The Libertarian Alternative

205 Pages·2016·1.25 MB·English

by  Chris Berg

THE
LIBERTARIAN
ALTERNATIVE
THE LIBERTARIAN ALTERNATIVE
CHRIS BERG
MELBOURNE UNIVERSITY PRESS
An imprint of Melbourne University Publishing Limited
11–15 Argyle Place South, Carlton, Victoria 3053, Australia
[email protected]
www.mup.com.au
First published 2016
Text © Chris Berg, 2016
Design and typography © Melbourne University Publishing Limited, 2016
This book is copyright. Apart from any use permitted under the Copyright Act 1968 and subsequent
amendments, no part may be reproduced, stored in a retrieval system or transmitted by any means or
process whatsoever without the prior written permission of the publishers.
Every attempt has been made to locate the copyright holders for material quoted in this book. Any person or
organisation that may have been overlooked or misattributed may contact the publisher.
Cover design by Design by Committee
Typeset by Cannon Typesetting
Printed in Australia by McPherson’s Printing Group
National Library of Australia Cataloguing-in-Publication entry

Berg, Chris, author.
The libertarian alternative/Chris Berg.

9780522868456 (paperback)
9780522868463 (ebook)

Includes index.

Libertarianism—Australia.
Public administration—Australia.
Political parties—Platforms.
Australia—Politics and government—21st century.

