CHAPTER 4

THE LOST REVOLUTION

Wild Spirit, which art moving everywhere;
Destroyer and preserver …

— PERCY BYSSHE SHELLEY

The smart backpacker chooses his travel reading carefully, preferably a single paperback equivalent in size to War and Peace. That’s how in 1985 I ended up reading E. P. Thompson’s The Making of the English Working Class by a pool at the University of California. It must have been near an air force base because my memory is of watching B-52 bombers taking off and lazily circling to cruising height, off on patrol, perhaps even to their failsafe points, should the balloon suddenly go up – which I thought ironic, given Thompson’s role in the Campaign for Nuclear Disarmament.

Thompson’s book – 958 pages of small, close-set type – was one that every serious left-wing historian of the time had to read but few did, the way every serious Christian one day plans to read the Old Testament, and every Young Liberal Ayn Rand’s The Fountainhead. As a book it was so intellectually overwhelming that one needed a gap year to take it on, which is what I now had. I had spent the previous half-year since completing my BA doing shift work in various canning and assembly factories to save for the trip, so in important ways I was in the mood for Thompson’s message about how the working-class communities that reached their zenith in places like Dandenong and Doveton created themselves out of the violence of the Industrial Revolution.

For reasons that will become obvious, Thompson’s thesis is worth recounting briefly. At the end of the eighteenth century, the English working class of handloom weavers, agricultural labourers, ironworkers, miners and the like still lived a largely rural existence, employed at home or in small workshops, with strong connections to village or parish life. Yet by the early 1830s many had been agglomerated into large factories under the discipline of the overseer and the mechanical clock, and their once middling towns like Manchester, Liverpool and Leeds had been transformed into the ‘dark satanic mills’ of Blake’s poem, with thousands upon thousands of factory hands crammed into dangerous slums, where they died young and poor. The old world had been physically transformed: bricked over, blackened, cheapened, uglified.

In the long run and on average, Britons ended up wealthier, the economists tell us, but the economic transformation was carried through with callousness and violence, according to a set of economic ideas imposed from on high, totally unrelieved by any sense of participation in a common project for the national good. Its ideology, according to Thompson, was that of the masters and the masters alone. In barely thirty years – the same period of time that spans from the mid-1980s to today – an economy that had previously served the whole community now served a narrow class of winners, practically enslaving the rest. It wasn’t until the political system caught up half a century later that the material benefits began to be spread with any degree of justice. Thompson’s book suggests a question: did it have to be done that way? This, in some ways, is our question too.

It’s not surprising that people resisted this change, sometimes violently, by smashing up the power looms and threshing machines that had taken their jobs, and by forming unions, some of whose members were transported to Australia for their troubles. We have too easily forgotten that the horrors of the industrial revolution – the fourteen-hour days, the pregnant women down mines, the stunted children up chimneys, the life of hunger followed by an early death – existed in the folk memory of Australia’s working-class settlers. (The same nightmare still haunts trade union officials whenever they hear the term ‘WorkChoices’.) These horrors are what many early settlers came here to escape. Their idea of Australia was a society that worked for everyone, not just mine owners and factory owners and landholders. After crossing the Atlantic on my backpacking trip in 1985 I went to the Belfast streets where my parents grew up; I saw the cramped, dark flat in which they lived when they were first married and immediately understood why they had got on a ship to Australia and never gone back. In Doveton, life was stupendously better.

Something similar to E. P. Thompson’s story of England in the first three decades of the 1800s has happened in Australia between the mid-1980s and today. Not the immiserisation (obviously, thanks to the victories of social democracy over the last century in creating a welfare state, there is no equivalent to the mass destitution of that time), but the pace and scale of social and economic change. The transformation from the industrial to the post-industrial era has been so total as to constitute the sociological equivalent of an extinction event.

The queues of workers’ cars lining up to get into the factories – gone. The publicly owned banks and utilities – gone, or about to go. The union movement, which once covered half the employed workforce and rivalled the state for economic power – mostly gone (it’s down now to just 12 per cent coverage in the private sector, replaced in part by the welfare lobby, which has had to step into the breach to speak up for the working poor). Secure, full-time employment, with its guarantee of holidays, sick pay and promotion – in many industries long gone.

And along with these changes to the world of work, the expectations of equal chances in life are also gone for many. The dream of home-ownership for all – gone. The levelling idea of the public school, attended by the children of factory manager and factory worker alike – gone. The easy-to-get apprenticeships that enabled young working-class Australians to get a toehold in the economy – gone. The hope of natural advancement through a firm, backed by in-house training – gone. Just as England’s green and pleasant fields were paved over with brick, its vocations replaced by the machine, its pastoral life rent asunder by industrialisation, in just thirty years our little world, with its factories and the communities they supported, has been made extinct, wiped out like the dinosaurs by Professor Schumpeter’s fiery asteroid. By a revolution.

The big problem for the creative destroyers is that the political, social and economic values of the Australian people were formed during the long post-war era of success, before the factories and the factory communities began to be smashed up. Australians still want their country to make things, still want laws that limit the boss’s prerogatives, still want business and the better-off to pay a decent share of taxation, still want more training for their children, and still want a decent social safety net and universal health and education services. This egalitarian and nation-building outlook, which was formed in the post-war period of economic and social success, is the essence of the Australian national consciousness. It is the opposite of what the economic theorists want to impose upon us, and it is the thing that pulls them up every time they overreach. It is only because the Hawke and Keating governments tempered their creative destruction with imaginative and egalitarian social policy that they got as far as they did – and still, by the end, the electorate was waiting for them with its baseball bats. John Hewson ignored egalitarianism completely and failed completely. John Howard kept within eyesight of egalitarian sentiment for a while, but then tried to give Australia WorkChoices. Creative destruction is nothing if not unpopular.

