A Spectre is Haunting Australia: the spectre of Corporatism.
Since March this year the Centre for Independent Studies has been promoting its new manifesto ‘TARGET30 – towards smaller government and future prosperity‘. TARGET30’s stated goal is to get Australia’s total government spending below 30% of GDP by 2023, reversing the steady growth in the size of government (federal, state and local) that has happened in the past 40 years (in other words since 1973, the year of the first Whitlam government budget):
TARGET30 will consist of a series of research reports and companion activities, including public events, commencing with this introductory report, proposing concrete plans and policy suggestions for reducing the size of government in Australia from approximately 35% of GDP today to 30% or less over the next 10 years.
It’s been a long time since I last looked over a policy proposal from the CIS; it’s reassuring to find that the CIS have maintained the intellectual rigor I expect from them while I’ve been ignoring them. For example in the introduction to the TARGET30 manifesto Simon Cowan, its lead author, tells readers:
TARGET30 acknowledges that governments have a crucial role to play in modern societies. There are always some things that need doing which individual citizens, voluntary organisations, and private companies are unable or unwilling to do, therefore requiring state intervention.
So the legitimate function of government, for TARGET30’s purposes is to do those needful things that other members of a modern society are unwilling or unable to do. However this declaration is quickly qualified in the next paragraph:
However, over the last hundred or so years, government intervention has expanded far beyond this limited scope to include responsibilities that citizens could (and arguably should) be discharging themselves. Nowadays, anytime there is a problem, we invariably and immediately turn to the government rather than explore solutions on our own first. We have come to expect that governments will do anything we are unable or unwilling to do ourselves.
Calling this a qualification is a kindness that Cowan doesn’t deserve; it verges on self-contradiction. Particularly when it comes to the needful things that we are unable to do for ourselves and can’t get done through the private sector. If it’s a need we share with others – if, in other words, it might be considered a public good rather than a private good – it might well be legitimate business for government and Cowan has contradicted himself in a mere four sentences.
So what are these responsibilities of government that citizens could (and arguably should) be discharging themselves? We find some indication in Appendix B ‘The impact of the size of government on society’ in a section on the ‘Entitlement Mentality’:
Before the state created a right to unemployment benefits, for example, people saved or insured through friendly societies and trade unions to ensure an income if they lost their job. Nowadays, few bother. Before Medicare, families insured themselves so they could buy treatment if they fell ill, and charitable foundations raised money to build and run hospitals. But now that the state provides health care, individuals are less inclined to insure themselves. When government takes over such functions, therefore, the market shrivels, philanthropy dwindles, and self-reliance is replaced by state dependency.
Given Cowan’s disapproval of the growth of government over the last hundred or so years, I think we can date the end of this golden age of self-reliance at around 1913. It started, of course, on January 1, 1901 (or so I shall assume for now; it’s quite conceivable that a later paper in the TARGET30 series will propose rolling back Federation as a good way to reduce total government expenditure in Australia). That’s even further back than John Howard’s beloved white picket fence age of the 1950s.
I doubt that the lost age of self-reliance – whenever it was – was as golden as Cowan depicts it. Before the state began to provide unemployment benefits, for example, people who could afford to saved or insured their income through friendly societies. Those who couldn’t, didn’t. Before Medicare, families insured themselves to pay for medical treatment because there was no other alternative and the level of health care children received depended very much on how much their parents were able, or willing, to pay for health insurance.
Cowan’s description of the way things were before we all developed an entitlement mentality thanks to nanny state coddling by big government owes much to romantic imagination and little to historical fact. So does the section of Appendix B which follows it, where big government is charged with ‘crowding out of charities [and] weakening family connections’. Cowan’s account of how the size of government affects society is pure myth-making.
None of these lapses amount to faults in the manifesto. Far from it; the purpose of a manifesto is to inspire your existing supporters and allies and turn passive supporters into active ones. TARGET30 will succeed if it convinces the right people to share CIS Executive Director Greg Lindsay’s conviction, proudly declared in the foreword, that the CIS ‘has the best ideas’. Reasoned argument be blowed – it’s inspiring myth as brings in the punters.
But a good bogey helps too; an oppressor, or oppressor class, whose shackles must be thrown off. Expropriators to expropriate. Personifications of state dependency. And here they are – public servants and welfare recipients:
Recent data from the 2010 election shows that approximately 13.5% of all voters were employed in the public service… Of course, people employed by the state are not the only group in society with a strong interest in increasing taxes and government spending. Approximately 35% of all voters rely on government welfare payments for income…
This means between 4 and 5 of every 10 voters rely on the government for virtually all of their income (there may be some overlap between these two groups)…
Potentially, this dependence poses a formidable opposition for any politician trying to cut back on the growth in state spending.
Since the publication of the TARGET30 manifesto, the first two of the promised TARGET30 research papers have appeared on-line; one on tax/welfare ‘churn’ – a topic very familiar to afficionados of the research papers Peter Saunders produced for the CIS back in the day – and one on Medicare. I’ll get down to writing about those later.
Postscript: if you’re a little bemused by my choice of ‘The Corporatist Manifesto’ as the title for this series of posts be of good cheer. That’s explained in Part II, coming to a web-site near you very soon.