How To Achieve Free Market Success in Australia

It is a sad fact that the state of liberty in Australia is in a rather sorry shape. The size and scope of government is consistently increasing, our economic and social freedoms are shrinking, and there is no respite in sight. There can be no denying that freedom is on the retreat.

Yet why is this? Our think tanks are world-class. We have many believers of small government in state and federal parliaments (albeit somewhat hidden in the closet), and youth political organisations like the ALSF are completely onside. Why, by any objective standard, have we failed?

Rather than using excuses of political culture, and blaming external forces, I would suggest that we look squarely at ourselves as the reason. We need to take responsibility for our failings, and address them for the way forward. I believe that one of the fundamental reasons we have not succeeded is that we have failed to look at the battle for liberty in a strategic manner, and instead have approached things in a manner that can be described as ad hoc at best.

Allow me to explain. Think, if you will, of the promotion of liberty as analogous to the structure of production, and the way institutions fit together. For this example, I will use a simplified and bastardised version of Hayek’s model (apologies to puritans)!

The structure of production in a developed economy can rather easily be defined. First you have the initial stages, representing investments and businesses involved in the enhanced production of basic inputs – raw materials. The middle stages convert these raw materials into various types of products that add more value – intermediate and capital goods. The final stages take these, transform them, and package them as consumer goods.

This theory, I suggest, can be applied just as equally to the structure of social change, and, through that, to the institutions of social change and political battle. So. How would this work?

Firstly you have your raw materials – ideas. These are raw intellectual materials; abstract theories and concepts. These are generally removed from the average citizen, and abstract in nature. These then become converted into policy analysis and policy papers. Slightly more accessible perhaps, but still generally removed from your average layman. Then you have the third stage. Consumer goods. Policies are neatly packaged, simplified, and presented to the people. The proposals are translated in a way the citizenry can understand and act upon.

So, how does this translate into something a little more concrete and into an institutional setting. Firstly, we have the raw ideas – these come from the universities. A great example would be the work in the University of Chicago in the 1960’s and 70’s. These are then developed into policy proposals by think tanks – to continue the example, Cato and others in the 1980’s. Then, we have the ‘implementation phase’ where grassroots advocacy and activist organisations fight in the trenches to convince the public, and then lobby the politicians – the National Taxpayers Union, Americans for Tax Reform etc. After all, it was this combination that ensured the great deregulations here, leading to  significant increases in economic growth and prosperity.

Success is achieved in this model when all organizations work together in a holistic manner and are equal in strength. It is only when all three components are in play and institutions in all three stages are health that we can actually achieve true policy change.  It is essential that all three stages are strong and functioning to maximise output in the final stage.

Now look at Australia. We certainly have the raw ideas – whether it be through the work of those in our Academy (eg Sinclair Davidson and Alex Robson) or that we steal it from abroad, whilst outnumbered by the left, we certainly are represented here. Then it comes to the middle stage, the think tanks. The CIS and the IPA are without doubt world class, and produce brilliant policy papers and proposals. Now we come to the implementation stage. And….. um… hmm…

There is nothing.

This, I suggest, is the fundamental problem we face. We have no organisations dedicated to free market ideas that are focused to a)packaging the message in a nice simple format for the average Australian to be able to digest and b)lobbying politicians to adopt this. None. The left have them. Social conservatives have them. Even crazy insane people have them. But not us. Granted, the IPA has recently started moving in that direction, which is great, but ultimately that isn’t their comparative advantage. What we need in Australia is a genuine grassroots free market advocacy organisaiton.

For those of you who don’t know me personally, I’m currently in the US learning the skills to do just that. As part of that, I’m participating in the Koch Associate Program in conjunction with my employment at Americans For Tax Reform; whilst many don’t know the name Koch, it is not only the largest private company in the world (revenue exceeding $100 billion USD a year), it also funds pretty much the entire small government movement. At the risk of turning this into blatant self promotion, the year long program’s aims are “ to identify up-and-coming leaders and entrepreneurs interested in liberty and help them develop the knowledge, skills, and experience necessary for careers with market-oriented think tanks, policy institutes, and other non-profit organizations”. In just two weeks I have learned more on how to effect change than I have in many years at home (and will try to go into concepts of the Science of Liberty and Market Based Management in a later post). So my grand plan down the track is to set something up like this back in Australia (hence the self-serving nature of this post!)

