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1998 34: 215Journal of SociologyMark Beeson and Ann Firth

the 1980sNeoliberalism as a political rationality: Australian public policy since

  

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Neoliberalism as a politicalrationality: Australian publicpolicy since the 1980sMark Beesona and Ann Firthba Asia Research CentreMurdoch University

b Social and Behavioural Sciences

University of Queensland

Abstract Since the 1980s a remarkable transformation has occurred in the rationale that informs

public policy in Australia. This transformation reflects a fundamental change in the waynational economies and populations are conceived by policy-makers, and has led tothe emergence of new strategies of governance as a consequence. We argue that this

change of direction in Australian public policy may be best thought of as a specificneoliberal ’political rationality’. The first section of the paper outlines changes in con-ceptions of the economy and subjectivity which are associated with neoliberalism asa political rationality. The second part of the paper examines the articulation and imple-mentation of neoliberalism in Australia over the last couple of decades.

IntroductionOver the course of the last 10 or 20 years, a remarkable transformation hasoccurred in the way national policy-makers attempt to manage economic activity.In the Anglo-American economies in particular, a noteworthy ’convergence’ hasoccurred about the best, or more accurately, the most feasible ways to influenceeconomic activity within national borders. As the ’interventionist’ policy tools ofthe Keynesian era appeared increasingly less equipped to deal with the economiccrises that emerged during the 1970s, policy-makers experimented with a rangeof ’supply side’ and monetarist approaches to economic management which wereinstrumental in undermining both the legitimacy and potential efficacy of ’biggovernment’. Such policy innovations ultimately led to the consolidation of a newand distinctive mode of governance. Although not simply an economic doctrine,’neoliberalism’ is a convenient shorthand for a range of ideas, practices andapproaches to the conduct of government that are associated with a normativepreference for small states and a reliance on market mechanisms to determineeconomic outcomes.

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In what follows we shall suggest that neoliberalism may best be thought of asrepresenting a distinctive ’political rationality’. The notion of a political rational-ity provides a way of focusing on certain widely accepted nostrums and theoreti-cal assumptions that currently inform policy-making, and provides a useful wayof understanding how a number of contemporary governments approach themanagement of economic security. It is a notion that may be employed to explaintransitions in governmental practice either within individual countries (Larner1997), or to distinguish broad approaches to governance across regions (Beesonand Jayasuriya 1998). We apply the concept of political rationalities to the

making of Australian public policy since the early 1980s. In short, we argue thatthe emergence of a neoliberal political rationality in Australia is a manifestationof new ways of thinking about national economies and their possible manage-ment ; ideas which have had a profound influence on Australian public policy.

In the first section of the paper we outline the characteristics of political ratio-nalities in general and the distinguishing features of a liberal political rationalityin particular. In the second section we examine conceptions of the economy andthe individual as objects of government in a neoliberal political rationality. Thefinal section of the paper uses the material from the first two sections to under-take an exploration of a number of aspects of Australian public policy. We arguethat the concept of political rationalities provides an important conceptual toolwith which to understand contemporary public policy. In short, we attempt toshow how public policy in Australia since the 1980s has been increasingly shapedby a neoliberal political rationality, which has itself been predicated upon a newand distinctive conception of the economy as an object of government.

Political rationalitiesPolitical rationalities are particular and historically specific instances of whatMichel Foucault calls ’governmental ity’. Foucault used the term ’governmentality’to refer to a particular way of thinking about government which emerged inWestern Europe in the 18th century and which has as its object the economicsecurity and prosperity of the state itself. Governmentality is distinguished fromearlier forms of rule, in which national wealth is measured by the size of territoryor the personal fortune of the sovereign, by the recognition that national economicwell-being is tied to the rational management of the national population. Foucault(1991: 102) defined governmentality as: ’the ensemble formed by the institutions,procedures, analyses, and reflections, the calculations and tactics that allow theexercise of this very specific albeit complex form of power, which has as its targetpopulation, as its principal form of knowledge political economy, and as itstechnical means, apparatuses of security’. Governmentality is contemporaneouswith the emergence of an exchange economy and is ’pre-eminently economic’ in thesense that it is geared ’to securing the conditions for optimum economic

performance’ (Burchell 1993: 273).The concept of governmentality has been developed in the subsequent research

of a number of English-speaking scholars who are engaged in a form of analysiswhich they designate ’history of the present’. In the work of these scholars the

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concept of political rationality links government at the level of the state with otherattempts ’to structure the field of possible action of others’ (Foucault 1982: 221),while avoiding the reduction of government to techniques of domination. In thisform of analysis, political rationalities structure the field of possible governmentaction and provide a common language for the conduct of policy debates. Theimportance of the concept of political rationalities in history of the presentanalysis is anchored in the assumption that ’thought itself’ plays a critical role inthe structure, contestation and evaluation of relations of power in modernsocieties (Barry et al. 1996: 2).

