The Australian variant of neoliberal capitalism

153

9. The Australian variant of neoliberal capitalismLynne Chester

Capitalism has evolved into diff erent ‘varieties’ or forms, notwithstanding one of its defi ning features being sustained but irregular growth (Amable 2003; Boyer 2005; Hall and Soskice 2001; Hodgson et al. 2001; Keen 2003). Within typologies of capitalism, Australia is classifi ed as a ‘liberal market- based economy’, falling within a ‘highly homogenous Anglophone cluster’ of the United States (US), United Kingdom (UK), Canada and New Zealand. Australia experienced exceptionally fast and stable growth during the two decades after the World War II, followed by a more erratic pattern in the 1970s and 1980s. The subsequent twenty years has witnessed far less volatility with annual economic growth rates sustained within a band of around 5 per cent or less. Growth, albeit at a markedly reduced rate, continued through the recent global fi nancial crisis which is contrary to the experience of the US, UK and Canada.

The latter period of less volatile but sustained positive growth coincides with the political ascendancy of neoliberalism which has become the ‘central guiding principle of economic thought and management’ (Harvey 2005: 2). Neoliberalism, as a hegemonic discourse, became progressively embedded in the actions and policies of the Australian state from the mid- 1980s. Market discipline, competition and commodifi cation symbolize neoliberalism although some acolytes have acknowledged that ‘market order requires a particular kind of state to secure it’ (Gamble 2006: 22). Why has Australia’s growth pattern occurred since neoliberalism’s ascendancy? Why has Australia continued to experience positive growth through the period of the global fi nancial crisis although other liberal market- based economies have not? Is the Australian growth regime dif-ferent in some way from those other economies within the Anglophone capitalism cluster? The purpose of this chapter is to delineate the defi ning nature of the institutional architecture and confi guration of the Australian neoliberal growth regime and determine if there are diff erences with other neoliberal market- based regimes which may explain the reasons why growth has continued despite the downturn elsewhere.

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154 Neoliberalism

Capitalism’s diversity has been observed through diff ering confi gura-tions of its institutional architecture, or mode of régulation, although all share common features of production and consumption (Boyer 2003, 2005).1 These confi gurations also reveal a periodization of capitalism – diff erent growth regimes – as new forms of accumulation have evolved, creating diff erent combinations of production and consumption norms (Boyer 1988; Lipietz 1986a). Each stage of capitalism (regime of accumu-lation) has distinctive regular social and economic patterns. The period post World War II, of intensive accumulation with mass consumption, is commonly referred to as ‘Fordism’ and that for the period since the 1970s economic crisis as ‘post- Fordism’.

The mode of régulation is the ‘materialization of the regime of accumu-lation’ (Lipietz 1986b: 19) and coheres particular periods of accumulation by reproducing capitalism’s fundamental social relations (Boyer 1990). In other words, the mode of régulation governs, guides, supports and secures an accumulation regime by reducing, containing and mediating the inher-ent confl icts of capitalism where the mode of production is structured around two fundamental unequal social relations: the commodity relation and the wage relation (Aglietta 1979 [1976]; Brenner et al. 1991; Dunford 1990; Jessop 1990, 2001; Lipietz 1987; Tickell and Peck 1995).

A hierarchy or dominance of particular institutional forms has been found to characterize diff erent modes of régulation in addition to the ongoing metamorphosis of each institutional form (Boyer and Saillard 2002). A non- interventionist state and tight monetary controls were dominant from the mid- nineteenth century until World War I. Collective wage negotiations, the strong growth of credit money, oligopolistic forms of competition and diff erent forms of state intervention characterized Fordism. The monetary regime and the ‘internationalisation of compe-tition’ have been driving changes to the wage- labour nexus during the current regime of accumulation (Boyer and Saillard 2002 [1995]: 39). Thus the mode is not fi xed or immutable because its constituent elements constantly change to ensure its enduring capacity to reproduce and main-tain capitalism’s social relations, to ‘secure the compatibility of social confl icts with the requirements of the accumulation process’ (Baurdiel and Wissen 2002: 108–9). It is this evolving mode – this evolving set of institutional forms both individually and in conjunction – which ensures the conditions for ongoing capitalist accumulation. However, the mode of régulation ‘cannot prevent all disequilibria’ (Destanne de Bernis 1988: 45). Consequently, crises occur because the very nature of the mode of régula-tion is unable to ensure stabilization indefi nitely.

Five institutional (or structural) forms comprise the mode of régulation and each is the codifi cation of capitalism’s fundamental social relations


The Australian variant of neoliberal capitalism 155

through laws, rules, regulations, compromises, negotiated outcomes, common value systems or representations (Boyer 1990; Boyer and Saillard 2002). These fi ve institutional forms are defi ned by: wage- labour’s rela-tionship with capital, monetary and credit relationships, the relations between fi rms, the nature of international relationships and arrangements, and the form of state intervention.

The nature of the mode of régulation can be understood by analysing each of its fi ve institutional forms and their conjunction. This approach refl ects the chapter’s structure which scrutinizes the nature and conjunc-tion of Australia’s institutional architecture, and outcomes, as the neo-liberal virtues of the market and state minimalism have been increasingly embraced. This examination also exposes the disjuncture between neolib-eralism’s rhetoric and actual outcomes such as new forms of intervention by the state. The conjunction of Australia’s institutional forms is drawn together and a characterization posited of the neoliberal post- Fordist mode of régulation compared to that of the Keynesian- Fordist era. This characterization, and its resultant economic dynamic, is compared against a broad synthesis of the corresponding institutional architecture and out-comes for the three Anglophone liberal market- based economies of the US, UK and Canada. The Australian neoliberal mode is found to exhibit unique institutional features and a distinct confi guration which, it is con-tended, refl ects an unacknowledged variant of neoliberal post- Fordist market- based economies.

AUSTRALIA’S INSTITUTIONAL ARCHITECTURE

A marked shift has occurred in the structure of all fi ve institutional forms, comprising Australia’s mode of régulation, during the last three decades. A major infl uence has been increasing global integration driven by an Australian state which has actively embraced the notions of free trade and the removal of constraints on capital fl ows through bilateral trading agree-ments, other international alliances and a raft of economic policy deci-sions. Competition has been promoted strongly by the state through new national and sector- specifi c regulatory regimes, one of the world’s largest privatization programmes, and contracting- out of services previously provided direct by government.

There has been a progressive decentralization of the determination of wages and working conditions accompanied by work intensifi cation, changing hours of work and declining trade union density (Hampson et al. 1999; Watson et al. 2003). Wage increases are no longer tied to cost of living adjustments but determined by individual enterprise and workplace


156 Neoliberalism

considerations. New forms of non- standard work have rapidly emerged to replace permanent full- time workers but are paid lower equivalent wage rates (Campbell 1997). Employers argue the need for fl exibility yet these changes are aimed at cutting labour costs and dramatically reduc-ing the power of trade unions in favour of capital. Not only has the state been instrumental to this shift by making labour law far more favourable to capital but also by weakening the welfare state through expenditure reallocations, restricting eligibility and the use of tax concessions of most benefi t to those on higher incomes (King and Stilwell 2005; Peetz 2006; Saunders 2002).