I know many in Australia doubt the efficacy and practicality of grassroots organisations as opposed to think tanks (I had a debate with the doyen of the ALS, Mr. Humphreys, on this very matter a few weeks ago). However I am convinced that until we set up a vibrant grassroots advocacy movement – that actually works – to promote the free market back at home, we are doomed to continue the failures of the past.

For us to succeed, we must step down from the ivory towers of intellectualism, we must tear ourselves away from online debates, and we must get into the trenches are really start to fight. Only then can we really create change.

(Note: This post was based on From Ideas to Action: The Roles of Universities, Think Tanks, and Activist Groups by Richard H. Fink. Whilst my desire to set up a free market grassroots advocacy organisation in Australia has been around for years, this specific model and argument is completely taken from Richard Fink and the Charles G. Koch Charitable Foundation and I can claim no credit for it whatsoever)

Cross-posted at my personal blog.

28 thoughts on “How To Achieve Free Market Success in Australia

  1. Pingback: How To Achieve Free Market Success In Australia « The musings of an Australian classical liberal in Washington DC

  2. Good, good. But a few points.

    First, we do have one organisation at the third stage — the Liberal Democratic Party. The LDP aims to take the basic ideas and the consequent policy positions and package them in a way that can appeal to the general public, and consequently help to shift the political debate in the country.

    Second, the real reason that liberty will be a difficult sell is based on two broader underlying themes to human nature. The first is that we are naturally conservative. By that I don’t necessarily mean “right-wing” or “vote Liberal”… I mean people naturally like to stick to what they know and avoid change. The second trait is that people in a democracy are easily sold new schemes to “fix the world”. The policy proposal of “do nothing” does not fit into the human desire to “do something” when faced with a problem.

    These two trends conflict somewhat, with the conservative nature slowing down the “do something” nature… but ultimately we are left with a one-way ratchet… as each successful “do something” becomes part of the status quo and is defended both by the “do something” and “conservative” ethos. Against these trends, the “let people be free” ethos is a difficult sell.

    As a case study, consider Medicare. Taking away Medicare would scare the bejesus out of people because it is change (we must have it because we used to have it, they say) and because it involves political inaction (but you have to do something, they cry). Against this, even super-Tim will find it difficult to make progress. But good luck! I’ll certainly support whatever you try.

  3. So the way to turn Australia free is to start a drug network that raises millions, use the money to hire mercenaries, and take over Tasmania and make it a base from which to conquer the rest of Australia. We reform all institutions, and then hire private firms to guard Australian waters from people-smugglers. (Or would we just let all people in, even if they have diseases?)
    OR a libertarian could win $100million in Lotto, and start up a pro-liberty magazine.
    Any other ideas?

  4. Tim

    good luck but you will need it.
    i suspect ideas of liberty, responsibility and self-reliance are in a long term cyclical retreat. i just cannot see what it will take to turn around this handout/victim/blame culture.

    there is another factor at work – the suicide gene that has so infected the Left – this desire that the West (and in particular white males) has to apologise for everything.

    sounds great though!

  5. I think Johns point is pretty spot on. I would go further and say that people somewhat dislike markets because in markets prices are always changing and people don’t like change. This is a big part of why I think we need to take the current monetary noise out of markets. Current monetary policy makes markets prices much more volatile than is normal and in the process undermines confidence in markets. Before the great monetary interventions of the 20th century people used to trust markets. I think there is a crucial linkage between monetary policy and trust in markets. There is a reason (now forgotten by most) why our culture has a phrase “as good as gold”.

    Institutionally the way to combat the ratchet is to put time limits on most legislation and to demand that new initiatives need to overcome significant hurdles. In the arena of government finance concepts such as TABOR with direct democratic hurdles on government expansion would slow the ratchet. The problem with such institutional restrictions relates to getting them instituted in the first place.

    The ratchet is why every civilisation ultimately destroys itself. This is the effect that Ibn Khaldun observed and wrote about more than 600 years ago.