In stressing the relationship between thought and the exercise of power, historyof the present exponents are careful to distinguish political rationalities from

political philosophies and economic doctrines. According to Dean and Hindess(1998: 7) government is a complex activity, which cannot be viewed simply as theimplementation of any particular political or economic theory. The incorporationof economic doctrines or political philosophies into governmental practice is

always partial and necessitates connection with administrative techniques andforms of calculation which modify, if not transform, the theories and their objec-tives. Rather than the realisations of political or economic philosophies, politicalrationalities are more accurately viewed as amalgams of political expediency,policies, ’common sense’, responses to public opinion, economic doctrines andnotions of human rights (Rose and Miller 1992).

For Rose and Miller (1992: 178), political rationalities exhibit certain dis-cernible regularities. Firstly, political rationalities distinguish between differentforms of authority (political, religious, familial etc.) and specify the proper distri-bution of tasks between these authorities. They also specify the goals and princi-ples to which the activities of government should be directed. Secondly, politicalrationalities take their particular form in relation to the way in which the objectsof government are conceived. For example, different formulations of what consti-tutes an economy are associated with different notions about who can legitimatelyregulate it. Likewise, political rationalities specify particular subjectivities as

desirable or assumed. The third characteristic of political rationalities concernsthe way in which their distinctive use of language both translates reality intopolitical debate and elaborates programs and policies in a particular idiom.

Importantly for history of the present studies, political rationalities cannot bedivorced from the mechanisms or technologies through which thinking aboutgovernment is put into effect. According to Miller and Rose (1990: 8), ’if politicalrationalities render reality into the domain of thought ... technologies of govern-ment seek to translate thought into the domain of reality’. This insistence uponcombining ways of thinking with ways of acting is characteristic of the non-

totalising, contingent approach of history of the present. Typically, history of thepresent studies examine the articulation of political rationalities with technologiessuch as accounting, audit, architecture, schools, health and life insurance, self-esteem programs and sanitation. The association of political rationalities and gov-ernmental technologies in history of the present analysis draws attention to twofeatures of modern government. The first is the dispersed nature of government,evidenced in the diversity of authorities and sites, both state and non-state,

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through which political government is exercised. The second is the complex andoften mundane nature of modern rule. Government is understood as ’the multipleand delicate networks that connect the lives of individuals, groups and organisa-tions : to the objectives of authorities’ (Rose and Miller 1992: 176).A focus on technologies of government is central to Rose’s (1993: 290-2) elabo-

ration of liberalism as a political rationality. Rose isolates four characteristics ofliberalism as a practice of government. Firstly, liberalism is tied to knowledge ofhuman conduct developed within the social sciences. In order to know the generallaws and particular states of its objects, government becomes connected to data,theories, diagrams and techniques of calculation. Secondly, liberal strategies of ruleare tied to technologies whose purpose is to create self-governing individuals whoare able to provide for their own welfare through an alignment of personal desireswith the aims of governing authorities. Thirdly, liberalism maintains the autonomyof the family, private firm and individual by governing at a distance through thevehicle of expertise, particularly the professionals expertise of doctors, psychol-ogists, social workers and economists. Finally, Rose suggests, liberalism is charac-terised by a continual questioning of the activity of government, both in terms ofthe legitimacy of different authorities in relation to the objects of government andin an attempt to make government more efficient.

This concern with practical government and its relationship to available tech-nologies is one distinguishing feature of neoliberalism as a political rationality. Asecond is the rejection of the oppositions between state and civil society,government and market, public and private which, according to Rose and Miller(1992: 174), have structured previous analyses. They argue that such oppositionsdo not adequately reflect the way that political power is ’exercised through a

profusion of shifting alliances between diverse authorities in projects to govern amultitude of facets of economic activity, social life and individual conduct’. In

particular they reject the opposition between government and individual freedomwhich is characteristic of liberalism as a political philosophy.

From the perspective of liberalism as a political rationality, individual freedomis an artefact of particular strategies and modes of regulation rather than theabsence of government intervention. As a consequence, in analyses which conceiveof liberalism as a political rationality there is a focus upon the ways in which a

variety of governing authorities, both state and non-state, seek to promote a formof life characterised by personal autonomy and rational choice. The emphasis is

upon the ways in which liberalism proposes to govern through the self-regulationof individuals who are at once the object and partner of those technologies ofgovernment through which political reason becomes practical (Burchell 1993). Ineffect, liberalism seeks to achieve an alignment between personal desires and theaims of governing authorities.