Time and again the economic narrators smugly remind us of the scale of their revolutionary achievement. But they never tell the whole story. Between 1983 and 2015, Australia experienced a social and economic revolution as profound as any in our history; contrary to what they tell us, it has not all been for the good, and it could have been done differently. Those from working-class communities who have failed to gain a higher education, start a business or become successfully self-employed have lost a great deal, even when their take-home pay has increased. As E. P. Thompson put it, writing about the Industrial Revolution: ‘People may consume more goods and become less happy and less free at the same time.’ Understanding this fact is essential if we are to build a future that works for everyone.

My sister’s old workmate from Heinz, Cheryl, articulated this better than anyone else could. Her working life – and, hence, her life – was better before the old economy was wiped out, and no MBA-toting economics adviser can tell her otherwise. And her example is representative of what has happened to hundreds of thousands, if not millions of other working-class Australians.

The national secretary of the National Union of Workers, Tim Kennedy, tells me he has another way of representing this. At gatherings of warehouse workers just like Cheryl (it’s in warehousing that many former manufacturing workers now work – my other sister, Pamela, being another), he asks employees to line up from youngest to oldest, and asks how many started their working lives as permanent, full-time employees. Only the oldest workers put up their hands. Then he asks how many started with a full-time job. Those over forty years then put up their hands. Then he asks how many started as casuals. Almost everyone under forty then raises their hands.

Plot that on a graph if you must, because it tells you something. These workers’ frustration is obvious. Those who work for major companies are proud to do so and have great loyalty to their firms, partly because they know that direct employment means they will be comparatively well looked after. But those employed indirectly through labour-hire firms, with no direct contractual relationship to the people whose imported products they move from one place to another, are far from happy about it, apart from their relief at having any sort of job at all. Under such arrangements, two-way loyalty is impossible.

It’s not unusual, Kennedy says, for warehousing workforces to be 60 per cent casual, 40 per cent permanent. Back at Heinz it was 100 per cent permanent, with casuals only being employed for seasonal work – an arrangement dictated by the logic of nature, not the logic of shareholder interests. And, he estimates, on the many current warehouse sites that once were factories, for every ten old factory workers there is barely one or two storemen or storewomen. Their jobs have gone, their work has intensified, they are not listened to, they are treated with less respect than their forebears, and managements are more ruthless and more tyrannical. Overall, their lives have become nastier and more brutal.

The economic reformers know this, of course; turning the nation’s economy into the equivalent of a giant vacuum cleaner that sucks all the wealth and power to the top is the whole point. They don’t call it exploitation; they just phrase it differently: it is ‘increased productivity’.

In his 2003 novel Millennium People, J. G. Ballard paints a picture of an England in which the professional middle class – de-unionised, largely self-employed, having to work all hours of the day instead of nine to five, totally at the whim of managers, enslaved to mortgages and private school fees, and suffering debilitating and soul-destroying anxieties as a result – is the new proletariat. In the neighbourhood of Chelsea Marina, its members form a new revolutionary class and begin a doomed revolt.

It’s an intriguing concept that doesn’t quite come off; Millennium People is far from Ballard’s best book. But it did kick-start a train of thinking that is now, more than a decade after the book’s publication, becoming widespread: the idea that while the new economy may have made us wealthier (on average, at least), it hasn’t made us happier, and that we’re left wanting something more, even if we find it difficult to define exactly what that is.

The reason Ballard’s story of middle-class revolt fails is because his obsession with middle-class dystopia blinds him to the real truth about the new economy. In the new economy the true exploited proletariat is not the new middle class, it is the new working class – which is to say the old one, although robbed of its power, freedom and affluence. The new proletariat is made up of the millions of people just like Cheryl. And it is only the anger of these millions of Cheryls, expressed through the ballot box, that stops state and federal governments from taking economic reform to its absolute extreme. They are the ones who are keeping the productivity commissioners and CEO class in check. If our revolution has heroes, here they are.

So why won’t all those little people just lie down and let history trample over them? Why can’t they see that all this economic reform has been for the best? Why don’t they cheer when the economists remove public support for their industries and close down their factories and make them and their children unemployed? How can they be so ungrateful as not to thank Paul Keating for liberating them from their dull, monotonous, supposedly unskilled and unimportant jobs making cars? Can’t they read the statistics? Can’t they see the upward trends in per-capita GDP that come from liberalised markets? Are they blind to the cheaper price tags on imported goods? Don’t they realise their children will thank them for sacrificing everything they have and know? Are they stupid?

There is nothing new about these questions. The issue of whether working-class living standards went up or down between 1800 and 1830 is one of the great historical debates, and it is still being fought. The grandfather of all economic reform, Friedrich von Hayek, wrote about it, which is why right-wing think tanks here in Australia still prosecute the ‘yes’ case in this 200-year-old dispute with such extraordinary enthusiasm. If the little people came out of the Industrial Revolution better off, the economic reformers contend, they will come out of our current de-industrial revolution better off too. E. P. Thompson’s book leads the ‘no’ case, believing that the little people were morally right to resist.

