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Review by Charles Richardson

Governing Morals: A Social History of Moral Regulation
by Alan Hunt
Cambridge University Press, 1999, $39.95, 273pp. ISBN 0-521-64689-8

Fundamental to liberalism is the belief that toleration does not equal approval; in other words, that immoral behaviour is sometimes a private matter, not a fit subject for outside intervention. Coercion, and particularly government coercion, needs to be strictly confined to acts that affect the rights of othersøthere is no justification for punishing immorality alone.

There is a thriving theoretical debate (which this reviewer has participated in) about how the limits of the ÔprivateÕ sphere should be drawn. As a practical matter, however, the regulation of (im)morality usually becomes controversial only when the moral judgement itself is contested. Whether we talk about drugs, sexual preference, gambling or prostitution, the dispute about enforcement and the dispute about morality are inextricably linked. It is all very much a practical affair, and if we stay at the theoretical level we will never fully understand what is going on in the policy debate.

Here lies the importance of this book. The heart of HuntÕs work is a historical survey of movements for the regulation of morality in Britain and America over the last three hundred years. Instead of trying to cover the whole of this ground, Hunt limits himself to a few periods and organisations, going into some detail about controversies that seem eerily similar to those of todayÕs Australia, despite their remoteness in time and place.

Although Hunt casts his net widely in theory, defining Ômoral regulationÕ so broadly as to include just about any social movement, in practice his discussion sticks to the traditional Ôvictimless crimesÕøprostitution, obscenity, blasphemy, alcohol, drugs. Indeed most readers could afford to skip the theoretical introductory chapter. Hunt is from a Marxist background, and the heavy diet of Marxist and Foucauldian terminology can be a bit daunting. Not that he puts any faith in traditional Marxist solutions: Ôwhile Gramsci anticipated that social revolution would ease the birth of the new, we can have no such optimismÕ (p.220).

The rest of the book makes for fascinating reading, including a wealth of interesting historical detail. I had not known, for example, that Bernard Mand-eville, author of The Fable of the Bees, was an early advocate of legalised prostitution, or that it was only in 1908 that consensual incest was made a crime in Britain. But the historical material has some vital lessons for the present as well.

One lesson is the close link between moral and political repression; campaigns against sexual or religious deviance constantly overlapped with those against political deviance. In the early nineteenth century, for example, the Vice Society Ôsaw themselves as being engaged against the forces of secular rationalism; hence they perceived an intimate connection between religious blasphemy and political seditionÕ (p.70). One might suggest that they were more perceptive than some of their modern-day opponents, who assume that they can appease the conservatives by sacrificing the freedom of unpopular groups.

Artistic non-conformity is another frequent casualty. There is a shock of recognition in hearing of puritans a century ago targeting ÔZola, Flaubert, Balzac and othersÕ (p.142)øjust as their twentieth-century successors, in the name of banning Ôdirty booksÕ, focused on Joyce, Lawrence and Nabokov.

The ÔmedicalÕ paradigm emerges as an important theme in the regulation of private conduct. Although Ôhealth regulationÕ tries to present itself as morally neutral in regard to tobacco, drugs, sex, and so on, Hunt shows that health and morality are often complementary strategies for would-be regulators. Ô[T]he shift from projects of sexual purity to social hygiene projects did not extinguish the discourses of sexual purity. Rather they lived on within the medicalised model that is perhaps best characterised as a medico-moral projectÕ (p.78).

A very important lesson concerns the deeply ambiguous heritage of feminism. Hunt sees that even in Victorian times there was an Ôanti-heterosexual elementÕ (p.106), and he shows us the tension between puritan and libertarian tendencies:

Victorian feminism . . .Ê [came] to espouse a sexual politics in the form of Ôsexual purityÕ that was unambiguously both conservative and authoritarian, and was to bequeath a problematic legacy to twentieth-century feminism (p.141).

Parallels with todayÕs debates are not stressed in the book. Hunt draws them out only in occasional asides, such as when he compares panic over drugs and child abuse with the Ôwhite slaveryÕ fabrications of the 1890s (a subject he is particularly strong onøsee esp. pp.177-180). His discussion of modern times in chapter six is relatively brief and inconclusive, but the analysis in terms of Ôcrises in gender relationsÕ and Ôcrises in familial relationsÕ seems to be clearly on the right track.