Economy and subjectivity in a neoliberal politicalrationalityIn order to examine the images of the economy and the individual in a neoliberalpolitical rationality we begin by outlining earlier conceptions of these objects of

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government and then chart their transformations. In early 19th century liberalismthe economy as an object of government is conceived of as a self-regulating andrelatively self-contained national system (Hindess 1998: 212). The notion of aself-regulating system separates economic activity from the sphere of govern-mental activity. The economy, thus conceived, is driven by the self-interest ofindividuals and exhibits a natural tendency to growth. The natural growth of theeconomy depends upon the existence of economic independence in those whowork for wages and economic freedom in the case of merchants, manufacturersand landowners. Where economic independence is compromised by the provisionof public assistance in the form of benefits and pensions the natural dynamic ofthe economy is adversely affected. The assumption that economic independenceand economic freedom are essential to the optimisation of national wealth is

associated with a conception of individuals as autonomous creatures driven by thedesire to better their own material circumstances and those of their families. Inclassical liberalism this characteristic is assumed to be a ’natural disposition’(Tucker 1755: 3) of human beings which, in the case of wage earners, has beendestroyed by policies based on the assumption that it is the role of governingauthorities to provide the population with either employment or subsistence. Thefocus of governmental policy in the liberal mode of government in the early 19thcentury is the restoration of the population to the natural state of economic inde-pendence via the abolition of the legal right to public assistance in order to max-imise the operation of the self-regulating system of wealth creation (Firth 1998).

The promotion of an image of the economy as a self-regulating system isassociated with the belief that the dynamism of self-interest is a more efficientmechanism for optimising national wealth than governmental initiatives,particularly those which rely upon a conception of the common good. Accordingto Hayek (1979: 162) in a complex economic order involving an extensivedivision of labour, ’it can no longer be the pursuit of perceived common ends butonly abstract rules of conduct’ that guarantee economic prosperity. Attempts tobuild patterns of social relationships derived from perceptions of the commongood using ’deliberately designed systems of rules’ are condemned by Hayekbecause they fail to recognise that the efficient operation of the economic systemis based upon the impersonal rules which emerge from the market process. Themost fundamental of these rules is that self-interest, in the form of the individualpursuit of financial gain, is the source of wealth creation. For Hayek (1979: 165),the efficiency of self-interest is the result of an evolutionary process in which’financial gain rather than the pursuit of a known common good became ... thecause of the increase in general wealth’. The issue of efficiency will be taken uplater in this section in relation to a transformation in the conception of the econo-my as an object of government.

Hindess (1998: 223) suggests that the perception of the economy as a self-

regulating system is associated with the belief that if properly managed it can beexpected to provide resources for both the state and society. In particular, eco-nomic activity provides the state with the means to defend national territory,enforce its laws, and provide society with the resources necessary for the educa-tion and maintenance of desirable norms of health and well-being in the national

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population. In other words, good government is synonymous with securing theconditions for economic growth, which may then be employed in pursuit of otherpolitical and social ends.

The assumption that national economies are relatively self-contained systemsarises from the importance of a national population in thinking about wealthcreation. In early 19th century liberal governance the source of national prosperitywas the productivity, education and health of the nation’s population. Thepotential importance of the national population in wealth creation was reinforcedby the increasing attention paid to the role of consumption, including the consump-tion of wage earners, in maintaining prosperity through the creation of domesticdemand (Smith 1981: 435). Since the wage earning population was observed to befixed within national boundaries, national economies were assumed to be relativelyself-contained. The perceived immobility of capital exemplified in the writing ofRicardo (1971: 155) reinforced this view. Such ideas have been overturned bytransformations in the organisation of economic activity.

Economic management in a global economyThe conception of the national economy as a self-regulating and self-containedsystem is currently being displaced by the image of a ’global’ economy.Globalisation is a notoriously contested concept (Perraton et al. 1997), a detaileddiscussion of which is beyond the scope of this paper. However, it is important torecognise that while profound and tangible changes in the organisation ofeconomic activity may have occurred, many of the policy responses to this phe-nomenon have been shaped by its discursive impact. In other words, as Cerny(1996: 620) puts it, ’the spread of the discourse [of globalisation] itself alters thea priori ideas and perceptions which people have of the empirical phenomenawhich they encounter; in so doing, it engenders strategies and tactics which in turnmay restructure the game itself’. At one level, therefore, the displacement of theimage and idea of a discrete national economy as a self-regulating and relativelyself-contained system has undermined a reliance on the sorts of Keynesian policytools that characterised the ’golden age’ of post-war capitalist development. Atanother level, however, states have themselves been complicit in undercutting theirown autonomy and sovereignty by entrenching policies-deregulation, liberalisa-tion and market-centred reforms-that have become associated with attempts tomanage an increasingly global economy. The changes in the structure of theinternational economy that such political initiatives engender, particularly thegrowing influence and scale of unregulated financial markets, have underminednational economic autonomy in general and monetary and fiscal policy autonomyin particular (Andrews 1994).

