Since the working year doesn’t really get started until after Australia Day, it’s not too late to tell you my New Year’s resolutions. Actually, they’re more in the nature of re-affirming my guiding principles as an economic commentator. Why are we playing the economic game? Who are the people it’s supposed to benefit? And would all the policies I write in support of lead us towards or away from these ultimate objectives?
My first principle is that “the economy” – all the daily effort we put into producing and consuming goods and services – should be managed to benefit the many, not the few.
But it’s hard to believe this has been our overriding objective, particularly in recent decades. Although most of the activity in the economy is undertaken by the private sector – households and businesses – this activity is regulated by the public sector, governments.
Since our governments are democratically elected, this ought to mean that governments govern in the interests of all voters, not just some. But, as we all know, sometimes it doesn’t work out that way.
Sometimes governments pander to the majority when it gangs up against an unpopular minority – asylum seekers, for instance. Other times, governments act in the interests of powerful individuals, businesses and interest groups.
Since the two main political parties have become locked in a hugely expensive contest to influence voters at election time, they seem to have become more receptive to the interests of businesses able to donate generously to party coffers.
The notion that the economy will work best when governments manage it in ways that best suit the interests of business was hugely reinforced by the 30-year reign of a fad called “neoliberalism” – a movement started by naïve econocrats and economists (and supported by yours truly) that was soon hijacked by businesses and politicians who saw an opportunity to advance their own interests.
The neoliberal era is over – the proof of which you see every time Scott Morrison announces another government subsidy to a new gas-fired power station, oil refinery or Snowy Mountains scheme.
But our new project, to redress the balance of benefit in favour of ordinary workers and consumers, has a long way to go. It will make more progress when more voters understand the need to give ordinary players in the economic game a bigger share of the prizes.
Business invariably justifies its demand for favourable treatment by the jobs it creates. But increasingly, those jobs are of a lower quality than we have come to expect.
Many are casual, part-time and insecure. They come with fewer safeguards: sick and holiday pay, workers compensation coverage, super contributions. Pay rises are fewer and meaner. Wage theft has become common.
Voters need to realise the rise of crappy jobs in the “gig economy” is not some inescapable consequence of technological progress. It’s a policy choice that governments have made using the power we give them.
Were voters to tell politicians more forcefully that such a deterioration in the quality of the working life of the rising generation is unacceptable, they would act to stop less-scrupulous businesses finding ways to avoid or evade the labour laws that protect the rest of us.
All this is happening while the share of national income going to profits has risen strongly, at the expense of the share going to wages. And the share of income collected by the top 1 per cent of Australia’s income earners has risen to about 9 per cent of total income.
A capitalist economy wouldn’t work as well as it does were entrepreneurs not always trying new ways to increase their profits. The trouble is that not all the ways they try are of benefit to the rest of us, not just themselves and their shareholders.
In such cases, governments should not shirk their responsibility to act in the interests of the many not the few. Nor should we fear that, unless we give businesses free rein in their pursuit of higher profits, our business people will lose all interest in running businesses.
So, a longstanding view of mine is that we’d all be better off if business executives focused less on maximising profits (and their related bonuses) and more on giving their customers value for money and ensuring all their employees had rewarding jobs.
Not just jobs that were better paid and more secure, but more emotionally satisfying because they gave workers more autonomy – more freedom to choose the best ways of doing their job – and jobs better fitted to a worker’s particular strengths and preferences.
Easier said than done? True. Particularly because, though governments can prohibit certain undesirable practices in the treatment of workers, they can’t legislate to force bad bosses to be good ones.
Not easy, but not impossible to reshape the economy to improve it for ordinary people, not just bosses. And we won’t get any improvement until we accept that it is possible, and that we should measure the politicians we vote for according to their willingness and ability to spread the benefits of economic life less unequally.