We see throughout the depth and persistence of the conservative obsession with sex, or the Ôgovernmentalisation of the sexual fieldÕ (p.185). HuntÕs summary is hardly optimistic:

Moral reformers today, both conservatives and feminists, share . . . a view of sex as an inherently dangerous force and also share an anti-hedonism in so far as ÔpleasureÕ is not valorised as a significant human aspiration. . . . [B]oth strands have become increasingly hostile to liberal values of choice and diversity. (p.200)

It recalls Norman MailerÕs remark to Abbie Hoffman regarding drugs:

Let the fascists have dope, itÕs time to draw the wagons round and carefully choose the liberties we still have enough time to defend. (Steal This Urine Test, Penguin, 1987: 2)

To this reviewer, however, it seems that the history presented by Hunt is grounds for a cautious optimism. One thing he shows is that there has always been resistance to regulatory projects. The high Tory Henry Sacheverell is the bookÕs first hero, giving Ôa surprisingly liberal, and probably opportunist, argumentÕ against Ôthe Sanctified Pretence of Reformation of MannersÕ (p.51). Nor was Victorian morality undisputed territory; some feminists opposed the Ôwhite slaveryÕ agitation, the army sometimes objected to the persecution of prostitutes, and a group called the Personal Rights Association organised opposition to Ôthe legislative imposition of moralityÕ (p.238n44).

Indeed, political support for moral regulation is often illusory. Hunt comments that Ôthe political elite . . . never embraced the [Vice] SocietyÕs wider project for a more extensive package of moral legislationÕ (p.76), despite the large number of establishment figures who served as patrons. Much the same could be said of more recent conservative leaders; although Hunt notes the Ôideological retraditionalisationÕ embodied in Margaret Thatcher and (to a lesser extent) Ronald Reagan, the actual results of their policies were a grave disappointment to the moral conservatives.

These days, moral regulation is contested more explicitly than ever before. Although the conservative project remains a powerful and insidious threat to liberty, its doctrines and assumptions are constantly being challenged. Scientific and technological progress, together with improved living standards and declining superstition, are a powerful counter to the forces of regulation. The struggle continues, but those who wish to enlist on the side of the enlightenment will find this book a valuable resource.

Review by Chris Taylor

The Australian Century: Political Struggle in the building of a nation
Edited and introduced by Robert Manne
Text Publishing Company, Melbourne, 1999, $24.95, ISBN 1-875847-21-9

t is pleasing to read an Australian history that notes in its very first line that Ô[p]olitical history is the backbone of every national narrativeÕ (p.1).

The words are Robert ManneÕs and this history is very much his project. He demonstrates that, contrary to what some think, political struggle is in fact a driving force in Australian history and our contemporary society, and is a force both positive and negative in its effects. The projectÕs achievement is all the more admirable considering the obvious difficulties in compiling a work of history, both thematic and chronological, authored by nine different historians and a journalist.

The Australian Century is divided into nine chapters, seven of which deal with a different historical periodøFederation, the Great War, the Depression, the birth of the Liberal Party, the Labor split, WhitlamÕs revolution and LaborÕs reforms of the 1980s. The remaining two chapters of The Australian Century deal thematically with aboriginal rights and the republican debate.

The historical contributions are generally welcome. Brian de Garis and Robert Murray share a deep and abiding interest in their respective eras, Federation and the Labor split, interest that is well communicated to their readers. Ian Hancock details well the events that shaped post-war Australia. Allan Martin and John HirstÕs contributions provide important abstracts for all students of Australian history dealing with the crucial but unpopular eras of depression and war.

The last three chapters are of the greatest interest to liberal thinkersøPaul KellyÕs ÔLabor and globalisationÕ, Brian Attwood and Andrew MarkusÕ ÔThe Fight for Aboriginal RightsÕ, and John HirstÕs ÔTowards the republicÕ.