Consequent upon these profound changes, the economic ideas and politicalpractices that characterised an earlier Keynesian era have come to appear inade-quate and inappropriate to later generations of policy-makers. The emergence ofa neoliberal political rationality, therefore, has been associated with a transforma-tion in the image of the economy as an object of government from one seen as

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essentially national and self-contained to one that is seemingly transnationalisedand locked in relentless international competition. Successful competition is nowperceived to depend upon the promotion of economic efficiency, not only in theproduction of goods and services, but in all areas of national life. Economic

security, in other words, requires the prioritising of competition and economicefficiency in areas as diverse as welfare, health or education, because policy-makers have come to feel that they may impact upon the overall economic perfor-mance of the nation as a whole. Thus, the priority accorded to economic efficien-cy in order to create or maintain international competitiveness initiates a newrelationship between economy, state and society in which their distinctiveidentities as separate spheres of national life are increasingly blurred (Hindess1998: 212).

As we have seen, in rationalities of government which conceive of the economyas a self-regulating system with a natural tendency to growth, economic activityprovides the resources for education, health services and welfare. In a neoliberalpolitical rationality, society and the state must be transformed to make themcontribute to the drive for economic efficiency. The result is increasing pressure tomake relationships based on bureaucratic norms or ideas of the common goodmeet the standards of efficiency that are believed to characterise the impersonalforces of supply and demand. The image of the market thus becomes the ideal towhich schooling, education, health services, welfare and the agencies of the statewhich provide these services are encouraged to conform in order to ensure

national economic survival.The image of market-like relations characterised by a high degree of economic

efficiency provides the source for the distinctive idiom in which neoliberal policiesin areas as diverse as education, health, welfare and the reform of the publicservice have been articulated. Central to this idiom is the concept of methodolog-ical individualism, a notion that assumes that statements about groups or largersocial collectivities are ultimately reducible to statements about the individualsthat make up those groups. A focus on individuals, whether they are citizens orfirms, has important theoretical and policy implications. In keeping with theprivileging of the individual, new strategies and objects of government haveemerged in countries like Britain, Australia and New Zealand. Increasingly, gov-ernments and businesses are attempting to promote and inculcate specific ’enter-prising’ values in the population at large (Rose 1992). Congruent with a beliefthat market mechanisms are the most efficacious determinants of economic out-

comes, individuals are being encouraged to become more productive and efficientelements in overarching economic processes.

Governments around the world-but especially in the Anglo-Americannations-have, therefore, been attempting to develop new strategies of governancethat are designed to promote national economic security. This has involved a

complex array of techniques and a wider array of agencies than simply govern-ments, per se. In Australia the attempt to enhance economic competitiveness andprosperity by reconstituting not only national institutions but also the populationitself has gone further than most. As such, it merits closer examination.

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Neoliberal reform in AustraliaAlthough we have been at pains to emphasise that political rationalities in generaland neoliberalism in particular are complex amalgams of economic ideas, politicalpractices and the influence of a number of broader social forces, the effects ofwhich are diffuse and not restricted to explicitly governmental interventions, inwhat follows we shall devote most of our attention to public policy and theactivities of successive governments since 1983. We shall focus on the AustralianLabor Party (ALP) in particular, as it pioneered many of the policies and strategiesthat have become the bilaterally supported conventional wisdom. This approachseems justified for a number of reasons. First, it is simply not possible to coverevery aspect of the transition to and operation of a neoliberal political rationalityin Australia. Second, reservations about the continuing autonomy of ’the state’notwithstanding, national governments continue to exert a powerful influence onthe conduct of social and economic activity within national borders. Third, theALP was not simply in power during the 1980s when broadly conceived neo-liberal policies became internationally very influential, but it also enthusiasticallyadvocated and implemented such policies in Australia. This section will attemptto show how an emergent neoliberal political rationality came to influence a rangeof government policies, and how market mechanisms and competitive pressurescame to be embedded in many of Australia’s most important social institutions.Although this section focuses primarily upon the emergence of neoliberalism as apolitical rationality during Labor’s term of office, it should be noted that the samepolitical rationality is evident in the assumptions about the economy and

population that underpin the policies of the Liberal-National Party Coalition gov-ernment elected in 1996.

