit share has risen 17% to 24%. 108 00:09:25.540 --> 00:09:30.320 The government share has stayed at about the same low level. 109 00:09:31.640 --> 00:09:37.660 It may come as a surprise to learn that by comparison with other OECD countries, 110 00:09:37.860 --> 00:09:43.940 we've for a long time had low levels of government spending and a small public sector. 111 00:09:44.500 --> 00:09:52.000 It never was bloated, as Peter Reith and John Howard used to tell us so insistently throughout the 1980s. 112 00:09:52.660 --> 00:10:01.160 And yes, as GDP has soared, we find that the real unit cost of labour has fallen for 20 years and more. 113 00:10:02.920 --> 00:10:07.100 Indeed, Bob Gregory's figures, with which some of you will be aware, 114 00:10:08.500 --> 00:10:14.480 tell us that in 1996, young men of between 25 and 34 years old, 115 00:10:14.480 --> 00:10:26.020 were already bringing home, in real terms, $75 less per week than their fathers were some 20 years earlier, in 1976. 116 00:10:27.500 --> 00:10:33.160 Moreover, they can now expect to get pushed out of a deregulated labour market at age 55. 117 00:10:34.520 --> 00:10:39.000 The good news is that they're going to live 20 years longer than their grandparents. 118 00:10:40.220 --> 00:10:44.360 The bad news is that their retirement incomes are in a black hole, 119 00:10:44.360 --> 00:10:48.620 in part because they depend on the whims and ethics of the big end of town. 120 00:10:50.200 --> 00:10:58.780 Look a little deeper and we see that economic reform has delivered a redistribution of income, resources and capability. 121 00:10:58.980 --> 00:11:01.060 I can't disaggregate those things. 122 00:11:01.260 --> 00:11:06.320 From the bush to the city, from the public sector to the private sector, 123 00:11:06.540 --> 00:11:11.600 from families to the market economy, from consumers to producers, 124 00:11:11.600 --> 00:11:18.320 the GST takes 10% off the input costs of corporations and charges it to you, the consumer. 125 00:11:18.920 --> 00:11:23.880 From the bottom, 70% of wage and salary earners to the top 10%, 126 00:11:23.880 --> 00:11:27.980 and the big one, from wage and salary earners to corporations. 127 00:11:29.460 --> 00:11:36.300 Corporations have been the only big winners from economic reform, as they were always meant to be. 128 00:11:39.600 --> 00:11:41.540 Our experience of reform, 129 00:11:43.600 --> 00:11:44.440 is that it's only a matter of how much money goes into it. 130 00:11:44.440 --> 00:11:49.880 The middle Australia project is a questionnaire, interview and focus group study 131 00:11:49.880 --> 00:11:55.220 of 400 randomly selected Australians in five capital cities. 132 00:11:55.920 --> 00:11:59.340 Middle means chosen from census collector's districts 133 00:11:59.340 --> 00:12:06.040 with average household incomes above the 20th percentile and below the 90th percentile. 134 00:12:07.080 --> 00:12:09.160 Indexed... it's nearly everyone, okay? 135 00:12:09.920 --> 00:12:11.560 Indexed to year 2003. 136 00:12:11.560 --> 00:12:20.760 thousand prices, this represents an average household income cut off of just over 57,500 137 00:12:20.760 --> 00:12:26.320 for the top of the sample and just under 36,500 for the floor. 138 00:12:27.980 --> 00:12:36.260 Now, the central question, how do we experience the economy? And more particularly, how has 139 00:12:36.260 --> 00:12:41.640 middle Australia, defined in this way as just about everyone who is neither rich nor poor, 140 00:12:41.880 --> 00:12:49.820 experienced economic reform? Experience here is crucial precisely because conventional 141 00:12:49.820 --> 00:12:56.640 studies conducted by political pollsters and market research organisations don't generally 142 00:12:56.640 --> 00:13:03.920 take it seriously. They prefer to examine not experience, but attitudes that are nearly 143 00:13:03.920 --> 00:13:05.780 always measured from the top down. 144 00:13:06.260 --> 00:13:12.940 And in terms of some external interest position. For example, political pollsters want to assess 145 00:13:12.940 --> 00:13:17.760 support for a leader or for some bundle of policies on health or defence or whatever. 