In Australia today, the greatest insult any economist can hurl at you, perhaps apart from ‘rent-seeker’, is ‘Luddite’, which refers to the nineteenth-century English clothing workers who fought against the introduction of the steam-powered weaving machinery that turned them from respected artisans into unskilled, low-paid factory workers. (In fact, on the morning I wrote this passage the term appeared prominently in the Australian Financial Review – in the column of a former Labor leader, no less.) Knowing what we now know about the comparative riches the economy had in store for these workers fifty years into the future, the ‘yes’ case argues, they should have folded – taken it on the chin for the nation, so to speak.

It is, of course, obvious to anyone except the creative destroyers that this view has a serious flaw: it is totally lacking in moral content. Humans don’t work this way. They don’t give up without a fight, they don’t voluntarily accept poverty, and they don’t surrender their culture and traditions without a struggle. The creative destroyers, with their high salaries and indexed pensions and share portfolios and property values to protect, are asking working Australians to make sacrifices for the common good which they themselves would never contemplate. The English working class actually went backwards materially for three decades and more: their working hours increased, their diets deteriorated, they became addicted to gin, and their children, crammed into slums and deprived of fresh air and clean water, died in greater numbers than before. More than this, the quality of their lives deteriorated too, by which is meant their way of life, their culture and their communities.

As Thompson famously put it, we have to rescue the people who fought against economic reform from ‘the enormous condescension of posterity’. Their cause – which amounted to saving their own lives – may appear backward to us, and borderline criminal to economists, but that’s not how it appeared to them at the time.

Their aspirations were valid in terms of their own experience; and, if they were casualties of history, they remain, condemned in their own lives, as casualties. Our only criterion of judgement should not be whether or not a man’s actions are justified in the light of subsequent evolution. After all, we are not at the end of social evolution ourselves. In some of the lost causes of the people of the Industrial Revolution we may discover insights into social evils which we have yet to cure.

And that’s the point: just like the English working class who went through the Industrial Revolution, the people who experienced the destruction of places like Doveton have something important to say to us.

Every revolution needs a revolutionary class, and this one is no exception. It was carried through by the true heirs of the political psychology that once belonged to the Marxist Left: the economic reformers, armed with their philosophy of creative destruction, which Schumpeter stole from Marx.

When I call these people the heirs of the revolutionary psychology of Marxism, in many cases I mean it quite literally. We can place the beginnings of this revolution back in the late 1970s and early 1980s, when the ideologies of neoliberalism and neoconservatism, as implemented by the governments of Margaret Thatcher and Ronald Reagan, began to influence those Australian conservatives dismayed by the lack of reforming zeal of the government of Malcolm Fraser. Some of these intellectuals – the most notable being the then editor of the Australian Financial Review, P. P. McGuinness, who once worked for the Brezhnev-era Moscow Narodny Bank – were actual former pseudo-Marxist left-wing fellow travellers. Another node of this thinking, Quadrant magazine, contained similar characters who had moved from left to right over the course of their lives.

Like all revolutionary ideologies, this one began with a concept of freedom and a Promethean quest to transform the nation. Its historical task was to unleash the power of the market, which it saw as having been placed in chains by the overly powerful post-war state. And like all revolutionary ideologies, it believed that its central conviction – in this case, that the market should be totally free – was so important that it displaced other moral considerations. Just as in Marxist thought all social relations, institutions and rights had to give way to the logic of history, for the economic reformers all things had to give way to the logic of the market. The market had the right to destroy any social relations, from subsidised industry to trade unions to the local public school, because the market relations that replaced them would by their very nature create something better. With the help of neoconservatism, economic reform even developed its own pseudo-Marxist sociological terminology to justify all this – phrases like ‘new class elite’, ‘provider capture’ and ‘rent-seeker’ – and its own populist political strategy, which was to ignite a revolt by the people against the shadowy ‘elites’, which were somehow pulling the levers of power even when out of government.

In the face of this idea, which was carried through with such conviction that it even began to influence sizeable chunks of the Labor Party, communities like Doveton, whose economic strength lay in the partial subordination of the market to the needs of society, didn’t stand a chance. The idea received a massive boost when federal treasurer Paul Keating induced a panic with his exaggerated claim in 1986 that Australia was done for and on the road to becoming a banana republic. The predictable end point was that people in places like Doveton would eventually be denounced as scroungers who, because they relied on transparent public support to keep their industries strong, were stealing wealth earned by others through the operations of the free market.

Equally predictably, though, was something else important: that this new ideology of freedom for the market, like all such revolutionary ideologies, would calcify into a formula that would in fact narrow the way we see the world, limit our imaginations, take away our ability to think in moral terms and reduce our capacity to conceive of something better. Creative destruction has become an intellectual straightjacket, like Marxism became in Eastern Europe. And this calcification is exactly what has happened here in Australia. It was carried through by the managerialists, the nomenklatura of the neoliberal age.