The transformation of economic policyIf one incident captured the transition from a conception of the economy as a self-regulating and relatively self-contained national system to the idea that Australiawas inescapably part of an emergent supra-national order it was (then) TreasurerPaul Keating’s suggestion in 1986 that Australia was in danger of becoming a’banana republic’. As Paul Kelly (1992: 197) observes, Keating’s statement cameto be seen as a warning that the key institutional structures of Australia’s uniquehistoric compromise, particularly arbitration, protection and a reliance on com-modity exports-structures which flowed from the conception of the economy asa national system-needed to be revitalised or swept aside. In short, policy neededto be reformed to accommodate the belief that economic security depended uponsecuring a share of the prosperity generated by international restructuring. In

particular, Australian public policy needed to respond to the challenge of inte-grating ’the Australian economy’ into a trans-national economic system. The

exposure of Australia’s economic space to international competitive pressureswhich such a move entailed gave additional impetus to new strategies of govern-ment which sought to act upon individuals. The imperative of international struc-tural adjustment became a discursive device with which to legitimate domestic

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reforms premised upon the necessity of inculcating more competitive, economi-cally efficient behaviour in the Australian workforce.A key policy initiative in this regard was the ’Garnaut Report’ (Garnaut 1989).

The Report represents something of a watershed in Australian policy-makers’moves toward a new political rationality. Significantly, it represented a major shiftin thinking about the way the ’Australian economy’ was integrated into an

increasingly inter-connected international system, especially the need for domesticreform to respond to and be driven by international competitive forces. TheGarnaut Report, and a number of similar volumes from government advisorybodies like the Industry Commission and the East Asia Analytical Unit, wereinstrumental in entrenching a new understanding of the way economies work, theconstraints placed on national policy-makers, and the benefits of using marketforces to achieve particular social and economic ends.

The extent to which neoliberalism as a political rationality has established itselfas the dominant paradigm for thinking about the management of the economy andpopulation is demonstrated by the Liberal-National Party Coalition government’senthusiastic embrace of the Garnaut-inspired reforms. the Coalition’s seminalWhite Paper on foreign and trade policy advocated a ’whole-of-nation approach’in which policy takes account of ’the linkages between the domestic and inter-national threads of policy’ (Commonwealth of Australia 1997: 73). It is an

approach that builds on ALP reforms and attempts to extend the notion of nationalsecurity to one which accommodates the imperatives of ’globalisation’. It is impor-tant to recognise the continuity in logic that informs such policies. For all theCoalition’s rhetorical repudiation of the ALP’s ’big picture’ initiatives, there is aclear recognition of the transformed nature of the international economic and, forthat matter, political system in which policy must be constructed. The Coalition,like successive Australian governments before it, has attempted to reconcile thetension between the national and international spheres-and the possible erosionof autonomy and sovereignty it implies-by attempting to make a virtue of neces-sity and utilise market forces and a range .of more subtle social interventions tobring about change in the domestic sphere.

The attempt to extend the reach of competitive market pressures throughout theeconomy culminated in the publication of the ’Hilmer Report’ (Hilmer 1993).Chaired by the Director of the Australian Graduate School of Management, theReport definitively sanctioned ’competition policy’ as the principal rationale under-pinning economic reform in Australia and as the centrepiece of Australian publicpolicy. The Report argued that Australia had no choice but to improve its ’inter-national competitiveness’ and become ’more innovative and more flexible’ (Hilmer1993: 1). While the focus of the Hilmer Report was principally ’firms and institu-tions’, it represented a more deep-seated transformation of public policy inAustralia that has been echoed in other influential reports and policy initiatives.

One of the central assumptions underpinning the Hilmer Report is that a keyrequirement for the efficient functioning of a modern market economy is the

development of appropriate technologies through which to engender the qualitiesof enterprise and self-reliance deemed necessary for national economic competi-

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tiveness. In short, public policy came to be seen in terms of protecting the’competitive process per se’ (Hilmer 1993: 26). Competition, in other words, is tobe the central mechanism with which to realign economy and society. Hilmerrecommends that a National Competition Council (NCC) be established to over-see the imposition of competitive mechanisms, drawing on ’independent andexpert policy advice’. The Council ’would be directed to take a pragmatic,business-like approach’ to the reform process (Hilmer 1993: 319, emphasis inoriginal), the intention being to instigate economy-wide change with competitivemarket pressures as the central catalyst of change.