146 00:13:19.060 --> 00:13:23.640 And similarly, market researchers are looking for a way to sell us some kind of product. 147 00:13:25.180 --> 00:13:33.140 Now, no one doubts the technical sophistication of this work, yet one problem remains. The 148 00:13:33.140 --> 00:13:36.200 explanations generally treat the thoughts, feelings and emotions of the people who are 149 00:13:36.200 --> 00:13:36.240 The explanations generally treat the thoughts, feelings and emotions of the people who are 150 00:13:36.260 --> 00:13:37.200 involved in the economy. 151 00:13:37.200 --> 00:13:43.980 and convictions of ordinary people as behavioural and attitudinal responses to external signals 152 00:13:43.980 --> 00:13:51.620 and structural conditions. The external structure is given primacy and the experience is read 153 00:13:51.620 --> 00:13:56.400 too narrowly, merely as a derivation or worse, as an adaptive response. 154 00:13:58.220 --> 00:14:05.140 Well, needless to say, this is big brother stuff and it's also bad social science. The 155 00:14:05.140 --> 00:14:12.400 psychology is wrong because it bleaches out social meaning. And it's bad sociology because 156 00:14:12.400 --> 00:14:18.740 cultures, especially moral cultures, are discounted and treated as nothing more than inchoate 157 00:14:18.740 --> 00:14:24.400 ideas and private sentiments to be read off from existing structural conditions. 158 00:14:25.780 --> 00:14:32.580 With this crude functionalism, we miss the all-important background assumptions that ordinary 159 00:14:32.580 --> 00:14:35.120 people use to orient their lives and their lives. And we miss the all-important background assumptions that ordinary people use to orient their lives and their lives. 160 00:14:35.120 --> 00:14:48.320 So we fail to take account of cultural inheritance, memory, orientations to action and risk, coping strategies and underlying commitments to others. 161 00:14:49.340 --> 00:14:52.180 So we fail to take account of cultural inheritance, memory, orientations to action and risk, coping strategies and underlying commitments to others. 162 00:14:52.180 --> 00:14:52.240 So we fail to take account of cultural inheritance, memory, orientations to action and risk, coping strategies and underlying commitments to others. 163 00:14:52.240 --> 00:15:01.020 So we fail to take account of cultural inheritance, memory, orientations to action and risk, coping strategies and underlying commitments to others. 164 00:15:01.520 --> 00:15:03.100 So we fail to take account of cultural inheritance, memory, orientations to action and risk, coping strategies and underlying commitments to others. 165 00:15:03.100 --> 00:15:07.040 evaluated from within the lived experience of middle Australia. 166 00:15:08.940 --> 00:15:11.340 Let's look first at four points, 167 00:15:12.540 --> 00:15:14.740 at some of the more directly, 168 00:15:14.960 --> 00:15:19.060 with four points at some of the more directly accessible aspects 169 00:15:19.060 --> 00:15:20.620 of the experience. 170 00:15:21.140 --> 00:15:22.980 This is the straightforward bit. 171 00:15:23.740 --> 00:15:23.800 Four. 172 00:15:24.540 --> 00:15:25.180 One. 173 00:15:27.000 --> 00:15:29.400 They know who the winners and losers are 174 00:15:29.400 --> 00:15:32.800 and they seem to have a fairly clear idea 175 00:15:32.800 --> 00:15:36.360 of what's happened to their incomes over long periods of time. 176 00:15:37.460 --> 00:15:41.000 Economic reform assumes that people will not notice 177 00:15:41.000 --> 00:15:42.480 what is happening to their incomes, 178 00:15:43.280 --> 00:15:46.620 providing that you move resources away from them in small bites, 179 00:15:47.280 --> 00:15:51.240 spread broadly over large groups over a long period of time. 180 00:15:52.360 --> 00:15:54.200 Providing that the floor rises, 181 00:15:54.920 --> 00:15:58.560 huge relative losses can still be experienced as small gains. 