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05 December 2014

IPA: Not quite behind the throne

The IPA (Institute of Public Affairs) has had many words written about it, including that it may be the power behind the throne in the Abbott government. The problem is that ‘behind the throne’ usually means a shadowy or lesser known presence but the IPA is making itself anything but that, which may well lead to its undoing.

While the IPA certainly seems to be influencing the current government, one debating point is whether that is a genuine direct and active influence or merely a confluence of ideologies? Either way, it allows the government to support the IPA’s position on many issues and the IPA to claim it is influencing the public agenda.

Abbott in 2013, prior to the election, spoke at the IPA’s 70th anniversary (video here and transcript here) and in relation to its ‘wish list’ of 75 policies for an incoming LNP government openly endorsed ten of them and said: ‘that is a big “yes” to many of the 75 specific policies you urged upon me’.

Others have shown that Abbott, while definitely accepting some of the proposals, has been a little more pragmatic in adopting others or has been slow to take them too far. As with his decision not to proceed with the repeal of section 18c of the Racial Discrimination Act, Abbott may agree in principle with the IPA’s position but he is still a politician and will sometimes bow to political pressure, including public reaction, or to an inevitable political reality, such as not having control of the senate.

It is no coincidence that the IPA and Liberal Party policy are similar because Liberal members of parliament are involved in its activities and its current chairman is Rod Kemp, a former Liberal minister in the Howard government (who had already been a director of the IPA before becoming a Liberal member of parliament). Liberal power broker Michael Kroger is also on the board and one other member is also a former Liberal candidate — the other members of the board are business people. It claims to be a research organisation but there are no academics on its board, although it does have an academic Research Committee. Its approach to research, however, is anything but ‘academic’. Its Executive Director, John Roskam, says:

I’m sceptical about peer review in as much as you’re reviewed by your mates. Good analysis will stand up to scrutiny whether it’s peer reviewed or not.

The rejection of ‘peer review’ is interesting because, although designed to bring rigour to research, peer review has elements of a free market approach. It is competitive in the sense that other academics exercise their self-interest in finding flaws, if they can, in another’s work, thereby promoting their own work and their ability to ‘sell’ their own skills and knowledge. (It is sometimes when these elements dominate that the science can suffer.) If that does not follow market principles, then I’m not sure what does, but the IPA rejects it. We can only question why.

The IPA also refuses to divulge the funding for its research whereas mainstream research may be considered ‘suspect’ if funded by organisations that have a vested interest in the outcome of the research. Roskam again:

… he denies the IPA tailors its findings to the demands of the paying client. On the contrary, he says, clients come to the IPA because their concerns are consistent with IPA principles.

The IPA was founded in 1943, by big business, in response to what was seen as the threat of government interventionist social policies (also perceived as ‘socialist’ policies, remembering that Labor was in government at the time). Sir George Coles, founder of the Coles group, was its first chairman and it has been pointed out that all of its members in the early years lived in Toorak, an elite address in Melbourne.

It is also no coincidence that the Liberal Party was founded the following year: the IPA was involved and is reputed to have influenced (even provided) Menzies’ original policies. Early on it was a more conservative organisation but since the 1980s has become neo-liberal.

Although claiming to be a research organisation, its main aim appears more about getting its views before the public: in 2012‒13 financial year it claimed 878 mentions in print and online; 164 articles by its ‘researchers’ in the national media; 540 radio appearances and mentions; and 210 television appearances and mentions. I am not sure exactly what it means by ‘mentions’ — does it include critical mentions? — but it certainly appears a way of inflating the figures. Thus it claims media success in pushing its agenda. It may not be a bad thing that the IPA is now so openly pursuing its approach because, at least, it opens its arguments to wider scrutiny, rather than simply being a shadowy and secretive presence behind the throne.

Like the old union ambit claims (I’m sure it will enjoy that comparison), the IPA may not get all it wants but creates the debate and climate for the type of reform it wants. As its director for development and communications explained:

If we’re not out there arguing for the Australian Human Rights Commission to be abolished … no one is going to advance the idea of radically reforming it.

