Don't ask what is an Australian, but more importantly, who is an Australian.
If society is a problem to the system, then society can be changed by replacing the people in that society with others more compliment to the existing system...read Multiculturalism!

The chances of the waning of capitalist Neo-liberalism in Australia are zero. The chances of redirecting the society towards a humane and traditional social construct, are also zero under this system!

All tools in the Neo liberal tool chest are designed to reduce or destroy traditionalism!

This guy is a scholar at QUT? He's paid to write this stuff? It's just a rant of little analytic value. Basically the author hates any attack on benefits or union power.. the question of what the community will accept in terms of the trade off between tax taken and benefits paid is not considered worthy of note..

Curmugeon:
To quote no less a luminary than the redoubtable Forrest Gump; "stupid is what stupid does"!

Now I'll leave you with the rest of the day to work out if that applies to you and your ilk or the Author?
Rhrosty.

You posters so far are sticklers for punishment. You saw the author's name, and you actually read the stuff!

The author clearly understands neither economics not the origins of the term “neo-liberal” and its predecessors. “Economic Rationalism”, for example, was hardly every used until Michael Pusey published “Economic Rationalism in Canberra”. This set the tone for later uses of the phrase – almost always as a term of abuse, vaguely defined, bearing little resemblance to what actual economists and policymakers thought. A few on the drier end of the economic spectrum took it up for a while and tried to adopt it as a label for their own beliefs, but most gave up as it became almost exclusively an insult.

The “natural rate” of unemployment is not some God-given standard. Its more formal name is the non-accelerating inflation rate of unemployment (NAIRU), and it largely supplanted the neo-Keynsian idea of the Phillips curve after the supposed trade-off between inflation and unemployment broke down with stagflation in the 1970s. The Phillips curve was abandoned because it didn't fit the facts, not for ideological reasons. the NAIRU theory doesn’t propose that governments can do nothing about unemployment; only that demand stimulus alone cannot sustainably drive unemployment below a certain point. Beyond that point, it is likely to result in accelerating inflation. If governments want to reduce unemployment below that rate, they need to use other policy tools.

No actual policy maker or mainstream economist believes “governments should not interfere in anyway with the invisible hands of the market.” None advocates “trickle down”. None wants to dismantle the welfare state. No-one outside of the movies proclaims “greed is good”.

The problem with this article and is that it absolutizes and caricatures policy positions that are never expressed in those terms except, occasionally, on the extreme fringes.

It’s so much easier to vent one’s righteous rage at a straw man, I suppose.

ttbn, what's the problem with the author's name?

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Rhian, there are two problems with the NAIRU:
Firstly there's a lack of imperial evidence for it, with inflation remaining low when employment fell far below what the NAIRU was previously thought to be.

Secondly it's theoretical basis is flawed. Most of the people not employed are not counted as unemployed, and there are also many more who are underemployed. Also the NAIRU figure takes no account of regional variations in employment and unemployment.

Hi Aiden

I agree there are problems with the NAIRU.

I was more concerned to explain the history of how it came to supplant the Phillips curve. The author implies it was an ideological choice intended to provide a rationalisation for governments to do nothing about unemployment. That is wrong on two counts. Firstly, the reason the Phillips curve was abandoned (or modified to take account of inflationary expectations, which took it close to being a NAIRU anyway) was because of the simultaneous increases in inflation and unemployment in the 1970s, which weren’t supposed to happen. Second, the NAIRU does not imply that governments can, or should, do nothing about unemployment, only that some types of measures will not be effective beyond a certain point. It can actually support an interventionist approach to labour markets. For example, much of Keating’s “Working Nation” package was aimed at reducing unemployment by measures that would effectively shift the NAIRU, such as retraining and employment incentives.

It’s a while since I studied these things in detail, but it seems to me both Phillips curves and NAIRUs have been overtaken by other ideas, like hysteresis. Hysteresis seems to be a reasonable description of how labour markets have worked in recent decades, but doesn’t have much explanatory power that could translate into a policy program.

Rhian, you may not have noticed it, but basing policy decisions on the NAIRU has been used by politicians (and public servants) as an ideological choice. It's worse than doing nothing: the 2010 interest rate rises were a deliberate attempt by the RBA board to keep the unemployment rate high because they thought that was the only way to keep the inflation rate low. But there was no real inflation threat, and doing nothing would've probably been sufficient.

As for the Phillips curve, the problem was that externally imposed cost push inflation (as happened when OPEC cut oil supply) raised the inflation rate without a corresponding drop in the unemployment rate. Phillips (and indeed Keynes) failed to anticipate that problem, but the basic idea is still sound.

Hi Aiden

Did the RBA think we were at or below the NAIRU in 2010? It seems unlikely, as the rate had risen over the previous 2 years after the GFC, it actually fell a bit in 2011, and it had been significantly lower in 2006-2008 with no evidence of an inflationary breakout.

The OPEC price shock exacerbated stagflation in the 1970s, but didn’t start it. Wages growth was in double figures by 1971 and inflation was over 7%, while unemployment was climbing (though low by today’s standards). The first major oil shock didn’t hit until 1973, by which time inflation was already over 10%.

Ian Macfarlane’s Boyer lecture on the period is quite interesting.

http://www.abc.net.au/radionational/programs/boyerlectures/lecture-2-from-golden-age-to-stagflation/3353140