On the death of Robin Williams, a friend of mine, Emily, sent me a link to a YouTube clip of the best scene from Dead Poets Society. I am what you would call very pro-Williams – many people aren’t – and mainly because of this movie, which I saw with a girlfriend I was very fond of when it was released in 1989. At twenty-five and about to head off to Cambridge, I was still young enough to put myself in the shoes of the movie’s students; arriving there still infected by Peter Weir’s great story, in which the heroes are the romantic poets Whitman, Thoreau, Byron and Tennyson, I was determined not to spend all my time conducting some dry-as-dust academic research but to be the sort of student the Williams character – who was named (for us perhaps ironically) Mr Keating – would have wanted me to be. I would try to read everything – the classics, philosophy, literature, poetry – and breathe deeply the romance of the great university town. My PhD thesis would be a meal ticket and no more. If I didn’t fully succeed in this, I did at least try.

I’m now older than Mr Keating was in the film, and seeing the YouTube clip affected me in a different way. The teacher’s message still seemed subversive, but for different reasons. You may recall the scene. Mr Keating, who has just taken the job of English master at the exclusive male boarding school where he himself was once a student, asks his class to open their poetry textbook, written by one Dr J. Evans Pritchard, at the introduction. He tells one student, Neil, to read the opening paragraph. It says that the greatness of a poem can be determined in a relatively simple way, by gauging first how artfully the objective of the poem has been rendered (through the use of meter, rhyme and figures of speech) and then how important that objective is. And the simplest way to do this is to plot these qualities on a graph, with the poem’s artistic perfection (‘P’) plotted horizontally and its importance (‘I’) plotted vertically: ‘Calculating the total area of the poem yields the measure of its greatness.’ As Neil is reading this, Mr Keating draws such a graph on the blackboard, and next to it the formula ‘P × I = G’. He then turns to the class and says, ‘Excrement!’ before instructing his pupils to take Dr J. Evans Pritchard’s introductory chapter in their hands and ‘Rip it out!’

In 1989 the culture wars were just beginning, and this scene became one of its early battles. It fitted the template perfectly: Keating’s instruction to his class to rip out the text as a metaphor for the corrupting of the young, who were being incited by their irresponsible teachers to reject authority and take up a romantic variant of nihilism. Writing in 1990, the Australian sociologist John Carroll – whose work I admire, even though I suspect our political views might be diametrically opposed – shrewdly observed in an essay in Robert Manne’s Quadrant that although Dead Poets Society is set in 1959, it is ‘the most persuasive presentation of 1960s ideology there has ever been’. To Carroll, the 1960s, far from being unique, was a ritual playing out of the sort of romantic revolt that periodically convulses the West ‘every time the middle-class order, stipulated on family, vocation, duty and civil society, swings into its own decadence ruled by snobbery and greed’, the French Revolution and the Romantic movement being the most recent cases. From this perspective, Carroll continues, Dead Poets Society ‘is evidence that a new bout of profane materialism has indeed emerged in the 1980s’.

I think Carroll is on to something important, although his political target is the wrong one. To Carroll, ripping out the introduction to the poetry textbook, with its reassuring sense of order triumphing over romantic rebellion, was an act of mindless, anti-intellectual destruction. But to me, removing its philistine formulas seems the first step towards understanding poetry’s true meaning, and by extension the true meaning of any intellectual endeavour. In the field of public policy, if human feeling cannot trump mathematical calculation, we are in danger of becoming a mere economy rather than a society, digits on some economist’s spreadsheet rather than human beings living in actual communities.

Exhibit one for this position also came to me from Emily. Recently, attending a policy seminar put on by one of Australia’s better-funded think tanks, she was shown a PowerPoint graph titled ‘Figure A.1: Framework for prioritising economic reform’. In the same way Dr J. Evans Pritchard asks students to plot the greatness of Byron’s odes and Shakespeare’s sonnets on a graph, the think-tank asks us to determine the greatness of policy ideas two-dimensionally. On the vertical axis, one plots the estimated additional gross domestic product in the year 2022 created by any proposed reform. And on the horizontal, one plots the degree of confidence we have that the government can intervene successfully to achieve the expected gains. In shorthand, we might write something like: Expected GDP × Confidence of Success = A Better World, or GDP × C = B.

In the spirit of Mr Keating, we might say, for instance, that a reform like the Rudd/Gillard mining tax might score high on the vertical but low on the horizontal, and therefore is not worth contemplating. But a tax reform to reward savings by superannuants might score high both horizontally and vertically, yielding a massive total area and therefore revealing the reform to be truly great (even if also highly regressive). Also following Mr Keating, we might respond with a single word: ‘Excrement.’

The most worrying thing about this graph is that it actually does represent how many of our policymakers think and talk. It’s a sort of Zen representation of the policy world: on the one axis GDP, on the other political calculation. But where are the people? Isn’t reform supposed to be about them? Their absence explains all you need to know. If the little people won’t accept economic reform, it’s because when they hear policymakers argue for reform using reasoning like this, they know their interests don’t count. They are right to reject it.

It’s easy, especially for those on the Left, to blame neoliberalism. The people may very well be rejecting neoliberal economic reform, but the issue is actually a broader one that is shared by all political parties in Australia: the democratic inadequacy of managerialism. Economic reform may have started out as a political philosophy of freedom in the courts of Thatcher and Reagan, but it has hardened into a process formulated by Australia’s managerial class across all parties, and led intellectually by the theorists who inspire the great management consultancy firms.