182 00:15:59.400 --> 00:16:01.580 But that's not the way it's experienced. 183 00:16:02.660 --> 00:16:04.220 The theory must be wrong. 184 00:16:05.220 --> 00:16:08.340 About 90% of them say that people on high incomes, 185 00:16:09.200 --> 00:16:10.680 rich people with lots of assets, 186 00:16:11.120 --> 00:16:12.080 big business, 187 00:16:13.140 --> 00:16:16.360 and big business are the runaway winners from reform. 188 00:16:17.500 --> 00:16:19.720 There's nothing surprising about that. 189 00:16:20.240 --> 00:16:21.920 What is more heartening 190 00:16:21.920 --> 00:16:24.940 is that they've not been snowed by the ideology. 191 00:16:25.580 --> 00:16:27.500 Huge majorities of them 192 00:16:27.500 --> 00:16:29.380 know that people on low incomes, 193 00:16:29.400 --> 00:16:30.820 small business, 194 00:16:31.140 --> 00:16:32.980 and ordinary people generally 195 00:16:32.980 --> 00:16:37.700 are more likely to be losers than winners from economic reform. 196 00:16:38.400 --> 00:16:41.580 And they know that people in the middle have missed out. 197 00:16:43.660 --> 00:16:44.800 And one more thing here. 198 00:16:45.820 --> 00:16:48.380 Neoliberal economic theory would have us believe 199 00:16:48.380 --> 00:16:52.260 that the market is the best way of rewarding people for effort. 200 00:16:53.160 --> 00:16:56.360 It follows that changes in the distribution of income 201 00:16:56.360 --> 00:16:59.320 reflect effort, worth, and due reward. 202 00:16:59.320 --> 00:17:00.940 And that's the real reward for the real contributions 203 00:17:00.940 --> 00:17:04.080 of the respective stakeholders to the larger economy. 204 00:17:05.660 --> 00:17:07.880 Strange, then, that in the last three years 205 00:17:07.880 --> 00:17:10.020 of the longest boom in living memory, 206 00:17:10.860 --> 00:17:12.820 one in which ordinary people get nothing 207 00:17:12.820 --> 00:17:14.100 or as little as possible, 208 00:17:14.680 --> 00:17:16.920 a majority of middle Australians are saying 209 00:17:16.920 --> 00:17:19.260 that the distribution is not fair. 210 00:17:21.660 --> 00:17:22.700 Second point. 211 00:17:22.980 --> 00:17:26.460 They worry about jobs, jobs, jobs. 212 00:17:27.460 --> 00:17:29.300 And they believe that the income of the middle class, 213 00:17:29.300 --> 00:17:32.440 the incomes and job prospects of Australians, are falling. 214 00:17:33.400 --> 00:17:35.980 In the last three years of the millennium, 215 00:17:36.040 --> 00:17:38.980 as the economy settled into boom conditions, 216 00:17:39.500 --> 00:17:41.780 we find that the number of middle Australians 217 00:17:41.780 --> 00:17:44.780 who say that wage and salary earners are the losers 218 00:17:44.780 --> 00:17:50.720 from economic reform climbs some 13 points to 70%. 219 00:17:52.780 --> 00:17:54.480 And again, rather unsurprisingly, 220 00:17:54.500 --> 00:17:59.020 about 80% of them say that they are more insecure now, 221 00:17:59.300 --> 00:18:02.280 than before reform began some 20 years ago. 222 00:18:03.240 --> 00:18:05.960 The dominant mood is one of anger. 223 00:18:06.900 --> 00:18:10.120 And it is most keenly felt by those who have feared worst. 224 00:18:11.880 --> 00:18:14.960 And yet, significantly, it's still the majority view. 225 00:18:16.080 --> 00:18:19.140 Again, the economic theory is wrong. 226 00:18:19.920 --> 00:18:22.360 It assumes that work is a disutility, 227 00:18:22.980 --> 00:18:25.000 or in other words, a negative thing 228 00:18:25.000 --> 00:18:27.560 that we're induced to do with carrots and sticks. 229 00:18:28.340 --> 00:18:29.280 Sticks that have been used to make money. 230 00:18:29.280 --> 00:18:29.920 And that's to be preferred, 231 00:18:29.940 --> 00:18:31.620 because they cost less than carrots. 232 00:18:35.020 --> 00:18:39.120 Well, we're angry, because labor market reform 233 00:18:39.120 --> 00:18:41.380 is an assault on the dignity of work. 234 00:18:42.620 --> 00:18:44.460 People experience their own work 235 00:18:44.460 --> 00:18:46.620 as something more than a tradable commodity. 