The Australian wage- labour nexus strongly exemplifi es the disjuncture between the ideology of neoliberalism and ‘actual existing’ neoliberalism. Markets, including the erroneously- called labour market, never operate freely according to the assertion of neoliberal ideology because ‘both markets themselves and the environments they operate in are always created by government regulations, and cannot exist without them’ (Campbell 2005: 189). The employment of labour is not determined by a ‘free’ market but by a system actively created by the Australian state. This was the case at the beginning of the twentieth century and continues to be so today.

The reshaping of fi nancial sector institutions along with a higher long- term dependence on debt by business and households, the rapid growth of fi nancial markets, the shift to bonds to raise debt fi nance, and the signifi cant contribution of off - balance sheet derivatives to debt, all epito-mize the dimensions transforming Australia’s fi nancial sector (RBA 1996, 2003, 2010). It is these structural changes along with the elimination of many capital controls, fl oating of the exchange rate, opening up of the banking system to competition, creation of central borrowing authorities, rapid expansion of superannuation funds, privatization of government banks and removal of restrictions on fi nance capital, such as capped inter-est rates, which have been driving the evolution of Australia’s monetary regime (Gizycki and Lowe 2000; RBA 1997, 1999). An ‘independent’ central bank focused on controlling infl ation, interest rates as the prime instrument of monetary policy, and heightened prudential regulatory control of the fi nancial sector are all directed at the new money forms and fi nancial market activity that emerged during the 1990s and into the new millennium (Bell 2004).

These policy shifts and structural outcomes strongly refl ect the precepts of neoliberalism which see optimal accumulation conditions requiring a ‘free market’ regime and protection of the value of money. Financial sector regulation has been reconfi gured so that it does not impede fi nan-cial market competition while purportedly protecting fi nancial system



stability. Monetary policy has become singularly focused on controlling infl ation and thus ensuring the value of money is not eroded through price instability. Australia’s central bank has become ‘independent’ of government as it has assumed control of monetary policy.

The abolition of tariff s, the dominance of the service sector as fi rms have redesigned internal processes, a strong uptake of ICT, and overseas and local providers meeting outsourcing needs have become some of the key structural characteristics of Australia’s form of competition (DIISR 2009; PC 2004). These changes have occurred as the state has actively intervened to improve competitive conditions for business through the National Competition Policy and a range of other actions. The state has ensured during the same period a monetary regime which has delivered a climate of relatively low interest rates as well as new forms and sources of money. The outcomes from the monetary regime and the wage- labour nexus, combined with Australia’s form of competition directly shaped by state intervention, have created a set of profi tability conditions exempli-fi ed by a strong upward shift in the share of profi ts in GDP. In addition, the primacy of the market has been strongly asserted and embedded, with competition regarded as a virtue and protectionism as an impediment to growth. The nation- state and local- state, through a wide range of inter-ventions, have applied the neoliberalism doctrine of market solutions to a widening realm of economic activity. Herein is one of the fundamental paradoxes of neoliberalism posed by Arestis and Sawyer (2005): why is there a need for competition policy in any national economy, if markets work so well through the process of competition?

Although the ‘glorifi cation’ of markets has been pushed to new extremes, the form of competition remains characterized by monopoly or oligopoly with fi rms more intent on controlling the market than participating in an ideal pure form. The monetary and fi nancial regime, and particularly the central bank’s interest rate policy, is closely scrutinized by international fi nancial markets. Monetary (interest rate) policy has become autonomous of fi scal policy with the exchange rate determined by fi nancial markets.

Australia’s international position has become one of increasing global dependence and integration. Exports are dominated by natural resources and primary products bound for China and India. Elaborately trans-formed manufactures dominate imports and nearly three- quarters of total trade is with Asia Pacifi c Economic Co- operation (APEC) forum members (DFAT 2010b). The current account defi cit remains dominated by income payable overseas for past inward investment fl ows and loans. Australia’s inward foreign direct investment (FDI) continues to grow correlating to the encouragement of foreign ownership (Bryan and Raff erty 1999). Outward FDI has grown rapidly in more recent years coinciding with


158 Neoliberalism

the strong growth in superannuation funds and Australia entering into a series of free trade agreements (FTAs) (DFAT 2010a). Australian entities have become increasingly dependent on off shore fi nancial markets as a source of borrowings to fi nance debt, often through the issue of bonds. Australia’s foreign exchange market has shown exponential growth and the Australian dollar has become one of the most traded currencies with the majority occurring in off shore markets (BIS 2005).

Economic policy decisions to fl oat the exchange rate, relax capital controls, abolish foreign ownership restrictions and negotiate FTAs, in conjunction with Australia’s membership of the World Trade Organisation, the APEC and the OECD, have all actively fostered this global integration and dependence of Australia. In addition, Australia’s actions and decisions actively support the neoliberal policy agendas of these international institutions to promote open trading borders free from government restraint as the solution to stimulate growth and reduce poverty.

Other signifi cant institutional changes to Australia’s mode of régula-tion, in this contemporary neoliberal post- Fordist era of recent decades, are evidenced by the state. Throughout the 1990s and 2000s all Australian governments restructured their respective public sectors through the privatization of public assets, outsourcing and contracting- out (through competitive tendering) for the delivery of government services, and the private provision of economic and social infrastructure (Chester and Johnson 2006). The Australian welfare system also has been pared back to direct provision of income ‘safety net’ payments with ongoing tighten-ing of eligibility criteria, and regulation of private providers for a nar-rower range of welfare services (Saunders 2002). These changes to the assets and functions of the public sector were integral to the Australian state extending its interventions to an economic ‘micro- structuring’ role without relinquishing its ‘macro- structuring’ functions (Chester 2008). Three dominant examples of the ‘micro- structuring’ role adopted by the state are:

● introduction of a goods and services tax, income tax cuts leading to a fl atter structure of rates, and tax incentives to encourage self- provision of services, for example, health insurance, superannuation;

● the nearly decade- long National Competition Policy programme dismantling public utility monopolies and permitting third party access to infrastructure complemented by specifi c programmes to improve the competitiveness of industry; and,

● progressive decentralization of the determination of wages and working conditions to individual enterprises and workplaces.



More recent extensions of this ‘micro- structuring’ role include: com-pulsory income management of designated welfare recipients; a tem-porary levy on individual’s income above A$50 000 per annum to fund reconstruction after unprecedented natural disasters in early 2011; a tax on mining profi ts to fund company tax cuts, superannuation tax con-cessions and infrastructure provision; a 2010 banking reform package to give consumers more ‘choice’ to switch accounts and support for the residential- mortgage- backed- securities market; and a new regulator for the not- for- profi t sector. This ‘micro- structuring’ role is supported by regula-tory institutions specifi cally created to promote regulation- of- competition and regulation- for- competition (Jordana and Levi- Faur 2004).

In addition, there have substantial Federal Budget surpluses in the 12 years to 2008, budgetary expenditure following a pro- cyclical pattern, and public debt virtually eliminated until the stimulus packages of recent years responding to the global fi nancial crisis (Chester 2008).

