Learn from the mistakes of others

The less-is-more IR policy

Mark Christensen
On Line Opinion, 10 April 2006
First published in The Courier-Mail on April 4, 2006.

The fact that most Australians - and some ex-prime ministers - disagree with the Federal Government’s IR changes doesn’t make the changes wrong.

Or right, either. The need for change doesn't mean that any old change is right. These changes have been looking extremely biased from the get go. Nothing that's happened since they came into force has encouraged us to change peoples' minds, nor dispel their fears.

The WorkChoices reforms have been contentious because they bring to light unexplored policy inconsistencies and misunderstandings about the glue that holds society together - trust. If John Howard wants an idealistic attitude on IR, he needs to implement a grander vision by extending the same principle to matters outside economics.

Thing is, Howard's idealism appears to be merely economic.

Paul Keating has slammed the reforms as ideological. This is despite the fact they are based on a philosophy enacted by him in the 1980s: less is always more.

I would have thought that would have meant that Keating was perfectly qualified to call it for what it is. Meanwhile, just because they have superficial similarities, doesn't mean the implementations are equivalent.

Besides, the reforms are ideological - they advance a very particular economic (and consequently social and political) ideology. One that many people are quite unimpressed with - not so much anti-union, and excluding unions from any role of value. Collective bargaining is not just illegal now, even mentioning it is illegal.

Take away controls and rigid structures and we will all benefit from the resulting freedom. Removing restrictions on how employers and employees deal with each other is a classic example of this poetic principle. Flexibility is the source of win-win.

Except the new regime hasn't removed controls or restrictions - it has replaced safeguards with employer powers and restrictions on employers with restrictions on employees.

Other than mid-sized employers, industrial relations lawyers may well be the big 'winners' in the short term.

There’s a psychological hitch with this theory, however. We are uneasy with a policy trajectory that leaves us with nothing tangible to hang on to. Industrial awards and regulations seem real, while their gradual demise presents an unknown void free of third party intervention. Taken to its rational conclusion, the reform agenda leaves us with “nothing”.

You're catching on to "economic rationalism" i see.

This is where leadership is required.

When did "leadership" come to mean "bullying" and "bastardisation"? Oh, wait, I remember ...

People are certainly nervous about losing their wages and conditions. What Labor and Paul Keating cannot accept is that this fear also clouds the truth about how Australia gained its prosperity in the first place. Workers only have something substantial at risk because Hawke, Keating and others had the conviction to emphasise the futility of protecting what you value by fencing it in.

Umm ... what are you saying now?

This highlights a quaint irony with free market economics. The more it delivers, the more is at stake and so the more likely the beneficiaries are inclined to discount the mystical less-is-more formula and selfishly defend something short of the economic nirvana they crave. Of course this never works long-term, as it violates what has been proved successful along the way.

Deregulation hasn't proved to be much of a nirvana for those of us subjected to it. For those who own the newly deregulated industrial powers, it's been the land of milk and honey ... until the shit hits the fan. Then we get landed with over-regulation, or idiotic sub-regulation, where everyone assumes that law will solve the problem (again).

Community disquiet over IR actually stems from the dread of absolute freedom - the void of uncertainty. People want guarantees. Rather than see change as an opportunity, they automatically harp on about what could be lost. Though understandable, a leader with vision never allows such emotion to dent the truth about what fundamentally works - flexibility - and what does not - control.

Dread of 'absolute' freedom? No, we fear the lions being loosed on us by the newly extra-empowered ... people ... who've we've come to fear, loathe, and despise. The arrogant, selfish sons-of-fuckers who own the company - or more often are in middle management and are clawing their way up the actuarial ladder.

Flexibility is not the same as freedom, nor is control the opposite of flexibility either.

I wish economists had to spend time in the real world™ and were prohibited form their fantasy-lands. Oh, but that'd be 'controls' right.