Twenty years of being up-close to policymakers has convinced me that many have been wholly captured by the concerns and methodologies of the management consulting industry. McKinsey, Bain, Boston and so on have become the training grounds for the new policy elite of economists and other assorted ‘wonks’, who, wielding their favoured weapons of the spreadsheet and the PowerPoint deck, now inhabit the ministerial offices, policy units, departmental policy taskforces, think-tanks, industry associations and lobby groups that together determine what goes before parliament in the budget and in the most important social legislation.

The Productivity Commission functions as the Great Sanhedrin at the head of this new totalising economic reform religion. Its priorities are only those that can be represented by the use of data, and its idol is that elusive and occasionally nonsensical construct ‘productivity’. And the language in which its priorities and schemes are expressed is abstract, symbolic, often indecipherable and invariably devoid of the one quality that separates people from computer processors: human feeling. As in Dead Poets Society, there is no room in its reasoning for the poetry of human feelings, just maths.

It’s hardly an exaggeration to say that productivity has become the guiding principle of government in Australia today. Of the three Ps emphasised by the Intergenerational Report (the nation’s premier long-term planning statement), productivity clearly outstrips participation and population in the centrality of its importance. This obsession – for that is what it is – was started by the Coalition, which set up the Productivity Commission in 1998, but has been advanced with some fervour by Labor, most noticeably the Rudd government. Looking to head off criticisms that its reforms were too statist and anti-market, but at the same time not wanting to appear neoliberal, Labor policymakers got into the habit of defending their reforms not on moral or free-market grounds but on the grounds that they lifted national productivity.

Take education. When the Rudd government was first elected, education was arguably its most important policy area. Rudd promised us nothing less than an ‘Education Revolution’. Here is how the special Education Revolution statement in that government’s first budget opened: ‘Investing in education is crucial to driving productivity growth and to building a modern and prosperous economy for the future.’ As an opening statement, it was revealing indeed of the government’s real priority. Not education. Not the nobility of learning or the ideal of transmitting knowledge to the young. Not even the social-democratic idea of promoting equality. In fact, the true priority did not relate to anything inherent in the idea of education itself. No, it was all about productivity.

As a speechwriter employed by numerous federal departments between 2007 and 2013, I witnessed this unfold day by day. Almost every speech draft I worked on would come back with the same instructions. ‘Please,’ it would ask, ‘add in Krugman’s line about productivity.’ If you don’t know it, here it is (although having been commanded to write it so many times, I find it almost painful): ‘Productivity isn’t everything, but in the long run it is almost everything.’ Because it came from Krugman, a Nobel Prize winner and a grand man of the Left, the sentence had been elevated to the status of an unquestionable maxim, like ‘what goes up must come down’. But question it for yourself. ‘Productivity is almost everything?’ Being thus qualified – ‘almost’ – it sounds so reasonable, doesn’t it? I say no, on two counts.

The first is that the concept itself is largely a definitional nightmare and, ultimately, a statistical nonsense. It seems simple enough at first. The most commonly used productivity measure, ‘multifactor productivity’, measures the efficiency with which an economy converts inputs (given amounts of labour and capital) into outputs (goods and services). But it’s not actually that simple. For a start, determining the level of productivity at any one time relies on estimates of inputs and outputs whose accuracy is often highly uncertain. Then there is the problem of determining what causes productivity to go up or down. Are rises in productivity produced mainly by technological advances, as the Left prefers to think, or by microeconomic reform which sweeps away inefficiencies and squeezes more from the workforce, as the Right argues? No one can say – it’s purely a matter of your political point of view.

Then there are the paradoxes produced by the fact that productivity is a ratio involving continually changing variables. So, for instance, productivity can fall when investment in new plant and equipment increases (as it did during the mining boom, when our economic growth was the envy of the world), and it can fall when higher numbers of people are employed to produce more things (as it did during the great boom years of the 1960s). When unemployment increases, so can productivity if output remains stable or goes up. And when employment increases, productivity can go down unless output increases by more. It’s easy to see, therefore, how productivity can trump full employment as a national objective, even though the latter has greater moral worth and popular support.

Productivity can also fall when we regulate for a cleaner environment and produce boutique ‘artisanal’ products of higher quality that people want to buy (like hand-crafted beer); conversely, it can rise when we pollute our air and drink tasteless generic lager. As I have mentioned, because productivity is essentially a ratio, these sorts of paradoxes are to be expected, but this can lead to absurd situations – including the ultimate absurdity whereby our economy can produce less with a much higher rate of unemployment and still see productivity go up.

So it’s possible for a nation to be poorer and more productive at the same time. It shouldn’t come as any surprise, therefore, that Australia has managed to come out of thirty years of economic reform with higher productivity but still have places like Doveton, where unemployment is through the roof and many people are unable to produce anything at all. It wouldn’t surprise me if the productivity of the Doveton economy has gone up even as its neighbourhoods lie in ruins – in fact, it would make perfect sense. The fact is that productivity has limited use as a guide to what we should do as a nation because it is devoid of all moral content.

Given all this, it’s no wonder that even the Productivity Commission itself can’t agree on exactly how the concept should be measured – and if it can’t be certain, how can we? Certainly the general idea of economic efficiency has its logical attractions, but to propose widespread economic change solely on the basis of a concept as impossible to define and measure as productivity is the height of insanity.