  6. I agree that the major issue for liberal policies is the ability for such ideas to be “sold” to the public. This is especially true for the youth market. Something I’ve noticed on university campuses is that the more economically liberal groups attract straight laced professional types and often lose most of the student body to more radical groups because they lack ‘sexyness’. It has always struck me how even the most laughable of groups promoting ridiculous ideas attract such a large membership. It ultimately comes down to the “cool-factor” of presentation. Given the choice between suited up Reagan clones or an outgoing post-gender communist I’m going to pick the latter. Whilst the classical liberal groups present their beliefs using crisp white leaflets double spaced for clarity the far left groups hold rally’s whilst presenting their views in photocopied indy mags.

    There is also a lack of passion in a lot of the debating which happens on campus. Given that most students are socially liberal by nature, such views always end up in agreement. This leaves the point of contention to economic matters which unfortunately can’t help but come off dry and overly complex. This is a major issue of politics in general property rights arguments are talk about the economy don’t engage people quite like arguments for say free speech. Businesses also are difficult to argue for given they lack a human face. Because of this corporate regulation doesn’t have the intrinsic feeling of ‘injustice’ like something like gay marriage.

    I’ve always tried to modify this presentation when I write in student magazines or work as part of a student committee. Grounding arguement with appeals to human rights and civil liberties will always lead to greater emotional connection. Keeping things funny and ironic always helps to engage readers. I actually enjoy a lot of leftist literature such as ‘No Logo’ by Naomi Klein because it is an enjoyable and entertaining read. I can’t say Friedman or Hayek ever wrote anything as enjoyable despite personally finding their views more favorable.

  7. It is a sad fact that the state of liberty in Australia is in a rather sorry shape.

    That’s true currently, but it’s also true in the US and most of Europe, especially the UK. There’s nothing unique about Australia.

    The proposals are translated in a way the citizenry can understand and act upon.

    History suggests that’s not essential. In New Zealand, Roger Douglas radically transformed the economy before most of the people realised what he was doing. He has written that it is important to move hard and fast, before the opposition can get organised.

    Success is achieved in this model when all organizations work together in a holistic manner and are equal in strength.

    Do they hold hands and chant ommm? Seriously, that’s nonsense. I doubt you could point to a single example. It certainly wasn’t the case with either the Thatcher or Reagan reforms.

    Now we come to the implementation stage. And….. um… hmm… There is nothing.

    As John Humphreys said, there is the LDP, growing exponentially. And let’s not forget there are semi-libertarian enclaves within the Liberal and Labor parties as well as the public sector. They are not formally organised, but every now and then their impact can be observed.

    We have no organisations dedicated to free market ideas that are focused to a)packaging the message in a nice simple format for the average Australian to be able to digest and b)lobbying politicians to adopt this. None.

    The CIS and IPA have considerable “lobbying” impact, with politicians regular attendees at their events. The Kennett government in Victoria was heavily influenced by the IPA.

    until we set up a vibrant grassroots advocacy movement – that actually works – to promote the free market back at home, we are doomed to continue the failures of the past

    A political party to compete with the LDP? A think-tank to compete with the CIS or IPA? Or do you have a whole new concept in mind?

    Tim, your passion and commitment would be enormously welcome in the LDP, and I expect you’d be embraced by the CIS or IPA too. But in the end there are only two options – present the ideas to the political class for them to adopt, or join the political class and achieve enough leverage to implement them yourself.

  8. Tim can’t join the LDP because it would ruin his career path up through the Liberal party. However on the outside chance that Tim was somehow catapulted into the LDP it would obviously benefit the LDP.

  9. Believe me Terje, I have no desire or ambitions whatsoever for a career with the Liberal Party – it’s just that, at this particular time, I think I can have more impact working through the Libs than through the LDP. But you never know what the future holds! 🙂

    Will respond to more substantive comments when I have a bit more time.

  10. David L

    Aren’t there also other libertarian parties (FREE, LA), other than other parties with libertarian tendencies (ORP, L4F, Shooters, No Excise Party)?

    Looks like a bright future to me.

    If only someone could talk some sense into the ALP, Coalition, Democrats and Greens.