236 00:18:47.400 --> 00:18:50.900 For them, it's largely about identity, meaning, 237 00:18:51.620 --> 00:18:53.860 personal independence, and making a contribution. 238 00:18:54.600 --> 00:18:58.040 And hence, something that satisfies inner social needs. 239 00:18:59.000 --> 00:19:01.520 Intrinsic motivations matter as much, 240 00:19:01.540 --> 00:19:03.620 or more than extrinsic rewards. 241 00:19:05.040 --> 00:19:07.360 But the market recognizes only the latter, 242 00:19:07.580 --> 00:19:09.580 and so pays in the wrong currency. 243 00:19:13.840 --> 00:19:16.420 Thirdly, it's hurting families. 244 00:19:18.460 --> 00:19:20.220 Over half of our middle Australians 245 00:19:21.080 --> 00:19:23.520 believe that families are changing a lot. 246 00:19:24.800 --> 00:19:27.280 And three quarters of those giving that answer, 247 00:19:28.040 --> 00:19:29.880 say that for them, it is the negative, 248 00:19:29.900 --> 00:19:32.580 rather than the positive aspects of those changes 249 00:19:33.100 --> 00:19:34.360 that stand out most. 250 00:19:35.860 --> 00:19:38.900 For reasons that are now excellently spelled out 251 00:19:39.520 --> 00:19:43.360 in your own Barbara Pocock's book on work-life collision. 252 00:19:43.800 --> 00:19:45.260 A wonderful book. 253 00:19:48.220 --> 00:19:51.100 Well, in the wake of 20 years of economic reform, 254 00:19:51.800 --> 00:19:53.540 middle Australians find themselves 255 00:19:53.540 --> 00:19:55.360 running out of coping strategies. 256 00:19:56.660 --> 00:19:59.700 I heard Sue put it once so long ago, 257 00:19:59.800 --> 00:20:00.640 she will have forgotten, 258 00:20:00.780 --> 00:20:03.420 and she was talking about how economists worry 259 00:20:03.420 --> 00:20:05.800 about income smoothing over time. 260 00:20:06.100 --> 00:20:08.500 I think that goes to the nub of it. 261 00:20:08.580 --> 00:20:10.740 They can't smooth their incomes over time. 262 00:20:10.880 --> 00:20:13.520 They can't make transfers from the lean years to the, 263 00:20:13.520 --> 00:20:15.380 from the fat years to the lean years. 264 00:20:16.260 --> 00:20:19.240 That's why material insufficiency on its own 265 00:20:19.240 --> 00:20:22.020 is not the, really the nub of the issue. 266 00:20:22.600 --> 00:20:25.340 Running out of coping strategies, sending two thousand people, 267 00:20:25.340 --> 00:20:27.680 two people out into the labour market instead of one, 268 00:20:28.340 --> 00:20:30.720 getting more education, delaying fertility, 269 00:20:31.420 --> 00:20:33.500 moving in search of a better job, 270 00:20:33.680 --> 00:20:35.620 and then when all of that runs out of steam, 271 00:20:36.340 --> 00:20:37.600 going into too much debt. 272 00:20:38.280 --> 00:20:42.560 And here, as the family faces the dull compulsions 273 00:20:42.560 --> 00:20:45.020 of the market, without the capacity, 274 00:20:45.240 --> 00:20:48.400 as Sue put it, to smooth their incomes over time, 275 00:20:49.340 --> 00:20:52.160 it's then that middle Australia most clearly experiences 276 00:20:52.160 --> 00:20:54.180 the truth about economic reform. 277 00:20:55.040 --> 00:20:57.760 Namely, that it reduces quality of life. 278 00:20:58.860 --> 00:21:03.160 If GDP is up, and if the economy is steaming ahead, 279 00:21:03.480 --> 00:21:06.520 how come that for the first time in remembered history, 280 00:21:06.780 --> 00:21:10.640 parents see their own adult children facing a future 281 00:21:10.640 --> 00:21:12.700 in which they have to settle for less? 282 00:21:13.080 --> 00:21:16.740 A world in which they're less likely to earn their own home, 283 00:21:16.820 --> 00:21:19.180 and one in which education and quality healthcare 284 00:21:19.860 --> 00:21:22.320 may cost them more than they can afford. 285 00:21:23.240 --> 00:21:24.160 At another level, 286 00:21:24.160 --> 00:21:28.820 our respondents are saying that there's something fundamentally wrong 287 00:21:28.820 --> 00:21:33.060 with a theory that says that the goodness of a human family 288 00:21:33.060 --> 00:21:36.100 should be judged on its capacity to put the market 289 00:21:36.100 --> 00:21:37.780 before its own social needs. 