The progressive and cumulative impact of all these institutional changes has resulted in a particular confi guration of the Australian mode of régulation’s institutional architecture. Table 9.1 presents a generalized synthesis of the contemporary Australian mode of régulation compared to that which prevailed during the previous Keynesian- Fordist golden age. It is apparent that the overall organizing principle of each institutional form has become, during the contemporary neoliberal post- Fordist era, one of market logic heavily directed and supported by strong regulatory interventions by the state. The nature and extent of the Australian state’s interventions are far diff erent from those during the period immediately following World War II until the 1980s. Yet these interventions – by the state at both macro and micro levels – are paradoxical given the prevailing economic and political ideology of neoliberalism that promotes deregula-tion, much less intervention by the state, and the triumph of ‘free’ markets. The disjuncture between neoliberalism’s free market rhetoric and actual outcomes, observed earlier with respect to each institutional form, is also sythesized in Table 9.1.

If one considers the Australian economic dynamic arising from this contemporary mode of régulation, some interesting outcomes are evident. Figure 9.1 charts the annual rates of change in wages, prices and GDP (as an indicator of economic growth) over the three decades to 2010.

During the 1970s, all three macroeconomic variables follow a pro- cyclical pattern. Wages growth generally exceeded annual price move-ments, and the growth rates of both were greater than changes to GDP. The decade of the 1980s shows even greater volatility in economic growth rates (which on occasion are negative) although the rate of annual change generally remains below that for wages and consumer prices. From the


160

Tab

le 9

.1

Aus

tral

ia’s

mod

e of

régu

latio

n, n

eolib

eral

ism

rhet

oric

and

out

com

es

Inst

itutio

nal

form

Key

nesia

n- F

ordi

st

mod

eN

eolib

eral

pos

t- F

ordi

st m

ode

Neo

liber

alism

rh

etor

icN

eolib

eral

ism o

utco

mes

Wag

e- la

bour

ne

xus

Cen

tral

ized

wag

e fi x

atio

n sy

stem

. W

age

grow

th ti

ed

to c

onsu

mer

pric

es.

Stro

ng c

olle

ctiv

e or

gani

zatio

n of

la

bour

and

pro

min

ent

barg

aini

ng ro

le.

Exp

ansio

n of

wel

fare

sy

stem

and

soci

al

wag

e.

Hea

vily

regu

late

d de

cent

raliz

ed

wag

e- ba

rgai

ning

. Dec

linin

g tr

ade

unio

n de

nsity

. Gro

win

g do

min

ance

of i

ndiv

idua

l em

ploy

men

t con

trac

ts. L

abou

r m

arke

t seg

men

tatio

n in

to h

igh-

pa

id sk

illed

jobs

and

cas

ual/

part

- tim

e un

skill

ed lo

wer

- wag

e jo

bs. I

ncre

asin

g pr

ivat

e pr

ovisi

on

of so

cial

wag

e el

emen

ts. W

elfa

re

syst

em p

ared

bac

k.

Der

egul

atio

n an

d fl e

xibl

e la

bour

m

arke

ts w

ill e

nsur

e fu

ll em

ploy

men

t

Pers

isten

t une

mpl

oym

ent

and

unde

r- ut

iliza

tion

of

labo

ur. D

ecen

tral

ized

wag

e de

term

inat

ion

syst

em h

eavi

ly

regu

late

d.

Mon

ey a

nd

fi nan

ceN

ew c

redi

t for

ms.

Hou

sing

inte

rest

ra

tes c

appe

d. C

entr

al

bank

con

trol

s ove

r th

e ba

nkin

g sy

stem

. F

orei

gn e

xcha

nge

cont

rols.

Polic

y an

d op

erat

iona

l in

depe

nden

ce o

f cen

tral

ban

k.

Mon

etar

y po

licy

used

to fi

ght

infl a

tion

and

scru

tiny

by

fi nan

cial

mar

ket.

Com

pani

es ru

n by

fi na

ncia

l log

ic. S

yste

mic

risk

ex

posu

re o

f fi n

anci

al m

arke

ts.

Inte

rest

rate

s se

t by

mar

ket.

Pric

e st

abili

ty

poss

ible

with

out

adve

rse

impa

ct

on e

mpl

oym

ent.

Bet

ter s

ervi

ce

leve

ls an

d re

duce

d ch

arge

s with

gre

ater

co

mpe

titio

n.

Pric

e st

abili

ty (i

nfl a

tion

targ

et

of 2

–3%

p.a

.) bu

t per

siste

nt

unem

ploy

men

t and

labo

ur

unde

r- ut

iliza

tion.

Sig

nifi c

ant

incr

ease

in c

harg

es fo

r goo

ds

prev

ious

ly p

rovi

ded

dire

ct b

y go

vern

men

t. E

scal

atin

g ho

use

pric

es a

nd h

ousin

g st

ress

.


161

Com

petit

ion

Olig

opol

y an

d hi

gh

leve

ls of

indu

stry

co

ncen

trat

ion

prot

ecte

d by

tariff

s.

Leg

islat

ive

focu

s on

ant

i- com

petit

ive

beha

viou

r.

Leg

islat

ive

rest

rictio

n of

co

ncen

trat

ion.

Pre

dom

inan

ce o

f ol

igop

olist

ic c

ompe

titio

n.

Der

egul

atio

n w

ill in

crea

se

com

petit

ion

by

entr

y of

new

fi rm

s. G

reat

er g

row

th,

effi c

ienc

y an

d w

elfa

re w

ith m

ore

com

petit

ion.

Incr

easin

g m

arke

t con

cent

ratio

n in

all

sect

ors a

nd o

ligop

olie

s do

min

ant.

Incr

easin

g re

gula

tion

of e

cono

mic

act

ivity

to m

ake

it ‘c

ompe

titiv

e’. I

nfra

stru

ctur

e an

d ut

ility

mon

opol

ies c

ontin

ue.

Inte

rnat

iona

l po

sitio

nM

ulti-

late

ral

agre

emen

ts. G

row

ing

inte

rnat

iona

lizat

ion

of fi

nanc

ial m

arke

ts.

‘Peg

ged’

exc

hang

e ra

te.

Adh

esio

n to

free

trad

e pr

inci

ples

. In

crea

sing

glob

al in

tegr

atio

n th

roug

h tr

ade.

Fin

ance

and

in

vest

men

t pro

mot

ed b

y in

tern

atio

nal a

llian

ces s

uch

as W

TO

, OE

CD

, APE

C a

nd

bila

tera

l FT

As.

Smoo

th c

urre

ncy

adju

stm

ents

. A

uton

omy

of

natio

nal e

cono

mic

po

licie

s.

Exc

hang

e ra

te v

olat

ility

. N

atio

nal e

cono

mic

pol

icie

s sh

aped

by

need

s of t

rans

natio

nal

corp

orat

ions

(esp

ecia

lly

reso

urce

s sec

tor)

and

key

trad

ing

part

ners

(Chi

na, I

ndia

, US)

.