  11. This is why we need a libertarian movement- to be the starting-point from which a party and a HOLY CAUSE can spring! AND a glossy magazine with pretty pictures, and a club to recoup for the fight of ideas in the ‘real’ world!
    The name ‘The Pan-Liberatrian Union’ springs readily to mind, because it can be shortened to Pan-Liberty.

  12. Jarryd – I agree, well put. It’s what I was getting at in the long post I linked to above.

    It’s a long time since I was an on-campus student at uni, but I don’t recall any libertarian groups at all when I was. Only the Young Liberals and they were pretty subdued.

    To fight the ‘Che factor’, we need to market libertarianism better. Marketing is considered a capitalist tool, and criticised as morally objectionable by anti-capitalists. Therfore I find it incredibly ironic (and a tad hypocritical) that the best political marketers are anti-capitalists like the Greens, and frankly we suck at it.

    I’ve read Klein as well, and yes I imagine she’s more entertaining than Friedman. In general there’s a shortage of entertaining libertarian authors. There’s Ayn Rand’s fiction which I enjoy but I wonder if someone with centrist or socialist leanings would really read Atlas Shrugged, and it’s 50 years old anyway. P.J. O’Rourke is hugely entertaining, and follows the libertarian line, even if he calls himself a conservative.

  13. Mark: ORP, L4F and No Excise are defunct. Shooters are nowhere near libertarian (closer to Christian Democrats except on core issue), while Free is a mix of libertarian and old fashioned unionism. LA seems to be just an idea at the moment.

    I agree that it’s better they exist than not exist though.

  14. I feel like we have a growing movement full of impatient people. I’m glad they’re impatient, however growth takes time. Which is why I’m also glad we have a commited core. Or rather a couple of commited cores.

  15. “History suggests that’s not essential. In New Zealand, Roger Douglas radically transformed the economy before most of the people realised what he was doing. He has written that it is important to move hard and fast, before the opposition can get organised.”

    Am I the only one that finds this kind of tactic incredibly disturbing? I don’t really believe in forcing a political ideology on citizens without convincing them of it first. It’s for similar reasons that I find the actions of the WTO a bit morally unsettling.

  16. If voters are attracted to solutions to problems, then we should legitimately show government expansion as the problem, and we can promise to downsize governments as our solution.

  17. Am I the only one that finds this kind of tactic incredibly disturbing? I don’t really believe in forcing a political ideology on citizens without convincing them of it first.

    Kennett in victoria said similar things to Douglas in terms of moving quickly. This is not about forcing a political ideology. In both New Zealand and Victoria people where and are still free to believe in whatever ideology they prefer. What it was about was achieving meaningful reform. New Zealand has not subsequently put the tariffs back up. Victoria has not de-privatised the electricity industry.

    Socialists don’t test their policies via referendums before implementing them. They impose them, claim them as sacred cows and then demonise anybody that suggests removing them.

    If people want direct democracy then lets test the water with TABOR. No increase in per capita tax revenue without the direct consent of the people.

  18. Nicholas – Based on past evidence I don’t think as a general rule voters are that attracted to politicians merely because they have a solution. I think voters are attracted to politicians that can effectively articulate the problem and that publicly empathise with those that suffer as a result. Having a meaningful solution is rather secondary and on it’s own doesn’t carry much currency at all.

    Of course a really good articulation of a problem can often make the solution entirely self evident to everybody that cares enough to really listen. Noel Pearson demonstrates this really well when he talks about the the problem of welfare dependence and laments the impact on people. Although technically he’s a policy advocate rather than a politician.

  19. To bring this back to my point, how did we get TABOR implemented? It wasn’t through politicians, rather it was through political grassroots advocacy groups!
    This is what we are lacking in Australia. Whilst the LDP certainly has a role, we need a non-politically partisan group dedicated soley to putting pressure on politicians to implement good laws.

  20. There you go, Tayap! Use Pearson’s approach- show that Governments are the problem. This can be done at grass-roots level by pointing out how intrusive the local councils are, with their ideas of zones, etc. Then reveal how the states keep on racketing up the taxes, so less government is the best solution.
    As John H. said, people are favourably-inclined to those who can solve their problems- so if we show them that Governments are the problem, our solution will be welcomed!

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