Does the financial crisis portend some sort of ideological shift – not in political philosophies adopted by the commentariat, public and political class, but in the practical operation of government and policymaking? I think Foucault’s term ‘governmentality’ – models by which governments relate to individuals, independent of the over-worked philosophical cleavages – is more useful than many on the right are predisposed to admit. Are we seeing a new shift in governmentality as a result of the financial crisis – are governments looking at the relationship between economy and society in a different way?
Frankly, I don’t see it, although many others do. My friend Michael Cooney asks in the Weekend Australian: “is the era of economic conservatism over? It is: what comes next?” And John Quiggin has been talking about the end of the neo-liberal consensus, and, I think rightly – although I suspect for different reasons – is placing the political reaction to the crisis in the framework of risk society government.
Nevertheless, I don’t mean here to whinge about the continued applicability of libertarian policy and ethics. Anyway, I’m with Mark Bahnisch when he says that ‘dichotomies about states v. markets are nonsense’, at least when talking about the contemporary public policy world.
But to return to Michael’s piece in the Oz, that he describes his new governmentality as that of ‘designing markets’ only goes to show just how little ideological change this financial crisis will actually bring about directly.
Obviously the three examples of designed markets that he cites – carbon, water and training – have their origins well before the crisis began. More indicatively, those great ‘neoliberal’ reforms and ‘deregulations’ of the 1980s and 1990s were themselves, more often than not, exercises in market design. The Hilmer Reforms imposed market frameworks on top of monopoly assets – while the markets they designed for gas, telecommunications, electricity and others were less theoretically complex than the governments grand new emissions trading scheme will be, I would argue that third party access requirements nonetheless share the same regulatory ideology. (For more on this, read my book.)
And while the financial crisis will no doubt bring about regulatory expansion in the financial sector, it is hard to see how it would be the catalyst for regulatory expansion outside that sector. What quasi-nationalisations have occurred have occurred reluctantly – there aren’t many mainstream politicians seriously rethinking the possibilities of widespread public ownership.
Nevertheless, there are shifts in liberal democratic governmentality occuring, although not because of the crisis.
The phrase ‘Nanny State’ may sound like a tedious ad hominem, but, as far as it indicates public policy justifications leaning more and more on the concept of ‘risk’ rather than rights, it is a useful shorthand for how the relationship between government and individual is changing. And since the collapse of mid-century liberal socialism, what has replaced it has not been libertarianism, obviously, but a more complex and interesting model which places regulation – and, crucially, independent regulatory institutions – at the centre of government practice.
These are long term trends which I do not see being diverted by the crisis. The debates that occupied our time before September 2008 will be the same debates that occupy our time in 2009. The financial crisis is a big deal, but it is not that big a deal.
Crossposted at chrisberg.org