For

m o

f the

st

ate

Key

nesia

n w

elfa

re

stat

e. P

ublic

ex

pend

iture

dire

cted

to

full

empl

oym

ent

obje

ctiv

e. In

dire

ct

inte

rven

tion

in

mar

kets

thro

ugh

wag

es

and

pric

e po

licie

s.

Purs

uit o

f str

uctu

ral

com

petit

iven

ess b

y pr

oact

ive

and

mar

ket-

enha

ncin

g st

ate.

Fisc

al

polic

y pr

o- cy

clic

al u

ntil

late

200

8 in

resp

onse

to g

loba

l fi n

anci

al

crisi

s. N

ew fo

rms o

f reg

ulat

ory

inte

rven

tion

and

rang

e of

new

in

stitu

tions

cre

ated

.

Min

imal

in

terv

entio

n w

ill

enha

nce

grow

th

and

prod

uctiv

ity.

Litt

le p

ublic

inve

stm

ent i

n so

cial

an

d ec

onom

ic in

fras

truc

ture

. F

allin

g pr

oduc

tivity

. New

form

s of

soci

al re

gula

tion

(e.g

. inc

ome

man

agem

ent;

inte

rven

tion

in

indi

geno

us c

omm

uniti

es).

Rec

ent

stim

ulus

pac

kage

s rev

ersin

g bu

dget

surp

lus t

o de

fi cit

equa

l to

4.9%

GD

P in

200

9–10

.

Sour

ce:

Che

ster

(201

0).


162 Neoliberalism

mid- 1980s it is evident that wages growth does not keep pace with infl a-tion. With the Reserve Bank initiating a series of interest rate cuts from the beginning of the 1990s, the business cycle evens out relatively speak-ing with the growth rates of all three macroeconomic variables broadly falling within a band of around 5 per cent or less. Economic growth is generally sustained at high rates compared to the pattern of the previous two decades. The infl ationary trend is downwards apart from an aberra-tion around the middle of the decade and there is no evidence that wages growth fuelled infl ation. Real wage growth in this decade was close to changes in productivity as the profi ts share of national income markedly rose in the early 1980s (Chester 2007: 993).

A diff erent economic dynamic is evident in the new millennium. As the new forms of regulatory and micro- structuring intervention by the state accelerate, infl ation begins to climb but falls somewhat marginally when economic growth dips. Annual wages growth outstrips consumer price changes during most years and moves inversely to economic growth, the latter only occurring very intermittently during the previ-ous three decades. Stable and high growth is not being propelled by the

–5%

Consumer Price Index Average Weekly Earnings Gross Domestic Product

0%

5%

10%

Ann

ual r

ate

of c

hang

e

15%

20%

25%

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

Source: RBA (2010).

Figure 9.1 Economic dynamic produced by Australian mode of régulation, 1971 to 2010



simultaneous growth of real wages and productivity. The trajectory of economic growth has become more volatile than the 1990s and is more reminiscent of the 1970s. The same can be concluded for the wage and price growth paths although neither have rates of change of similar magnitude to the 1970s nor is there a marked diff erential with economic growth rates. The pattern over the last two decades, depicted in Figure 9.1, shows that Australian wages growth has generally outpaced the annual rate of change in consumer prices and, since the late 1990s, has developed a consistent inverse relationship with economic growth. As GDP dips, wages growth is greater and then falls below GDP as the latter escalates. Data for 2009 and 2010 signal a change in this relationship, although maybe only temporarily as a result of the fi scal and monetary responses to the global fi nancial crisis.

The changing nature of interventions by the Australian state, and institutional restructuring, has led to the current economic dynamic evi-denced by the conjunction between wages, consumer prices and economic growth. Figure 9.2 overlays some of the most signifi cant institutional changes to Australia’s mode of régulation, during the period 1980 to 2010, onto the economic dynamic illustrated in Figure 9.1. The progressive and cumulative impact of these institutional changes, these interventions by the state, has resulted in a particular confi guration of the Australian mode of régulation’s institutional architecture. It is this evolving confi gu-ration which has led to the unprecedented pattern of growth of far less volatility. It is also this evolving confi guration which has led to increasing numbers in precarious employment, unsustainable levels of household indebtedness, a general widespread weakening of labour, unprecedented levels of direct state assistance to capital at the expense of improvements to the social wage, and increasing embeddedness within the international economy. The recent stimulus packages, responding to the global fi nan-cial crisis, may sustain the current growth regime as exemplifi ed in Figure 9.1 but at what, and whose, cost? The Federal government has repeatedly stated its intention to quickly return to a budgetary surplus and achieve a halving of debt within the next two years. It is clear who will pay the cost given the current confi guration of Australia’s mode of régulation. This evolving confi guration of Australia’s institutional architecture also con-fi rms previous observations of the ongoing metamorphosis of the mode of régulation to ensure its enduring capacity to reproduce and maintain capitalism’s social relations and thus the conditions for ongoing capitalist accumulation. The practices of neoliberalism, not its rhetoric, have driven these changes exercised by the state and reconfi guring of the mode’s con-stituent elements will continue, not abate, to maintain the conditions for accumulation.


164

6th

Acc

ord

1st p

rivat

izat

ion

1st A

ccor

d; 1

st F

TA

Mon

etar

y ta

rget

ing

aban

done

d

RB

A ta

rget

s infl

atio

n;

Nat

iona

l wag

e

NC

P

Wor

kpla

ce R

elat

ions

Act

GST

W

ork

Cho

ices

Act

11th

Bud

get s

urpl

usin

12

year

s; 1s

tst

imul

us p

acka

ge Mor

e st

imul

uspa

ckag

es; R

BA

raise

s int

eres

tra

te tw

ice

Bud

get d

efici

t = 4

.9%

of G

DP;

RB

A ra

ises

inte

rest

rate

4 ti

mes

to 4

.75%

Fair

Wor

k A

ct

17%

inte

rest

rate

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

4.75

% in

tere

st ra

te12

succ

essiv

e

–6%

–4%

–2%

Con

sum

er P

rice

Inde

xA

vera

ge W

eekl

y E

arni

ngs

Gro

ss D

omes

tic P

rodu

ct

0%2%4%6%8%10%

12%

14%

16%

Annual rate of change

Figu

re 9

.2

Sign

ifi ca

nt in

stitu

tiona

l cha

nges

and

Aus

tral

ia’s

eco

nom

ic d

ynam

ic, 1

980

to 2

010



ANGLOPHONE INSTITUTIONAL ARCHITECTURE AND ECONOMIC DYNAMIC OF EACH

Table 9.2 compares the Australian neoliberal mode of régulation and outcomes with a broad synthesis of the institutional architecture and outcomes for the other prominent members of the Anglophone capitalism cluster – the US, UK and Canada – of which the US has been denoted as the ‘paradigmatic case’ (Peck and Theodore 2007).