What is of interest here is the way in which the Hilmer Report reflects andattempts to operationalise a neoliberal political rationality. Its assumption that allareas of national life must be harnessed to the pursuit of economic efficiencyresonates with the Garnaut Report and the Business Council of Australia’s (BCA)policy document Australia 2010, which argues that ’Australia’s’ economic prob-lems require effective government leadership and getting the ’fundamentals’ right.’The fundamentals’, the BCA (1993: 7) suggests, are the ’attitudes and practicesthat are a prerequisite to establishing a competitive economic climate in whichenterprises and individuals operate in an open environment with incentive tocompete, to innovate and to manage the risks they face’. In seeking to institution-alise these fundamentals, Hilmer (1993: 332) recommends that the NCC ’providepublic education on the conduct, rules, and the role of competition in the commu-nity’. This rationale and approach to policy implementation is emulated andextended in the ’Karpin Report’ (1995).

Extending the reform agendaThe Karpin Report is a comprehensive blueprint for promoting the agenda ofincreased international competitiveness, especially at the micro level. Indeed, theKarpin Report may be seen as a logical extension of Garnaut and Hilmer, attempt-ing to consolidate neoliberalism at the level of the individual. The Karpin Reportis a seminal example of the way in which public policy was increasingly directedtoward making health, education and the public service contribute to re-making’Australia’ as a globally competitive economic space. The underlying rationale isto break down the boundaries between state, society and economy in pursuit ofgreater integration and overall efficiency. Crucially, Karpin outlines strategies topromote the greater utilisation of individual effort.

Karpin’s solution to Australia’s perceived economic problems is, in short, toinculcate ’enterprising’ attitudes and values amongst the population at large. Morespecifically, Australians, be they employees or managers, need to be enterprising ’inthe broadest sense of the word, not only in business but also in social communityorganisations and in terms o f their own personal lives in a changing world’ (Karpin1995: 77, emphasis added). In keeping with the dominant neoliberal politicalrationality Karpin (1995: lxi) is unequivocally of the view that markets are the bestmechanisms to ’achieve optimum allocation of resources and quality [sic] out-comes’. This may be most effectively achieved by encouraging the disseminationand inculcation of enterprising values through the education process, so that the

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’culture of enterprise would be threaded through the entire socialisation process’(Karpin 1995: 100). It was an idea that was endorsed by the former Labor govern-ment and foreshadowed by the highly important Working Nation statement(Keating 1994).

Simply put, Labor sought to make the population itself a key part of its reformagenda by making Australia’s social institutions and individual citizens more

capable of responding to competitive pressures and market signals. The KarpinReport symbolised a new approach to governing developed under the ALP’sreformist and pragmatic leadership. During the 1980s, the Labor leadershipbecame increasingly technocratic, steeped in the discourse of managerialism, andimbued with the idea that economic policy is no longer ’ideological’, but a ques-tion of finding optimal, technically correct solutions to economic problems(Keating 1993a: 58). Australia’s population came to be seen as something to beworked upon so that it might play a more efficient and productive part in nationaleconomic development. In other words, informed by a new political rationalitythat was both cognisant of the apparent constraints on governmental autonomyyet still wanting to influence broad economic outcomes, public policy became,paradoxically enough, more comprehensive in its ambitions.

Significantly, a major justification for a more encompassing approach to theinculcation of a ’positive enterprise culture’ is the necessity of preparing the nationfor competition in the ’Asia-Pacific century’ (Karpin 1995: 106). The externalimperative with which Garnaut was most concerned is, therefore, also deployedas a justification for the development of ’enterprise education’ in schools, throughwhich individuals will be equipped with ’the necessary mindset and skills to recog-nise opportunity, manage risk and mobilise and manage resources. Generally, it

means developing the qualities which a person needs to be enterprising such as theability to tackle problems, take initiatives, persevere and be flexible’ (Karpin1995: 113).

Government policy, then, is concentrated upon those areas where it may exertthe greatest influence. Karpin provides the rationale for an extension and inten-sification of existing policy initiatives. The education system in particular will beharnessed to the task of creating a flexible, self-reliant, reflexive population thatwill be able to respond swiftly to the stimulus of market signals. In this regard,the Karpin Report provides the definitive blueprint for such a government with itsemergent, individually oriented strategies of domestic reform.

Implementing reformsBefore considering the sorts of reforms that have been inspired by policy documentslike the Karpin Report, it is important to re-emphasise what a departure theseinitiatives represent from previous policies and, equally importantly, from earlierconceptions of the relationship between the economy, state and society. Reportssuch as Garnaut, Hilmer and Karpin, which are informed by a neoliberal politicalrationality, reject the belief that the economy can provide the resources for state andsociety without adverse effects on its own propensity to grow. Consequently,previous levels of expenditure on health, welfare and education are seen as unsus-

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tainable because they undermine national economic performance. In response,

governments in Australia since the 1980s have been dedicated to a comprehensiveprogram of domestic reform to reduce such expenditures. This section of the paperexamines these programs in the areas of education, public sector reform andindustrial relations policy.

