During the 1960s, a delegation of French politicians visited Beijing and met the Chinese premier, Zhou Enlai. One of the Frenchmen asked the premier what he thought about the impact of the French Revolution on the course of world history. Zhou Enlai responded: "You know, I think it is too early to tell".
On Wednesday this week, Prime Minister John Howard received final approval from the coalition's party room for his industrial relations reforms. The measures enshrined in the Work Choices package are regarded by the left and the union movement as the culmination of a decade-long campaign by the "New Right" to decentralise wage fixation.
By coincidence, it was exactly 20 years ago this month that the New Right as a movement first gained wide public attention when it featured on the front cover of The Bulletin magazine.
History is best viewed in the long run and, when it comes to matters such as the French Revolution, a perspective of centuries is probably necessary. Nevertheless, after two decades, it is possible to assess some of the successes and failures of the New Right.
The New Right was not a single coherent philosophy but rather a banner that united those who believed in the efficiency of markets and who shared a distrust of government intervention in the economy. Ideas that are now commonplace were once regarded as radical. In the late 1980s, as the New Right gradually became respectable, it lost its name tag, and its policies simply became "economic rationalism".
In 1985, The Bulletin listed the main concerns of the New Right as freeing the labour market, eliminating tariff protection, privatisation of state-owned assets, applying competition to government services and reducing the size of government.
So far the New Right has achieved only 3½ of these five objectives. Tariffs are all but gone, most government-owned businesses have been sold and, through measures such as national competition policy, markets have been introduced into many areas of government services.
On industrial relations, progress has been mixed. At best the job has been only half done. Even after Work Choices becomes law, the United States, Britain and New Zealand will all have labour markets that are more free than in Australia. The landscape for industrial relations is changing as, for example, self-employment increases and union membership declines. However, these outcomes are more a result of economic and social trends than of deliberate government decisions.
Some aspects of industrial relations policy have actually gone backwards. In the 1980s, the New Right argued for the decentralisation of wage fixation to allow regions to compete to attract industry on the basis of differential work conditions and wage costs, but now -- with the creation of a nationwide, centralised system -- such a possibility appears lost.
Reducing the size of government is the one objective on which the New Right categorically failed. Neither the Liberal nor Labor Party has shown any willingness to roll back the frontiers of the state. Australia's record levels of economic growth should have provided the conditions for a fundamental realignment of our taxation and spending priorities. This hasn't happened.
The role of the state in determining macro-economy policy may be reduced but, at the micro level, our personal lives are now more highly regulated than ever. Everything from the dimension of the trunks of trees in our front garden to the number of cars that can be accommodated in the garage of a new house is subject to bureaucratic approval.
The fact that the issues identified by the New Right are still being argued about is a testament to its relevance, but there is one phenomenon that the New Right failed to predict.
Opponents of choice, markets and private enterprise, having lost the intellectual debate over government's role in the economy, are now attempting to gain control over the most important institution of capitalism itself -- the corporation. The ability of individuals to come together to pool their money and share the risks of doing business, with the sole objective of making a profit, is so central to our understanding of a free economy that it is often taken for granted. The unrestrained demands of "corporate social responsibility" and the regulation of companies it entails are the as yet ignored threats to our future prosperity.
Australians have been lucky. We haven't had to wait 200 years to gain the benefits of the New Right's policies. Hopefully it won't be 2205 before all of those policies are finally implemented.
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