It is immediately apparent from Table 9.2 that the overall organizing principle of each institutional form, for each economy, is one of market logic strongly framed and underpinned by regulatory interventions by respective nation- states. Some other common points are: policy and operational independence of central banks; monetary policy used to fi ght infl ation; adhesion to free trade principles; sector specifi c and national competition regulation; prevailing oligopolistic competition; persistent unemployment; labour market segmentation; low levels of, and in some cases signifi cant declines in, trade union density and collective bargain-ing coverage; marked increases in public social expenditure since 1980 despite substantial paring of welfare systems; marked increases in utility charges; escalating household debt; and increasing private provision of social wage elements. Despite these points of commonality, some signifi cant points of diff erentiation are evident, including:

● the US and UK are fi nance- led growth regimes, Canada is export- led and Australia has been pursuing structural competitiveness with a high reliance on primary exports;

● the US and UK hold hegemonic international positions whereas the international insertion of Canada and Australia is framed by their respective export markets, and develop through the increasing adoption of trading agreements;

● Canada’s export- led growth regime is highly dependent on the US, while that of Australia is strongly reliant on primary exports to China and India and thus the economic growth rates of each will be infl uenced by that of their dominant export partners;

● there is explicit infl ation targeting by the UK, Canada and Australia but not by the US;

● the ratio of minimum to median wages has noticeably fallen in the US and Australia but remained relatively stable in the UK and Canada;

● long- term unemployment is persistent or increasing in the UK and US but has fallen in Canada and Australia;

● decentralized wage- bargaining but heavily regulated in Australia and three levels of government in Canada determine employment standards;


166

Tab

le 9

.2

US,

UK

, Can

adia

n an

d A

ustr

alia

n ne

olib

eral

pos

t- Fo

rdis

t mod

es o

f rég

ulat

ion

and

outc

omes

Inst

itutio

nal

form

US

UK

Can

ada

Aus

tral

ia

Wag

e- la

bour

ne

xus

Min

imal

regu

latio

n an

d lo

caliz

ed w

age

dete

rmin

atio

n. C

olle

ctiv

e ba

rgai

ning

cov

erag

e ne

arly

ha

lved

to 1

4% in

20

year

s to

200

0. L

ow tr

ade

unio

n de

nsity

. Lab

our m

arke

t se

gmen

tatio

n. G

row

th in

te

mpo

rary

and

par

t- tim

e jo

bs. F

all i

n m

inim

um

wag

es to

bar

ely

a th

ird o

f m

edia

n. L

imite

d so

cial

w

age

prov

ision

. Wel

fare

sy

stem

elig

ibili

ty ti

ghte

ned.

Pe

rsist

ent u

nem

ploy

men

t an

d ra

pid

rise

from

200

8.

Incr

ease

d lo

ng- t

erm

and

yo

uth

unem

ploy

men

t. Pu

blic

soci

al e

xpen

ditu

re

incr

ease

d fr

om 3

9% o

f tot

al

gove

rnm

ent e

xpen

ditu

re in

19

80 to

44%

in 2

007.

Wag

e co

unci

ls re

plac

ed w

ith

natio

nal m

inim

um w

age.

St

atut

ory

unio

n re

cogn

ition

. C

olle

ctiv

e ba

rgai

ning

cov

erag

e fa

lls fr

om 7

0% to

30%

from

19

80–2

000.

Slig

ht fa

ll in

trad

e un

ion

dens

ity. S

harp

incr

ease

in

clai

ms t

o em

ploy

men

t trib

unal

s. G

row

th in

tem

pora

ry a

nd p

art-

time

jobs

. Min

imum

wag

es

stab

le a

roun

d 46

% o

f med

ian.

Pe

rsist

ent u

nem

ploy

men

t fal

ling

to a

roun

d 5%

this

deca

de b

ut

rapi

d ris

e fr

om 2

008.

Per

siste

nt

long

- term

une

mpl

oym

ent (

>25

%

unem

ploy

ed).

Incr

easin

g pr

ivat

e pr

ovisi

on o

f ret

irem

ent i

ncom

e.

Cut

s to

amou

nt a

nd d

urat

ion

of

unem

ploy

men

t ben

efi ts

. Pub

lic

soci

al e

xpen

ditu

re in

crea

sed

from

36%

of t

otal

gov

ernm

ent

expe

nditu

re in

198

0 to

46%

in

2007

.

Fed

eral

, pro

vinc

ial a

nd

terr

itoria

l em

ploy

men

t st

anda

rds.

Col

lect

ive

barg

aini

ng c

over

age

falls

mar

gina

lly to

32

% fr

om 1

980–

2000

. T

rade

uni

on d

ensit

y re

lativ

ely

stab

le a

roun

d 30

%. G

row

th in

te

mpo

rary

and

par

t- tim

e jo

bs. M

inim

um w

ages

ab

out 4

2% o

f med

ian.

Pe

rsist

ent h

igh

leve

ls of

un

empl

oym

ent a

lthou

gh

dow

nwar

d tr

end

until

20

08. F

alls

in y

outh

and

lo

ng- t

erm

une

mpl

oym

ent.

Publ

ic so

cial

exp

endi

ture

in

crea

sed

from

33%

of t

otal

go

vern

men

t exp

endi

ture

in

1980

to 4

3% in

200

7.

Hea

vily

regu

late

d de

cent

raliz

ed

wag

e- ba

rgai

ning

. Col

lect

ive

barg

aini

ng c

over

age

stab

le

at 8

0% fr

om 1

980–

2000

then

gr

owin

g do

min

ance

of i

ndiv

idua

l em

ploy

men

t con

trac

ts a

nd

decl

inin

g tr

ade

unio

n de

nsity

. Fal

l in

ratio

of m

inim

um to

med

ian

wag

es to

52%

by

2008

. Inc

reas

ing

priv

ate

prov

ision

of s

ocia

l wag

e el

emen

ts. W

elfa

re sy

stem

par

ed

back

. Per

siste

nt u

nem

ploy

men

t. F

alls

in y

outh

and

long

- ter

m

unem

ploy

men

t. Pu

blic

soci

al

expe

nditu

re in

crea

sed

from

32%

of

tota

l gov

ernm

ent e

xpen

ditu

re

in 1

980

to 4

8% in

200

7.


167

Mon

ey a

nd

fi nan

cePo

licy

and

oper

atio

nal

inde

pend

ence

of c

entr

al

bank

alth

ough

ove

rsig

ht b

y U

S C

ongr

ess.

Mon

etar

y po

licy

used

to

fi ght

infl a

tion

and

scru

tiny

by fi

nanc

ial m

arke

t. Sy

stem

ic ri

sk e

xpos

ure

of fi

nanc

ial m

arke

ts.

Pric

e st

abili

ty (n

o ex

plic

it in

fl atio

n ta

rget

alth

ough

de

sired

rang

e st

ated

of

arou

nd 1

.5–2

% p

.a.)

but

pers

isten

t une

mpl

oym

ent.

Sign

ifi ca

nt in

crea

ses i

n ut

ility

cha

rges

. Esc

alat

ing

hous

ehol

d de

bt a

nd h

ousin

g st

ress

.

Polic

y an

d op

erat

iona

l in

depe

nden

ce o

f cen

tral

ban

k fr

om 1

997.

Mon

etar

y po

licy

used

to fi

ght i

nfl a

tion

and

scru

tiny

by fi

nanc

ial m

arke

t. Pr

ice

stab

ility

sinc

e ea

rly 1

990s

(a

nnua

l infl

atio

n ta

rget

of 2

%)

but p

ersis

tent

une

mpl

oym

ent.