Leaders-with-vision™ of late tend to be bloody-minded ideologists. Oh, right, Howard and Co.

While many are overlooking this practical principle, they rightly sense something is still missing. There is no plan to fill the hole left by removing cosy-yet-inefficient structures - be that centralised wage-fixing, public monopolies or tariffs.

Implementing massive change without a plan is just, well, OK ... expected ... of economists and politicians. Perhaps of religious nutters too. Or, perhaps IT gurus.

If framework X is 'inefficient', and you're gonna replace it with framework W, surely you ought to have thought about this kind of thing. It's not a new problem, this change-requires-planning-and-preparation thing ...

Rather than criticising the principle he bravely actioned 20 years ago, Paul Keating should be pointing out that success in taking the final step requires us to replace our former comforts with the only means possible of managing commercial and social interfaces in a complex world: trust.

But there is no TRUST.

That was the reason wage controls were brought in in the first place. And why collective bargaining developed. And, oh, fuck it, why people are so scared - they're not just imagining what might happen - they fear that the only reason the boss hasn't screwed them worse to date was the regulation ...

Trust has to be earned, built. You don't get trust by saying "trust us".

Any lawyer will tell you that trust is a fickle thing. Yes, it underpins social relations. But at the end of the day, people found they needed some recourse for when their trust was broken, smashed, fucked over. Kings found it convenient to hand that stuff over to courts and bureaucrats. To law and regulation.

Unqualified trust - or social capital as economists call it - wasn’t as important when Australia was less sophisticated and had more modest goals. Our blend of market and socialist ideals was still delivering reasonable results.

Social capital = 'unqualified trust'? When did that happen?

Oh no! "Socialist" ... must be evil, right?

But we are now looking to take a leap of faith to something pure - to implement fully the less-is-more principle. And while trust is a pre-condition for moving forward, key aspects of it remain unexamined by those who demand change.

Leaps of faith, in economics are probably daily occurrences (everything seems to be a leap of faith - you know, like oh, the real world™)

Trust cannot be bought or guaranteed, despite its profoundness. People actually realise John Howard can’t compel others - or even themselves - to trust. As former Cambridge philosophy Professor Onora O’Neill says: “Elaborate measures to ensure that people keep agreements and do not betray trust must, in the end, be backed by - trust. At some point we just have to trust.”

Yes, but there must be something upon which to base that trust. It cannot simply come out of nowhere, or exist because we desire it to exist.

And if a person behaves inconsistently with trust, they can't expect to have it.

The other confronting feature of trust is that it cannot be partitioned according to economic and social purposes. It’s both or neither. This is where John Howard really struggles with inconsistency.

Perhaps he struggles with the concept itself?

He implores us to abandon our fears and assume the best of fellow human beings - most especially, your boss. But then panders to a meaner nature on various non-economic fronts.

And that is why we distrust him. Or his "exciting" social experiments.

While prosaic justifications for the war on terrorism and our crude policy on asylum seekers can be mounted, they clearly violate the principle upon which we have gained so much. They are about protective barriers, control and covetousness. As America can attest with Iraq, a formulaic approach to security and freedom is as effective in promoting harmony as communism was in generating affluence.

Earning trust requires exhibiting trustworthy conduct.

If the government wants support for sensible IR reforms, it must be consistent and unconditionally refuse to deal in the fear of uncertainty. This is the only way to promote the trust needed to complement the sound principles underpinning Australia’s economic success.

Not actually the only way. In fact, he needs to take us seriously - to recognise that even if our fears are irrational, treating us like shit isn't any way to convince us otherwise.

He needs to show that he trusts us.

After all, he's supposed to be our representative, to represent us. We don't serve his needs, he serves ours. [I'm not unaware of the effect of political parties on that idea in practice.]

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Mark lives in Brisbane and writes a lot. When not reflecting on philosophy and religion, he works as an economist in his consulting firm, in tempore Advisory, which pays the bills.

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