Where are the new ideas ?
Andrew Norton at Catallaxy has an interesting piece responding to a claim by Dennis Glover that rightwing thinktanks are much better funded than their leftwing counterparts. He makes the contrary argument that the universities represent a left equivalent, a claim which I don’t think stands up to the close examination it gets at Larvatus Prodeo.
More interesting, though is Norton’s characterisation of the state of the debate
Since most of the institutions of the social democratic state are still in place, social democratic ideas are perhaps going to seem less exciting than those of their opponents on the right or the left. They are about adaptation and fine-tuning more than throwing it all out and starting again. …. The right doesnâ€™t have ideas because it has think-tanks, it has think-tanks because it has ideas that need promoting
This was a pretty accurate description of the situation in the 1980s and early 1990s, but it has ceased to be so. The right hasn’t had any new ideas for some time, and the policy debate between social democrats and neoliberals has been a stalemate for most of the last decade.
In economics, the big theoretical ideas underlying the resurgence of the right – public choice theory, property rights analysis, rational expectations macro and so on- were developed in the late 1960s and 1970s. The big theoretical ideas since 1980, such as the renewal of game theory, endogenous growth theory, behavioral economics have not been particularly leftwing, but they have undermined the certitudes about the optimality of market outcomes that underlie neoliberalism.
On the policy front, the neoclassical counter-revolution turned into policy programs in the 1980s. These ideas were set out in broad terms by Kasper et al in Australia at the Crossroads in 1980, and a more detailed version emerged in the UK, NZ and Australia in the 1980s, incorporating privatisation, competitive tendering, tax reform, free trade, anti-union industrial reform and so on. There have been no really new ideas along these lines since National Competition Policy in the early 1990s.
The Howard government illustrates the point. Whenever it wants to be seen as a radical reforming government it reaches into the 1980s bag for a policy that, the Hawke-Keating government wanted to adopt but couldn’t manage for one reason or another – Telstra privatisation, the GST, IR reform and so on. In its populist mode, policy initiatives have been more redolent of the 1950s.
Most of the rest of the time, though, the Howard government is dealing with the fact that the radical reforms advocated by neoliberals haven’t worked exactly as advertised. Just like the social democrats, they spend most of their time adjusting and fine tuning.
So we’ve seen steady readjustments. For example, it’s become clear that there’s no workable alternative to Medicare, and that keeping the private insurance system going at all will require massive subsidies making the whole notion of a market untenable. Similarly, in Norton’s own area of higher education, the government has repeatedly found that the predictable outcomes of increased exposure to market forces (proliferation of MBAs, declining diversity, capuccino courses and so on) are not what they expected, and have reacted with a reassertion of centralised control, yielding, in many ways, the worst of all worlds.
The only real attempt at a systematic set of new ideas since the early 1990s has come from advocates of the Third Way, and they have delivered a lot less than promised. There are, I think, some interesting new ideas in the air, and I’ll try to post about them.