Sign

ifi ca

nt in

crea

ses i

n ut

ility

ch

arge

s. L

arge

st re

cipi

ent o

f fi n

anci

al in

com

e fr

om re

st o

f th

e w

orld

. Esc

alat

ing

hous

ehol

d de

bt (r

atio

of d

ebt t

o in

com

e hi

ghes

t of G

7 ec

onom

ies)

.

Polic

y an

d op

erat

iona

l in

depe

nden

ce o

f cen

tral

ba

nk 1

991.

Mon

etar

y po

licy

used

to fi

ght i

nfl a

tion

and

scru

tiny

by fi

nanc

ial m

arke

t. Sy

stem

ic ri

sk ex

posu

re

of fi

nanc

ial m

arke

ts.

Infl a

tion

targ

et (m

id- p

oint

of

1–3

% p

.a.).

Esc

alat

ing

hous

ehol

d de

bt d

riven

by

revo

lvin

g cr

edit.

Polic

y an

d op

erat

iona

l in

depe

nden

ce o

f cen

tral

ban

k fr

om 1

993.

Mon

etar

y po

licy

used

to

fi gh

t infl

atio

n an

d sc

rutin

y by

fi n

anci

al m

arke

t. Sy

stem

ic ri

sk

expo

sure

of fi

nan

cial

mar

kets

. Pr

ice

stab

ility

(infl

atio

n ta

rget

of

2–3

% p

.a.)

but p

ersis

tent

un

empl

oym

ent a

nd la

bour

und

er-

utili

zatio

n. S

igni

fi can

t inc

reas

e in

cha

rges

for g

oods

pre

viou

sly

prov

ided

dire

ct b

y go

vern

men

t. E

scal

atin

g ho

useh

old

hous

ing

debt

and

hou

se p

rices

/hou

sing

stre

ss.

Com

petit

ion

Ant

i- tru

st le

gisla

tion

pare

d ba

ck in

198

0s w

ith fo

cus

mov

ed fr

om li

miti

ng p

ower

/pr

eser

ving

div

ersit

y to

one

of

bus

ines

s and

cons

umer

in

tere

sts.

Sect

or sp

ecifi

c an

d na

tiona

l com

pe tit

ion

regu

latio

n. O

ligop

olist

ic

com

petit

ion

prev

ails

(e.g

. med

ia, h

ealth

care

, be

er).

Incr

easin

g m

arke

t co

ncen

trat

ion

in a

ll se

ctor

s.

Leg

islat

ion

to p

rohi

bit a

nti-

com

petit

ive

beha

viou

r, an

d co

ntro

l mer

gers

and

acq

uisit

ions

. N

atio

nal c

ompe

titio

n re

gula

tion

and

sect

or sp

ecifi

c re

gula

tion

with

com

plex

re

gula

tory

regi

mes

cre

ated

for

ener

gy, w

ater

and

tran

spor

t. O

ligop

olist

ic c

ompe

titio

n pr

evai

ls (e

.g. b

anki

ng, g

roce

ry

reta

iling

, det

erge

nt).

Leg

islat

ion

to p

rohi

bit

anti-

com

petit

ive

prac

tices

. Se

ctor

spec

ifi c

and

natio

nal c

ompe

titio

n re

gula

tion.

Olig

opol

istic

co

mpe

titio

n pr

evai

ls (e

.g.

tele

com

mun

icat

ions

, civ

il av

iatio

n m

anuf

actu

re).

Leg

islat

ive

rest

rictio

n of

co

ncen

trat

ion.

Pre

dom

inan

ce o

f ol

igop

olist

ic c

ompe

titio

n (e

.g.

med

ia, b

anki

ng, g

roce

ry re

taili

ng,

utili

ties,

dom

estic

airl

ines

). In

crea

sing

mar

ket c

once

ntra

tion

in a

ll se

ctor

s. In

crea

sing

sect

or

spec

ifi c

and

natio

nal c

ompe

titio

n re

gula

tion

of e

cono

mic

act

ivity

to

mak

e it

‘com

petit

ive’

.


168

Tab

le 9

.2

(con

tinue

d)

Inst

itutio

nal

form

US

UK

Can

ada

Aus

tral

ia

Inte

rnat

iona

l po

sitio

nA

dhes

ion

to fr

ee tr

ade

prin

cipl

es. D

omin

ates

glo

bal

trad

e/fi n

anci

al m

arke

ts a

nd

inst

itutio

ns. 1

7 FT

As a

nd 4

be

ing

ratifi

ed

or n

egot

iate

d.

Wor

ld’s

lead

ing

impo

rter

and

th

ird la

rges

t exp

orte

r. H

igh

relia

nce o

n en

ergy

impo

rts.

Trad

e defi

cit

since

mid

197

0s

and

mor

e tha

n 6%

of G

DP

by m

id 2

000s

. Lea

ding

hos

t ec

onom

y fo

r for

eign

dire

ct

inve

stm

ent i

nfl o

w. B

y 20

09,

asse

ts h

eld

by fo

reig

ners

wer

e do

uble

the f

orei

gn a

sset

s of

US

owne

rs.

Adh

esio

n to

free

trad

e pr

inci

ples

. Key

pla

yer i

n gl

obal

tr

ade/

fi nan

cial

mar

kets

and

in

stitu

tions

. Fift

h la

rges

t tra

ding

na

tion.

3 F

TA

s and

3 b

eing

ne

gotia

ted.

Also

par

ty to

all

EU

tr

ade

agre

emen

ts. T

rade

defi

cits

do

min

ant s

ince

mid

198

0s. H

igh

relia

nce

on im

port

s of f

ood

and

natu

ral r

esou

rces

.

Adh

esio

n to

free

trad

e pr

inci

ples

. Inc

reas

ing

glob

al in

tegr

atio

n th

roug

h tr

ade

and

fi nan

cial

mar

kets

. 10

FT

As a

nd 1

2 pe

ndin

g.

US

is la

rges

t tra

ding

pa

rtne

r. T

rade

surp

luse

s fr

om 1

970s

unt

il 20

09. N

et

expo

rter

of e

nerg

y.

Adh

esio

n to

free

trad

e prin

cipl

es.

Incr

easin

g gl

obal

inte

grat

ion

thro

ugh

trad

e and

fi na

ncia

l m

arke

ts. F

inan

ce a

nd in

vest

men

t pr

omot

ed b

y in

tern

atio

nal

allia

nces

such

as W

TO, O

ECD

, A

PEC

and

bila

tera

l FTA

s. Ex

chan

ge ra

te v

olat

ility

. Nat

iona

l ec

onom

ic p

olic

ies s

hape

d by

nee

ds

of tr

ansn

atio

nal c

orpo

ratio

ns

(esp

ecia

lly re

sour

ces s

ecto

r) a

nd

key

trad

ing

part

ners

(Chi

na,

Indi

a, U

S). 6

FTA

s and

5 b

eing

ne

gotia

ted.

Hig

h re

lianc

e on

expo

rts o

f min

eral

s, en

ergy

and

ag

ricul

tura

l pro

duct

s, an

d m

anu-

fact

ured

impo

rts.