The second count against productivity is that there are so many priorities of government – even so many economic priorities of government – that, far from being ‘everything’ or ‘almost everything’, productivity is, arguably, almost nothing. Let’s set aside the thousands of legal, administrative and technical things we expect governments to do in our name and consider only the numerous economic ones. We expect governments to raise revenue and manage the nation’s finances responsibly; to raise loans in order to finance investment, and to pay them back; to ensure that our schools and hospitals and other services are well funded; to stop bridges from collapsing, roads from developing pot holes and ports from rotting into the waves; to reduce the extremes of poverty and wealth through progressive taxation and a sound welfare system; to keep an eye on the balance of trade and stop it from ballooning in either direction; to prevent recessions; to keep interest rates at optimal levels; to keep inflation in check; to keep unemployment down; to stop the currency from getting too high or too low; and so forth. And yet so many of our economists think that everything must come second to continuing economic reform, as measured by the statistical phantom of productivity increase. It all reminds you of a cricket coach so lost in the data spewing out of his computer that he forgets that the idea is to win the game by scoring more runs than the other team.

One might argue that, in the pursuit of rising productivity, we sometimes stuff everything else up; numerous highly productive American cities with competitive business taxes and low minimum wages but bankrupt budgets, crumbling infrastructure and mass poverty can attest to that. Does this mean that raising productivity isn’t an important goal of government policy? Of course not. Efficiency has its place. Within selected government departments there could usefully be units working on strategies to make our nation more productive in various ways, but even within the Department of Treasury this should be a boutique task in comparison with the core jobs of managing the nation’s finances, creating jobs, fighting inflation and so forth. To judge everything else – fiscal policy, employment policy, living standards and social equality – according to what it means for productivity is folly. And for a party like the ALP to reduce its social-democratic quest to the morally and emotionally empty goal of raising productivity is the slow road to political suicide. People will follow Labor to the barricades in defence of the ideal of equality, but not for the productivity ratio.

There is no surer sign of the weakness of this managerialist approach to politics than that it has already hardened into a template. Examine almost any major policy idea these days – it might be designed to improve the performance of early childhood education, schools, universities, hospitals, rail transport, freight delivery or a dozen other things – and you will find a similar formula. Announce a national goal of achieving universal access to a certain minimum standard; set new performance targets; establish a framework against which to measure service standards; define the sort of data that would be useful to achieving this; introduce a data-gathering process; publish the data on a public website to put pressure on the service deliverers and create a market with perfect information; link this data, perhaps in the form of statistically modified league tables, to new pools of quality-assurance funding to correct failure; and, finally, set up peer-to-peer information sharing among the relevant professions to drive continuous learning.

This sort of thing, bought off the shelf from the large management consulting firms, seldom works. The data may get collected and published, eventually, but the necessary funding to make it all work and achieve the promised results never seems to appear. The Gonski school reforms are the greatest and saddest example of this, but far from the only ones. It’s managerial fantasy by formula, and only serves to stop politicians from thinking about what they should really be doing.

If you watch our politicians talk about reform policies like these, you seldom hear simple statements of common logic, belief, ideology, philosophy, morality or even emotion. All you hear is them flipping over in their minds the PowerPoint slides the consulting firms have devised using the logic, symbols and priorities of managerialism. The following fictional exchange would be typical:

INTERVIEWER: Minister, your policy isn’t working, is it?

MINISTER: That’s not correct. The goals have been set. Our Quality Standards Framework is in place. Crucial data has been gathered and is about to be published …

INTERVIEWER: But you’ve just announced that early targets have not been met – in fact results are going backwards. Your flagship funding program has been radically scaled back, promised training programs to build the new workforce have not eventuated …

MINISTER: That’s because the states and territories won’t cooperate …

You know the rest. Devising policy like this makes perfect sense to the managerialists in charge of our reform processes, but the people can see through it. And that’s why they are switching off in large numbers and seeking answers beyond the major parties.

Let’s think about what the managerialists have done to our language. This is an easy target, admittedly; lampooning managerialist sludge has itself descended into cliché, and I won’t do it here. It suffices to say that when policymakers talk about ‘inputs’, ‘interventions’ and ‘outcomes’, and especially about ‘productivity’, they’re not talking about real changes to the way we live. They’re talking about the symbols, abstractions and data they use to measure and represent the results of these changes. It’s a new language that is altogether different from the one ordinary people speak: words become numbers, verbs become processes, poetry becomes two-dimensional and prose becomes PowerPoint. It’s dull and alienating, obviously, but it does more than simply damage a government’s ability to communicate with the people (which in a democracy is serious enough); it also stops a government from having any true purpose at all.

Recently, nearing the end of an election campaign, I heard a party leader answer a question about what sort of government there would be should he win by saying it would be ‘a government focused on outcomes’. To any political leader, this sort of thing makes a rough sense, being shorthand for ‘we won’t be ideological or extreme but moderate, sensible and middle-of-the-road, and we will keep our promises’, or some other variety of blandness. But to the rest of us it is meaningless. In this case it was proof that the prospective new government’s priorities would be little more than those the management consultants could redefine, measure and tick off. Hospital waiting lists down – tick. Suburban train delays down – tick. Spending on school maintenance up – tick. And so forth, all while horror stories about postponed operations, late trains and demountable classrooms continue.