Kelly outlines the rise of a reformist Labor in the 1980s and early 1990s under Hawke and Keating. He rightly emphasises the qualities that won Labor five successive federal elections and generated nationwide economic reforms, qualities such as the complementary Hawke-Keating relationship, the emergence of a governing mentality within LaborÕs ranks, and the sheer talent assembled in a single generation of Labor figures.

Importantly, Kelly takes to task the idea, propounded by many academic writers ofÊ the Left, that LaborÕs governance represented the triumph of a neo-liberal or even neo-conservative ideology. Kelly rejects the image of a Hawke-Keating ÔhijackÕ, the term coined by Dean Jaensch, by reiterating the importance of the external and internal forces acting upon Australia and its governments at the time, and the genuinely consensual approach adopted initially by Hawke.

Kelly clearly understands the importance of the Hawke-Keating reforms to AustraliaÕs present economic health; but he also recognises that there were constraints upon Labor that prevented them from undertaking wholehearted reform in particular areas. Kelly cites the labour market as one area where it was left to the Howard Government to make the fundamental changes required for a progressive and dynamic approach. He might also have cited public debt and deficit (especially considering the later Keating years), reform of the public service, health policy and indirect taxation.

Attwood and MarkusÕ essay represents the low point of The Australian Century. It would be puerile to dismiss learned writers simply on the basis of the titles adopted by their institutions but one knows one is in for a rough ride when the ÔSchool of Historical and Gender Studies at Monash UniversityÕ rears its head!

Attwood and Markus stumble upon what is the crucial point in understanding the Australian approach to indigenous affairs.

However the notion that Aboriginal people might have rights in accordance with their status as the original peoples, Aboriginal rights finds no place within the mainstream of Australian politics or culture. The denial of these rights has been the fundamental reality which has confronted Aboriginal political leaders across the generations. (p. 264)

Having stumbled upon this truthøthat Australians will not tolerate a progressive but nonetheless illiberal approach to raceø Attwood and Markus proceed to ignore its implications. Turning their backs on liberalism from the very outset, the authors are unequipped to deal with the reality of late twentieth-century aboriginal affairsøthe evident failure of government to alleviate aboriginal poverty or provide a viable economic future for remote communities.

Instead of pro-per scrutiny of indigenous affairs, the reader receives only polemic, shaken with a hint of academic laziness. The
post-Menzies Coalition governments were Ôindecisive and incapable of major initiatives, and it [was] not until Labor assumed leadership of a movement for significant reform that primacy of place was given to Aboriginal issuesÕ (p.278).Ê The ÔNew RightÕ was not simply a puppet master of the mining industry, it invented opposition to land rights and was Ôa political movement shaped by a commitment against the values of social democracy and small ÔlÕ liberalismÕ (p. 281).Ê Prime Minister John Howard ruined the 1997 conference on ÔreconciliationÕ by Ôhector[ing] the assembled audience, some of whom turned their backs during his addressÕ (p. 291).Ê The Howard Government was
Ô[e]ager to lend an ear to pastoralists and minersÕ and Ôshowed little interest in working out a compromise acceptable to the traditional owners of the countryÕ (p. 292).

Apparently Attwood and Markus are:

¥ unaware of the steps taken by pre-Whitlam governments to end racial discrimination in fact rather than in rhetoric, or that leadership does not simply equate with espousing the values which a writer shares;

¥ unable to understand what liberalism is, unless prefacing it in this manner simply obliterates it of its original meaning;

¥ unaware that Howard responded to the astonishing behaviour of delegates at the conference that proceeded his actual address (namely the disrespect shown to him as leader of the nation that was actually paying for them to be there!); and

¥ ignorant of the extraordinary attempts made by the Howard Government during 1996-98 to facilitate dialogue with a range of aboriginal people with very different views, against very strong support amongst many Liberals and Nationals for complete repudiation of native title, and the actual resultøa negotiated passage of a significantly compromised bill through the Senate.

Attwood and MarkusÕ time might have been better spent considering the legitimacy of the Aboriginal and Torres Strait Islander Commission (ATSIC). After all, ATSIC is disliked by both
radical and conservative aborigines, as the writers themselves acknowledge. Whether ATSIC can continue to perform its three different functionsøas government department, de facto indigenous parliament and service providerøis debatable, as is the resulting effect on Australian public administration.