Trad

e defi

cits

fr

om 1

980s

unt

il la

te 2

000s

.


169

For

m o

f the

st

ate

Purs

uit o

f fi n

ance

- led

grow

th. E

xten

sive

and

pene

trat

ive

web

of

regu

latio

n un

derp

inni

ng

mar

kets

frag

men

ted

acro

ss

man

y ag

enci

es. B

udge

t de

fi cit

ever

y ye

ar si

nce

1980

ex

cept

199

8–20

01; e

qual

to

10.

9% o

f GD

P in

201

1.

20%

of n

atio

nal b

udge

t ex

pend

iture

on

defe

nce

and

secu

rity.

Purs

uit o

f fi n

ance

- led

grow

th.

Bud

get d

efi c

it sin

ce 1

980

exce

pt

2 ye

ars i

n la

te 1

980s

and

199

8–20

01; e

qual

to 1

0.2%

of G

DP

in 2

011.

Aus

terit

y pr

ogra

mm

e ad

opte

d in

201

0. R

ecen

t cut

s to

corp

orat

e ta

x ra

te. D

efi c

it to

be

elim

inat

ed b

y 20

14–1

5. 9

% o

f na

tiona

l bud

geta

ry e

xpen

ditu

re

on d

efen

ce. V

olun

tary

sect

or a

nd

civi

l act

ion

expe

cted

to d

eliv

er

serv

ices

pre

viou

sly fu

nded

by

gove

rnm

ent.

Purs

uit o

f exp

ort-

led

grow

th. F

iscal

pol

icy

pro-

cycl

ical

unt

il 20

08 in

re

spon

se to

glo

bal fi

nan

cial

cr

isis.

Ann

ual b

udge

t su

rplu

s fro

m 1

998

until

20

09. S

urpl

us to

be

rest

ored

by

201

5; b

udge

t defi

cit

equa

l to

3.7%

of G

DP

in 2

010.

8%

of n

atio

nal

budg

etar

y ex

pend

iture

on

defe

nce.

Purs

uit o

f str

uctu

ral

com

petit

iven

ess b

y pr

oact

ive

and

mar

ket-

enha

ncin

g st

ate.

F

iscal

pol

icy

pro-

cycl

ical

unt

il la

te 2

008

in re

spon

se to

glo

bal

fi nan

cial

cris

is. N

ew fo

rms o

f re

gula

tory

inte

rven

tion

and

rang

e of

new

inst

itutio

ns c

reat

ed. L

ittle

pu

blic

inve

stm

ent i

n so

cial

and

ec

onom

ic in

fras

truc

ture

. 6%

of

natio

nal b

udge

tary

exp

endi

ture

on

def

ence

. New

form

s of

soci

al re

gula

tion

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170 Neoliberalism

● trade defi cits are longstanding for the US, UK and Australia but a recent phenomenon for Canada;

● national budget defi cits have prevailed in the US and UK since 1980 whereas budget surpluses dominate Canadian and Australian budg-etary policy since the 1990s until the recent global fi nancial crisis reversed the situation; and

● expenditure on defence accounts for 20 per cent of the US national budget compared to 9 per cent in the UK, 8 per cent in Canada and 6 per cent for Australia.

Many of these characteristics and outcomes are contrary to neoliberal-ism’s free market rhetoric although, for the purpose of this discussion, the economic dynamic (evidenced by the conjunction between wages, prices and economic growth) arising from these institutions provides evidence of deeper structural diff erences within the Anglophone capitalism cluster. Figures 9.3, 9.4 and 9.5 show the annual rates of change in wages, prices and GDP (as an indicator of economic growth) from 1983 to 2010 for the US, UK and Canada respectively.

United StatesA

nnua

l rat

e of

cha

nge

(%)

12

10

8

6

4

2

0

–2 1983

1986

Gross Domestic Product Wages Consumer Prices

1989

1992

1995

1998

2001

2004

2007

2010

–4

Source: OECD (2000, 2006, 2010).

Figure 9.3 Economic dynamic produced by US mode of régulation, 1983 to 2010



For the US (Figure 9.3), the volatility in GDP growth, like Australia, was reduced after the late 1980s until 2007. GDP growth has generally outstripped that of wages and prices, the exceptions being in the early 1990s, early 2000s and 2008–09 although in the early 2000s economic growth did not dip signifi cantly below the growth rates of the other two macroeconomic variables. Wages growth has also been generally greater than prices throughout the period although this position is reversed in the late 1980s, during 1994–95 and in 2007. Notably the long- term relation-ship between wages and prices growth appears restored since 2008 when GDP growth becomes negative the following year.

A somewhat similar pattern is shown by the UK (Figure 9.4). The vola-tility of the 1980s is less evident in the subsequent two decades and GDP generally outstrips wages and prices except in the late 1980s–early 1990s, late 1990s and 2008–09. In addition, like the US, wages growth has gener-ally exceeded the annual rate of change in prices other than in 1990, 1993, 1995–96 and 2007–09. However, three aspects distinguish the UK eco-nomic dynamic from that of the US. First, throughout the period, the dif-ference between the year- on- year changes in wages and prices is far greater

United Kingdom

Ann

ual r

ate

of c

hang

e (%

)

12

14

10

8

6

4

2

0

–2

–4

1983

1986


1989

1992

1995

1998

2001

2004

2007

2010

–6

Source: OECD (2000, 2006, 2010).

Figure 9.4 Economic dynamic produced by UK mode of régulation, 1983 to 2010


172 Neoliberalism

in the UK although the gap is considerably narrowed from 1989 to the mid- 1990s. Second, the episodes when GDP growth has been surpassed or equalled by wages and prices have occurred slightly earlier than in the US. Finally, the long- term relationship between wages and prices was not resurrected in 2007–09, although the data for 2010 show some signs that this may have been a temporary aberration as in 1995–96.

The Canadian economic dynamic (Figure 9.5) shows more ongoing volatility than that for the US, the UK or Australia, although there are some strong similarities with the US and UK, namely: wages generally outstripping price increases and the occasions where this is not the case are akin to those for the US and UK; GDP growth rates generally outpace wages and prices growth; GDP growth become negative in 2009; and the long- term relationship between wages and prices are not aff ected by the fall in GDP growth rates post- 2007.

There are, however, some signifi cant points of diff erences between the above fi ndings and those discussed earlier for Australia. In 1983 and 1991, but not in 2009, Australia experienced negative economic growth. None of the other three economies of the Anglophone cluster exhibited such a

CanadaA

nnua

l rat

e of

cha

nge

(%)

12

10

8

6

4

2

0

–2

–4

1983

1986


1989

1992

1995

1998

2001

2004

2007

2010

–6

Source: OECD (2000, 2006, 2010).

Figure 9.5 Economic dynamic produced by Canadian mode of régulation, 1983 to 2010



pattern, only showing negative GDP growth in 2009. The rate of change in Australia’s GDP has not generally eclipsed wages and price growth. During the period 1983 to 2010, GDP growth exceeded the rates of change for both wages and prices on only four occasions. This compares to 25 occasions for the US, and 24 for both the UK and Canada. Australian wages growth, from the late 1990s, developed a consistent inverse relation-ship with economic growth until 2009 and 2010 – and that relationship shows year- on- year reversals. The same relationship is not present in the US, UK or Canada which all tend to exhibit a pattern of wages growth generally mirroring economic growth.