Dependent on their policy advisers, such politicians are like the prisoners chained to the wall of Plato’s metaphorical cave: they see and hear only abstract representations and echoes of political, economic and social reality. From the perspective of the policymakers – who have never left their caves, never spent much time in places like Doveton and therefore have never seen what effect their ideas have on the lives of actual people and communities – their formulas and ideas are unquestionable, the height of wisdom itself, and opposing them seems completely irrational. If we just get rid of the minimum wage and penalty rates to make workplaces more flexible (or put a ‘price signal’ on visiting a doctor and extend the GST to cover food, or let the market determine the level of university fees, or test every school student and put the results on a website, or get rid of subsidies to manufacturing and buy our vehicles and submarines and processed food from other countries, or remove the restrictions on the importation of foreign labour), then we will attain rising levels of economic productivity, win the praise of Paul Kelly, be compared to Paul Keating, have a graph that rates high on both the vertical and the horizontal axes simultaneously, and be considered truly great.

There is only one way to proceed: we must heed Robin Williams’ call, take the ‘Framework for prioritising economic reform’ and rip it out.

To understand what’s really going on in our economy and our society, we need a better language than the one on offer from the managerialists, one that tells us the truth but hasn’t had the important elements of human feeling sucked out of it. It wouldn’t hurt occasionally to listen to artists.

In literature, the past is usually one great eternal summer. To George Orwell, writing between his mid-thirties to mid-forties (roughly 1939 to 1949), childhood represented not just carefree youth but a past that he was certain was superior to the present. Yes, it included coal miners coughing their lungs up in rain-swept northern villages, men doffing their caps in the presence of the landlord or the boss, and the thin red line protecting the opium monopoly in some far-flung colony. But the countryside had not yet been overrun by suburbia – Orwell’s detested ‘villa-civilisation’ – with its motorways and faux Tudor pubs. Sturdy carthorses grazed in open fields; dace still swam in unpolluted streams and ponds; beer still tasted like beer; the Great War hadn’t killed a million Englishmen; the Great Depression hadn’t reduced the working class to starving beggars; totalitarianism, with its propaganda and surveillance, hadn’t been thought of; and the Luftwaffe hadn’t turned London into a rubble heap. The things we now consider unquestionable benefits of scientific and technical progress – which prolong our lives, keep us warm in winter and cool in summer, and allow us to travel the world for a few thousand dollars – had not yet arrived, meaning that, to the majority, the idea of ‘progress’ was largely theoretical, a swindle, a bringer of mass destruction. Looked at in this way, Orwell had a point. He called this memory of the past ‘the Golden Country’, and it is central to the meaning of his best novels, Coming Up for Air (1939), Animal Farm (1946) and Nineteen Eighty-Four (1949).

Orwell, of course, isn’t the only writer to notice that progress comes with a cost, and that the march of time doesn’t necessarily make life better. Two of my favourite novels, L. P. Hartley’s The Go-Between and J. L. Carr’s A Month in the Country, also deal with this idea: men returning to the places of their youth, where the formative events of their lives took place. Why is the superiority of the past such a recurrent theme of literature? It’s a form of pastoral, of course, and thus nostalgia, not meant to be taken literally. But does the appeal of the past lie only in the fact that the past was when we were younger and more carefree, fitter and stronger, without mortgages to pay and superannuation balances to worry about, and had possibly fallen in love for the first time? Maybe. But could it be that, in some essential ways, the past was better? Could it be that, as Shelley once observed, it is actually great artists (and not, we might add, economists and change-management theorists) who are most sensitive to the transformations going on around us, who best understand what those changes have in store and whether they really do add up to something superior, and who are best placed to tell us how to proceed?

If this is so, then pastoral has something to tell us, because in all pastoral, as in the paintings of Poussin, beneath the drooping vines and beyond the prancing minstrels, there lies a truth of sorts: that life, in many of its important and easily definable aspects, actually was better once. When, in their dismissive way, economists tell us to forget the past and embrace a risky new world, we should not necessarily acquiesce, at least not fully or without a fight. Ordinary people – and by this I don’t mean ‘change agents’ – understand this, and this is why change is often resisted, and why opposition to change will always find a listening ear.

Asked to come up with a theme for a major lecture to be given by one of my speechwriting clients, the then Labor treasurer, Wayne Swan, I encouraged him to talk about something he knew and loved: the poet of blue-collar America, Bruce Springsteen. The speech made the point that artistic sensibility is much like the finely sprung workings of a seismometer, sensing motions deep beneath the surface of society, the first rumblings of change. Economists can do that, admittedly, with their repetitive predictions about how the global free market is coming to destroy everything, and that the best we can do is hasten its triumph by shutting our mouths and surrendering – freedom being nothing more to them than the recognition of necessity. But their chants are less like warnings than commands. This is because economics, unlike art, lacks a serious moral dimension. Data, after all, doesn’t ‘do’ morality, being incapable of telling us what economic and social change means for the quality of our lives, beyond how much GDP it might, theoretically, create for some of us. If, for example, the data tells us that greater inequality will produce higher GDP, then many managerialists, including some normally quite left-wing ones, will accept it as necessary for the national good. I wouldn’t. Springsteen’s songs, by contrast, amplified echoes of the decline of blue-collar affluence, quality of life and happiness in America that Springsteen had heard in his New Jersey home town, the sort of place the dismal scientists ignorantly or wilfully never see, and whose decline they can only conceive as a good thing.

