Australia’s Two Futures

by seangljacobs

Clare O’Neil and Tim Watts, Two Futures: Australia at a Critical Moment, Text Publishing Co, Melbourne 2015

Sean Jacobs

Progressive young federal Labor politicians Clare O’Neil and Tim Watts recently released Two Futures: Australia at a Critical Moment, which defines disruptive technology, inequality, climate change and economic growth as the ‘forces that will reshape our nation in the next twenty-five years.’

O’Neil and Watts, however, do little to limit the concerns of those Australians wary of self-described ‘progressives’. Proposing, as they do, that the state has a clear role within these ‘defining issues’ is to skip and misunderstand not just Australian history but the expanding and untameable nature of modern government. The added tendency of both authors to rely upon study after study, and academic upon academic, with little reference to liberty, freedom and choice, or even private or public debt, shows an un-camouflaged desire for a future led by government, think-tanks and academia at the expense of the common sense held by everyday Australians.

In many ways what O’Neil and Watts describe as their ideal future is not ‘the future’ but has already been tried. Many Western governments, for example, have done their best at stoking innovation, premeditating climate change and redressing inequality with results that hardly inspire more intensified government effort.

Even the briefest glance at the history of modern innovation shows that new technology overwhelmingly arrives not from the state but an organic alchemy between capitalism and culture. ‘Einstein didn’t construct his theory under order from a bureaucrat,’ famously wrote the late Milton Friedman. ‘Henry Ford didn’t revolutionize the automobile industry that way.’

When Australia was settled in the eighteenth and nineteenth centuries, periods receiving zero attention from the authors, enlightenment principles combined with real-world problems to produce everything from the steam engine to the telephone. Over time Australia’s defining historical innovations – the stump jump plough, rust resistant wheat, the Ridley Stripper, merino wool and so forth – emerged out of necessity and not bureaucratic thrust or the taxpayer start-up kitty.

O’Neil and Watts desire shiny things like global innovation hubs without discussing Australia’s economic, geographic and social DNA. In this sense they, unlike conservatives, fail to look further back to see further forward. Pointing this out doesn’t mean opposing game-changing technology or scientific breakthrough but accepting that, even with the best cross-sector intentions and laser-guided use of taxpayer money, the Silicon Valleys and Tel Avivs of the world are not so easily replicable down under.

In terms of climate change the same historical depth is not needed to show the costly and ineffective nature of government intervention. ‘For years,’ they write, ‘Australia has been locked in a toxic debate about how to decrease pollution. Meanwhile, the rest of the world has moved on – talking about more ambitious targets and competing to capture the big upside to acting early on climate change.’ What they describe as a ‘toxic debate’, however, has actually been a triumph of common sense against Kevin 07’s proposal for an Emissions Trading Scheme – an initiative that the rest of the world has not only tossed aside but left for dead. Such a proposal, as many Australians knew at the time, would’ve only penalised commercial intercourse and done little to reduce global emissions.

O’Neil and Watts interestingly point out that solar panels ‘are now installed in over a million Australian homes: up from just eight thousand in 2007’ but they cite this as a key example of ‘the disconnect between public action and political inaction.’ Surely, however, this is a great illustration of the Australian people choosing their renewable energy needs without the wise oversight of government?

Inequality will always be an uncompromising issue for the progressive Left. But O’Neil and Watts, to their credit, promote more creative tactics to redress inequality – early education, unions, flexible skills training and reconciliation for indigenous Australians – than usual progressive referrals to ‘the gini coefficient’ and philosophers like John Rawls. But there are two questions to ask here. Do such measures, after hard-nosed reflection, really need to be state-facilitated? And, more fundamentally, why should we expect Australians to all be equal in the first place?

The tendency of the authors, on every second page, to name-drop professor after professor, and study after study, will frustrate some readers. Referring to studies, for example, to tell us that nurturing children from an early age is important isn’t exactly cutting edge thinking but a validation of common sense. This tactic, like other Labor books of this kind (Andrew Charlton’s Ozonomics or Jim Chalmers’ Glory Daze), constantly gives the floor to academic ‘thinkers’, Paris’ OECD and Australia’s Chief Scientist rather than, say, the lifeblood of economic growth: Australian small business.

Granted, O’Neil and Watts try hard not to put academia, international organisations or government at the apex of absolutely everything. In some instances like high-tech, for example, they want the government ‘engaging where it can have an effect: bringing a strategic approach to national innovation, connecting different parts of the economy so we are more than the sum of our parts, and supporting plucky individuals with great ideas.’

They should keep in mind, however, that some seemingly harmless tinkering here and a ‘nudge’ there simply becomes a welcome mat for more government action that, once instated, is incredibly difficult to roll back. One only has to look at the growth in government activities since Federation, or the explosion in Commonwealth overreach since the Whitlam years, to see the unyielding and spaghetti-like nature of the modern state at work.

In more subtle ways the growth of regulation has harmed many industries, disfigured costs and reduced choice. Again, however, this goes undetected as O’Neil and Watts see issues like decreased workforce participation as a matter of lousy ‘childcare subsidies’ rather than regulatory hurdles like the minimum wage, penalty rates or, in the realm of childcare supply itself, lofty staff-to-child ratios and staff qualifications.

O’Neil and Watts, for all their good intentions, fail to appreciate where their thinking can actually be harmful for Australia’s future. A future where the ‘decisions made by the Minister for Early Childhood Education, for Asian Engagement or for Climate Change could have a greater influence on long-term growth than those made by the treasurer’ is not something to desire but oppose. We have done remarkably well as a nation, and will continue to prosper, not by constantly calling for government solutions but by putting faith in the Australian people.