Little genuine attention is paid in this chapter to the realities of ÔreconciliationÕ. Manne might describe aboriginal dispossession as Ôthe ghost at the banquet of Australian democracyÕ and state that Ô[n]o issue has haunted the Australian conscience more profoundly in recent yearsÕ (p.8), but this doesnÕt make it true. Advocates of the kind of Ôaboriginal rightsÕ endorsed by Attwood and Markus continue to convince themselves that only by achieving reconciliation, whatever that might be, will a hole in the Australian conscience be filled. Such a view might resonate with some Australians but for the vast majority of suburban Australians the issue is utterly irrelevant. For most rural and regional Australians, faced with the realities of aboriginal affairs, the issue provokes little but contempt. While aboriginal Australians tie themselves to this course of action they will continue to fail to realise the substantial changes they are seeking.

Attwood and Markus also fail to analyse the constitutional underpinning of this whole issueøthe notorious race power (s. 51 xxvi) of the Commonwealth Constitution. The abolition of that clause in its entirety ought to be the concern of all Australians, although such a course of action might endanger the entire structure ofÊ Ôindigenous policyÕ, its institutions and employees.

On November 6 this year, Australians were invited to voice their opinion on a proposed constitutional amendmentønot to abolish the race power but to overturn one of the least important aspects of the constitution, the origin of the Head of State.

Of course, it would be unfair to review John HirstÕs second contribution to The Australian Century in the context of post-referendum analysis. But letÕs face it, life is unfair.

The referendum result was clear and unambiguousøa failure to achieve a national ÔyesÕ majority or a ÔyesÕ majority in a single State for either question. As such, HirstÕs essay actually offers some insights into the failure of the Australian Republican Movement to mobilise popular support for its decade-long campaign. The ARM failed to communicate its intentions and values to Australian voters and this failure characterised its organisationÕs development and membership.

Hirst does touch on an interesting issue when surveying Geoffrey Dutton and Donald HorneÕs attempts to promote a proto-republicanism in the 1960s. Both those writers Ôsaw AustraliansÕ acceptance of the monarch as symbolising their stuffiness, timidity and lack of realism about where their country stood in the world. A nation that threw off the monarchy would revitalise itself and overcome the cultural cringeÕ (p. 300). It may be the case that similar motives could be ascribed to more recent republicans but ARM failed not only to convince Australians that there was not a hidden agenda to republicanism, an agenda founded on an unwillingness, such as that displayed by Horne and Dutton, to recognise the worth of our national life, but also failed to convince many others that minimalist republicanism was not a worthless shell.

The rancour and ill-humour with which many republicans have responded to the referendum result would seem to indicate that advocates of this change have some distance to go before a republic becomes a reality.

The Australian Century is a worthy read. The bookÕs historical chapters are genuinely insightful and generally well written. The subject matter tackled ought to be on a syllabus of every secondary school in the country. Nonetheless the project is tainted by failure (particularly the dreadful Attwood and Markus piece) and a general misunderstanding of the continuing strength of liberalism and the value of community skepticism of the state.

Review by Geoff Jones

1998 Industry Economics Conference Proceedings
Productivity Commission
Melbourne, 1999, $16.95, 274pp. ISBN 1 74037 0368

his volume was released in September 1999 and is a collection of thirteen papers selected from the 1998 Industry Economics Conference held in Canberra 6-7 July 1998.Ê The papers are divided into four broad categories.Ê Section 1 covers ÔPrivatisation and RegulationÕ, section 2 is ÔIndustry Economics and TheoryÕ, section 3 is ÔFinancial Crises and BankingÕ, while section 4 covers ÔIndustry Structure and Policy in AustraliaÕ.

It is unlikely that anyone would read the volume cover to cover.Ê However, the release of conference papers seems to serve as a convenient record of events, as well as a resource for those interested in the contemporary issues of the day.

Reviewing a collection of diverse conference papers is difficult, particularly where the diversity is in both content and style.Ê Somewhat self-indulgently the reviewer has chosen to focus on the paper by Stephen King and Rohan Pitchford entitled ÔPrivatisation: Does Reality Match the Rhetoric?Õ.Ê This is in keeping with the theme of the conference which was: ÔPrivatisation, Regulation and ReformÕ.