290 00:21:40.420 --> 00:21:41.060 Four. 291 00:21:42.380 --> 00:21:43.800 Between two thirds, 292 00:21:44.020 --> 00:21:46.180 and this is the bit that the media doesn't like, 293 00:21:46.860 --> 00:21:50.300 between two thirds and three quarters of middle Australia 294 00:21:50.300 --> 00:21:53.040 says that big business has too much power. 295 00:21:54.160 --> 00:21:56.320 That it is exploiting the people, 296 00:21:56.420 --> 00:21:59.600 and that corporations should be regulated more firmly. 297 00:22:00.600 --> 00:22:04.520 Middle Australians are not closet socialists. 298 00:22:04.580 --> 00:22:05.580 We never were. 299 00:22:05.980 --> 00:22:08.180 Indeed, they carry within them 300 00:22:08.180 --> 00:22:11.300 their own very successful history of market democracy. 301 00:22:11.980 --> 00:22:15.240 They like businesses to flourish and make good profits. 302 00:22:15.600 --> 00:22:19.600 Yet in the situation in which economic reform has put them, 303 00:22:19.700 --> 00:22:21.240 they are revolutionaries. 304 00:22:21.380 --> 00:22:24.140 They want government to make business work. 305 00:22:24.160 --> 00:22:24.860 They want to make business work for the people, 306 00:22:24.960 --> 00:22:26.660 rather than the other way about. 307 00:22:28.060 --> 00:22:31.220 Most people have waited in bank queues 308 00:22:31.220 --> 00:22:33.740 and on the end of telephone lines for long enough 309 00:22:33.740 --> 00:22:36.120 to understand what economic reform means. 310 00:22:37.000 --> 00:22:40.140 They know that increasing shareholder value 311 00:22:40.140 --> 00:22:42.060 means downsizing, 312 00:22:42.240 --> 00:22:43.200 trashing jobs, 313 00:22:43.480 --> 00:22:44.420 unpaid overtime, 314 00:22:44.700 --> 00:22:45.600 and poor service. 315 00:22:46.200 --> 00:22:48.640 They know that streamlining government 316 00:22:49.160 --> 00:22:51.460 means slashing the public sector, 317 00:22:51.680 --> 00:22:53.800 cutting the entitlements of citizens, 318 00:22:54.160 --> 00:22:56.440 and forced reliance on the market 319 00:22:56.440 --> 00:23:00.560 for privately funded health, education, and retirement. 320 00:23:02.840 --> 00:23:05.420 The Middle Australia survey suggests 321 00:23:05.420 --> 00:23:08.160 that the ideology of economic reform indeed 322 00:23:08.160 --> 00:23:10.840 may even have had a perverse effect. 323 00:23:11.420 --> 00:23:16.580 Indications are that a substantial slice of Middle Australia 324 00:23:16.580 --> 00:23:20.120 has taken the promises of reform at face value. 325 00:23:20.340 --> 00:23:24.120 And so expected economic restructuring 326 00:23:24.160 --> 00:23:25.860 to make things better for them. 327 00:23:27.080 --> 00:23:30.400 Now that they see what reform has taken from them, 328 00:23:30.460 --> 00:23:31.540 they blame government, 329 00:23:31.740 --> 00:23:35.920 and perhaps expected to do more rather than less 330 00:23:35.920 --> 00:23:38.260 there's strong indications that that's the case, 331 00:23:38.340 --> 00:23:39.500 to put things right. 332 00:23:40.480 --> 00:23:43.600 They have certainly not, as the reformers so hope, 333 00:23:43.720 --> 00:23:45.280 given up on government 334 00:23:45.280 --> 00:23:47.760 and thrown in their lot with the market. 335 00:23:48.900 --> 00:23:53.020 Huge majorities of them think that government can do quite a bit, 336 00:23:53.020 --> 00:23:54.940 rather than very little, 337 00:23:55.020 --> 00:23:57.240 to fix a whole range of things, 338 00:23:57.380 --> 00:23:59.340 including reducing unemployment, 339 00:23:59.900 --> 00:24:02.280 improving health and social services, 340 00:24:02.560 --> 00:24:03.700 reducing poverty, 341 00:24:04.020 --> 00:24:04.860 cutting crime, 342 00:24:05.200 --> 00:24:06.660 creating more jobs, 343 00:24:06.840 --> 00:24:08.160 supporting families, 344 00:24:08.400 --> 00:24:11.020 reducing the gap between the rich and the poor, 345 00:24:11.180 --> 00:24:12.460 90% want that, 346 00:24:12.600 --> 00:24:14.880 making business pay fair wages, 347 00:24:14.940 --> 00:24:16.580 and supporting communities. 