The problem this analysis faces is our inability to recall what this quite recent past, this life before the economic transformations of the mid-1980s, was like. It may have sounded like a Bruce Springsteen rock ballad from Darkness on the Edge of Town, or maybe some song written for Cold Chisel by Don Walker – ‘Flame Trees’, perhaps. But what did it look like? It is too easy for the boosters of economic reform to dismiss this past as always overcast and raining, brown-walled and acrylic-carpeted, greasy-haired, cigarette-smoking, pallid and poor. If you look hard, though, you can still catch glimpses of how this past moved and worked.

I have before me a magazine called International Auge of Mexico. It’s a massive, magnificent, glossy representation of the world before the internet. Auge translates roughly as ‘peak’ or ‘apogee’, and every edition was a separate feature on countries or places then considered on the rise. This one is a special edition from April 1973 all about Australia, called Australia the Awakening Giant. Going by what the creative destroyers tell us, we should expect to see a portrait of a drab, dreary, bogan country, a place in decline as it is slowly strangled by corporatism, tottering on its wobbly forelegs like an obese heifer, waiting for the Yom Kippur War, the Arab oil embargo and Vietnam-linked inflation to finish it off. Instead, Australia is portrayed as full of life and potential. Australia was once cut off and largely unknown, the magazine says. ‘But today, with rapid communication and transportation, Australia is neither unknown nor isolated, and has taken its proper place on the map as one of the most rapidly growing and progressive countries in the world.’

Off every page of the magazine leap bright pictures of thrusting skylines of modernist architecture, rapid transit systems, high-tech communications, cultural sophistication, leading-edge manufacturing industries with new factories producing 450,000 shiny new cars a year, radio-controlled pilotless aircraft and bulk container ships, all interposed with the more traditional representations of agriculture, the outback, Indigenous history and Australians at play on the beach. ‘Australia’s industrialisation,’ it says, ‘has come a long way in a short time; all the ingredients – resources, expertise, sound economy, population growth and stable government – are there for it to continue its dramatic story of development. So this is Australia,’ it continues, ‘a land quite unlike any other. It is a country well worth getting to know, not only because of its intrinsic fascination but also because it deserves to be recognised as a nation with a tremendous future.’

All up, Australia in April 1973 looks a pretty damn nice place to live. No wonder Australians over fifty remember it that way. To put it mildly, this is not the picture the economic reformers want us to see, because it contradicts their convenient story that, before they came along to rescue it, the Australian economy was lying face-down in the gutter.

The Hollywood epic The Deer Hunter, directed by Michael Cimino, is another piece of evidence, though far less glossy. Much criticised despite winning five Oscars, most of the movie, especially its orientalist representations of Asia, doesn’t stand up today. However, the opening act, set around work, marriage, drinking and deer hunting in a Pittsburgh steel town, supposedly in 1967 but really in 1978, is like a time capsule of a way of life that barely exists today, except in folk memory and the grooves of Springsteen’s early LPs. What is of interest is the representation of a world in which the working class, through its unions, its culture and the economic power that resided in its muscles, was still master of its own little world. Its culture is rough, male, lubricated by beer and bourbon chasers, and punctuated by periodic fistfights – so it is best not totally idealised. But because we now know what came after – deindustriali-sation and economic devastation – we can see that something significant was lost with its passing. What was it?

This story of loss is told by the New Yorker writer George Packer in his book The Unwinding: An Inner History of the New America. As Packer tells it, in the wake of the Reagan revolution, de-industrialisation began to spread like a cancer along the highways of old blue-collar America, bringing with it unemployment, drugs and rising crime rates. In Ohio the steel plants downsized and then shut – or, rather, moved to Mexico, where the labour was cheaper (just like Heinz moved from Dandenong to New Zealand). Workers over fifty took their retirement and the younger ones left town; the owner-managed strip shops went under and were replaced by ugly, minimum-wage-paying low-cost chain stores like Wal-Mart, built on Springsteen’s dark edge of town; houses lay empty and then were vandalised and burnt; whole neighbourhoods were depopulated and became ghost towns; local taxes dried up, decimating municipal police forces and allowing gangs to get a stranglehold over the streets; schools went into decline and student grades fell, taking away any hope of upward social mobility; and crack cocaine finally dissolved what was left, the way gin did in Hogarth’s eighteenth-century England. Our picture of Doveton is starting to look familiar.

As Packer puts it:

Over the years, America had become more like Wal-Mart. It had gotten cheap. Prices were lower, and wages were lower. There were fewer union factory jobs, and more part-time jobs as store greeters. The small towns where Mr. Sam [Wal-Mart’s creator, Sam Walton] had seen his opportunity were getting poorer, which meant that consumers there depended more and more on everyday low prices, and made every last purchase at Wal-Mart, and maybe had to work there, too.

So ask yourself: if you were a blue-collar American, where and when would you have preferred to live: Michael Cimino’s Pennsylvania or George Packer’s Ohio? The world created by post-war planners and ruled over by industries and trade unions, or that created by modern market economists? And if you were a blue-collar Australian, in which Doveton would you want to live: the Doveton of then or the Doveton of now? We have improved on the past in many ways, and one could easily point to places in Australia where life is far better now, but not in Doveton and other murdered suburbs.

If, as L. P. Hartley wrote at the start of The Go-Between, ‘The past is a foreign country: they do things differently there’, then the past in Doveton was a different suburb. Its people were at the centre of things in a way they clearly are not now: they all had jobs. Their past was better than their present. But what of their future?