The King and Pitchford paper received some media coverage at the time of the conference along the lines of Ônoted economists criticise privatisationÕ.Ê The paper is much more than that however.Ê The authors dismiss a number of arguments on both sides of the debate, and provide a timely reminder to policy makers in Australiaøwho are used to avoiding the ÔUK mistakesÕøthat other pitfalls remain.

The paper is a very thoughtful overview and critique of privatisation research and policy.Ê And while it is tempting to believe that the privatisation debate and practice has run its course, the paperÕs motivation is convincing that there is much more mileage in the issue over the coming decade at least in Australia, and many more years in neighbouring countries.Ê To the extent that their criticisms of previous Australian privatisations are justified, this may have implications for future regulation.

King and Pitchford suggest that four key issues need to be answered in considering privatisation:

• ÊWhat are the different incentives that face public sector managers and private sector owners?
• ÊWhy cannot the government establish incentive schemes that eliminate the differences between ownership regimes?
• ÊWhy does the government want to use ownership as a tool of economic policy?
• ÊHow should the government choose between public and private sector ownership?

In considering the different incentives facing private and public sector managers, the authors assert that ÔPublic and private ownership will only matter if the incentives that face public sector managers and private sector owners differÕ.Ê This is a crucial question, but I am not sure that it is the only relevant factor.Ê There is also the question of who should bear the risk of business performanceøtaxpayers or shareholders?Ê Perhaps a good recent example is the media coverage of losses apparently incurred by NSW electricity distributors operating in the National Electricity Market.Ê It would seem likely that the managers involved faced large incentives operating in a competitive market, but we may prefer that private shareholders bore the risk of such losses, rather than NSW taxpayers.

A convincing case is made that ownership is simply a regulatory tool, and that a standard view that privatisation reduces government involvement is na•ve.Ê Privatisation may in fact increase government involvement.Ê This ties in with a view taken by David Greig in his paper, ÔPrivatisation: A Practitioners Perspective,Õ which argues that privatisation is particularly successful where the outputs can be well-defined, and/or there is a competitive market operating.Ê Where outputs cannot be well defined, and the absence of a competitive market means ongoing regulation is deemed necessary, privatisation can simply lead to a change and/or increase in government role.

One response to this point has been that regulating is more of a government ÔcoreÕ responsibilityøwhere governments ÔsteerÕ rather than ÔrowÕ.Ê This has some intuitive appeal and may be true, but to the reviewerÕs knowledge has not been demonstrated in any rigorous way.Ê It is perhaps an area ripe for research to examine in theory and practice whether there is any systematic difference between any government failure in ownership and operation, and government failure in regulating privatised bodies.Ê The results have large implications for policy making in a second best world.

King and Pitchford summarise their discussion in Ôfive simple lessonsÕ:

• Ownership matters because it affects incentives;
• If regulation is perfect there is no difference between public and private ownership;
• From the previous point, ownership is simply a regulatory tool;
• Ownership and regulation are only issues when private and social incentives do not coincide; and
• Ownership, regulation and industry structure must be considered as an integrated package.Ê They are not separate issues.

This leads to King and Pitchford arguing sensibly for considering privatisation (both whether to, and in what form) on a case by case basis.Ê They set up some useful real world examples to amply demonstrate this point.Ê What is missing from the real world analysis is the political motivationsøand this is not a criticism since it is clearly beyond the scope of the paper.Ê However, the authors seem to make conclusions about the type of policy advice offered on the basis of the end outcomes adopted.Ê This may be a little harsh on bureaucrats who recognised the points made by King and Pitchford, but were trumped by political considerations.

Overall, the paper achieves its aim of provoking thought on what economic theory has to offer privatisation practitioners, the need to think carefully about all dimensions of the privatisation decision, and highlighting the mistakes to avoid.

Review by Jeremy Bray

AustraliaÕs Economic Revolution
by John Edwards
UNSW Press, Sydney, 1999, $9.95 ISBN 0 86840 562 0

s is well known, from the middle of 1997, the global economy began to pass through a series of financial crises, first occurring among South-East Asian economies, then in Russia, causing considerable economic disruption to those countries affected and threatening to spread to South America and even the United States.