348 00:24:18.660 --> 00:24:21.420 Well, these are some of the more 349 00:24:22.920 --> 00:24:25.480 uncontroversial findings from the Middle Australia project. 350 00:24:26.760 --> 00:24:29.080 Now, let me propose to you 351 00:24:29.080 --> 00:24:32.760 a few of the inferences that I've drawn from the findings 352 00:24:32.760 --> 00:24:35.140 and presented in the book 353 00:24:35.140 --> 00:24:37.520 called The Experience of Middle Australia. 354 00:24:42.180 --> 00:24:43.900 Inferences, four of them. 355 00:24:46.680 --> 00:24:47.320 One. 356 00:24:49.280 --> 00:24:53.700 Economic reform is experienced as a disturbance 357 00:24:53.700 --> 00:24:55.740 to the moral fabric of society. 358 00:24:57.800 --> 00:25:00.640 Our Middle Australia focus group participants 359 00:25:00.640 --> 00:25:03.300 constantly speak of too much greed, 360 00:25:03.580 --> 00:25:05.180 too much dog-eat-dog, 361 00:25:05.460 --> 00:25:06.500 lost respect, 362 00:25:06.740 --> 00:25:07.960 too much aggression, 363 00:25:08.120 --> 00:25:09.540 of unreal expectations, 364 00:25:09.900 --> 00:25:13.860 and about the burden of having to treat strangers as competitors. 365 00:25:15.080 --> 00:25:17.300 In these and other related contexts, 366 00:25:17.300 --> 00:25:20.040 concerns about doing the right thing by others. 367 00:25:20.820 --> 00:25:23.780 The focus groups are saturated with this. 368 00:25:23.860 --> 00:25:25.340 It's the first thing that hits you 369 00:25:25.340 --> 00:25:26.920 when you listen to the tapes again. 370 00:25:28.940 --> 00:25:31.260 Concerns about doing the right thing by others, 371 00:25:31.400 --> 00:25:34.200 workmates, children, partners, and friends. 372 00:25:36.300 --> 00:25:38.280 The respondents constantly make 373 00:25:38.280 --> 00:25:39.940 worried and uncertain appeals 374 00:25:39.940 --> 00:25:43.820 to notions of duty, responsibility, rights, 375 00:25:44.000 --> 00:25:46.660 entitlements, and obligations to others. 376 00:25:47.980 --> 00:25:50.180 Their anger and resentment 377 00:25:50.180 --> 00:25:52.860 are a window into what they experience as 378 00:25:52.860 --> 00:25:55.620 pinching one of Richard Sennett's beautiful phrases, 379 00:25:55.780 --> 00:25:58.860 what they experience as the troubled ethical value 380 00:25:58.860 --> 00:26:00.780 that we place on our own desires 381 00:26:01.300 --> 00:26:03.600 and our own relationships with others. 382 00:26:05.360 --> 00:26:08.160 We find economic reform implicated 383 00:26:08.160 --> 00:26:09.660 and often directly accused 384 00:26:10.300 --> 00:26:12.780 of setting off what Middle Australia experiences 385 00:26:13.300 --> 00:26:16.320 as a heaving and splitting in the moral understructure 386 00:26:16.320 --> 00:26:19.080 of our plural, always plural, value system. 387 00:26:20.060 --> 00:26:24.140 I read this as a revolt against the economic rationalist 388 00:26:24.140 --> 00:26:25.600 come neoclassical push 389 00:26:26.320 --> 00:26:29.340 to force what our respondents call the almighty dollar 390 00:26:29.340 --> 00:26:33.340 ever more deeply into the fine grain of daily life 391 00:26:33.340 --> 00:26:35.400 as a solvent of knowledge, 392 00:26:35.660 --> 00:26:37.000 Robbins' phrase, 393 00:26:37.320 --> 00:26:39.040 a denominator of value, 394 00:26:39.260 --> 00:26:43.540 and an automated code for all significant life choices. 395 00:26:44.580 --> 00:26:47.580 They accept that everyday consumption 396 00:26:47.580 --> 00:26:51.100 is about trading off one possibility against another 397 00:26:51.100 --> 00:26:52.780 according to your means, 398 00:26:53.040 --> 00:26:57.140 but not that competing motivations of care 399 00:26:57.140 --> 00:26:59.400 for family members, for justice, 400 00:26:59.580 --> 00:27:00.620 for social recognition, 401 00:27:00.940 --> 00:27:02.500