Labor’s proposed reforms of the higher education system outlined in 1987

marked an intensification and extension of attempts to render Australia a more

competitive place. As part of a more generalised strategy of introducing competi-tive pressures into every aspect of national social life, Australian universities havebeen encouraged to develop a commercial mentality and mimic the organisationalstructure of corporations (Henry 1992). This trend has been encouraged by agreater reliance on fee paying students and the necessity of making courses moreeconomically ’relevant’, both in terms of the fees they generate and the needs ofindustry. In short, successive Labor governments have attempted to enlist the edu-cation system in its broader project of making Australia more economically com-petitive (Dudley and Vidovich 1995).

More subtly, educational ’efficiency’ has increasingly come to be defined interms of narrow economic criteria, rather than the broader social and cultural

agenda it formerly enjoyed (Marginson 1993). The effect of this is twofold. Onthe one hand there is the systematic attempt to inculcate a specific set of values inwhich the individual is encouraged to become more enterprising and self-reliant.On the other, the population is regarded as potential ’human capital’ to be

equipped with the requisite skills that might allow it to fulfil a more productivepurpose. While the ultimate outcome might be ostensibly economic and reflectiveof a new conception of the economy, the form of governmental intervention andthe range of authorities and agencies co-opted into its overarching project is farmore extensive. As Hunter (1993) points out, the exercise of governmental powerin educational activities is a complex and multi-faceted process, which seeks toachieve its ends by problematising existent educational practices and developingnew strategies of management and administration.

An area where successive ALP governments were able to play a more direct rolein shaping important domestic institutions in pursuit of their overall reform agendawas the public service. Michael Pusey’s (1991) influential, if controversial, thesissuggests that key sections of the Canberra bureaucracy are dominated by ’economicrationalists’, or supporters of the sorts of policy initiatives associated with a neo-liberal political rationality. Moreover, Pusey contends that this amounted to a

fundamental shift in the purposes to which state activities are directed, and theadoption of technical, rather than a substantive rationality. The move toward amore technocratic style of policy-making and implementation was reinforced by theinstitutional practices and memory of key bureaucratic departments. The Treasuryhas long since promoted the sorts of market-conforming reforms that have nowbecome the economic and political orthodoxy (Whitwell 1986), and which haveprovided an underpinning theoretical rationale for much contemporary policy.

The emergence of a neoliberal political rationality, therefore, needs to be seen aspart of a deep-seated and complex process, of which the development of a new

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economic paradigm is only a part, albeit a conspicuous and influential one. Otherreforms, such as the reorganisation of the public service in line with market princi-ples, affected not only the structure and organisational logic of the state, but alsoits role and mode of operation. The Hawke-Keating governments’ reforms of thepublic service amounted to what Yeatman (1990) describes as a ’culturalrevolution’ in which ’scientific’ management practices were applied by ’technicalexperts’ in an attempt to concentrate bureaucratic power and allow its more

effective application at particular sites deemed desirable by government. Central toLabor’s reform of the public service was an intention to judge the bureaucracy on’results, outcomes and performance’ and to make it a more effective instrument inthe implementation of economic structural adjustment (Keating 1993b: 1).

The new emphasis on managerialism was structurally embedded in the bureau-cracy with the establishment of the Senior Executive Service (SES), a senior

administrative elite whose primary merit and attraction to government resided inits managerial capacity and technical expertise, skills that might be applied to anyproblem or area regardless of the values and issues specific to a portfolio(Yeatman 1990). Pusey (1991: 117-21) stresses that one of the intentions of thereforms was to avoid the possibility that managers might be ’captured’ by theinterests they were intended to serve-mobility in the service lessened this possi-bility and also enhanced the influence of the increasingly powerful central agen-cies whose members experienced rapid promotion through the ranks. The reformsreinforced the importance of the central agencies by giving them a coordinatingbudgetary and review function over other agencies. To maintain their diminishedpositions the latter had to adopt the language and guise of a particular form ofeconomic rationality which derived its authority from and reinforced the positionof new conceptions of the economy and the best ways of making all aspects ofAustralian economic and social existence more competitive. The Coalition gov-ernment has extended the overall direction of Labor’s reforms by attempting tointroduce corporate sector values and organisational structures into the publicservice, and by ’outsourcing’ core activities (Dodson 1996: 33).

The reform of the public service was driven principally by the perception thatan oversized and inefficient bureaucracy could no longer be sustained by aneconomy struggling to remain competitive in an increasingly global system. Otherinitiatives had more overtly political implications. After reconstituting the ALPitself on more pragmatic and less ’ideological’ lines (Jaensch 1989), the Laborleadership attempted to nullify the trade union movement as a potential obstruc-tion to market-based reform. Collectively organised labour represented a poten-tial obstacle to the optimal functioning of an internationally integrated economy,in which market forces and competitive pressures encouraged the development offlexible and responsive individuals.