Even its approach that the ABC should be abolished as a government funded media service contributes to the ABC inviting its spokespeople to appear in the name of ‘balance’. (Although, interestingly, the IPA also wants the repeal of laws that mandate ‘balance’ in the media.) So, by pursuing a more radical agenda, it actually achieves lesser changes towards its ultimate aim.

The IPA agenda is not simply a set of policy prescriptions but a plan to reshape Australia in the neo-liberal image. Even the title of the article where its 75 policy ideas were presented clearly sets out that intent: ‘Be like Gough: 75 radical ideas to transform Australia’ [emphasis added]. The article correctly suggests that political culture moves left or right when left or right governments are elected, but claims that left governments are more successful in moving to the left than right governments are in moving the political culture and society back to the right. The article suggests that Abbott, to be successful with a free market reform agenda, must act like Whitlam and do it quickly: ‘If he hasn’t changed Australia in his first year as prime minister, he probably never will’. (As Abbott has now been in government for over a year, perhaps we can take limited comfort from that assessment.)

The IPA claims all this in the name of ‘freedom’ and perhaps garners some wider support for its positions because of that. (It had 3,383 members at 30 June 2013 and plans to have five thousand by the end of 2015.) We all support ‘freedom’ but, as with any offer too good to be true, one needs to read the fine print and find out what is actually meant.

I think more pertinent than Abbott’s speech at the IPA anniversary was a speech by Rupert Murdoch at that same event. Here are a few interesting excerpts revealing the big business and IPA defence of the free market and how they would like to shape the debate:

… we must argue the morality of free markets and the immorality of markets that are not free. The cold, commercial word ‘market’ disguises its human character — a market is a collection of our aspirations, exertions, choices and desires.

We have not persuaded people that the market does better because it is more moral — or that socialism fails because it is largely immoral in its denial of fundamental freedoms. To the contrary, too many people think that the market succeeds because it is based on a vice — greed. And that socialism is better because it is based on a virtue — sharing.

The market succeeds because it gives people incentives to put their own wants and needs aside to address the wants and needs of others. To succeed, you have to produce something that other people are willing to pay for.

[The market is] about fairness and opportunity. He [Arthur Brooks, leader of an American free market think tank] defines fairness as the universal opportunity to enjoy earned success. That means enjoying the fruits of our success.

What’s fair or compassionate, for example, about using taxpayer dollars to bail out Wall Street bankers?
What’s fair about taking money from people who have earned it and giving it to people who didn’t?

People begin to resent the rich only when they conclude that the system is rigged. To put it another way, if we wish to persuade people that income inequality is not the right way to measure the fairness of our society, we have to work to make sure that social mobility is real — especially for people at the bottommost levels of society. By that measure, we have much left to do.

Unsurprisingly, Murdoch’s approach to ‘fairness’ was picked up by the treasurer, Joe Hockey, in a speech he made to the Sydney Institute in June of this year:

In other words the average working Australian, be they a cleaner, a plumber or a teacher, is working over one month full time each year just to pay for the welfare of another Australian. Is this fair?

Whilst income tax is by far our largest form of revenue, just ten percent of the population pays nearly two thirds of all income tax. In fact, just two percent of taxpayers pay more than a quarter of all income tax. Maybe these taxpayers would argue that the tax system is already unfair.

The majority of Australians do not understand (rightfully, in my opinion) why some level of redistribution of income is ‘unfair’: the arguments that do exist are more about the extent of redistribution. Also, Murdoch’s claim that ‘income inequality’ is not the right way to measure fairness does not stand up to scrutiny. Murdoch suggests that social mobility is the answer but Piketty showed that the increasing wealth of those at the top is creating a clear lack of mobility, not just for those at the bottom (whom Murdoch mentioned), but those in the middle and upper middle income levels, who now have only miniscule opportunity to rise to the levels of wealth of those at the top (like Murdoch). Murdoch also ignores (as Piketty does not) that his children will inherit all that wealth and will not have ‘earned’ it — ‘earning’ success and wealth is meant to be central to the free market approach. If they believe that earned wealth is a key to the ‘fairness’ of the free market, why don’t they support inheritance taxes?