By early 1999, the situation had improved and the threat of ÔcontagionÕ was receding. In the midst of these developments, the Australian economy continued to grow strongly. Inflation remained low, unemployment continued to fall and a depreciation of the currency helped domestic industries to divert exports away from traditional markets to those where growth was still strong, such as the United States and Europe.

How was it that Australia was able to continue its good economic progress while countries with similar current account and net foreign debt profiles faltered, and when many of our major trading partners were experiencing recession? And is such good performance likely to continue?

These are the questions that John Edwards seeks to answer in his pamphlet, AustraliaÕs Economic Revolution. The short book seeks to isolate those factors that have contributed most to the ongoing good performance of the economy.Ê Edwards argues that, unlike previous periods of economic prosperity, which were both unsustainable and followed by prolonged periods of economic stagnation, the current expansion may continue into the next decade. In light of this, Edwards briefly considers what the economic, political and social effects of sustained economic expansion might be.

The pamphlet identifies four interdependent and complementary phenomena that, it is argued, have contributed most to the sustained performance of the Australian economy: strong productivity growth; a low inflation environment; a changing industrial structure and; the effects of globalisation on the economy.

These phenomena have occurred simultaneously in Australia, not only as a result of a changing world economy and technological advance, but most importantly because economic policy has been formulated so as to encourage their existence. The decentralisation of the industrial relations system and consequently the method of determining wage remuneration over the last sixteen years is cited as one of the key reasons for the improvement in productivity in the 1990s. Edwards argues that by removing the judiciaryÕs role in determining wages and conditions across industries, and implementing a system of enterprise bargaining, movements in wages have been more closely aligned with changes in productivity at the enterprise level.

Moreover, privatisation of government business enterprises, deregulation of previously regulated industries, and the more competitive environment fostered by globalisation and the establishment of bodies such as the Australian Competition and Consumer Commission have taken much pricing power away from businesses, and encouraged them to improve efficiency in order to increase profits.

Furthermore, the removal of a considerable amount of tariff protection for domestic manufacturing industries has meant that capital resources have been redistributed away from low-productivity growth manufacturing to the high-productivity growth areas such as business services and finance, so changing the industrial structure of the economy. Those manufacturers remaining in business are exporting greater volumes of their produce than was ever the case under the tariff regime, as a result of their improved efficiency and competitiveness.

As a result of these changes, the economy has experienced an improvement in multi-factor productivity growth to a level almost three times the OECD average over the 1990s. This improvement has allowed both real wages and employment to rise simultaneously, without threatening the Reserve BankÕs inflation target, allowing official interest rates to be set at levels which are supportive of strong growth. Edwards suggests that it is this sustainability of economic growth that differentiates the current period from previous periods of economic prosperity, such as the second half of the nineteenth century and the twenty years following the Second World War.

All of the reforms mentioned above, however, have been developing over the last sixteen years, and are more evolutionary than revolutionary, being gradual and staged rather than sudden and comprehensive. As well, the outcomes themselvesølow inflation, strong productivity growth, the increase in openness to the world economyøhave been with us for some time now: where is the economic revolution mentioned in the title?

Edwards suggests that this sudden shift lies not in the economy per se, but in perceptions of both the strength of the economy and the wider implications of uninterrupted growth. Having come through the global financial instability of 1997 and 1998 with good outcomes for growth, inflation, unemployment, productivity, export volumes and wages, the strength of the economy is being acknowledged and the prospect of continued expansion into the next decade is being realised.

Edwards concludes that this change in AustraliaÕs economic fortunes will have an effect on the nature of social, political and economic dialogue, which is expected to change from one concerning scarcity to one which focuses on how the newly-created surplus of wealth appearing in state and federal budgets is to be distributed. This topic is the subject of the final chapter of the pamphlet, which contains a discussion of both the issues and the various political responses to these issues that may emerge in the near future as a result of sustained economic growth.

This compact book is a thorough and well-measured piece, providing both comprehensive background material for those interested in the nature of the contemporary Australian economy and its recent evolution, and also interesting reading concerning the possible social, economic and political implications of a continued low-inflation expansion into the next decade.

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