The Accord-an agreement between government and organised labour togovern wage outcomes-was a crucial political and institutional mechanism withwhich to manage organised labour and ensure that it was a productive part of thenew model of economic management. Despite the Accord’s problematic historyand the failure of business to play a meaningful reciprocal role in return for cer-

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tainty in wage outcomes (McEachern 1991), the Accord’s ’corporatist’ structureallowed the ALP to eliminate a potentially significant obstacle to its economic

agenda. Indeed, what is striking in retrospect is the manner in which the unionmovement and its peak representative body, the Australian Council of TradeUnions (ACTU) passively accepted the logic and language of the new economicrationality and its underpinning theoretical rationale (Campbell 1993). Thedecline in Australian trade union membership and influence has not only allowedsuccessive governments to institute neoliberal reforms with little opposition, butthe rise of enterprise bargaining, workplace agreements and the panoply ofindividually oriented reforms has served to promote and consolidate a more subtleprocess of re-making the Australian workforce (Beeson 1997). It is now individualproductivity that is to engender a more competitive ’Australia’.

Revealingly, the encompassing and intertwined strategies of economic andsocial management extend even to those outside the workforce. At one level, thisis part of an international move to ’reduce’ unemployment by managing it

differently through new methods of calculation about the numbers of unem-ployed, and administrative strategies that present the unemployed as a distinctiveobject of governance (Walters 1996). At another level, however, successiveAustralian governments have, as Dean (1995) points out, developed increasinglyelaborate strategies that engage even the unemployed as ’clients’, and draw theminto processes of self-management which attempt to cultivate specific attitudesand patterns of behaviour in the targeted population. The Coalition governmenthas taken this process one stage further by privatising the entire apparatusdesigned to assist the unemployed to find work. The outcome is predictable anda continuation of the dominant approach to both the economy and the populationat large. Even the unemployed are caught up in web of interventions by state andnon-state agencies that are informed by an overarching neoliberal politicalrationality, and which are designed to reconstitute individuals in line with a newconception of economic activity and security.

Concluding remarksThis essay has been principally concerned with the activities of the Labor govern-ment and its period of office from 1983 to 1996. There is, however, little to

indicate that the current Liberal-National Party Coalition government is likely todeviate from the direction Labor has established. Indeed, Labor has already clearedmany of the obstacles that might have proved difficult for a Coalition governmentto overcome. The move toward enterprise bargaining and the decentralisation ofthe industrial relations system seems likely to continue at an even greater pace, asdoes further reform and reduction of the public service, and the increasingmarketisation of the education sector. Labor’s achievement-if it may be describedas such-has been the reconstitution of central elements of Australia’s institutionalinfrastructure, a transformation that has been reinforced by the systematic attemptto inculcate new values in the population at large. Whether these are described as’entrepreneurial’, ’flexible’, or simply as more ’competitive’, their intent was to

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facilitate a style of governance that may most usefully be understood as flowingfrom a distinctive neoliberal political rationality.

Constrained by external economic forces on the one hand, and a new concep-tion of the economy and its relationship to civil society on the other, successiveAustralian governments have increasingly sought to operate where they retainlegitimacy and effective political authority: over the construction of domesticsocial relations. Paradoxically, therefore, at a time when conventional monetaryand fiscal policy-making tools are losing much of their usefulness, governmentpolicy initiatives designed to enhance national economic security have becomemore comprehensive and broad-ranging.

Public policy under successive Labor governments and latterly under theCoalition has seen the emergence and consolidation of a new style of, and ration-ale for, government intervention. Although this has had an impact on a range ofpublic policies its impact is most apparent in the economic sphere. This is hardlysurprising. Economic policy increasingly takes precedence over all areas of publicpolicy. At its most encompassing, the neoliberal political rationality that hasincreasingly come to inform Australian public policy is’a strategy for extendingmarket mechanisms to areas of individual and organisational activity that hadpreviously been considered as non-market spheres of allocation, with majorimplications for the conduct of private and public life. In short, the dominance ofa neoliberal approach to governance combined with an associated discourse ofcompetitive individualism has profoundly affected our understanding of economicprocesses and of our own places within them. The remarkable rise and consoli-dation of a neoliberal political rationality has rapidly come to shape our ’commonsense’ understanding of the world, and is, therefore, as Bourdieu (1991) remindsus, all the more powerful for that reason.

Note* We would like to acknowledge the valuable comments of Kanishka Jayasuriya and the

_/ournal of Sociology’s anonymous referees on an earlier version of the paper. The usualcaveats apply.

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