When Murdoch uses the words ‘greed’ in relation to the markets and ‘sharing’ in relation to socialism, although critical of that view, he actually raises a basic difference. The market is based on the philosophy of the self-interested individual and what is ‘greed’ but an expression of self-interest? Sharing is based on social responsibility and the common good. If, as Murdoch says, people do have this view, it is not some vague unwarranted feeling but a genuine value judgement based on the underlying principles. (Also noting that when Murdoch and the IPA use the word ‘socialism’, they do not mean Soviet-style socialism but almost any progressive view that suggests governments have a role to play in ensuring fairness.)

While Murdoch claims that the market represents human aspirations, my piece on the free market showed the extent to which the economic theory of the market is not based on reality at all: it is a framework supporting the property-owning classes, particularly the property-owning elites. If I lose my property I have no place in the market, no opportunity to improve my situation. I think the ultimate loss of property is someone with a severe disability who has lost their capacity to sell even their labour. What would happen to such people in a pure free market? They would be like the beggars of the past, living on the streets and probably starving.

That takes us to the different views of freedom of the left and the right as discussed in ‘Whose freedom?’. Because the right and the free-market advocates do not accept lack of means or lack of capacity as a limitation on freedom, they do not see why government needs to intervene. It is only the left or progressive view of freedom, that it should include improving the capacity of individuals to exercise their freedom, that deals with situations like the severely disabled person’s freedom in a market society.

The example of the disabled person also shows that there is still a distinction between the ‘market’ and ‘society’, a distinction that is blurred or ignored in the IPA and Murdoch view of the world. Australian society generally takes the view that the disabled person, or the unemployed person forced out of the market (often through no fault of their own), should be given some support. That is done in the social realm, not by the market (although in many ways it supports the market), but because that social approach draws funding (through taxes) from market activities, groups like the IPA, and its business supporters, believe such funding should be severely limited — or non-existent in their perfect world! You can see where the Abbott government draws its inspiration from in its approach to welfare but, as it discovered post-budget, it is not a view widely held by Australians.

Murdoch also mentioned that there was a difference between being ‘pro-market’ and ‘pro-business’, a difference the IPA does not yet seem to have grasped. It has in its 75 ideas the development of northern Australia which, it states, the government should support by creating a special economic zone that provides government incentives and concessions. If the IPA actually believes in the free market then the north would be developed without government assistance because it would be in the self-interest of the free market players to do so. If it requires government assistance, then that is actually, in Murdoch’s words, a ‘pro-business’ stand requiring government interference in the market. Some have unkindly suggested that this approach is simply supporting Gina Rinehart’s vision of the north that includes lower taxes for her mining operations. As a fictional political character used to say many years ago: ‘You may well think that but I could not possibly comment’.

There are reports, however, that some major corporations did withdraw funding support for the IPA over its earlier stance on Aboriginal affairs and more recently over its support of climate change deniers. If those reports are true (and apparently they cannot each be confirmed), it would suggest that some big businesses have more sense, and more understanding of issues beyond the market, but which influence the market, than the current IPA.

The IPA philosophy runs counter to the Australian concept of ‘a fair go’, as Hockey discovered to his discomfort when he echoed Murdoch’s words. As suggested by my other pieces, the IPA misrepresents ‘freedom’ by supporting a very limited concept of the word. It also misrepresents its supposed free market philosophy by supporting specific business proposals that require government intervention (in contravention of the free market philosophy). It thinks that ‘the market’ is society. Its research is questionable, as is its political judgement, as evidenced by its approach to climate change.

The IPA may be behind Abbott’s throne but it is making its presence known, even boasting of its role, which may not be in its or Abbott’s best interests. It has arguments built on sand that are not in accord with the values of the majority of Australians. The more it comes out from behind the throne, as it is doing, the more Australians will understand what it, and the Abbott government, truly stand for.

What do you think?