Interestingly, these perceived diff erences in the economic dynamic between the four Anglophone economies are not refl ected in rates of unemployment (Figure 9.6). From 1990 to the early 2000s, the two smaller Anglophone economies exhibit the highest unemployment rates. Canada’s rate continues to be the highest for the rest the decade. This pattern coin-cides with Canadian economic growth rates exceeding those for wages and prices. The Australian unemployment rate, on the other hand, steadily falls from 2001 until the global fi nancial fi nance in 2008. By 2005, Australia has

Per

cent

age

12

14

10

8

6

4

2

0

United States United Kingdom Canada Australia

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Source: OECD (2000, 2006, 2010).

Figure 9.6 Unemployment rates, 1983 to 2009


174 Neoliberalism

the lowest unemployment rate of all four Anglophone economies. This fall for Australia occurs when economic growth is more often than not less than wages growth. This fall also coincides with a series of interest rate increases and a substantially growing annual budget surplus (Figure 9.2).

Interest rate rises and budget surpluses did not match the UK unem-ployment rate’s steady fall over the twelve years to 2005, which shows a signifi cant shift in the relationship of prices to GDP. Prices growth fell quickly in the early 1990s to well below GDP, with this diff erential main-tained until the global fi nancial crisis. The same occurred in the latter half of the 1980s – a falling rate of unemployment when prices growth is signifi -cantly less than GDP. When this nexus is broken, the UK unemployment rate accelerates.

In contrast, the long- term US conjunction between wages, prices and economic growth has endured although some temporary variation is shown by wages growth (Figure 9.3). The US maintained the lowest unemployment rate from 1983 with an upward shift after 2001. By 2008 the US unemployment rate is barely separable from the UK and Canada in Figure 9.6. All four economies show a sharp upswing since the global fi nancial crisis and slumps in economic growth rates. It is clear, however, that similar trends in unemployment rates – both upward and downward – are being generated by very diff erent conjunctions between wages, prices and economic growth, that is, the economic dynamic of the correspond-ing institutional architecture. This is evidence of deeper structural diff er-ences within the Anglophone capitalism cluster which have generally gone unacknowledged.

CONCLUDING COMMENTS

Given its high reliance on market mechanisms for coordination of the economy, Australia is commonly categorized as a liberal market- based variety of capitalism along with the other English- speaking economies of the US, the UK and Canada. However, Australia’s growth pattern follow-ing the ascendancy and hegemony of neoliberalism has not mirrored that of these other Anglophone economies, and did not turn negative during the global fi nancial crisis as occurred elsewhere.

Diff erent forms of capitalism are observable through diff ering confi gu-rations of capitalism’s institutional architecture, or mode of régulation. Hierarchies or dominance of particular institutional forms have also been observed to characterize diff erent modes of régulation with the monetary regime (fi nance and credit relationships) and the ‘internationalization of competition’ currently dominant compared to the wage- labour nexus



during Keynesian- Fordism. However, these observations are not con-fi rmed by two substantive fi ndings of the foregoing analysis of the neolib-eral post- Fordist institutional architecture of four economies within the Anglophone liberal market- based cluster.

First, the analysis demonstrated signifi cant diff erences in institutional features and conjunctions within one so- called type of capitalism. The contemporary organizing principle of each institutional form, for each economy, has become one of market logic strongly framed and under-pinned by regulatory interventions by respective nation- states, and other points of commonality. Nevertheless, not all liberal- market based econo-mies are pursuing the same neoliberal post- Fordist growth regime (the US and UK are fi nance- led, Canada is export- led and Australia has pursued structural competitiveness with a high reliance on primary exports). In addition, there are very notable diff erences in international positions, budgetary policy approaches, trade defi cits, regulation of decentralized wage- bargaining, the ratio of minimum to median wages and patterns of long- term unemployment.

Second, the analysis demonstrated that neoliberal post- Fordist domi-nance of the institutional forms of fi nance and competition is not shared to the same extent in all liberal market- based economies. The wage- labour nexus is still very dominant in Australia’s contemporary mode of régula-tion despite the monetary regime exerting a stronger infl uence than during Keynesian- Fordism. This is not shared by the US and the UK. Overall, Canada and the Australia show greater similarities of dominant institu-tional forms than if compared with the larger economies of the US and UK. The economic growth rates of Canada and Australia also closely refl ect that of their dominant export partners – Australia tied to the cur-rently high economic growth rates of China and India; Canada heavily tied to that of the US.

The purpose of this chapter has not been to engage with the ‘Varieties of Capitalism’ discourse nor debate the merits or shortcomings of the ‘two capitalisms’ categorization. Rather, it has been to discern the defi ning character of Australian neoliberal post- Fordist capitalism vis- à- vis those economies with which it is constantly categorized. The foregoing analysis has delineated commonalties, as well as clear and distinct diff erences, between four liberal market- based economies following the ascendancy of neoliberalism. These diff erences are too numerous and infl uential on the economic dynamic of these economies to suggest that the commonal-ties are superior and thus outweigh the signifi cance of these diff erences. Australia has been found to not readily replicate or shadow the contem-porary neoliberal institutional architecture and economic dynamic of the other three economies. This, I would contend, suggests that particular


176 Neoliberalism

categorizations of capitalism – such as the dualism of the ‘varieties school’ – may be too generalized and mask important structural neoliberal post- Fordist diff erences within each category which renders the classifi cation somewhat meaningless. A more meaningful and realistic understanding of the diff erences (and similarities) between purportedly ‘like capital-isms’ can, however, be gleaned by analysing a nation- state’s institutional structure.

The relatively small size of the Australian economy undoubtedly is a direct determinant of the limited interest, outside Australia, of under-standing this expression of capitalism. Yet this should not be an excuse for any variant of neoliberal post- Fordist capitalism to be unacknowl-edged and instead subsumed by a US- centric typology. The institutional architecture of the Australian liberal market- based economy is evidence that neoliberalism has not generated a ‘one- size- fi ts- all’ to sustain and secure diff erent Varieties of Capitalism. The Australian neoliberal post- Fordist mode of régulation not only confi rms the ongoing metamorpho-sis of the mode of régulation to ensure its enduring capacity to reproduce and maintain capitalism’s social relations and thus the conditions for ongoing capitalist accumulation. It also confi rms that the practices of neoliberalism, not its rhetoric, have created distinctive features within the institutional forms comprising the mode of régulation, and their conjunction, to ensure capitalism – in all its guises and variants – is sustained and secured. Not only has the endurance of capitalism been bolstered but the hegemony of neoliberalism has been further strength-ened through its diff erent forms of stranglehold over the diff erent forms of capitalism.

NOTE

1. At least four confi gurations have been observed (market- oriented, meso- corporatist, statist and social- democratic) (Boyer 2005).

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The Australian variant of neoliberal capitalism

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