320.5120994
Contents
Introduction
Part I: THE LIBERTARIAN ETHIC
1 How Free Markets Free People
2 The Libertarian Alternative
3 How We Went Left and Right
4 Market Success, Government Failure
Part II: LIBERTARIANISM APPLIED
5 The Spirit of Free Trade
6 Unlocking the Borders
7 How Incentives Can Save the Environment
8 The Intimacy of Free Speech
9 Peace and a Tolerable Administration of Justice
Part III: CHOICE, LIBERTY AND ECONOMIC REFORM
10 Personal Choice
11 How the Human Rights Project Lost Its Way
12 Economic Reform 2.0
13 A Different Way
Acknowledgements
Bibliography
Notes
Index
Introduction
I
T HAS BEEN more than thirty years since the Hawke government began to
deregulate and liberalise the Australian economy. We’re still not over it.
In December 1983, Bob Hawke and his treasurer, Paul Keating, floated the
Australian dollar. Their decision was both inspired and visionary. It was also
forced upon them. Speculators were flooding Australia with capital, betting that
the dollar would appreciate against other world currencies. This was
unsustainable.
The float was an epoch-defining decision. Australian governments started to
place their faith in markets. In 1985, the government opened the banking sector
—one of the most tightly monopolised and anti-competitive industries in the
Australian economy—to foreign competition. Throughout the next decade,
publicly owned businesses were privatised. Tariffs and other trade barriers were
lowered. The labour market was substantially deregulated. The airline market
was opened to competition. Ports were sold and restrictions on shipping
liberalised. The final break with the past came with changes to the tax system—
the introduction of the Goods and Services Tax (GST) in 2000 replaced a sales
tax regime that had been instituted by James Scullin’s Labor government in
1930.
Australians tend to cringe at the myth-making of countries like the United
States, which has suffused its own past with a complex political folklore, only
tenuously connected to the historical record. But where Americans have George
Washington and his apple tree, Australians have the larrikin Bob Hawke and the
lanky Paul Keating ripping out the foundations of old Australia and propelling
its economy towards the twenty-first century. The reforms of the 1980s and
1990s have become the stuff of legend.
The historian and journalist Paul Kelly set the tone with his 1992 book The
End of Certainty. His account is seen as definitive not just because of the detail
in his history of the politics of the 1980s but also for the overarching story he
imposed on that period. Kelly argued that the Hawke–Keating reform agenda
represented a definitive break with what he called the Australian Settlement.
This settlement, which dated back to the first decades of the twentieth century,
had five pillars: the White Australia policy, protectionism, the industrial relations
arbitration system, state paternalism, and ‘imperial benevolence’ or faith in the
rightness of the British Empire. The Australian Settlement had been sustained
with remarkable bipartisan clarity throughout most of the twentieth century; its
edifice was only chipped away after the retirement of Robert Menzies.
The irony was that Kelly’s book was released at the tail end of the reform
movement he helped define. He created a test by which future governments and
reform movements are now judged. When business leaders and political
commentators speak today of ‘the need for reform’, they are consciously or
unconsciously calling on The End of Certainty folklore. ‘Reform’, of whatever
stripe, has become the gold standard of government. For the political class, a
successful government is that which reforms; an unsuccessful government
squibs on reform. But while one of the most common tropes in the Australian
press is the business-leaders-urge-reform genre, in which CEOs and corporate
lobbyists complain that politicians are avoiding tough decisions about economic
change, rarely do they offer any specific proposals. The reform mantra has
allowed each side of politics to dress up regulatory or legislative change as a
great reform no matter what its purpose. For the Australian Labor Party, the
Minerals Resource Rent Tax (MRRT) and the emissions trading scheme
introduced by Julia Gillard’s government were considered great reforms. For the
Coalition, abolishing those two schemes constituted great reform. Each harks
back to the Hawke–Keating era not just as precedents for economic change but
as some sort of justification for that change. Reform has become the sine qua
non of government.
What made the reforms of the 1980s significant was not their constituent
parts but that they added up to an agenda. Governments of the time deliberately
shifted the Australian economy from one system of political economy to another.
They began to instinctively favour market solutions to policy problems where
their predecessors had looked to the state. It was a revolution in philosophy as
much as it was a legislative program. Once the full significance of this
revolution sank in, there was a host of books published by intellectuals of the old
Left who believed that Hawke and Keating had hijacked the grand old Labor
1
Party and its socialist-tinged traditions. The sociologist Michael Pusey
influentially argued that the Commonwealth bureaucracy had been captured by
economic rationalists, a sort of reverse-Fabian takeover of the institutions of
2
government. These economic rationalists had a new idea of what Australia
ought to look like and what values public policy should reflect.
So the budding reformists have a problem. Since John Hewson’s economic
policy package Fightback! died at the hands of voters in 1993, there has been no
driving vision of what Australia might look like, no vision of what values ought
to underpin political change. There is scarcely any serious contest of ideas. We
can attribute that to a generation of politicians too weak to build and defend a
vision. It’s a neurosis that infects the entire political class.
The Libertarian Alternative, in all modesty, is my attempt to offer a new
agenda. Libertarianism is a political philosophy that favours liberty in all its
facets. The libertarian agenda is deceptively simple but powerful and ambitious.
It wants people to be free to trade across national borders and to move their
families across them too. It provides a philosophical structure for open markets,
unencumbered by excessive regulation and red tape, exposed to and
strengthened by engagement with a global marketplace. It views overregulation
not simply as a cost to business but as a brake on human progress and
innovation. It takes seriously the choices people make about how they spend
their money and sell their labour, without assuming that policymakers and the
government know better what values those people are weighing up when they
make risky decisions. It views entrepreneurs as the central driver of economic
growth, and the key to future living standards. And it says that decisions are
better when they are made by the people they affect. Libertarianism offers a new
and important perspective on the biggest issues facing Australian society, from
human rights to the environment and inequality, from trade to sexuality and
gender. It provides a new way through our moribund political debates.
The first part of The Libertarian Alternative explains the libertarian ethic—
the underpinnings of the philosophy of individual freedom and its relationship to
the social good we all desire: human flourishing. I give a potted history of this
philosophy and its deep, largely forgotten roots in Australian history. To be a
libertarian in Australia today is to be part of a distinct tradition that can be traced
back to the nineteenth century.
The libertarianism I argue for is a fundamentally practical one. It takes
people as they are. It treats human society as an impossibly complex, endlessly
diverse and infinitely exciting web of relationships and ideas. It asks what
economic and political system suits a world in which people have different
preferences and want to lead different lives, form different communities and
enjoy different lifestyles, but all have equal rights. Government can only limit
our liberties, not enhance them. Markets and civil society, by contrast, facilitate
such difference, encourage toleration and cooperation, and take advantage of the
natural pluralism of a free people.
In the second part of the book, I apply these principles to the policy issues
that matter most today. Libertarianism exposes old problems to a new light,
helping us understand how to tackle them and what’s at stake in doing so. I start
with the big two: trade and immigration. Nothing reveals the distinctiveness of
libertarian thought more than its insistence that trade and immigration are two
sides of the same coin: the case for opening borders to goods and capital is the
same as that for opening borders to people. I examine the inequality debate and
argue that before governments try to ‘fix’ economic inequality, they should first
realise they’re already making the problems of poverty and inequality worse. I
discuss how environmental problems are fundamentally property rights
problems, and how to handle the biggest of them all: climate change. I consider
freedom of speech and privacy, two of the thorniest issues of modern public
policy. Some conservatives argue that libertarianism can’t handle questions of
national security and foreign policy—I make the case for a security policy that
respects individual freedoms, and a non-interventionist foreign policy.
In the third part of The Libertarian Alternative, I return to the domestic
sphere to tackle freedom of choice, consumerism, and what the human rights
debate tells us about the state of libertarian ideas today. The economist Adam
Smith wrote that all that was necessary to allow a nation to thrive was ‘peace,
3
easy taxes, and a tolerable administration of justice’. What made sense in 1755
is even more compelling now, as technological change and innovation eliminates
many of what our predecessors saw as the necessary limits on the market
economy. We’re on the edge of a revolution in the way we work, the way the
economy functions, and the way we relate to each other. Exploiting these
possibilities to the fullest will mean rethinking what government is for—and
recognising its limits. That theme ties this book together.
Libertarianism is a philosophy of optimism. It is a philosophy that
understands what institutions can and cannot do. It embraces change. It
embraces difference and diversity and pluralism. It wants government out of
your wallet and out of your bedroom. Libertarianism, alone, wants individual
freedom in all its dimensions.
Part I
THE LIBERTARIAN ETHIC